<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________
Commission File No. 000-22933
---------
WEEKS REALTY, L.P.
(Exact name of Registrant as specified in its Charter)
Georgia 58-2121388
------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
4497 Park Drive, Norcross, Georgia 30093
(Address of principal executive offices, including zip code)
(770)923-4076
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if changed since last
report)
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 such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past ninety (90) days. (X) YES ( ) NO
<PAGE>
INDEX PAGE
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets
at June 30, 1998 and December 31, 1997.......................... 3
Consolidated Condensed Statements of Operations
for the three and six months ended June 30, 1998 and 1997....... 4
Consolidated Condensed Statements of Cash Flows
for the six months ended June 30, 1998 and 1997................. 5
Notes to Consolidated Condensed Financial
Statements...................................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................... 17
PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 2. CHANGES IN SECURITIES........................................... 32
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................ 32
SIGNATURES............................................................... 33
- --------------------------------------------------------------------------------
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Weeks Realty, L.P.
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
June 30, December 31,
(Unaudited; in thousands, except unit data) 1998 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Real estate assets
Land $ 148,862 $106,196
Buildings and improvements 886,419 627,309
Accumulated depreciation (77,470) (61,548)
- --------------------------------------------------------------------------------------------
Operating real estate assets 957,811 671,957
- --------------------------------------------------------------------------------------------
Developments in progress 152,633 100,433
Land held for future development 35,947 22,562
- --------------------------------------------------------------------------------------------
Net real estate assets 1,146,391 794,952
- --------------------------------------------------------------------------------------------
Cash and cash equivalents 432 5,421
Receivables 9,020 7,031
Deferred costs, net 20,872 13,087
Investments in and notes receivable
from service companies 32,212 9,257
Investments in unconsolidated real estate entities 3,023 2,525
Other assets 19,049 20,088
- --------------------------------------------------------------------------------------------
TOTAL ASSETS $1,230,999 $852,361
- --------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Debt
Mortgage notes payable $ 264,865 $192,595
Unsecured notes 100,000 --
Credit facility borrowings 187,810 82,920
- --------------------------------------------------------------------------------------------
Total debt 552,675 275,515
- --------------------------------------------------------------------------------------------
Accounts payable and accrued expenses 26,865 14,578
Other liabilities 7,891 4,876
- --------------------------------------------------------------------------------------------
Total liabilities 587,431 294,969
- --------------------------------------------------------------------------------------------
Other limited partners' capital interests,
6,827,961 and 5,632,695 Common Units
at June 30, 1998 and December 31, 1997,
respectively, at redemption value (Note 1) 215,934 180,246
- --------------------------------------------------------------------------------------------
Partners' capital
Preferred Units, at $25.00 liquidation preference,
6,000,000 of 8% Preferred Units outstanding
at March 31, 1998 and December 31, 1997 150,000 150,000
Common Units, 19,522,073 and 17,703,992 Common Units
outstanding at June 30, 1998 and December 31, 1997,
respectively 277,634 227,146
- --------------------------------------------------------------------------------------------
Total partners' capital 427,634 377,146
- --------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $1,230,999 $852,361
- --------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these condensed balance sheets.
3
<PAGE>
WEEKS REALTY, L.P.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
(Unaudited; in thousands, except per unit data) June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental income $31,698 $18,879 $60,043 $36,279
Tenant reimbursements 4,134 2,259 8,094 4,416
Other 494 301 882 643
- -----------------------------------------------------------------------------------------------------------------------------
36,326 21,439 69,019 41,338
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating, maintenance
and management 5,334 2,774 10,055 5,289
Real estate taxes 2,992 1,768 5,738 3,467
Depreciation and amortization 9,195 5,700 17,556 11,044
Interest, including amortization of
deferred financing costs 7,275 4,714 13,377 10,006
General and administrative 1,334 875 2,614 1,752
- -----------------------------------------------------------------------------------------------------------------------------
26,130 15,831 49,340 31,558
- -----------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE EQUITY IN EARNINGS OF
UNCONSOLIDATED ENTITIES, INTEREST INCOME
AND GAIN ON SALE OF REAL ESTATE ASSET 10,196 5,608 19,679 9,780
Equity in earnings of unconsolidated
service companies 401 576 889 1,224
Equity in earnings of unconsolidated
real estate entities 86 -- 154 --
Interest income 247 305 526 543
Gain on sale of real estate asset -- 209 -- 209
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME 10,930 6,698 21,248 11,756
Dividends to preferred unitholders (3,000) -- (6,000) --
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME AVAILABLE TO COMMON UNITHOLDERS $ 7,930 $ 6,698 $15,248 $11,756
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON UNIT
Basic $0.30 $0.32 $0.60 $0.59
Diluted 0.30 $0.32 0.59 $0.59
- -----------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON UNITS
Basic 26,261 20,963 25,568 19,791
Diluted 26,450 21,163 25,761 20,008
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
4
<PAGE>
WEEKS REALTY, L.P.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
(Unaudited; in thousands) June 30, 1998 June 30, 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 21,248 $ 11,756
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17,556 11,044
Amortization of deferred financing costs 717 452
Amortization of deferred compensation 145 145
Straight-line rent revenue (654) (324)
Undistributed earnings of unconsolidated entities (586) (1,224)
Gain on sale of real estate asset -- (209)
Net change in:
Receivables and other assets (1,436) (2,386)
Deferred costs (3,460) (2,414)
Accounts payable and accrued expenses 5,427 5,666
Other liabilities 1,137 910
- -----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 40,094 23,416
- -----------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Property acquisition, development and construction (227,407) (80,647)
Real estate loans (5,331) (6,657)
Investments in and advances to unconsolidated entities (23,051) --
Collections of notes receivable and other 451 437
Proceeds from sale of real estate asset -- 2,484
- -----------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (255,338) (84,383)
- -----------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Capital contributions from Company 51,915 106,891
Unsecured note borrowings 100,000 --
Line of credit proceeds (repayments), net 104,890 2,390
Payments of mortgage notes payable (11,576) (32,879)
Deferred financing costs (6,179) (70)
Distributions (28,795) (15,501)
- -----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 210,255 60,831
- -----------------------------------------------------------------------------------------------
DECREASE IN CASH AND CASH EQUIVALENTS (4,989) (136)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,421 260
- -----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 432 $ 124
- -----------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
The Operating Partnership's 1998 property acquisition and development activity
was net of the settlement of real estate loans of $7,898,000, the assumption of
other liabilities in excess of other assets of $4,224,000, the assumption of
indebtedness of $83,846,000 and the issuance of Common Units valued at
$41,578,000.
The Operating Partnership's 1997 property acquisition and development activity
included the assumption of indebtedness of $4,360,000 and the issuance of Common
Units valued at $14,334,000.
The accompanying notes are an integral part of these condensed financial
statements.
5
<PAGE>
WEEKS REALTY, L.P.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. THE COMPANY
Weeks Realty, L.P., a Georgia limited partnership, (the "Operating
Partnership"), and its subsidiaries own, operate, develop, construct, acquire
and manage industrial and suburban office buildings in the southeast United
States and Texas. Weeks Corporation, a Georgia corporation, through its wholly
owned subsidiaries, Weeks GP Holdings, Inc. and Weeks LP Holdings, Inc.,
referred to herein as the "Company," is the sole general partner and a limited
partner and owns a majority interest in the Operating Partnership. The
Operating Partnership, including the operations of its subsidiaries, conducts
substantially all of the on-going operations of Weeks Corporation, a publicly
traded company which operates as a self-administered and self-managed real
estate investment trust ("REIT") under the Internal Revenue Code of 1986 (the
"Code").
As of June 30, 1998, the Company owned 74.1% of the common units of limited
partnership interest ("Common Units") in the Operating Partnership. Common
Units held by persons other than the Company (the "Other Limited Partnership
Interests") represented a 25.9% partnership interest in the Operating
Partnership. The Company's weighted average ownership interest in the Operating
Partnership was 74.3% and 75.9% for the three months ended and 73.9% and 75.8%
for the six months ended June 30, 1998 and 1997, respectively.
The Operating Partnership conducts its third-party service businesses through
two subsidiary 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 Operating Partnership holds
100% of the nonvoting and 1% of the voting common stock of the 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 Operating Partnership to substantially all (99%) of the
economic benefits from the results of the Service Companies' operations.
Under the provisions of the Operating Partnership's limited partnership
agreement, as amended, the Company is obligated, upon request to redeem each
Common Unit held by the Other Limited Partnership Interests for shares of Weeks
Corporation common stock on a one-for-one basis, or cash, at the Company's
option. The Company currently anticipates that it will elect to issue common
stock for Common Units presented for redemption by the Other Limited Partnership
Interests in the Operating Partnership. The Other Limited Partnership Interests
redemption rights are reflected in the caption "other limited partners' capital
interests" in the accompanying consolidated balance sheets at the cash
redemption price (computed using the Company's closing stock price as quoted on
the New York Stock Exchange) at the balance sheet dates.
Additionally, the terms of the limited partnership agreement obligate the
Company to contribute the net proceeds from the issuance of additional equity
securities, including issuances under the Company's incentive stock plan and
stock warrant agreements (see Note 5), to the Operating Partnership in exchange
for Units having substantially the same economic characteristics as the equity
securities issued by the Company.
6
<PAGE>
Operating Partnership net profits, net losses and cash flow (after allocations
to preferred ownership interests) are allocated to the partners in proportion to
their common ownership interests. Cash distributions from the Operating
Partnership shall be, at a minimum, sufficient to enable the Company to satisfy
its annual dividend requirements to maintain its REIT status under the Code.
As of June 30, 1998, the Operating Partnership's in-service property portfolio,
including one property totaling 86,000 square feet held in a 50% owned entity,
consisted of 259 industrial properties, 29 suburban office properties and 5
retail properties comprising 22,343,000 square feet. The Operating
Partnership's primary markets and the concentration of the Operating
Partnership's in-service portfolio (based on square footage) are Atlanta,
Georgia (57.9%), Miami, Florida (11.1%), Raleigh-Durham-Chapel Hill, North
Carolina (10.3%), Nashville, Tennessee (9.8%), Dallas/Ft. Worth, Texas (4.8%),
Orlando, Florida (3.3%), Spartanburg, South Carolina (1.7%) and Jacksonville,
Florida (1.1%). In addition, 44 industrial and suburban office properties and
one property expansion were under development or in lease-up and ten industrial
properties were under agreement to acquire as of June 30, 1998, comprising an
additional 6,966,000 square feet.
7
<PAGE>
2. BASIS OF PRESENTATION
The accompanying consolidated condensed financial statements include the
consolidated condensed financial position of the Operating Partnership and its
subsidiaries at June 30, 1998, and December 31, 1997, and their results of
operations and cash flows for the three and six months ended June 30 , 1998 and
1997. The Service Companies and their subsidiaries are reflected in the
accompanying consolidated condensed financial statements on the equity method of
accounting. All significant intercompany balances and transactions have been
eliminated in the consolidated condensed financial statements. Certain prior
year amounts have been reclassified to conform to the 1998 presentation.
The accompanying interim unaudited financial statements have been prepared by
the Operating Partnership's management in accordance with generally accepted
accounting principles for interim financial information and in conformity with
the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, the interim financial statements presented herein reflect
all adjustments of a normal and recurring nature which are necessary to fairly
state the interim financial statements. The results of operations for the
interim periods are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. These financial statements
should be read in conjunction with the Operating Partnership's audited financial
statements and the notes thereto included in the Operating Partnership's Annual
Report on Form 10-K for the year ended December 31, 1997.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, SFAS 131, "Disclosures About Segments of an Enterprise and Related
Information" was issued prescribing new guidelines for the reporting of segment
data. SFAS 131 will apply to all public, for-profit companies and will be
effective for the Operating Partnership beginning with the fourth quarter and
year ending December 31, 1998. The Operating Partnership was not subject to
segment reporting under prior accounting standards, but may be required to
provide certain segment disclosures under SFAS 131. The Operating Partnership
continues to evaluate the disclosure provisions of SFAS 131 and plans to adopt
SFAS 131 in it financial statements for the year ending December 31, 1998.
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 Operating Partnership implemented this new
guideline, which did not have a material impact on the Operating Partnership'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 be effective for the Operating Partnership beginning January 1, 2000. The
Operating Partnership is evaluating the provisions of SFAS 133 and plans to
adopt SFAS 133 in its financial statements beginning in 2000.
8
<PAGE>
3. BORROWINGS
UNSECURED NOTES
On March 20, 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 September 1997 to effectively fix
the interest rate on the unsecured note borrowing. The costs to settle the
hedge were included in deferred financing costs and will be amortized over the
life of the unsecured notes as interest expense, resulting in an effective
interest rate of approximately 7.6%. The unsecured notes are subject to certain
covenants, including those governing interest coverage and total leverage.
On August 4, 1998, the Operating Partnership issued $100,000,000 of 7.375%
unsecured notes due August 1, 2007. The proceeds from these unsecured notes
were used to reduce borrowings under the Operating Partnership's revolving
credit facility. These unsecured notes are subject to certain covenants,
including those governing interest coverage and total leverage.
CREDIT FACILITY
Effective July 1, 1998, the Company 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 1, 1998, the
Operating Partnership entered into a $20,000,000 swing revolving credit facility
(the "Swing Facility") with one bank. The combined Line of Credit and the Swing
Facility are referred to herein as the "Credit Facility." The new Credit
Facility remains unsecured and can be used for development and construction,
acquisitions and general corporate purposes. The entire Credit Facility is
guaranteed by the Company. The Operating Partnership are required to meet
certain financial and non-financial covenants including those governing the
Operating Partnership's maximum unsecured borrowings, 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%. The Swing
Facility matures on June 30, 1999, and may be extended annually.
In prior periods, the Service Companies and Weeks Development 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 Weeks Development refinanced their
Credit Facility borrowings with intercompany loans from the Operating
Partnership (see Note 4).
Through June 30, 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.
The weighted average interest rate on Credit Facility borrowings, excluding the
effect of the interest rate swap agreements described below, was 6.7% at June
30, 1998. Fees on the unused portion of the Credit Facility were 0.15%.
Effective July 1, 1998, interest 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.
Interest paid, net of amounts capitalized, totaled $9,710,000 and $9,250,000 for
the six months ended June 30, 1998 and 1997, respectively. Interest costs
capitalized totaled $2,697,000 and $1,283,000 for the
9
<PAGE>
three months and $4,859,000 and $2,222,000 for the six months ended June 30,
1998 and 1997, respectively.
At June 30, 1998, the Operating Partnership had in place three interest rate
swap agreements with a commercial bank to effectively change the interest costs
on $50,000,000 of Credit Facility borrowings from the variable rates discussed
above to fixed rates. The agreements, with notional principal amounts of
$10,000,000, $10,000,000 and $30,000,000, mature in July 1998, July 1999 and
July 2001 with effective fixed interest rates of 7.4%, 7.6% and 7.8%,
respectively.
MORTGAGE NOTES PAYABLE
Mortgage notes payable at June 30, 1998 and December 31, 1997, specifically
listed for notes with outstanding balances in excess of $10,000,000, consist of
the following (in thousands):
---------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
---------------------------------------------------------------------------
FIXED RATE
Three mortgage notes, principal and interest
at 8.59%, due in 2010 $ 77,553 $ --
Mortgage note, interest only at 7.13%,
due in 1999 38,000 38,000
Mortgage note, principal and interest at 9.24%,
due in 2005 15,687 15,800
Mortgage note, principal and interest at 9.625%,
due in 2000 12,797 12,897
Mortgage note, principal and interest at 8.10%,
due in 2006 11,875 12,015
Mortgage note, interest only at 7.625%,
due in 2000 10,300 10,300
Other mortgage notes, principal and interest
at 6.00% to 9.80%, due in 1999 to 2012 92,879 97,786
VARIABLE RATE
Industrial revenue bonds, interest at 3.55% to 6.65%
at June 30, 1998, due in 2004 and 2010 5,774 5,797
---------------------------------------------------------------------------
$264,865 $192,595
--------------------------------------------------------------------------
10
<PAGE>
At June 30, 1998, fixed rate mortgage notes payable included 33 notes with a
weighted average interest rate of 8.2%. The weighted average term to maturity
of fixed rate mortgage notes payable was 6.9 years at June 30, 1998. Fixed rate
mortgage indebtedness increased by $72,270,000 in 1998 due to the assumption of
four mortgage notes totaling $83,847,000 in connection with the Operating
Partnership's building acquisitions, net of principal repayments and retirements
of $11,577,000. Certain Company officers and Common Unitholders guarantee a
portion of the fixed rate mortgage notes.
Scheduled maturities of mortgage notes payable at June 30, 1998, are summarized
as follows (in thousands):
--------------------------------------------------------------------
YEAR AMOUNT
--------------------------------------------------------------------
Remainder of 1998 $ 1,915
1999 52,401
2000 36,938
2001 12,597
2002 9,562
2003 and thereafter 151,452
--------------------------------------------------------------------
$264,865
--------------------------------------------------------------------
11
<PAGE>
4. INVESTMENTS IN AND NOTES RECEIVABLE
FROM UNCONSOLIDATED SERVICE COMPANIES
The Operating Partnership conducts its 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 also own land in various business parks, either directly
or through ownership interests in real estate partnerships and joint ventures.
The Operating Partnership intends, based on market conditions, to acquire land
from the Service Companies and their subsidiaries for the development of future
properties. As discussed in Note 2, the Service Companies and their
subsidiaries are accounted for on the equity method of accounting. Under the
equity method, the Operating Partnership recognizes, in its consolidated
statements of operations, its economic share (99%) of the earnings or 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):
------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
FINANCIAL POSITION 1998 1997
------------------------------------------------------------------------
ASSETS
Real estate assets $13,700 $12,403
Investments in unconsolidated entities 11,737 2,849
Receivables and other assets 18,276 20,158
------------------------------------------------------------------------
$43,713 $35,410
------------------------------------------------------------------------
LIABILITIES AND EQUITY
Borrowings from the Operating Partnership $33,523 $10,900
Credit facility borrowings -- 16,620
Other borrowings 2,000 2,000
Other liabilities 9,480 7,513
Total equity (deficit) (1,290) (1,623)
------------------------------------------------------------------------
$43,713 $35,410
------------------------------------------------------------------------
As discussed in Note 3 and effective March 17, 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 $10,900,000 of 12% notes
due in 2004.
12
<PAGE>
At June 30, 1998, the Operating Partnership's investment in and notes receivable
from the Service Companies and their subsidiaries totaling $32,212,000 includes
notes receivable from the Service Companies and their subsidiaries of
$33,523,000 and the Operating Partnership's investment in the Subsidiaries of
($1,311,000).
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
RESULTS OF OPERATIONS JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 JUNE 30, 1997
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Construction and development fees $ 553 $ 520 $ 1,205 $ 1,057
Landscape 1,524 1,719 2,559 2,871
Commissions 558 284 790 462
Property management fees and other 51 139 130 286
---------------------------------------------------------------------------------------------------------------
2,686 2,662 4,684 4,676
---------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Direct costs 1,303 1,569 2,107 2,461
Interest expense Operating Partnership 757 328 1,148 655
Interest expense - other 33 87 200 164
General and administrative 942 570 1,759 1,039
Other 117 84 205 282
---------------------------------------------------------------------------------------------------------------
3,152 2,638 5,419 4,601
---------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE GAINS ON SALE OF
PROPERTIES AND EQUITY IN EARNINGS
OF UNCONSOLIDATED ENTITIES (466) 24 (735) 75
Gain on sale of properties - third parties -- 234 377 234
Gain on sale of properties Operating
Partnership -- -- 142 580
Equity in earnings of
unconsolidated entities 221 (8) 465 271
---------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (245) $ 250 $ 249 $ 1,160
---------------------------------------------------------------------------------------------------------------
Net income attributable
to Operating Partnership $ (243) $ 248 $ 246 $ 1,149
Interest expense Operating Partnership 757 328 1,148 655
Elimination of intercompany
profits Operating Partnership (113) -- (505) (580)
---------------------------------------------------------------------------------------------------------------
Equity in earnings of Service Companies $ 401 $ 576 $ 889 $ 1,224
---------------------------------------------------------------------------------------------------------------
Distributions and interest paid
to Operating Partnership $ 373 $ -- $ 373 $ --
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
Cash Flows June 30, 1998 June 30, 1997
---------------------------------------------------------------------------------------------------------------
Operating activities $ 1,726 $(3,556)
Investing activities (11,845) 1,432
Financing activities 5,661 315
---------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
In connection with the Operating Partnership's January 1998 acquisition of a
real estate portfolio in Miami, Florida (see Note 7), 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.
5. PARTNERS' CAPITAL
In April 1998, the Operating Partnership paid distributions to Common
Unitholders of $12,075,000 or $0.465 per Common Unit and to Preferred
Unitholders of $3,000,000 of $0.50 per unit relating to first quarter 1998
operating results. In July 1998, the Operating Partnership paid distributions
to Common Unitholders of $12,222,000 or $0.465 per Common Unit and to Preferred
Unitholders $3,000,000 or $0.50 per unit relating to second quarter 1998
operating results.
In the first quarter of 1998, the Operating Partnership issued Common Units to
the Company totaling 1,072,797 and 468,750 and received net proceeds of
$33,100,000 and $14,100,000, respectively. The cash contributions discussed
above result from the contribution by the Company of the net proceeds from the
sale of Company common stock in the public equity markets. The proceeds were
used to reduce the Operating Partnership's outstanding Credit Facility
borrowings.
In February 1998, the Company contributed $1,400,000 to the Operating
Partnership resulting from the Company's sale of 350,000 common stock warrants.
In return, the Operating Partnership agreed to issue 350,000 Common Units to the
Company in exchange for an exercise price of $32.75 per Common Unit upon the
exercise of such warrants. The terms of this agreement are structured to
parallel the terms of the Company's sale of 350,000 common stock warrants with
an exercise price of $32.75 per common share. The Operating Partnership's
obligation to issue Common Units and the Company's common stock warrants expire
in February 2008.
14
<PAGE>
6. NET INCOME PER COMMON UNIT
The Operating Partnership adopted the provisions of SFAS 128 for the year ended
December 31, 1997. For the three and six months ended June 30, 1998 and 1997,
reconciliations of income available to Common Unitholders and weighted average
Common Units used in the Operating Partnership's basic and diluted net income
per Common Unit computations are detailed below (in thousands, except per share
data):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 JUNE 30, 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMPUTATION OF NET INCOME PER COMMON UNIT
Net income available to Common
Unitholders - basic and diluted $ 7,930 $ 6,698 $15,248 $11,756
- ----------------------------------------------------------------------------------------------------------
Weighted average Common Units - basic 26,261 20,963 25,568 19,791
Dilutive securities -
Stock options 189 200 193 217
- ----------------------------------------------------------------------------------------------------------
Weighted average Common Units - diluted 26,450 21,163 25,761 20,008
- ----------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON UNIT
Basic $ 0.30 $ 0.32 $ 0.60 $ 0.59
Diluted 0.30 0.32 0.59 0.59
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Basic net income per Common Unit for the periods presented was computed by
dividing income available to Common Unitholders by the weighted average number
of Common Units outstanding during the period. Diluted net income per Common
Unit was computed based on the dilutive effect of the Company's stock options
outstanding. Common Units issuable upon the exercise of outstanding Company
common stock warrants were not dilutive for the three months ended March 31,
1998.
Previously reported net income per Common Unit under prior accounting standards
was equal to basic net income per Common Unit under SFAS 128.
15
<PAGE>
7. ACQUISITIONS
In June 1998, the Operating Partnership acquired five industrial buildings
totaling approximately 1,074,000 square feet and 67.9 acres of undeveloped land
located in Dallas/Ft. Worth, Texas. The aggregate acquisition consideration of
approximately $48,300,000 was paid in cash, funded through Credit Facility
borrowings. The second phase of this acquisition consisting of four industrial
buildings and total anticipated aggregate acquisition consideration of
approximately $40,200,000 is expected to close in September 1998, and is subject
to customary closing conditions and the updating of due diligence procedures.
The actual acquisition consideration for these four buildings will be based on
actual occupancy levels achieved prior to the expected closing date, with a
minimum aggregate acquisition price of approximately $32,500,000.
Additionally, in the second quarter of 1998, the Operating Partnership acquired
ten industrial and suburban office buildings totaling approximately 467,000
square feet for approximately $29,550,000. The aggregate acquisition
consideration was comprised of the issuance of $3,264,000 of Common Units, the
assumption of mortgage indebtedness of $2,949,000 and $23,337,000 of cash,
funded through Credit Facility borrowings. The acquired properties are located
in Tennessee, Florida, North Carolina and Georgia.
On January 9, 1998, the Operating Partnership acquired a 2,477,000 square foot,
24-building portfolio and approximately five acres of land subject to ground
leases in Miami, Florida. Aggregate acquisition consideration of approximately
$175,200,000, including closing costs and acquisition expenses, consisted of the
issuance of $28,310,000 of Common Units, the assumption of $78,033,000 of
mortgage indebtedness (see Note 3), the assumption of certain other liabilities
in excess of certain other assets of approximately $4,224,000, and cash of
approximately $64,633,000 funded through Credit Facility borrowings. In
connection with the acquisition, the Operating Partnership has also agreed,
subject to customary closing conditions and the completion of due diligence
procedures, to acquire a 90,000 square foot building under development for
approximately $5,100,000 and approximately nine acres of adjacent, undeveloped
land for approximately $4,000,000.
Additionally, in the first quarter of 1998, the Operating Partnership acquired
two industrial buildings under development totaling approximately 102,800 square
feet for approximately $4,400,000. The aggregate acquisition consideration was
comprised of the issuance of $1,514,000 of Common Units and $2,886,000 of cash,
used to fund the assumption and repayment of indebtedness, closing costs and
acquisition expenses, funded through Credit Facility borrowings.
16
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the accompanying
consolidated condensed financial statements 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 Operating Partnership 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, 15 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 Operating
Partnership 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 Operating Partnership'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 re-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 Operating
Partnership's filings with the Securities and Exchange Commission, including
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Annual Reports
on Form 10-K. The Operating Partnership 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 Operating Partnership and its subsidiaries own, operate, develop, construct,
acquire and manage industrial and suburban office buildings in the southeast
United States and Texas. The Operating Partnership and its subsidiaries conduct
substantially all of the on-going operations of Weeks Corporation (the
"Company"), a publicly-traded company which operates as a self -administered and
self-managed REIT. The Operating Partnership was formed and capitalized with
the proceeds from the Company's initial public offering in August 1994 and
succeeded to substantially all of the interests in certain land and industrial
and suburban office buildings under common ownership and the development,
landscape and property management businesses of the predecessors to the
Operating Partnership and the Company. For a further description of the
Operating Partnership, see Note 1 to the consolidated condensed financial
statements.
17
<PAGE>
RESULTS OF OPERATIONS
Operating information relating to the Operating Partnership's properties for the
three and six months ended June 30, 1998 and 1997, is summarized below (in
thousands):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED % ENDED ENDED %
JUNE 30, 1998 JUNE 30, 1997 CHANGE JUNE 30, 1998 JUNE 30, 1997 CHANGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rental revenues $31,698 $18,879 67.9% $60,043 $36,279 65.5%
Tenant reimbursements 4,134 2,259 83.0% 8,094 4,416 83.3%
- ----------------------------------------------------------------------------------------------------------------------
Property operating revenues 35,832 21,138 69.5% 68,137 40,695 67.4%
- ----------------------------------------------------------------------------------------------------------------------
Operating, maintenance and
management expenses 5,334 2,774 92.3% 10,055 5,289 90.1%
Real estate taxes 2,992 1,768 69.2% 5,738 3,467 65.5%
Depreciation and amortization 9,195 5,700 61.3% 17,556 11,044 59.0%
- ----------------------------------------------------------------------------------------------------------------------
Property operating expenses 17,521 10,242 71.1% 33,349 19,800 68.4%
- ----------------------------------------------------------------------------------------------------------------------
Property operating revenues less
property operating expenses $18,311 $10,896 68.1% $34,788 $20,895 66.5%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Period to period 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 as of January 1, 1997.
The Operating Partnership 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.
For the comparable three and six months ended June 30, 1998 and 1997, operating
results of the core properties, representing 191 properties totaling
approximately 13,474,000 square feet, are summarized below (in thousands):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED % ENDED ENDED %
JUNE 30, 1998 JUNE 30, 1997 CHANGE JUNE 30, 1998 JUNE 30, 1997 CHANGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rental revenues $18,233 $17,903 1.8% $36,024 $35,155 2.5%
Tenant reimbursements 2,228 2,120 5.1% 4,451 4,253 4.7%
- ----------------------------------------------------------------------------------------------------------------------
Property operating revenues 20,461 20,023 2.2% 40,475 39,408 2.7%
- ----------------------------------------------------------------------------------------------------------------------
Operating, maintenance and
management expenses 2,845 2,648 7.4% 5,441 5,105 6.6%
Real estate taxes 1,655 1,669 (0.8%) 3,341 3,319 0.7%
Depreciation and amortization 5,483 5,377 2.0% 10,954 10,652 2.8%
- ----------------------------------------------------------------------------------------------------------------------
Property operating expenses 9,983 9,694 3.0% 19,736 19,076 3.5%
- ----------------------------------------------------------------------------------------------------------------------
Property operating revenues less
property operating expenses $10,478 $10,329 1.4% $20,739 $20,332 2.0%
- ----------------------------------------------------------------------------------------------------------------------
Average occupancy 95.5% 96.7% 95.4% 96.4%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1998, TO THE
THREE MONTHS ENDED JUNE 30, 1997
Property operating revenues (rental revenue plus tenant reimbursements)
increased $14,694,000 or 69.5% between periods. Of this increase, $10,503,000,
$3,753,000 and $438,000 were attributable to acquisition, development and core
properties, respectively. The increases relating to acquisition and development
properties were due to the acquisition of 76 properties (37 in 1997 and 39 in
1998) totaling approximately 6,152,000 square feet and the stabilization of 25
development properties (14 in 1997 and 11 in 1998) and two property expansions
(both in 1997) totaling approximately 2,630,000 square feet. Property operating
expenses increased $7,279,000 or 71.1% between periods due primarily to the
growth in the property portfolio resulting from the acquisition and development
properties discussed above.
Property operating revenues from core properties increased 2.2% despite a
decrease in overall average occupancy of approximately 1.2%. This increase was
due to both rental rate and reimbursement increases between periods. Property
operating expenses increased 3.0% due primarily to increased maintenance
expenses in 1998. Property operating revenues less property operating expenses
from core properties increased 1.6%, exclusive of depreciation and amortization
expense.
Interest expense increased by $2,561,000 or 54.3% from $4,714,000 for the three
months ended June 30, 1997, to $7,275,000 for the three months ended June 30,
1998, due to increased mortgage interest of $1,764,000 related to mortgage debt
assumed in connection with certain of the Operating Partnership's 1997 and 1998
property acquisitions and increased net interest expense on unsecured Credit
Facility and note borrowings due primarily to higher average borrowings in 1998
compared to 1997.
Operating Partnership general and administrative expenses increased by $459,000
or 52.5% from $875,000 for the three months ended June 30, 1997, to $1,334,000
for the three months ended June 30, 1998, due primarily to increased personnel
and related costs associated with the Operating Partnership's geographic
expansion. As a percentage of total revenue, general and administrative
expenses decreased from 4.1% in the second quarter of 1997 to 3.7% in the second
quarter of 1998.
Interest income decreased $58,000 or 19.0% from $305,000 for the three months
ended June 30, 1997 to $247,000 for the three months ended June 30, 1998, due
primarily to the settlement of approximately $7,900,000 of real estate loans in
1998.
Equity in earnings of unconsolidated service companies represents the Operating
Partnership'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 Operating Partnership (see Note 4 to the consolidated condensed
financial statements). Equity in earnings of the Service Companies and their
subsidiaries decreased by $175,000 or 30.4% from $576,000 for the three months
ended June 30, 1997, to $401,000 for the three months ended June 30, 1998, due
primarily to lower profits from land and property sales in 1998. Equity in
earnings of unconsolidated real estate entities of $86,000 in 1998 represents
the Operating Partnership's 50% share of earnings from a single building equity
investment.
19
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1998, TO THE
SIX MONTHS ENDED JUNE 30, 1997
Property operating revenues (rental revenue plus tenant reimbursements)
increased $27,442,000 or 67.4% between periods. Of this increase, $19,033,000,
$7,342,000 and $1,067,000 were attributable to acquisition, development and core
properties, respectively. The increases relating to acquisition and development
properties were due to the acquisition of 76 properties (37 in 1997 and 39 in
1998) totaling approximately 6,152,000 square feet and the stabilization of 25
development properties (14 in 1997 and 11 in 1998) and two property expansions
(both in 1997) totaling approximately 2,630,000 square feet. Property operating
expenses increased $13,549,000 or 68.4% between periods due primarily to the
growth in the property portfolio resulting from the acquisition and development
properties discussed above.
Property operating revenues from core properties increased 2.7% despite the
impact of lost property operating revenues of approximately $73,000 from the
sale of a 96,000 square foot building in April 1997 and a decrease in overall
average occupancy of approximately 1.0%. Adjusted for the building sale
discussed above, property operating revenues from core properties increased
approximately 2.9%. This increase was due to both rental rate and reimbursement
increases between periods. Property operating expenses increased 3.5% due
primarily to increased utilities and maintenance expenses in 1998. Property
operating revenues less property operating expenses from core properties
increased 2.5%, exclusive of depreciation and amortization expense and after
adjusting for the building sale discussed above.
Interest expense increased by $3,371,000 or 33.7% from $10,006,000 for the six
months ended June 30, 1997, to $13,377,000 for the six months ended June 30,
1998, due primarily to increased mortgage interest of $3,188,000 related to
mortgage debt assumed in connection with certain of the Operating Partnership's
1997 and 1998 property acquisitions.
Operating Partnership general and administrative expenses increased by $862,000
or 49.2% from $1,752,000 for the six months ended June 30, 1997, to $2,614,000
for the six months ended June 30, 1998, due primarily to increased personnel and
related costs associated with the Operating Partnership's geographic expansion.
As a percentage of total revenue, general and administrative expenses decreased
from 4.2% in the first half of 1997 to 3.8% in the first half of 1998.
Equity in earnings of unconsolidated service companies represents the Operating
Partnership'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 Operating Partnership (see Note 4 to the consolidated condensed
financial statements). Equity in earnings of the Service Companies and their
subsidiaries decreased by $335,000 or 27.4% from $1,224,000 for the six months
ended June 30, 1997, to $889,000 for the six months ended June 30, 1998, due
primarily to lower net profits from the Operating Partnership's third-party
service businesses resulting from higher overhead expenses in 1998. The Service
Companies incurred higher overhead as they expanded their businesses in the
Operating Partnership's markets outside Atlanta, Georgia. Equity in earnings of
unconsolidated real estate entities of $154,000 in 1998 represents the Operating
Partnership's 50% share of earnings from a single building equity investment.
LIQUIDITY AND CAPITAL RESOURCES
The Operating Partnership continues to generate increasing cash flows from
operations. Cash provided by operating activities increased from $23,416,000
for the six months ended June 30, 1997, to $40,094,000 for the six months ended
June 30, 1998, due primarily to the growth in the Operating Partnership's
20
<PAGE>
operating income resulting from 25 development properties (14 in 1997 and 11 in
1998) and two property expansions (both in 1997) stabilized and from 76
buildings acquired (37 in 1997 and 39 in 1998).
The Operating Partnership's net cash flow from operations is currently
sufficient to meet the Operating Partnership's current operational needs and to
satisfy the Operating Partnership's current quarterly distributions on both its
common and preferred units, which are structured to ensure that the Company can
satisfy the dividend requirements necessary to maintain its status as a REIT.
Management believes that operating cash flows will continue to be adequate to
fund these requirements in 1998.
In the six months ended June 30, 1998, the Operating Partnership invested
$227,407,000 of cash in property acquisition, development and construction
activities. This compares to $80,647,000 for the same six month period in 1997.
This increased cash investment activity primarily reflects the increased cash
component of the Operating Partnership's building acquisition activity in 1998
compared to 1997 of approximately $97,011,000 with the remaining increase due to
increased development and land acquisition activity.
Financing for the Operating Partnership's property investment activities
primarily consisted of $94,141,000 of net proceeds from unsecured note
borrowings, $47,200,000 from common equity offerings and $104,890,000 from
Credit Facility borrowings in the first half of 1998, compared primarily to
$106,568,000 from a common equity offering in the first half of 1997. The debt
and equity components of the Operating Partnership's ongoing financing strategy
may differ from period-to-period based upon market conditions.
In addition to its operating cash flow, the Operating Partnership has aggregate
borrowing capacity of $245,000,000 under the Credit Facility (see Note 3 to the
consolidated condensed financial statements), which may be used, among other
things, to meet its operational obligations and to fund the distributions
necessary for the Company to meet its annual REIT dividend requirements. The
Operating Partnership currently intends to finance its development, construction
and acquisition activities primarily through borrowings under the Credit
Facility, and to periodically refinance such borrowings with longer term debt or
equity. On August 4, 1998, subsequent to the reduction of Credit Facility
borrowings from the net proceeds of approximately $98,300,000 from an unsecured
note issuance, the Company had available capacity under the Credit Facility of
approximately $108,400,000.
The Operating Partnership believes it has adequate liquidity, borrowing capacity
and sources of capital, including available capacity under its existing Credit
Facility and remaining capacity of approximately $650,000,000 under a universal
shelf registration statement, to meet its current operational requirements, to
fund annual principal repayments under existing mortgage notes payable, and to
fund its current development and acquisition activity. It is management's
expectation that the Operating Partnership 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. These
resources include the expansion of the available borrowing capacity under the
Credit Facility and other forms of debt and equity financing, in both public and
private markets. The Operating Partnership has unsecured investment grade
corporate debt ratings which may assist it in accessing the corporate debt
market in future periods. Future development and acquisition activities will be
undertaken by the Operating Partnership 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 an appropriate return on
investment has been internally approved. The Operating Partnership maintains
staffing levels sufficient to meet its existing construction and leasing
activities and capitalizes a portion of the costs relating to
21
<PAGE>
these activities to development projects and leasing transactions, respectively.
If market conditions warrant, the Operating Partnership may adjust staffing
levels to avoid a negative impact on the Operating Partnership's results of
operations.
Total consolidated debt amounted to $552,675,000 at June 30, 1998, including
borrowings under the Credit Facility of $187,810,000, mortgage notes payable of
$264,865,000 and unsecured notes of $100,000,000. Of the $264,865,000 of
mortgage indebtedness, $259,091,000 is fixed rate and $5,774,000 is variable
rate. The weighted average interest rate on the Operating Partnership's fixed
rate mortgage debt was 8.2% and on its variable rate mortgage debt was 3.9% at
June 30, 1998. The weighted average interest rate under the Credit Facility at
June 30, 1998 (excluding the effect of the interest rate swap agreements
described below) was 6.7%. The weighted average effective interest rate on the
Operating Partnership's fixed rate unsecured notes was 7.6% at June 30, 1998
(see Note 3). At June 30, 1998, the Operating Partnership had in place interest
rate swap agreements to fix the Operating Partnership's interest costs on
$50,000,000 of the Operating Partnership's Credit Facility borrowings. The
weighted average effective interest rate under the fixed swap arrangements was
approximately 7.7%. If interest rates under the Credit Facility, in excess of
the $50,000,000 discussed herein, and under the Operating Partnership's variable
rate mortgage debt, fluctuated by 1%, interest costs to the Operating
Partnership, before capitalization of interest, if any, based on outstanding
borrowings at June 30, 1998, would increase or decrease by approximately
$1,400,000 on an annualized basis. As discussed earlier, in August 1998, the
Operating Partnership reduced its Credit Facility borrowings by approximately
$98,300,000, thus reducing its exposure to interest rate changes.
Based on the outstanding balance of mortgage notes payable at June 30, 1998, the
weighted average interest rates on the mortgage notes with a final maturity in
each of the next five years were 7.4% in 1999, 8.7% in 2000, 7.4% in 2001, 8.2%
in 2002 and 8.3% in 2003.
At June 30, 1998, including total consolidated debt of $552,675,000 and
$2,000,000 of other notes payable of unconsolidated entities, the total debt
obligations of the Operating Partnership and its unconsolidated entities were
$554,675,000 or 36% of total market capitalization. At June 30, 1998 (based on
the closing price of the common stock of the Company of $31.625 on June 30,
1998), the 26,350,034 Common Units outstanding would have a total market value
of $833,320,000, 6,000,000 preferred units outstanding would have a total
liquidation value of $150,000,000 and the 350,000 Common Units issuable upon the
exercise of the Company's common stock warrants outstanding would have an
estimated market value of $1,400,000, resulting in a total equity value of
$984,720,000.
22
<PAGE>
CURRENT DEVELOPMENT AND ACQUISITION ACTIVITY
At June 30, 1998, the Operating Partnership had committed development and
acquisitions totaling approximately $362,306,000, representing 54 buildings and
one property expansion totaling 6,966,000 square feet. Including new
acquisition and development activity, net of closed acquisitions and the
stabilization of development properties, between July 1, 1998 and August 11,
1998, the Operating Partnership had, at August 11, 1998, committed development
and acquisitions totaling approximately $368,390,000, representing 54 buildings
and one property expansion totaling 7,005,000 square feet. Properties under
agreement to acquire as of August 11, 1998, consisted of seven buildings,
totaling 1,206,000 square feet, with a total expected cost of approximately
$57,495,000. Development properties as of August 11, 1998, consisted of 47
buildings and one property expansion, totaling 5,799,000 square feet, with a
total expected cost of approximately $310,895,000.
It is expected that such development and acquisition properties will stabilize
or be acquired as detailed below:
- --------------------------------------------------------------------------------
Square Estimated
Year Buildings Feet Cost(a)
- --------------------------------------------------------------------------------
1998 21 3,242,000 $167,690,000
1999 25 2,781,000 158,441,000
2000 8 982,000 42,259,000
- --------------------------------------------------------------------------------
54 7,005,000 $368,390,000
- --------------------------------------------------------------------------------
(a) For development properties represents the entire estimated cost of the
property at the estimated stabilization date.
In addition, the Operating Partnership has committed, subject to closing
conditions and the completion of due diligence procedures, to acquire
development land totaling $29,510,000 over various periods ranging up to five
years.
It is expected that future development and land acquisition expenditures will be
funded primarily through Credit Facility borrowings, refinanced as required
through new debt or equity offerings in both private and public markets, and
future acquisitions will be consummated primarily through a combination of cash
funded through borrowings under the Credit Facility, the issuance of Common
Units and the assumption of indebtedness, some of which will also be repaid
through borrowings under the Credit Facility.
The information provided above includes Forward-looking Statements 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 Operating Partnership. 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 Statements.
SUPPLEMENTAL DISCLOSURE OF FUNDS FROM OPERATIONS
The Operating Partnership 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 property, plus depreciation and
amortization of real property, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships
and joint
23
<PAGE>
ventures will be calculated to reflect funds from operations on the same basis.
Funds from operations is influenced not only by the operations of the
properties, but also by the capital structure of the Operating Partnership.
Accordingly, the Company expects that funds from operations will be one of the
factors considered by its Board of Directors in determining the amount of cash
distributions the Operating Partnership will pay to its unitholders. The
Operating Partnership computes funds from operations under the current NAREIT
definition by subtracting from net income the dividends to preferred unitholders
before making an adjustment for the non-cash items described above. 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." 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
Operating Partnership's operating performance or as an alternative to cash flow,
as defined by GAAP, as a measure of liquidity. Funds from operations presented
herein is not necessarily comparable to funds from operations presented by other
real estate companies due to the fact that not all real estate companies
calculate funds from operations in the same manner. However, the Operating
Partnership's funds from operations is comparable to the funds from operations
of real estate companies that use the current NAREIT definition.
The Operating Partnership'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 Operating
Partnership's statement of operations under GAAP. The "straight-line" rental
adjustment increased rental revenues by $403,000 and $174,000 for the three
months ended and $654,000 and $324,000 for the six months ended June 30, 1998
and 1997, respectively. In accordance with the NAREIT guidelines, the Operating
Partnership 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 $59,000 and $158,000 for the three months ended and
$478,000 and $448,000 for the six months ended June 30, 1998 and 1997,
respectively.
24
<PAGE>
For the three months ended June 30, 1998, funds from operations increased by
$3,548,000 or 38.6% to $12,737,000 compared to funds from operations of
$9,189,000 for the three months ended June 30, 1997. For the six months ended
June 30, 1998, funds from operations increased by $7,206,000 or 42.2% to
$24,271,000 compared to funds from operations of $17,065,000 for the six months
ended June 30, 1997. Funds from operations for the three and six months ended
June 30, 1998 and 1997 are detailed below (in thousands):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 JUNE 30, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income available to
Common Unitholders $ 7,930 $ 6,698 $15,248 $11,756
Depreciation and amortization 9,195 5,700 17,556 11,044
Depreciation and amortization -
unconsolidated entities 29 -- 44 10
Gain on sale of operating real estate asset -- (209) -- (209)
Gain on sale of operating real estate asset --
unconsolidated entities -- (76) -- (76)
- ------------------------------------------------------------------------------------------------------------------
Funds from operations available to
Common Unitholders $17,154 $12,113 $32,848 $22,525
- ------------------------------------------------------------------------------------------------------------------
Weighted average Common Units
Basic 25,261 20,963 25,568 19,791
Diluted(1) 26,450 21,163 25,761 20,008
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the weighted average Common Units outstanding plus the dilutive
effect of outstanding stock options. Common stock equivalents related to
outstanding stock options totaled 189,000 and 200,000 for the three months
ended and 193,000 and 217,000 for the six months ended June 30, 1998 and
1997, respectively. Outstanding Company common stock warrants were not
dilutive for the three and six months ended June 30, 1998.
25
<PAGE>
SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES AND LEASING COSTS
The following table details the Operating Partnership's capital expenditures and
leasing costs for the three and six months ended June 30, 1998 and 1997 (in
thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1998 JUNE 30, 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Building acquisitions(1)(2) $ 70,650 $32,060 $250,231 $ 49,758
Development and land acquisition activity(3)(4) 56,284 27,236 116,664 47,827
Non-revenue-producing building
improvements 414 266 792 362
Tenant improvement and leasing costs
on second-generation leases(5) 1,366 1,161 3,193 2,094
- -------------------------------------------------------------------------------------------------------------------
$128,714 $60,723 $370,880 $100,041
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Building acquisitions in 1998 included two buildings acquired while still
under development. Both of these buildings were stabilized at June 30,
1998.
(2) Reflects aggregate acquisition costs including the assumption of
indebtedness of $2,949,000 and the issuance of $3,264,000 of Common Units
in the three months ended June 30, 1998, and the assumption of indebtedness
of $83,846,000, the issuance of $33,088,000 of Common Units and other
assumed liabilities, net of other assets, of $4,224,000 in the six months
ended June 30, 1998. Reflects aggregate acquisition costs including the
assumption of indebtedness of $3,750,000 and the issuance of $13,946,000 of
Common Units in the six months ended June 30, 1997.
(3) Includes first-generation leasing costs on stabilized development
properties totaling $1,480,000 and $249,000 in the three months ended and
$2,023,000 and $1,346,000 in the six months ended June 30, 1998 and 1997,
respectively.
(4) Reflects aggregate development and leasing costs including the issuance of
$2,191,000 of Common Units and exclusive of the decrease in construction
payables of $1,260,000 in the three months ended June 30, 1998, and net of
the settlement of real estate loans of $7,898,000, the issuance of
$8,490,000 of Common Units and exclusive of the increase in construction
payables of $2,467,000 in the six months ended June 30, 1998. Reflects
aggregate development and leasing costs exclusive of the decrease in
construction payables of $1,119,000 in the three months ended June 30, 1997,
and including the assumption of indebtedness of $610,000, the issuance of
Common Units of $388,000 and exclusive of the decrease in construction
payables of $1,714,000 in the six months ended June 30, 1997.
(5) Includes second-generation leasing costs totaling $630,000 and $510,000 in
the three months ended and $1,437,000 and $1,067,000 in the six months ended
June 30, 1998 and 1997, respectively.
26
<PAGE>
The following table summarizes by period the Operating Partnership's capitalized
tenant improvement and leasing costs incurred in the renewal or re-leasing of
previously occupied space for the six months ended June 30, 1998, and the year
ended December 31, 1997, respectively. The information detailed below is
presented based on the date the tenants occupy the leased space.
CAPITALIZED TENANT IMPROVEMENTS AND LEASING COSTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
(In thousands, except per square foot information) JUNE 30, 1998 DEC. 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Properties
Re-leasing
Square feet re-leased 945 1,073
Capitalized tenant improvements and leasing commissions $1,973 $2,276
Capitalized tenant improvements and leasing commissions
per square foot $ 2.09 $ 2.12
RENEWAL
Square feet renewed 1,039 2,358
Capitalized tenant improvements and leasing commissions $ 794 $1,392
Capitalized tenant improvements and leasing commissions
per square foot $ 0.76 $ 0.59
TOTAL
Square feet 1,984 3,431
Capitalized tenant improvements and leasing commissions $2,767 $3,668
Capitalized tenant improvements and leasing commissions
per square foot $ 1.40 $ 1.07
- --------------------------------------------------------------------------------------------------
SUBURBAN OFFICE PROPERTIES
RE-LEASING
Square feet re-leased 32 69
Capitalized tenant improvements and leasing commissions $ 109 $ 493
Capitalized tenant improvements and leasing commissions
per square foot $ 3.43 $ 7.11
RENEWAL
Square feet renewed 65 134
Capitalized tenant improvements and leasing commissions $ 22 $ 267
Capitalized tenant improvements and leasing commissions
per square foot $ 0.34 $ 1.99
TOTAL
Square feet 97 203
Capitalized tenant improvements and leasing commissions $ 131 $ 760
Capitalized tenant improvements and leasing commissions
per square foot $ 1.34 $ 3.74
- --------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
SUPPLEMENTAL DISCLOSURE OF TENANT AND LEASE EXPIRATION INFORMATION
TENANTS
As of June 30, 1998, the Operating Partnership's properties were leased to 958
tenants including local, regional, national and international companies. The
Operating Partnership's 30 largest tenants (measured by annualized base rent for
leases in place in stabilized properties and in properties under development or
in lease-up where tenants were paying rent at June 30, 1998) occupy a total of
approximately 4,583,000 square feet and represent 23.4% of the annualized base
rent as shown in the table below.
30 LARGEST TENANTS MEASURED BY ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
% OF TOTAL
SQUARE NUMBER ANNUALIZED ANNUALIZED
RANK TENANT FEET OF LEASES BASE RENT(1) BASE RENT(1) STATE
- ---------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
1 Northern Telecom, Inc.(2) 401,349 8 $ 3,002,853 2.2% NC,TN
2 Scientific Atlanta, Inc. 573,951 11 2,616,594 2.0% GA
3 IKON Office Solutions, Inc. 177,000 4 1,468,400 1.1% GA
4 Interpath Communications, Inc. 89,630 2 1,416,842 1.1% NC
5 GTE Mobilnet Service Corporation 126,124 3 1,351,146 1.0% GA,NC
6 360 Communications 114,476 7 1,299,767 1.0% NC
7 Radian International LLC 90,159 2 1,173,802 0.9% NC
8 Anixter, Inc. 178,822 4 1,098,144 0.8% GA
9 Tech Data Corporation 138,996 1 1,009,111 0.7% FL
10 Square D Company 102,262 2 992,016 0.7% TN,FL
11 Honeywell, Inc. 70,016 3 963,953 0.7% GA
12 PPD Pharmaco, Inc. 89,130 5 934,271 0.7% NC
13 DeVry Inc. 64,981 1 928,269 0.7% GA
14 The Athlete's Foot Group, Inc. 162,651 1 924,069 0.7% GA
15 Merisel, Inc. 142,487 2 900,147 0.7% FL
16 Ingram-Micro, Inc. 193,973 4 887,002 0.7% GA,FL
17 Fisher Scientific Company 223,219 1 875,019 0.7% GA
18 Moore U.S.A., Inc. 200,515 1 812,086 0.6% TX
19 National Data Corporation 50,283 4 786,777 0.6% GA
20 Data General Corporation 86,000 1 775,720 0.6% GA
21 Saab Cars U.S.A., Inc. 63,625 3 749,509 0.6% GA
22 Vanstar Corporation 86,880 5 740,449 0.6% GA
23 Reckitt & Colman, Inc. 313,900 2 733,120 0.5% GA
24 AT&T Corp. 62,271 4 721,880 0.5% NC,GA,TN
25 Quadram Corp./Intelligent Systems 137,100 1 719,775 0.5% GA
26 Best Buy Stores, L.P. 222,643 1 703,552 0.5% GA
27 United Healthcare Services, Inc. 72,991 2 699,856 0.5% GA,SC
28 Tridom Corporation 87,017 3 690,045 0.5% GA
29 Ahlstrom Recovery, Inc. 62,893 2 681,698 0.5% GA
30 Sally Foster, Inc. 197,200 2 673,233 0.5% SC
- ---------------------------------------------------------------------------------------------------------------
4,582,544 92 $31,329,105 23.4%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized cash base rent net of rental concessions, if any, based on
leases in place for stabilized properties and in properties under
development or in lease-up where tenants were paying rent as of June 30,
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 Operating Partnership 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 Operating Partnership.
28
<PAGE>
LEASE EXPIRATIONS
The following tables show scheduled lease expirations for the Operating
Partnership's total property portfolio, for its industrial property portfolio
and for its suburban office portfolio, respectively, based on leases under which
tenants were paying rent in both stabilized and pre-stabilized properties as of
June 30, 1998, assuming no exercise of renewal options or termination rights, if
any:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SQUARE ANNUALIZED % OF TOTAL
YEAR OF FEET % OF TOTAL BASE RENT(1) ANNUALIZED
EXPIRATION (IN THOUSANDS) SQUARE FEET (IN THOUSANDS) BASE RENT(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TOTAL PORTFOLIO
1998 2,424 11.1% $ 13,455 9.6%
1999 2,396 10.9% 15,149 10.8%
2000 3,530 16.1% 21,525 15.4%
2001 2,546 11.6% 15,595 11.2%
2002 2,969 13.6% 23,986 17.2%
2003 2,344 10.7% 17,809 12.7%
2004 1,262 5.8% 7,871 5.6%
2005 1,027 4.7% 3,667 2.6%
2006 769 3.5% 3,977 2.8%
2007 1,318 6.0% 7,917 5.7%
2008 563 2.6% 3,586 2.6%
2009 20 0.1% 157 0.1%
2010 65 0.3% 90 0.1%
2011 350 1.6% 1,784 1.3%
2012 and later 319 1.4% 3,233 2.3%
- -------------------------------------------------------------------------------------------------------------------
21,902(2) 100.0% $139,801 100.0%
- -------------------------------------------------------------------------------------------------------------------
INDUSTRIAL PROPERTIES
1998 2,181 11.0% $ 10,043 9.2%
1999 2,209 11.2% 12,970 11.8%
2000 3,288 16.6% 18,134 16.5%
2010 2,433 12.3% 13,954 12.7%
2002 2,550 12.9% 16,920 15.4%
2003 2,052 10.4% 12,928 11.8%
2004 1,150 5.8% 5,995 5.5%
2005 996 5.0% 3,207 2.9%
2006 748 3.8% 3,608 3.3%
2007 1,262 6.4% 7,327 6.7%
2008 477 2.4% 2,056 1.9%
2009 20 0.1% 157 0.1%
2010 0 0.0% 0 0.0%
2011 293 1.5% 1,704 1.6%
2012 and later 104 0.6% 701 0.6%
- -------------------------------------------------------------------------------------------------------------------
19,763 100.0% $109,704 100.0%
- -------------------------------------------------------------------------------------------------------------------
(Table continued on following page)
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SQUARE ANNUALIZED % OF TOTAL
YEAR OF FEET % OF TOTAL BASE RENT(1) ANNUALIZED
EXPIRATION (IN THOUSANDS) SQUARE FEET (IN THOUSANDS) BASE RENT(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SUBURBAN
OFFICE PROPERTIES
1998 230 13.4% $ 3,216 12.0%
1999 140 8.1% 1,757 6.6%
2000 190 11.1% 2,833 10.6%
2001 110 6.4% 1,587 5.9%
2002 416 24.2% 7,007 26.2%
2003 284 16.5% 4,687 17.5%
2004 104 6.1% 1,700 6.4%
2005 26 1.5% 382 1.4%
2006 17 1.0% 310 1.2%
2007 56 3.3% 590 2.2%
2008 79 4.6% 1,530 5.7%
2009 0 0.0% 0 0.0%
2010 0 0.0% 0 0.0%
2011 0 0.0% 0 0.0%
2012 and later 65 3.8% 1,164 4.3%
- -------------------------------------------------------------------------------------------------------------------
1,717 100.0% $26,763 100.0%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized base rent represents the annualized monthly base rental at
the time of lease expiration.
(2) The total square footage as of June 30, 1998, is comprised of
approximately 21,388,000 square feet of leases in in-service properties,
and approximately 514,000 square feet of leases in properties under
development or in lease-up where tenants are paying rent as of June 30,
1998.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, SFAS 131, "Disclosures About Segments of an Enterprise and Related
Information" was issued prescribing new guidelines for the reporting of segment
data. SFAS 131 will apply to all public, for-profit companies and will be
effective for the Operating Partnership beginning with the fourth quarter and
year ending December 31, 1998. The Operating Partnership is reporting under
prior accounting standards, but may be required to provide certain segment
disclosures under SFAS 131. The Operating Partnership continues to evaluate the
disclosure provisions of SFAS 131 and plans to adopt SFAS 131 in it financial
statements for the year ending December 31, 1998.
In March 1998, Emerging Issues Task Force Issue No. 97-11, "Accounting for
Internal Costs Relating to Real Estate Property Acquisition," was issued
prescribing that internal acquisition costs relating to the acquisition of
operating real estate properties should be expensed as incurred. Previously,
the Operating Partnership capitalized such costs to its acquisition properties.
The implementation of this new guidance will not have a material impact on the
Operating Partnership's financial statements.
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 be effective for the Operating Partnership beginning January 1, 2000. The
Operating Partnership is evaluating the provisions of SFAS 133 and plans to
adopt SFAS 133 in its financial statements beginning in 2000.
30
<PAGE>
IMPACT OF INFLATION
In the last three years, inflation has not had a significant impact on the
Operating Partnership because of the relatively low inflation rate.
Substantially all tenant leases do, however, contain provisions designed to
protect the Operating Partnership from the impact of inflation. Most of the
leases require tenants to pay their share of operating expenses, including
common area maintenance, real estate taxes and insurance, thereby reducing the
Operating Partnership'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 Operating Partnership 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 Operating Partnership would be able to replace existing leases with new
leases at higher base rentals.
OTHER MATTERS
The Operating Partnership continues to assess the potential impact of the year
2000 on the processing of date-sensitive information by the Operating
Partnership's hardware and software information systems. The year 2000 issue is
the result of many computer programs recognizing a date ending with "00" as the
year 1900 rather than the year 2000, causing potential system failures or
miscalculations which could result in disruptions of normal business operations.
The Operating Partnership's primary financial and operating systems are supplied
by third-party suppliers. Based on communications with these third-party
suppliers, evaluations of third-party systems and internal assessments of in-
house information systems, the costs of addressing potential year 2000 issues
are not expected to have a material adverse impact on the Operating
Partnership's financial position, results of operations or cash flows in future
periods. In fact, most of the Operating Partnership's software systems are
either currently year 2000 compliant or will be compliant well in advance of
January 1, 2000. However, such conclusions are based upon communications,
evaluations and assessments to date, and if future negative events occur which
can not be resolved in a timely manner, it could results in material financial
risk to the Operating Partnership. To date, the Operating Partnership has not
incurred any material incremental costs relating to this matter.
Additionally, the Company is assessing the potential impact of the year 2000
issue resulting from the potential failure of its key building mechanical
systems and the failure of its major vendors, suppliers and tenants to be year
2000 compliant. Any significant failures in these areas could result in a
material disruption of the Company's business. The Company anticipates the
completion of its assessments and evaluations in these areas by early 1999. The
Operating Partnership plans to allocate the time and resources necessary to
timely resolve any significant year 2000 issues.
31
<PAGE>
PART II - OTHER INFORMATION
ITEM 2 - CHANGE IN SECURITIES
During the three months ended June 30, 1998, the Operating Partnership
issued a total of 171,142 Common Units, in full or partial consideration
for the acquisition of real estate properties. The aggregate value of
the properties acquired by the Operating Partnership in exchange for such
Common Units was approximately $5,455,000. Common Units are convertible
by their holders into shares of Company common stock on a one-for-one
basis, or into cash, at the Company's option. 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 agreements. Certain of these
Common Units are subject to registration rights and lock-up agreements
which generally restrict the disposition of the Common Units until the
designated lock-up periods expire.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 - 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.
10.2 - 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.
10.3* - Asset Purchase Agreement dated April 23, 1998, among MEPC PLC
and Weeks Realty, L.P., and certain other purchases as
described therein.
10.4 - Tenth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated April 3,
1998.
10.5 - Eleventh Amendment to Seconded Amended and Restated Agreement
of Limited Partnership of Weeks Realty, L.P., dated May 26,
1998.
10.6 - Twelfth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated June 3, 1998.
27.1 - Financial data schedule.
(b) Reports on Form 8-K
Form 8-K dated June 16, 1998 and filed on June 16, 1998, reporting the
acquisition of real estate properties on June 1, 1998.
* Filed as an exhibit to the Operating Partnership's Current Report on Form
8-K dated June 16, 1998.
32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEEKS REALTY, L.P.
---------------------------------
(Registrant)
By: Weeks GP Holdings, Inc.,
As General Partner
August 14, 1998 /s/ A. R. Weeks, Jr.
---------------------------------
A. R. Weeks, Jr.
Chairman of the Board and
Chief Executive Officer
August 14, 1998 /s/ David P. Stockert
----------------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
33
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- --------------------------------------------------------------------------------
10.1 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.
10.2 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.
10.3* Asset Purchase Agreement dated April 23, 1998, among MEPC PLC and
Weeks Realty, L.P., and certain other purchases as described
therein.
10.4 Tenth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated April 3, 1998.
10.5 Eleventh Amendment to Seconded Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated May 26, 1998.
10.6 Twelfth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated June 3, 1998.
27.1 Financial data schedule.
* Filed as an exhibit to the Operating Partnership's Current Report on Form 8-K
dated June 16, 1998.
34
<PAGE>
EXHIBIT 10.1
- --------------------------------------------------------------------------------
SYNDICATED CREDIT 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 AGENT,
IN THE MAXIMUM PRINCIPAL AMOUNT OF
$225,000,000
July 1, 1998
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
<S> <C>
ARTICLE IDEFINITIONS AND CONSTRUCTION.................... 1
1.01 DEFINED TERMS............................. 1
"ADVANCE REQUEST"......................... 2
"AFFECTED BANK"........................... 2
"AFFILIATE"............................... 2
"AGENT"................................... 2
"AGREEMENT"............................... 2
"ANNUALIZED NOI".......................... 2
"APPLICABLE MARGIN"....................... 2
"ASSIGNEE"................................ 2
"ASSIGNMENT AND ACCEPTANCE"............... 3
"AUTHORIZED SIGNATORY".................... 3
"AVAILABLE CREDIT"........................ 3
"BANKS"................................... 3
"BASE RATE"............................... 3
"BASE RATE LOAN".......................... 3
"BBA"..................................... 3
"BREAKAGE COSTS".......................... 3
"BREAKAGE PERIOD"......................... 3
"CAPITALIZED LEASE OBLIGATION"............ 3
"CHANGE IN CONTROL,"...................... 4
"CODE".................................... 4
"COMMITMENT".............................. 4
"COMMITMENT SHARE"........................ 4
"CONSOLIDATED ENTITY"..................... 5
"CONTROL"................................. 5
"DEBT".................................... 5
"DEBT RATING"............................. 5
"DEBT RATING TABLE"....................... 6
"DEFAULT"................................. 6
"DEVELOPMENT IN PROGRESS"................. 6
"DEVELOPMENT IN PROGRESS VALUE"........... 6
"DIRECT FINANCING LEASE".................. 6
"DIRECT FINANCING LEASE VALUE"............ 6
"DOLLARS" or $............................ 6
"DOMESTIC BUSINESS DAY"................... 6
"EMPLOYEE BENEFIT PLAN"................... 7
"ENVIRONMENTAL LAWS"...................... 7
"ERISA"................................... 7
"EURO-DOLLAR BUSINESS DAY"................ 7
"EXPIRATION DATE"......................... 7
"EXTENSION DATE".......................... 7
"FACILITY AMOUNT"......................... 7
"FEDERAL FUNDS RATE"...................... 7
"FIXED CHARGES"........................... 7
"FIXED CHARGE COVERAGE RATIO"............. 7
"FLOATING RATE"........................... 8
"FULL RECOURSE COVENANTS"................. 8
"FUNDS FROM OPERATIONS"................... 8
<PAGE>
"GAAP".................................... 8
"GUARANTY" or AGUARANTEE,"................ 8
"INCOME".................................. 9
"INCOME PROPERTY"......................... 9
"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"........................ 10
"INTEREST PERIOD"......................... 10
"KEY EXECUTIVES".......................... 10
"LAND HELD FOR FUTURE DEVELOPMENT"........ 11
"LAND VALUE".............................. 11
"LENDING OFFICE".......................... 11
"LEVERAGE RATIO".......................... 11
"LIBOR RATE".............................. 11
"LIBOR RATE LOAN"......................... 11
"LIEN".................................... 11
"LOAN DOCUMENTS".......................... 11
"LOANS"................................... 11
"MANDATE LETTER".......................... 12
"MARGIN STOCK"............................ 12
"MATERIAL VENTURE"........................ 12
"MEASUREMENT DATE"........................ 12
"MEASUREMENT PERIOD"...................... 12
"MINORITY INTERESTS"...................... 12
"MOODY'S"................................. 12
"MORTGAGE"................................ 12
"MORTGAGE DEBT"........................... 12
"MPPAA"................................... 12
"MULTIEMPLOYER PLAN"...................... 12
"1996 CREDIT AGREEMENT"................... 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
"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
<PAGE>
"PRIME RATE".............................. 18
"PROPERTY"................................ 18
"PROPERTY INTEREST(S)".................... 18
"REFUNDING LOAN".......................... 18
"RELATED PARTIES"......................... 18
"REPORTABLE EVENT"........................ 18
"REQUIRED BANKS".......................... 18
"RESTRICTED INVESTMENT"................... 18
"REVOLVING CREDIT FACILITY"............... 19
"SEC"..................................... 19
"STANDARD AND POOR'S"..................... 19
"SUBSIDIARY".............................. 19
"SUBSTANCES".............................. 20
"SYNDICATED LOAN GUARANTIES".............. 20
"SWING BANK".............................. 20
"SWING CREDIT AGREEMENT".................. 20
"TAXES"................................... 20
"TERMINATING BANK"........................ 20
"TOTAL ANNUALIZED NOI".................... 20
"TOTAL ASSET VALUE"....................... 20
"TOTAL DEBT".............................. 20
"TOTAL INTEREST BEARING DEBT"............. 21
"TOTAL SECURED DEBT"...................... 21
"TOTAL UNSECURED DEBT".................... 21
"UNENCUMBERED PROPERTY VALUE"............. 21
1.02 ACCOUNTING ATERMS AND DETERMINATIONS...... 21
1.03 REFERENCES................................ 21
1.04 USE OF DEFINED TERMS...................... 22
1.05 TERMINOLOGY............................... 22
ARTICLE II REVOLVING CREDIT FACILITY...................... 22
2.01 SYNDICATED LOANS........................... 22
2.02 EXPIRATION; EXTENSION...................... 22
2.03 RATE OF INTEREST ON LOANS.................. 24
2.04 NOTICE AND MANNER OF BORROWING............. 24
2.05 AUTOMATIC CONVERSION....................... 26
2.06 INTEREST PAYMENTS ON LOANS................. 26
2.07 MATURITY................................... 26
2.08 NOTES...................................... 26
2.09 USE OF LOAN PROCEEDS....................... 26
2.10 PREPAYMENT OF LOANS........................ 27
2.11 GENERAL PROVISIONS AS TO PAYMENTS.......... 28
2.12 DEFAULT RATE OF INTEREST................... 31
2.13 FEES....................................... 31
(a) ORIGINATION FEE................ 31
(b) EXTENSION FEES................. 31
(c) FACILITY FEE................... 31
2.14 INCREASED COSTS; ILLEGALITY; CAPITAL
ADEQUACY................................... 32
2.15 CALCULATION OF COMPENSATION TO BANKS;
REQUIRED TRANSFER BY BANKS................. 33
2.16 FACILITY AMOUNT REDUCTION OR TERMINATION... 34
<PAGE>
ARTICLE III THE AGENT..................................... 34
3.01 APPOINTMENT; POWERS AND IMMUNITIES......... 34
3.02 RELIANCE BY AGENT.......................... 35
3.03 DEFAULTS................................... 35
3.04 RIGHTS OF AGENT AS A BANK.................. 36
3.05 INDEMNIFICATION............................ 36
3.06 CONSEQUENTIAL DAMAGES...................... 36
3.07 PAYEE OF NOTE TREATED AS OWNER............. 36
3.08 NONRELIANCE ON AGENT AND OTHER BANKS....... 37
3.09 FAILURE TO ACT............................. 37
3.10 RESIGNATION OR REMOVAL OF AGENT............ 37
3.11 DIRECTIONS TO AGENT........................ 38
ARTICLE IV CONDITIONS TO REVOLVING CREDIT FACILITY........ 38
4.01 BORROWER'S AUTHORITY....................... 38
4.02 GUARANTORS' AUTHORITY...................... 39
4.03 SATISFACTORY FINANCIAL CONDITION........... 39
4.04 REPRESENTATIONS AND WARRANTIES............. 39
4.05 PAYMENT OF FEES............................ 39
4.06 EXTENSION OF 1996 CREDIT AGREEMENT......... 39
4.07 NOTES...................................... 40
4.08 SYNDICATED LOAN GUARANTIES................. 40
4.09 CERTIFICATES OF INCUMBENCY................. 40
4.10 OTHER DOCUMENTATION........................ 40
4.11 REIT STATUS................................ 40
4.12 OPINION OF COUNSEL......................... 40
4.13 KEY EXECUTIVES............................. 40
4.14 REPAYMENT OF DEBT.......................... 40
4.15 GENERAL CONDITIONS......................... 40
ARTICLE V CONDITIONS TO LOANS............................. 40
5.01 REPRESENTATIONS AND WARRANTIES............. 40
5.02 AVAILABLE CREDIT........................... 41
5.03 NO MATERIAL ADVERSE CHANGE................. 41
5.04 FULL COMPLIANCE............................ 41
5.05 NO DEFAULT; NO CLAIMS...................... 41
5.06 INCUMBENCY................................. 41
5.07 ADVANCE REQUEST............................ 41
ARTICLE VI ENVIRONMENTAL MATTERS.......................... 41
6.01 REPRESENTATIONS, WARRANTIES................ 41
6.02 CONTINUED COMPLIANCE....................... 42
ARTICLE VII REPRESENTATIONS AND WARRANTIES................ 43
7.01 RELATED PARTIES............................ 43
7.02 CORPORATE ORGANIZATION..................... 43
7.03 LIMITED PARTNERSHIP ORGANIZATION........... 43
7.04 GENERAL PARTNERSHIP ORGANIZATION........... 43
7.05 LIMITED LIABILITY COMPANY ORGANIZATION..... 44
7.06 POWER AND AUTHORITY........................ 44
7.07 ENFORCEABILITY............................. 44
7.08 VIOLATION OF ORGANIZATIONAL DOCUMENTS...... 44
7.09 CONFLICTS.................................. 44
7.10 TITLE...................................... 44
<PAGE>
7.11 EXISTENCE OF LIENS......................... 45
7.12 FINANCIAL CONDITION........................ 45
7.13 LITIGATION................................. 45
7.14 FOREIGN QUALIFICATIONS..................... 45
7.15 TAX OBLIGATIONS............................ 45
7.16 CAPITAL STOCK.............................. 46
7.17 INSOLVENCY................................. 46
7.18 MARGIN STOCK............................... 46
7.19 FRANCHISES, LICENSES, ETC.................. 46
7.20 ERISA...................................... 46
7.21 FINANCIAL STATEMENTS....................... 47
7.22 MISREPRESENTATIONS......................... 48
ARTICLE VIII AFFIRMATIVE COVENANTS........................ 48
8.01 LOCATION OF RECORDS........................ 48
8.02 INSPECTION................................. 48
8.03 FINANCIAL AND OTHER INFORMATION............ 48
8.04 GOVERNMENTAL OBLIGATIONS................... 50
8.05 INSURANCE.................................. 50
8.06 OPERATION OF PROPERTIES, INSPECTION........ 51
8.07 PRESERVATION OF BUSINESS................... 51
8.08 MAINTENANCE OF RECORDS..................... 52
8.09 NOTICE OF ADVERSE CHANGES.................. 52
8.10 NOTICE OF LITIGATION....................... 52
8.11 PAYMENT OF OBLIGATIONS..................... 52
8.12 REIT STATUS................................ 53
8.13 COMPLIANCE WITH LAWS....................... 53
8.14 NOTICE OF EXERCISE OF REMEDIES UNDER
MORTGAGES.................................. 53
8.15 MANAGEMENT................................. 53
8.16 DEPOSIT ACCOUNTS........................... 53
8.17 INTERCOMPANY TRANSACTIONS.................. 53
8.18 DEBT RATING................................ 53
ARTICLE IX NEGATIVE COVENANTS............................. 54
9.01 GUARANTIES................................. 54
9.02 MERGER, CONSOLIDATION, ETC................. 54
9.03 DISPOSITION OF ASSETS...................... 54
9.04 JUDGMENTS.................................. 55
9.05 INDEBTEDNESS OF WEEKS CORPORATION AND
BORROWER................................... 55
9.06 INDEBTEDNESS OF SUBSIDIARIES............... 55
9.07 SECURED INDEBTEDNESS....................... 55
9.08 INDEBTEDNESS AND ACTIVITIES OF GP HOLDINGS
AND LP HOLDINGS............................ 56
9.09 DIVIDENDS AND DISTRIBUTIONS................ 56
9.10 ENVIRONMENTAL MATTERS...................... 56
9.11 CHANGE IN CONTROL.......................... 56
9.12 ADVANCES, LOANS AND OTHER RESTRICTED
INVESTMENTS................................ 56
9.13 LIENS...................................... 57
ARTICLE X FINANCIAL COVENANTS............................. 57
<PAGE>
10.01 MINIMUM INTEREST COVERAGE RATIO............ 57
10.02 MINIMUM FIXED CHARGE COVERAGE RATIO........ 57
10.03 MAXIMUM LEVERAGE........................... 57
10.04 MAXIMUM UNSECURED DEBT..................... 57
10.05 MAXIMUM SECURED DEBT....................... 57
10.06 MINIMUM DEBT YIELD......................... 57
ARTICLE XI DEFAULT........................................ 58
11.01 NONPAYMENT OF OBLIGATIONS.................. 58
11.02 OTHER MONETARY DEFAULTS.................... 58
11.03 DEFAULTS OF MATERIAL VENTURES.............. 58
11.04 BREACH OF WARRANTY OR REPRESENTATION....... 58
11.05 BREACH OF COVENANTS........................ 59
11.06 WEEKS REALTY PARTNERSHIP AGREEMENT
DEFAULTS................................... 59
11.07 PERMITTED MORTGAGE DEBT DEFAULTS........... 59
11.08 VOLUNTARY INSOLVENCY PROCEEDINGS........... 59
11.09 INVOLUNTARY INSOLVENCY PROCEEDINGS......... 59
11.10 VOLUNTARY RECEIVERSHIP..................... 59
11.11 INVOLUNTARY RECEIVERSHIP................... 59
11.12 ASSIGNMENT FOR THE BENEFIT OF CREDITORS.... 60
11.13 INSOLVENCY................................. 60
11.14 INTEREST RATE AGREEMENTS................... 60
11.15 SYNDICATED LOAN GUARANTIES................. 60
11.16 SWING CREDIT AGREEMENT..................... 60
ARTICLE XII RIGHTS AND REMEDIES........................... 60
12.01 PRIOR TO DEFAULT........................... 60
12.02 UPON DEFAULT............................... 60
12.03 CURE OF DEFAULTS........................... 61
12.04 COSTS OF COLLECTION........................ 61
12.05 SETOFF..................................... 62
12.06 SHARING OF COLLECTIONS..................... 62
ARTICLE XIII FEES AND EXPENSES; INDEMNIFICATION........... 63
13.01 FEES AND EXPENSES.......................... 63
13.02 AGENT'S ADMINISTRATION FEE................. 63
13.03 AMENDMENT, WAIVER AND PREPAYMENT FEES...... 63
13.04 INDEMNIFICATION............................ 64
ARTICLE XIV MISCELLANEOUS................................. 64
14.01 CUMULATIVE RIGHTS; NON-WAIVER.............. 64
14.02 NO OBLIGATION TO THIRD PARTIES............. 65
14.03 SUCCESSORS AND ASSIGNS..................... 65
14.04 GOVERNING LAW.............................. 67
14.05 SURVIVAL OF OBLIGATIONS.................... 67
14.06 ENTIRE AGREEMENT........................... 67
14.07 INVALIDITY................................. 67
14.08 HEADINGS................................... 68
14.09 CHANGES IN FORMS........................... 68
14.10 NOTICES.................................... 68
14.11 AMENDMENTS AND WAIVERS..................... 69
14.12 TIME OF THE ESSENCE........................ 70
14.13 EXECUTION IN COUNTERPARTS.................. 70
14.14 ATTORNEYS' FEES............................ 71
14.15 CONFIDENTIALITY............................ 71
<PAGE>
14.16 REPRESENTATIONS BY BANKS................... 71
14.17 MISCELLANEOUS.............................. 71
<PAGE>
TABLE OF EXHIBITS AND SCHEDULES
-------------------------------
EXHIBIT DESCRIPTION
- ------- -----------
A Form of Advance Request
B Form of Assignment and Acceptance
C Form of Syndicated Master Note
D Form of Syndicated Loan Guaranty
E Form of Certificate of Chief Financial Officer
SCHEDULE DESCRIPTION
- -------- -----------
1 Initial Permitted Mortgage Debt
7.01 Related Parties
9.06 Indebtedness for Money Borrowed
<PAGE>
SYNDICATED CREDIT AGREEMENT
---------------------------
THIS SYNDICATED CREDIT AGREEMENT (the "AGREEMENT") is made and entered into
---------
as of July 1, 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"), and WACHOVIA BANK,
----- ----
N.A., a national banking association ("WACHOVIA"), in its capacity as Banks'
--------
Agent hereunder (including any successor, "AGENT").
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower desires to borrow, repay and reborrow money from Banks,
on the terms and conditions set forth herein; and
WHEREAS, Banks are willing to make loans to Borrower, in amounts which do
not exceed at any one time the principal sum outstanding of $225,000,000.00, 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 loans 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 loans 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;
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:
<PAGE>
ARTICLE I
---------
DEFINITIONS AND CONSTRUCTION
----------------------------
1.01 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:
"ADVANCE REQUEST" shall mean a request for a Loan in the form of Exhibit A,
--------------- ---------
which is attached hereto and incorporated herein by reference.
"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.
"AGENT" shall mean Wachovia, in its capacity as the agent for Banks in
-----
accordance with the agency established pursuant to the provisions of Article
III.
"AGREEMENT" shall mean this Syndicated Credit 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 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 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.
-2-
<PAGE>
"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, which is attached hereto and incorporated herein by reference.
---------
"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.
"AVAILABLE CREDIT" shall mean the amount, if any, by which the Facility
----------------
Amount exceeds the aggregate principal amount of the Loans.
"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 LOAN" shall mean a Loan for which Borrower shall have elected
--------------
the Floating Rate option in accordance with the provisions of Section 2.04 or
for which the interest rate shall have been automatically converted to the
Floating Rate in accordance with the provisions of Section 2.05.
"BBA" shall mean the British Bankers Association.
---
"BREAKAGE COSTS" shall mean, with respect to any outstanding principal
--------------
amount of any LIBOR Rate Loan 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 Agent) Banks would have paid on deposits in Dollars of comparable
amounts for a term comparable to 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
-3-
<PAGE>
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 Facility Amount on such date.
"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
-4-
<PAGE>
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.
"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, 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.
-5-
<PAGE>
"DEBT RATING TABLE" shall mean the following:
-----------------
</TABLE>
<TABLE>
<CAPTION>
SENIOR
PERFORMANCE UNSECURED
PRICING DEBT RATING APPLICABLE FACILITY
LEVEL S&P/MOODY'S MARGIN FEE
- -----------------------------------------------------------------------
<S> <C> <C> <C>
I Above 0.675% 0.125%
BBB+/Baal
- -----------------------------------------------------------------------
II BBB+/Baa1 0.675% 0.150%
- -----------------------------------------------------------------------
III BBB/Baa2 .800% 0.150%
- -----------------------------------------------------------------------
IV BBB-/Baa3 .950% 0.150%
- -----------------------------------------------------------------------
Below
V BBB-/Baa3 1.150% 0.150%
- -----------------------------------------------------------------------
</TABLE>
"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.
"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
-6-
<PAGE>
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.
"EXPIRATION DATE" shall mean December 31, 2000, or such later December 31
---------------
to which the expiration of the Revolving Credit Facility may be extended from
time to time pursuant to the provisions of Section 2.02.
"EXTENSION DATE" shall have the meaning ascribed to such term in Section
--------------
2.02.
"FACILITY AMOUNT" shall mean $225,000,000.
---------------
"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 Agent on such day on such
transactions, as determined by Agent.
"FIXED CHARGES" shall mean the sum of (a) Interest Expense, and (b)
-------------
Preferred Dividends.
"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).
-7-
<PAGE>
"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.
"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, 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.
"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 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,
-------
-8-
<PAGE>
determined on a consolidated basis in accordance with GAAP, before deducting (a)
------
dividends on preferred stock, (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.
"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.
-9-
<PAGE>
"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:
---------------
(a) With respect to each LIBOR Rate Loan, the period commencing on the
date of such Loan and ending on the numerically corresponding day in the first,
second, third or sixth month thereafter, as Borrower may elect in the applicable
Advance Request; provided that:
--------
(i) 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;
(ii) 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
(iii) no Interest Period may be selected which would end after
the Expiration Date; and
(b) With respect to each Base Rate Loan, the period commencing on the
date of such Loan and ending on the earlier of 30 days thereafter or the
Expiration Date; provided that:
--------
(i) 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
(ii) no Interest Period may be selected which would end after
the Expiration Date.
"KEY EXECUTIVES" shall mean the principal officers of Weeks Corporation.
--------------
-10-
<PAGE>
"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, 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
Telerate (Screen 3750) (or, in the absence or unavailability of Telerate (Screen
3750), as such rate is determined by any other comparable interest rate
reporting service available to Agent) for the second Euro-Dollar Business Day
immediately preceding the first day of the Interest Period, plus the Applicable
Margin, as said rate may be adjusted by Agent from time to time as necessary to
compensate Banks for any loss of yield to Banks on LIBOR Rate Loans 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 LOAN" shall mean a Loan for which Borrower shall have elected
---------------
the LIBOR Rate option in accordance with the provisions of Section 2.04.
"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 DOCUMENTS" shall mean this Agreement, the Notes, the Syndicated 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.
"LOANS" shall mean all advances made by Banks ratably in
------
-11-
<PAGE>
accordance with their respective Commitments under the Revolving Credit
Facility. A "LOAN" shall mean an individual advance made by Banks ratably in
-----
accordance with their Commitments under the Revolving Credit Facility.
"MANDATE LETTER" shall mean that certain Mandate Letter dated December 17,
--------------
1997, 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.
"MEASUREMENT DATE" shall mean March 31, 1998, and each June 30, September
----------------
30, December 31 and March 31 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.
"1996 CREDIT AGREEMENT" shall mean that certain Credit Agreement, dated
---------------------
September 25, 1996, by and among Borrower, Weeks Construction Services, Inc.
("Construction"), Weeks Realty Services, Inc. ("Realty"), Weeks Development
- -------------- ------
Partnership ("Development") and Weeks Financing Limited Partnership
-----------
("Financing"), as borrowers, Weeks Realty, L.P., as Borrowers'
- ------------
-12-
<PAGE>
Agent, Borrower and Weeks Corporation, as guarantors, each Bank that was or
became a signatory thereto, as lenders, and Wachovia, as Swing Lender and as
Banks' Agent, as amended to, among other things, add GP Holdings and LP Holdings
as guarantors thereunder.
"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 March 31, 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 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 March 31, 1998.
"NOTE" shall mean a Syndicated Master Note, made by Borrower payable to the
----
order of a Bank and in the form of Exhibit C, evidencing the Loans made by such
---------
Bank to Borrower, and any extension, renewal, modification or restatement
thereby made by Borrower to the order of such Bank. "NOTES" shall mean all such
-----
Syndicated Master Notes.
"NOTES RECEIVABLE VALUE" shall mean the book value, determined in
----------------------
accordance with GAAP, of those promissory notes
-13-
<PAGE>
which are from third parties to Weeks Corporation or any Consolidated Entity and
are secured by Mortgages.
"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
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 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 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: July 1, 1998, and the first day
of each calendar quarter (October 1, January 1, April 1 and July 1) thereafter
as of which day the Debt Rating, as determined by Agent, shall be either (i)
lower than the Debt Rating, as determined by Agent, in effect on the immediately
preceding Performance Pricing Determination Date, or (ii) higher than the Debt
Rating, as determined by Agent, in effect on the immediately preceding
Performance Pricing Determination Date, if Borrower shall have given 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
-14-
<PAGE>
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 Loans.
"PERMITTED ENCUMBRANCES" shall mean any or all of the following:
----------------------
(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;
(c) 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;
(d) 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
-15-
<PAGE>
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;
(e) 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;
(f) rights reserved to or vested in any governmental agency to control
or regulate the use of any real property;
(g) any obligations or duties affecting any real property to any
governmental agency with respect to any right, power, franchise, grant, license,
or permit;
(h) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of real property;
(i) 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;
(j) 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
(k) 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 Loan Guaranties, (b)
--------------------
any Guaranty of the indebtedness of Borrower, not
-16-
<PAGE>
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, (c)
Guaranties of the obligations of Weeks Corporation or any Subsidiary, (d)
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, (e) 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 (f)
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 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
-17-
<PAGE>
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," 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.
"PROPERTY INTEREST(S)" shall mean any interest in any property or asset of
--------------------
any kind, whether real, personal or mixed, or tangible or intangible.
"REFUNDING LOAN" means a new Loan made on the day on which an outstanding
--------------
Loan is maturing or a Floating Rate Loan is being converted to a LIBOR Rate
Loan, if and to the extent that the proceeds thereof are used entirely for the
purpose of paying such maturing Loan or Loan being converted, excluding any
difference between the amount of such maturing Loan or Loan being converted and
any greater amount being borrowed on such day and actually either being made
available to Borrower pursuant to Section 2.04(d) or remitted to Agent as
provided in Section 2.11, in each case as contemplated in Section 2.04(d).
"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
-18-
<PAGE>
66-2/3% of the Facility Amount or, at and after the maturity of the Notes
(whether by acceleration or otherwise), any Bank or Banks holding at least 66-
2/3% of the aggregate outstanding principal amount of the Obligations.
"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 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.
"REVOLVING CREDIT FACILITY" shall mean the revolving credit facility
-------------------------
established by Banks for the benefit of Borrower pursuant to Article II.
"SEC" shall mean the Securities and Exchange Commission.
---
"STANDARD AND POOR'S" shall mean Standard and Poor's Ratings
--------------------
-19-
<PAGE>
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.
"SYNDICATED LOAN GUARANTIES" shall mean, collectively, an unconditional
--------------------------
guaranty of payment and performance, in the form of Exhibit D, which is attached
---------
hereto and incorporated herein by reference, 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 LOAN GUARANTY" shall mean any such unconditional guaranty.
- -------------------------
"SWING BANK" shall mean Wachovia, as lender under the Swing Credit
----------
Agreement dated the date hereof, or Wachovia or any other institutional lender,
as lender under any other Swing Credit Agreement.
"SWING CREDIT AGREEMENT" shall mean that certain Swing Credit Agreement,
----------------------
dated the date hereof, by and among Borrower, as borrower, Guarantors, as
guarantors, and Swing Bank, as lender, or any extension, renewal, modification
or replacement thereof.
"TAXES" shall have the meaning ascribed to such term in Section 2.11(c).
-----
"TERMINATING BANK" shall have the meaning ascribed to such term in Section
----------------
2.02.
"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
-20-
<PAGE>
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.
"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.
1.02 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
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preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect to the first
financial statements delivered under Section 8.03, shall mean the financial
statements referred to in Section 7.12).
1.03 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.
1.04 USE OF DEFINED TERMS. All terms defined in this Agreement shall
--------------------
have the same defined meanings when used in any of the other Loan Documents,
unless otherwise defined therein or unless the context shall require otherwise.
1.05 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
----------
REVOLVING CREDIT FACILITY
-------------------------
2.01 SYNDICATED LOANS. Upon the satisfaction of each of the conditions
----------------
of Article V, Banks shall extend a line of credit to Borrower under which Banks
will, ratably in accordance with their respective Commitments, subject to the
conditions of Article VI and all other terms and conditions of this Agreement,
from time to time at Borrower's request, make Loans to Borrower in amounts not
to exceed the Available Credit, which may be borrowed, repaid (subject to the
provisions of Section 2.10) and reborrowed, from time to time, in minimum
principal amounts as set forth herein, in one or more borrowings prior to the
Expiration Date. Each Base Rate Loan shall be in the principal amount of
$1,000,000 or a larger integral multiple of $500,000. Each LIBOR Rate Loan shall
be in the principal amount of $5,000,000 or a larger integral multiple of
$1,000,000.
2.02 EXPIRATION; EXTENSION. The Revolving Credit Facility shall have a
---------------------
term expiring on the Expiration Date, at which time
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<PAGE>
the principal amount of all Loans then outstanding (regardless of whether the
Interest Period of any such Loan may extend beyond said date) and all accrued
but unpaid interest thereon shall be due and payable in full. Upon the written
request of Borrower, which request shall be delivered to Agent at least sixty
(60) days prior to each Extension Date (as such term is hereinafter defined),
Banks shall have the option (without any obligation whatsoever to do so) of
extending the then current Expiration Date for additional one-year periods from
the then current Expiration Date, such extension to be effective on but not
before each of December 31, 2000 and December 31, 2001 (each an "EXTENSION
----------
DATE"), but in no event shall the Commitment of any Bank or any
- ----
Loan made hereunder, after December 31, 2000, be outstanding for a remaining
period greater than two (2) years. Notwithstanding any request by Borrower as
described in the foregoing sentence, in the event that a Bank chooses, in its
sole and absolute discretion, not to extend the Expiration Date for such an
additional one-year period, such Bank (a "TERMINATING BANK") shall give notice
-----------------
to Borrower and Agent not more than sixty (60) days but not less than forty-five
(45) days prior to the relevant Extension Date; provided that upon failure by
--------
any Bank to respond to a request of Borrower to extend the Expiration Date
within the period provided for such notice, such Bank shall be deemed to have
exercised its discretion not to extend the Expiration Date; provided further
-------- -------
that the Expiration Date shall not be extended with respect to any Banks unless
the Required Banks are willing to extend the Expiration Date and one or more of
the actions described in the following clauses (a), (b) and (c) shall be taken:
(a) the remaining Banks shall elect to purchase ratable assignments
(without any obligation to do so) from all Terminating Banks (in the form of an
Assignment and Acceptance) in accordance with their respective percentages of
the remaining aggregate Commitments; provided further that such Banks shall be
-------- -------
provided such opportunity (which opportunity shall allow such Banks at least
five (5) Domestic Business Days in which to make a decision) prior to Borrower's
finding another lender or lenders pursuant to the immediately succeeding clause
(b); and, provided further that should any of the remaining Banks elect not to
-------- -------
purchase such an assignment, then such other remaining Banks shall be entitled
to purchase an assignment from any Terminating Bank which includes the ratable
interest that was otherwise available to such non-purchasing remaining Bank or
Banks, as the case may be;
(b) Borrower shall find another lender or lenders, approved by Agent
(such approval not to be unreasonably withheld or delayed), willing to accept an
assignment from such Terminating Banks (in the form of an Assignment and
Acceptance); and/or
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<PAGE>
(c) Borrower shall reduce the Facility Amount in accordance with the
provisions of Section 2.16 in an amount equal to the aggregate Commitments of
any such Terminating Banks. If Borrower elects to reduce the Facility Amount
pursuant to this clause (c), notwithstanding any other provision of this
Agreement to the contrary, upon compliance by Borrower with the provisions of
Section 2.16, all Banks that are not Terminating Banks shall purchase ratable
assignments from each Terminating Bank of its interest in its Loans, Note and
this Agreement (in the form of an Assignment and Acceptance) in accordance with
their respective percentages of the remaining aggregate Commitments.
Each Terminating Bank shall be obligated to sell its interest in its Commitment,
Loans, Note and this Agreement by an Assignment and Acceptance in accordance
with Section 14.03(c) to any such Assignee or Assignees pursuant to this Section
2.02 for an amount equal to the sum of the outstanding unpaid principal of and
accrued interest on such Loans and Note, plus all other fees and amounts due
such Terminating Bank hereunder, calculated in each case to the date such
interest is purchased. Upon such assignment and assumption by the Assignee or
Assignees of the Terminating Bank's interest in the Loans, Note and this
Agreement, the Terminating Bank shall have no further Commitment or other
obligation to Borrower hereunder, except as provided in Section 2.11.
Notwithstanding the foregoing, if the Expiration Date is not extended for an
additional one year period on each Extension Date, there shall be no further
Extension Dates or extensions of the Expiration Date. Only one such request for
an extension may be made in any one calendar year, and IN NO EVENT SHALL THE
EXPIRATION DATE BE EXTENDED BEYOND DECEMBER 31, 2002.
2.03 RATE OF INTEREST ON LOANS. Interest shall accrue on the unpaid
-------------------------
principal amount of each Loan, at the election of Borrower as set forth in
notices given in accordance with Section 2.04, at the Floating Rate or the LIBOR
Rate, provided that no more than ten (10) LIBOR Rate Loans shall be outstanding
--------
at any one time.
2.04 NOTICE AND MANNER OF BORROWING.
------------------------------
(a) Borrower shall give Agent an Advance Request prior to 10:00 a.m.
(Atlanta, Georgia time) on the same Domestic Business Day for each Base Rate
Loan and at least three (3) Euro-Dollar Business Days before each LIBOR Rate
Loan.
(b) Upon receipt of an Advance Request, Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable share of the Loan.
Such Advance Request, once received by Agent, shall not thereafter be revocable.
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<PAGE>
(c) Not later than 2:00 p.m. (Atlanta, Georgia time) on the date of
each Loan (or, if the notice required to be given by Agent pursuant to paragraph
(b) of this Section 2.04 shall be given later than 12:00 noon (Atlanta, Georgia
time) on the date of any Loan, not later than two (2) hours following the time
such notice is given on the date of the Loan), each Bank shall (except as
provided in paragraph (d) of this Section 2.04) make available its ratable share
of such Loan, in federal or other funds immediately available in Atlanta,
Georgia, to Agent at its address determined pursuant to Section 14.10. Unless
Agent determines that any applicable condition specified in Article V has not
been satisfied, Agent will make the funds so received from Banks available to
Borrower by crediting a checking account maintained by Borrower with Agent.
Unless Agent receives notice from a Bank at Agent's address specified pursuant
to Section 14.10, no later than 4:00 p.m. (Atlanta, Georgia time) on the
Domestic Business Day of a Loan stating that such Bank will not make available
its ratable share of a Loan, Agent shall be entitled to assume that such Bank
will make available its ratable share of the Loan and, in reliance on such
assumption, 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 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 such Loan
available on such day, 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 any Borrower maintained with
Agent), together with interest thereon for each day during the period from the
date of such Loan until such sum shall be paid in full at a rate per annum equal
to the rate at which 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 a 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 such Loan, together with interest pursuant to the foregoing, it
will have no interest in or rights with respect to such Loan for any purpose
hereunder. If Agent determines not to exercise its option to advance funds for
the account of such Bank, it shall forthwith notify Borrower of such
determination.
(d) If any Bank makes a new Loan hereunder on a day on which Borrower
is to repay all or any part of an outstanding Loan from such Bank, such Bank
shall apply the proceeds of its new Loan to make such repayment as a Refunding
Loan, and only an amount equal to the difference (if any) between the amount
being borrowed and the amount of such Refunding Loan shall be made available by
such Bank to Agent as provided in paragraph (c) of this Section 2.04, or
remitted by Borrower to Agent as provided in Section 2.11, as the case may be.
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<PAGE>
(e) All Advance Requests shall specify (i) the date, (ii) the
amount,(iii) the interest rate election, (iv) such other information called for
in the form of the Advance Request, and (v) in the case of the election of a
LIBOR Rate Loan, the Interest Period for such Loan. Any such notice which 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 Agent's receipt of Borrower's Advance
Request for a LIBOR Rate Loan, 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 Agent shall
promptly notify Borrower and Banks of such determination, and the Loan subject
to the notice shall be a Base Rate Loan.
2.05 AUTOMATIC CONVERSION. All LIBOR Rate Loans not paid in full on or
--------------------
before the last day of the Interest Period therefor shall automatically convert
to Base Rate Loans upon the expiration of the Interest Period.
2.06 INTEREST PAYMENTS ON LOANS. Accrued and unpaid interest on the
--------------------------
unpaid principal amount of each Loan shall be due and payable on the last day of
the Interest Period applicable thereto and, if earlier, on the date three (3)
months after the date the Loan was made. Interest payable on the Loans shall be
computed on the basis of a hypothetical year of 360 days for the actual number
of days elapsed.
2.07 MATURITY. The entire unpaid principal amount of the Loans,
--------
together with all accrued and unpaid interest thereon, shall be due and payable
on the Expiration Date.
2.08 NOTES. (a) The Loans 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, Agent
shall deliver such Note to such Bank. Each Bank shall record, and prior to any
transfer of its Note shall endorse, on the schedules forming a part thereof,
appropriate notations to evidence the date, amount and maturity of, and
effective interest rate for, each Loan made by the Bank with respect thereto,
and such schedules of each such Bank's Note shall constitute rebuttable
presumptive evidence of the respective principal amounts owing and unpaid on
such Bank's Note; provided that the failure of any Bank to make, or any error in
--------
making, any such recordation or endorsement shall not affect the obligation of
Borrower hereunder or under the Notes or the
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<PAGE>
ability of any Bank to assign its Note. Each Bank is hereby irrevocably
authorized by Borrower so to endorse its Note and to attach to and make a part
of any Note a continuation of any such schedule as and when required.
(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.
2.09 USE OF LOAN PROCEEDS. The proceeds of the Loans will be used by
--------------------
Borrower and, through advances made by Borrower to or investments made by
Borrower in (to the extent permitted in accordance with Section 9.12) any other
Subsidiary or Non-Consolidated Venture, by any such Subsidiary or Non-
Consolidated Venture, to satisfy Borrower's obligations to Banks' Agent (as
defined in the 1996 Credit Agreement) under the 1996 Credit Agreement and
otherwise solely to finance their general business needs, including, without
limitation, their operating and administrative expenses, interest and principal
payments on loans, the acquisition, development and maintenance of their
properties, the payment of taxes, insurance and commissions relating to their
properties and business operations, the payment of distributions by Borrower to
its partners and of dividends by Weeks Corporation to its shareholders, and to
make loans to unrelated entities for the purpose of constructing buildings and
related improvements upon real property owned by such unrelated entities,
provided that the Person making such loan shall have obtained a recorded first
- --------
mortgage security interest in the real property under development and, further,
that the Person shall manage the construction of the building and related
improvements and that Weeks Corporation or any such Consolidated Entity or Non-
Consolidated Subsidiary shall have a contractual right to acquire the improved
real property prior to the making of the loan.
2.10 PREPAYMENT OF LOANS. (a) Borrower may, upon at least five (5)
-------------------
Euro-Dollar Business Days' notice to Agent, prepay any LIBOR Rate Loan in whole
at any time, or from time to time in part in amounts aggregating at least
$5,000,000 or any larger integral multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment, plus, if such prepayment is not made on the last day of the
applicable Interest Period, the amount of compensation, if any, determined to be
due pursuant to paragraph (e) of this Section 2.10, and the fee due pursuant to
Section 13.03. Each such optional prepayment shall be applied to prepay ratably
the LIBOR Rate Loans made by Banks.
(b) Borrower may, upon at least one (1) Domestic Business Day's notice
to Agent, prepay any Base Rate Loan in
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<PAGE>
whole at any time, or from time to time in part in amounts aggregating at least
$1,000,000 or any larger integral multiple of $500,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay ratably the
Base Rate Loans made by Banks.
(c) On each date on which the Facility Amount is reduced by Borrower
pursuant to Section 2.16, Borrower shall prepay such principal amount of the
Loans (either pursuant to the foregoing clause (a) or clause (b) of this Section
2.10 or both), if any (together with interest thereon and such compensation as
may be due in accordance with clause (e) of this Section 2.10), as may be
necessary so that, after such prepayment, the aggregate principal amount of the
Loans do not exceed the Facility Amount, calculated as of such date after the
Facility Amount has been so reduced.
(d) Upon receipt of a notice of prepayment pursuant to this Section
2.10, Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment. Such notice, once received by Agent,
shall not thereafter be revocable by Borrower.
(e) Upon prepayment of all or part of the outstanding principal amount
of any LIBOR Rate Loan prior to the last day of the Interest Period therefor,
including any such prepayment made as a result of an acceleration of the
maturity of the Loans upon a Default, Borrower shall pay to Agent, to be applied
ratably to each Bank's pro rata portion of such LIBOR Rate Loan, compensation
with respect to such prepayment equal to Banks' Breakage Costs with respect
thereto.
2.11 GENERAL PROVISIONS AS TO PAYMENTS. (a) Borrower shall make each
---------------------------------
payment of principal of, and interest on, the Loans 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 Agent at its address
referred to in Section 14.10. All such payments of principal of, and interest
on, the Loans and of fees hereunder shall be credited to the account of Borrower
on the day so received by 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). Agent will promptly distribute to each Bank its
ratable share of each such payment received by Agent for the account of Banks.
If 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 Agent, together with
interest thereon for each day during
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<PAGE>
the period from the date of 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 Agent determines that it obtained (or could
have obtained) overnight federal funds in such amount for each such day during
such period.
(b) Whenever any payment of principal of, or interest on, Base Rate
Loans 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 Loans 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.
(c) All payments of principal, interest and fees and all other amounts
to be made by Borrower pursuant to this Agreement with respect to any Loan or
fee 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 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 Agent party hereto on the date
- ----
hereof, the date of this Agreement, and in the case of each other Bank or Agent,
the effective date of the Assignment and Acceptance, or other instrument
pursuant to which it became a Bank or other party hereunder.
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<PAGE>
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 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 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
--------
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<PAGE>
unable, for any reason, to establish such exemption, or to file such forms and,
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 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.
2.12 DEFAULT RATE OF INTEREST. If a Default shall occur under this
------------------------
Agreement, interest shall accrue on the unpaid principal amount of the Loans
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 such Loan plus an additional two
percent (2.00%) per annum (200 basis points).
2.13 FEES. In consideration of Banks' establishing the Revolving
----
Credit Facility, Borrower shall pay Agent, for the ratable benefit of Banks, the
following fees:
(a) ORIGINATION FEE. An Origination Fee, which shall be due and
---------------
payable on the effective date of this Agreement, equal to 0.20% of the amount by
which the initial Facility Amount under this Agreement ($225,000,000) exceeds
the initial Facility Amount (as defined in the 1996 Credit Agreement) under the
1996 Credit Agreement ($175,000,000), which shall be pro rated among Banks on
the basis of the dollar amount, if any, by which each Bank's Commitment under
this Agreement exceeds such Bank's Commitment (as defined in the 1996 Credit
Agreement), if any, under the 1996 Credit Agreement, provided that the
--------
Commitment (as defined in the 1996 Credit Agreement) of any Bank which had no
Commitment under the 1996 Credit Agreement shall be deemed to be $0 for the
purposes of such pro ration.
(b) EXTENSION FEES. An Extension Fee, which shall be computed as
--------------
set forth below, for each extension of the Expiration Date after December 31,
2000, which shall be due and payable on each Extension Date, and which shall be
deemed fully earned
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<PAGE>
and nonrefundable when paid. The Extension Fee shall be computed by (a)
multiplying .10% by the Facility Amount in effect on the due date thereof, (b)
dividing the product so obtained by 360, and (c) multiplying the quotient so
obtained by the actual number of days in the year of the extension.
(c) FACILITY FEE. A Facility Fee, which shall be computed as set
------------
forth below, for each calendar year during which this Agreement is in effect,
which shall be due and payable in advance on the effective date of this
Agreement and on the first (1st) Business Day of each calendar year thereafter
commencing 1999, and which shall be deemed fully earned and nonrefundable when
paid. The Facility Fee shall be computed by (a) multiplying the percentage
determined as set forth below by the Facility Amount in effect on the due date
thereof, (b) dividing the product so obtained by 360, and (c) multiplying the
quotient so obtained, in the case of the Facility Fee due and payable on the
effective date of this Agreement, by the actual number of days in the period
commencing on such effective date and ending on December 31, 1998, and in the
case of each subsequent Facility Fee, the actual number of days in the calendar
year for which the Facility Fee is due. For purposes of the foregoing, the
percentage shall be determined by reference to the Debt Rating Table and shall
be based on the Debt Rating, if any, as determined by Agent, 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;
provided that if there is no Debt Rating in effect on such day, the percentage
- --------
shall be the same as that set forth in the applicable Performance Pricing Level
V of the Debt Rating Table.
2.14 INCREASED COSTS; ILLEGALITY; CAPITAL ADEQUACY. (a) If any Bank
---------------------------------------------
should suffer any increased cost in connection with any 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) repay in full the Notes and request Banks
to terminate this Agreement; or (ii) continue to borrow from Banks under the
terms of this Agreement and 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.
(b) 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
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<PAGE>
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 any 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).
----- -----
(c) If, after the date hereof, the adoption of any applicable law,
rule or regulation regarding capital adequacy, or 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.
2.15 CALCULATION OF COMPENSATION TO BANKS; REQUIRED TRANSFER BY BANKS.
----------------------------------------------------------------
(a) Any Bank or 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 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.
(b) 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
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<PAGE>
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.
(c) Notwithstanding the foregoing, in the event Borrower is required
to pay any Bank or 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 the need for compensation to such Bank or Agent, as the case may be
(an "AFFECTED BANK"), Borrower may give notice to such Affected Bank (with
-------------
copies to 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 outstanding Loans and 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, Loans, Note and 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 such Loans and 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 Loans, 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).
2.16 FACILITY AMOUNT REDUCTION OR TERMINATION. Borrower shall have the
----------------------------------------
option, from time to time, to reduce the Facility Amount by $10,000,000 or any
greater integral multiple of $5,000,000, by (a) giving written notice of its
election to exercise such option to Agent no later than three (3) Domestic
Business Days before the date the reduction is to be effective, and (b) giving
such notice of, and making such, prepayment, if any, as is required by the
provisions of Section 2.10 on account of such reduction of the Facility Amount.
In no event shall Borrower, as a result of any such election, be entitled to a
refund of any fees paid to Agent or any Bank hereunder or be entitled
thereafter, without the written consent of Agent and all Banks, to a restoration
of the amount, or any part thereof, by which the Facility Amount shall have been
reduced. Upon receipt of any such written notice, Agent shall deliver a copy of
the same to each Bank.
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<PAGE>
ARTICLE III
-----------
THE AGENT
---------
3.01 APPOINTMENT; POWERS AND IMMUNITIES. Each Bank hereby irrevocably
----------------------------------
appoints and authorizes Agent to act as its agent hereunder and under the other
Loan Documents with such powers as are specifically delegated to Agent by the
terms hereof and thereof, together with such other powers as are reasonably
incidental thereto. 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 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. 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 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, 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
Agent shall be ministerial and administrative in nature, and Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Bank. Agent shall administer the Loans and the
Loan Documents with the same degree of care as that customarily employed by
Agent in the administration of similar credit facilities for its own account.
3.02 RELIANCE BY AGENT. Agent shall be entitled to rely
-----------------
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<PAGE>
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 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 Agent. As to any matters not expressly
provided for by this Agreement or any other Loan Document, 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.
3.03 DEFAULTS. 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 Loans) unless 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 Agent receives such a notice of the occurrence of a Default,
Agent shall give prompt notice thereof to Banks. Agent shall give each Bank
prompt notice of each nonpayment of principal of or interest on the Loans
whether or not it has received any notice of the occurrence of such nonpayment.
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 Agent shall have received such directions, 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.
3.04 RIGHTS OF AGENT AS A BANK. With respect to the Loans 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 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 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 Agent) for services in connection with this Agreement or
any other Loan Document or otherwise without having to account for the same to
Banks.
3.05 INDEMNIFICATION. Each Bank severally agrees to indemnify Agent,
---------------
to the extent Agent shall not have been reimbursed by Borrower, ratably in
accordance with its
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<PAGE>
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 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 Agent. If any indemnity furnished
to Agent for any purpose shall, in the opinion of Agent, be insufficient or
become impaired, Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
3.06 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.
3.07 PAYEE OF NOTE TREATED AS OWNER. 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 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.
3.08 NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees that it
------------------------------------
has, independently and without reliance on 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 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. 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 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
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<PAGE>
other documents and information expressly required to be furnished to Banks by
Agent hereunder or under the other Loan Documents, 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 Agent;
provided that Agent shall make available to any Bank, upon such Bank's request,
- --------
(a) copies of Agent's records with respect to all sums received or expended by
Agent in connection with the Loans and the Loan Documents, and (b) information
as to the amount of the then outstanding Loans.
3.09 FAILURE TO ACT. Except for action expressly required of Agent
--------------
hereunder or under the other Loan Documents, 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 Agent by reason of taking, continuing to take, or failing to
take any such action.
3.10 RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment and
-------------------------------
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving notice thereof to Banks and Borrower, and 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 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 Agent shall have been
so appointed by the Required Banks and shall have accepted such appointment
within thirty (30) days after the retiring Agent's notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of Banks, appoint a successor 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 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
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as 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 Agent hereunder.
3.11 DIRECTIONS TO AGENT. Whenever a provision of this
-------------------
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<PAGE>
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 Agent to take or refrain from taking any action or to
the existence of any status or condition, and 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 Agent, deemed given, made or taken, as the case may be,
by each Bank, unless such Bank shall have given Agent contrary instructions
within seven (7) Domestic Business Days after its receipt of such notice from
Agent. Notwithstanding the foregoing, 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 Agent shall have actually received the same from such party or parties as
provided for herein.
ARTICLE IV
----------
CONDITIONS TO REVOLVING CREDIT FACILITY
---------------------------------------
The obligation of Banks to extend the Revolving Credit Facility and to make
the initial Loan thereunder is subject to the satisfaction of the following
conditions:
4.01 BORROWER'S AUTHORITY. Agent shall have received a Certificate of
--------------------
General Partner of Borrower, in form and substance acceptable to 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 Agent may require to evidence that Borrower has the legal
power and authority to enter into this Agreement, and the other Loan Documents,
and the transactions contemplated hereby.
4.02 GUARANTORS' AUTHORITY. 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 Loan Guaranty executed by it, together with such
other papers, certifications or documents of Guarantors as Agent may require to
evidence that each such Guarantor has the power and authority to enter into this
Agreement, the Syndicated Loan Guaranty executed by it, and the transactions
contemplated hereby.
4.03 SATISFACTORY FINANCIAL CONDITION. 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
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<PAGE>
alone) since September 30, 1997.
4.04 REPRESENTATIONS AND WARRANTIES. The representations and warranties
------------------------------
of Borrower and Weeks Corporation set forth in Article 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.
4.05 PAYMENT OF FEES. 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
Agent's counsel, the Origination Fee due pursuant to Section 2.13(a), and the
Facility Fee due pursuant to Section 2.13(c).
4.06 EXTENSION OF 1996 CREDIT AGREEMENT. Borrowers' Agent (as defined
----------------------------------
in the 1996 Credit Agreement) shall have given notice, pursuant to the terms of
the 1996 Credit Agreement, of the extension of the Expiration Date (as defined
in the 1996 Credit Agreement) to December 31, 2000, and Borrowers (as defined in
the 1996 Credit Agreement) shall have paid to Banks' Agent (as defined in the
1996 Credit Agreement), for the ratable benefit of Banks (as defined in the 1996
Credit Agreement), based on the amount of each such Bank's Commitment (as
defined in the 1996 Credit Agreement) in effect immediately prior to the First
Amendment, dated as of September 1, 1997, to the 1996 Credit Agreement, the
extension fee due in connection therewith equal to .125% of the original
Facility Amount (as defined in the 1996 Credit Agreement).
4.07 NOTES. Agent shall have received the original Notes, duly executed
-----
and delivered by Borrower.
4.08 SYNDICATED LOAN GUARANTIES. Agent shall have received the original
--------------------------
Syndicated Loan Guaranties, duly executed and delivered by Guarantors.
4.09 CERTIFICATES OF INCUMBENCY. Agent shall have received an original
--------------------------
Certificate of Incumbency from Borrower and each Guarantor with respect to the
Authorized Signatory of each such party.
4.10 OTHER DOCUMENTATION. Agent shall have received such other loan
-------------------
documentation as deemed reasonably necessary or desirable by Agent or its
counsel, satisfactory in form and substance to Agent, providing for the Loans to
be made.
4.11 REIT STATUS. Weeks Corporation shall be qualified as a real
-----------
estate investment trust under the Code.
4.12 OPINION OF COUNSEL. Agent shall have received a
------------------
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<PAGE>
favorable opinion letter from King & Spalding, counsel to Borrower and
Guarantors, in form and substance satisfactory to Agent and its counsel.
4.13 KEY EXECUTIVES. The Key Executives shall be A. R. Weeks, Jr.,
--------------
Thomas D. Senkbeil and Forrest W. Robinson.
4.14 REPAYMENT OF DEBT. The initial Loan shall be sufficient to pay
-----------------
the principal amount of all indebtedness of Borrower under the 1996 Credit
Agreement in full, together with all interest accrued and unpaid thereon, and
Borrower shall have made arrangements satisfactory to Banks' Agent (as defined
in the 1996 Credit Agreement) for the proceeds of such Loan to be applied, to
the extent required, to pay the principal amount of such indebtedness to Banks'
Agent (as defined in the 1996 Credit Agreement), together with all interest
accrued and unpaid thereon.
4.15 GENERAL CONDITIONS. Each of the conditions set forth in Article V
------------------
shall have been satisfied.
ARTICLE V
---------
CONDITIONS TO LOANS
-------------------
The obligation of Banks to make any Loan is subject to the satisfaction of
the following conditions at the time of the request for the Loan:
5.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
------------------------------
contained in this Agreement shall have been true and correct in all material
respects when made, and such representations and warranties and those made by or
on behalf of Borrower in connection with the Loan shall remain true and correct
in all material respects, except as otherwise disclosed in writing pursuant to
this Agreement to each Bank.
5.02 AVAILABLE CREDIT. The amount of the Loan does not exceed the
----------------
Available Credit.
5.03 NO MATERIAL ADVERSE CHANGE. No change shall 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 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 then current
fiscal quarter of Borrower, 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 hereof.
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<PAGE>
5.04 FULL COMPLIANCE. Borrower and Weeks Corporation shall be in full
---------------
compliance with all the terms and conditions of this Agreement.
5.05 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).
5.06 INCUMBENCY. The Authorized Signatories of each party executing and
----------
delivering any document to Agent in connection with the Loan shall be as set
forth in the applicable certificate of incumbency delivered to Agent pursuant to
Section 4.09 or as subsequently modified and reflected in an updated certificate
of incumbency delivered to Agent.
5.07 ADVANCE REQUEST. Agent shall have received an Advance Request,
---------------
executed by an Authorized Signatory of Borrower, in accordance with the
provisions of Section 2.04.
ARTICLE VI
----------
ENVIRONMENTAL MATTERS
---------------------
6.01 REPRESENTATIONS, WARRANTIES. Weeks Corporation and Borrower
---------------------------
represent and warrant to Agent and Banks that, except as otherwise disclosed in
writing by Borrower to 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
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<PAGE>
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 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 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.
6.02 CONTINUED COMPLIANCE. Weeks Corporation and Borrower covenant that
--------------------
Borrower will promptly inform 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 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 Agent
and such Person (if not Agent) an environmental audit covering such real
property from experts reasonably acceptable to Agent or such Bank, as the case
may be, at Borrower's sole expense.
ARTICLE VII
-----------
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Agent and Banks to enter into the Loan
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<PAGE>
Documents and to make Loans as contemplated hereby, Borrower and Weeks
Corporation represent and warrant to Agent and Banks, each of which
representations and warranties is deemed to be material, that:
7.01 RELATED PARTIES. Schedule 7.01 sets forth the identity of each of
---------------
the Related Parties in existence as of the date of this Agreement.
7.02 CORPORATE ORGANIZATION. Weeks Corporation, Construction, 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.
7.03 LIMITED PARTNERSHIP ORGANIZATION. Borrower, Weeks Financing
--------------------------------
Limited Partnership, 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.
7.04 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.
7.05 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.
7.06 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.
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7.07 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.
7.08 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 Corporation, GP Holdings or LP
Holdings, or the partnership agreement or certificate of Borrower.
7.09 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.
7.10 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.
7.11 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.
7.12 FINANCIAL CONDITION. All financial statements and all other
-------------------
financial information of Borrower and Weeks Corporation furnished to 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
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disclosed therein that are not so reflected or disclosed therein or in the Notes
thereto.
7.13 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 the basis for the institution of any such
litigation, proceeding or investigation.
7.14 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).
7.15 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 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.
7.16 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.
7.17 INSOLVENCY. After giving effect to the execution and delivery of
----------
the Loan Documents and the making of any Loans under the Revolving Credit
Facility and any Swing Loans (as defined in the Swing Credit Agreement) under
the Swing Credit Facility (as defined in
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the Swing Credit Agreement), 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.
7.18 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 any 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,
the provisions of Regulation X of the Board of Governors of the Federal Reserve
System.
7.19 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).
7.20 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
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<PAGE>
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 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 withdrawal by any
such member from any such Multiemployer Plan within the contemplation of MPPAA,
(g) except as otherwise disclosed to 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 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).
7.21 FINANCIAL STATEMENTS. None of the financial statements delivered
--------------------
by Borrower or Weeks Corporation to 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.
7.22 MISREPRESENTATIONS. No representation or warranty by Borrower or
------------------
Weeks Corporation made herein and no statement or certificate to be furnished to
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 VIII
------------
AFFIRMATIVE COVENANTS
---------------------
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<PAGE>
In order to induce Agent and Banks to enter into the Loan Documents and to
make Loans as contemplated hereby, Borrower and Weeks Corporation covenant and
agree with 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:
8.01 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 given by Borrower to Agent prior to moving said
books and records to such other location.
8.02 INSPECTION. Borrower and Weeks Corporation shall permit each of
----------
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.
8.03 FINANCIAL AND OTHER INFORMATION. Borrower and Weeks Corporation
-------------------------------
shall furnish to Agent and each Bank the following financial information:
(a) 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
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.
(b) Not later than the date on which quarterly or
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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, which is attached hereto and incorporated
---------
herein by reference, 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 all Loans.
(c) 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 Agent and the Required
Banks, audited by an independent practicing certified public accountant of
recognized national standing or otherwise reasonably acceptable to Agent and the
Required Banks, together with an auditor's opinion of such accountant without
material qualification.
(d) 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.
(e) From time to time (but not more frequently than quarterly) at
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
Agent or such Bank, as the case may be.
(f) If requested by 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 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
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<PAGE>
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.
(g) Such other or more frequent data, information, and reports with
respect to Borrower or any Related Party as Agent or any Bank may reasonably
request from time to time.
8.04 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 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).
8.05 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.
8.06 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
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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 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. Agent, Banks and any persons authorized
by 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 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.
8.07 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.
8.08 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.
8.09 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),
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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 Agent
and Banks a statement setting forth details of such material adverse change and
the action that it proposes to take with respect thereto.
8.10 NOTICE OF LITIGATION. Borrower and Weeks Corporation shall
--------------------
promptly notify 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).
8.11 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 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.
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8.12 REIT STATUS. Weeks Corporation shall at all times be and remain
-----------
qualified as a real estate investment trust under the Code.
8.13 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).
8.14 NOTICE OF EXERCISE OF REMEDIES UNDER MORTGAGES. Borrower and
----------------------------------------------
Weeks Corporation shall give prompt written notice to 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.
8.15 MANAGEMENT. Weeks Corporation and Borrower shall have
----------
management reasonably satisfactory to Agent and the Required Banks.
8.16 DEPOSIT ACCOUNTS. Weeks Corporation and Borrower shall maintain
----------------
their principal depository accounts with one or more Banks.
8.17 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.
8.18 DEBT RATING. Borrower shall give written notice to Agent
-----------
promptly of any change in the Debt Rating.
ARTICLE IX
----------
NEGATIVE COVENANTS
------------------
In order to induce Agent and Banks to enter into this Agreement and to make
Loans as contemplated hereby, Borrower and Weeks Corporation covenant and agree
with Agent and Banks that
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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:
9.01 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.
9.02 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.
9.03 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 (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.
9.04 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.
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9.05 INDEBTEDNESS 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
or from Swing Bank under the Swing Credit Agreement, (b) unsecured Intercompany
Debt, (c) Permitted Borrowings, (d) 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, (e) 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
Loans, (f) secured Indebtedness for Money Borrowed not prohibited in accordance
with Section 9.07, or (g) Indebtedness for Money Borrowed for which such Person
shall have become obligated solely pursuant to a Permitted Guaranty.
9.06 INDEBTEDNESS 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.
9.07 SECURED 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 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.
9.08 INDEBTEDNESS 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
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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.
9.09 DIVIDENDS 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.
9.10 ENVIRONMENTAL 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.
9.11 CHANGE 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
interest in Borrower, and no general partner shall be admitted to Borrower other
than GP Holdings.
9.12 ADVANCES, 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
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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.
9.13 LIENS. 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
-------------------
To induce Agent and Banks to enter into this Agreement and to make Loans as
contemplated hereby, Borrower and Weeks Corporation covenant and agree with
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:
10.01 MINIMUM INTEREST COVERAGE RATIO. The Interest Coverage Ratio
-------------------------------
shall not be less than 2.00:1.00.
10.02 MINIMUM FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
-----------------------------------
Ratio shall not be less than 1.75: 1.00.
10.03 MAXIMUM LEVERAGE. The Leverage Ratio shall not exceed 0.50:1.00.
----------------
10.04 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.
10.05 MAXIMUM SECURED DEBT. The Total Secured Debt shall not exceed 35%
--------------------
of Total Asset Value.
10.06 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
----------
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<PAGE>
DEFAULT
-------
Each of the following shall constitute a Default hereunder:
11.01 NONPAYMENT OF OBLIGATIONS. Failure of Borrower to make any payment
-------------------------
of principal or interest on the Obligations when due;
11.02 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 or any
Permitted Mortgage Debt), 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");
11.03 DEFAULTS OF MATERIAL VENTURES. Failure of any Material Venture 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 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;
11.04 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;
11.05 BREACH OF COVENANTS. Default by Borrower or Weeks
-------------------
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<PAGE>
Corporation under, or in the observance or performance of any of the covenants
contained in, this Agreement or the other Loan Documents;
11.06 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;
11.07 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");
11.08 VOLUNTARY INSOLVENCY PROCEEDINGS. The filing by 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;
11.09 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;
11.10 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;
11.11 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;
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<PAGE>
11.12 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;
11.13 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;
11.14 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 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;
11.15 SYNDICATED LOAN GUARANTIES. The termination or revocation of any
--------------------------
Syndicated Loan Guaranty, the denial or disaffirmation by any Guarantor of its
obligations under a Syndicated Loan Guaranty or any provision of a Syndicated
Loan Guaranty, or any Syndicated Loan Guaranty shall otherwise cease to be in
full force or effect; and
11.16 SWING CREDIT AGREEMENT. Any Swing Line Default (as defined in the
----------------------
Swing Credit Agreement) shall occur under the Swing Credit Agreement and such
Swing Line Default shall not be cured within any applicable cure period.
ARTICLE XII
-----------
RIGHTS AND REMEDIES
-------------------
12.01 PRIOR TO DEFAULT. Before or after the occurrence of a Default:
----------------
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 Agent and Banks in whatever way reasonably necessary to make each such
examination, audit and inspection.
12.02 UPON DEFAULT. Upon the occurrence of any Default and the
------------
expiration of any applicable cure period: 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
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<PAGE>
Borrower and Weeks Corporation agree to reimburse forthwith Agent and Banks for
all expenses of 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.
12.03 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
thereof, 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 or 11.16, 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 Obligations when due, neither 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 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 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 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.
12.04 COSTS OF COLLECTION. Borrower agrees to pay all costs of 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.
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12.05 SETOFF. Borrower and Guarantors hereby agree that 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 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.
12.06 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 XIII
------------
FEES AND EXPENSES; INDEMNIFICATION
----------------------------------
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13.01 FEES AND EXPENSES. Borrower and Guarantors shall provide, at
-----------------
their expense, to Agent all documents, instruments, assurances, and certificates
as Agent may reasonably deem necessary to consummate the transactions
contemplated hereby. Borrower and Guarantors shall be obligated, jointly and
severally, to Agent to pay all reasonable fees, expenses and costs incurred by
Agent in connection with the preparation, negotiation, and entering into of this
Agreement and the other Loan Documents and the administration of the Loans,
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 Agent and upon notice to Borrower, be charged to the Notes as
advances thereunder. In the event Agent pays any of the costs or expenses under
this Section 13.01, Borrower and Weeks Corporation shall reimburse Agent
promptly upon demand, and all such sums shall bear interest at the Default Rate
set forth in Section 2.12.
13.02 AGENT'S ADMINISTRATION 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 Agent, for its
sole account, in consideration of its structuring 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
Agent's Administration Fee. The Agent's Administration 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.
13.03 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 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 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 Agent shall determine in good faith shall
impose no more than an insignificant administrative, financial or other burden
on Agent, and (b) a fee in such reasonable amount as may be charged by Agent
(not to exceed $3,000) upon any prepayment of a LIBOR Rate Loan made pursuant to
the provisions of Section 2.10, which fee shall be due and payable upon the
making of any such prepayment and shall be fully earned and nonrefundable when
paid.
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13.04 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, Agent, their
respective directors, officers, employees, agents, affiliates, successors and
assigns from and indemnify Banks, 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 contemplated
by this Agreement, or use of any proceeds of the Loans, 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 Agent, Banks, or any such
indemnitee. At the request of 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 Loans or participations therein
on terms substantially similar to the terms set forth above. 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
-------------
14.01 CUMULATIVE RIGHTS; NON-WAIVER. No delay or omission by 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 Agent or Banks may be exercised from time to
time and as often as may be deemed expedient by Agent or any Bank. No consent
or waiver, expressed or implied, by 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 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 Agent or Banks from exercising any
right, privilege or power granted herein or alter
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the security title, security interest or lien hereof. 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 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.
14.02 NO OBLIGATION TO THIRD PARTIES. The Loan Documents are made
------------------------------
solely for the benefit of Guarantors, Borrower, 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 Agent or any Bank will exercise any remedies provided herein, and no party
other than 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 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 Agent and each Bank in favor
of Borrower contained in the Loan Documents.
14.03 SUCCESSORS AND ASSIGNS.
----------------------
(a) 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.
(b) 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 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
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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 related Loan or Loans, (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 related Loan or Loans, (iii) the
change of the principal of the related Loan or Loans, (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 Loans, or
(vi) the release of any Guaranty given to support payment of the Loans. 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 Agent with written notification stating that
such sale has occurred and identifying the Participant and the interest
purchased by such Participant.
(c) 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
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 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, Agent and Borrower, (B)
delivery of an executed copy of the Assignment and Acceptance to Borrower and
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 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
-67-
<PAGE>
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
Agent shall be required. Upon the consummation of any transfer to an Assignee
pursuant to this paragraph (c), the transferor Bank, the 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.
(d) Borrower authorizes 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 Agent's or Bank's possession concerning
Borrower which has been delivered to such Agent or any Bank by Borrower or Agent
pursuant to this Agreement or which has been delivered to such Agent or any Bank
by Borrower in connection with such 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.
(e) Anything in this Section 14.03 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of the Loans 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
--------
Loans 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 Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
14.04 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.
14.05 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.
14.06 ENTIRE AGREEMENT. This Agreement (together with the provisions of
----------------
the Mandate Letter relating to fees payable to Agent) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof.
-68-
<PAGE>
14.07 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.
14.08 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.
14.09 CHANGES IN FORMS. 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 Agent by Borrower or Weeks Corporation hereunder.
14.10 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
-69-
<PAGE>
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
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 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
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.
-70-
<PAGE>
14.11 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 Agent are affected thereby, by
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 any
Loans or any fees (other than fees payable solely to Agent) hereunder, (iii)
change the date fixed for any payment of principal of or interest on any 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 Loan Guarantee, (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 Agent, and 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 Agent forthwith following the date of 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 Agent's entitlement to collect, the fees
provided for in Section 13.03 upon any request by Borrower for a waiver or
amendment.
14.12 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
-------------------
14.13 EXECUTION IN COUNTERPARTS. This Agreement and any
-------------------------
-71-
<PAGE>
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.
14.14 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 Bank or Agent without reference to any
statutory presumption as to the amount thereof.
14.15 CONFIDENTIALITY. Each of Banks and 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 Loans; provided that
--------
nothing herein shall prevent any Bank or 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 or Agent shall promptly notify Borrower of same; provided,
--------
further, that neither any Bank nor 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.
14.16 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 Loans or
Swing Loans, as the case may be, 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 the Loans 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.
-72-
<PAGE>
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.
14.17 MISCELLANEOUS. The Loan Documents shall inure to the benefit of
-------------
and be binding upon Borrower, Guarantors and Banks, 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 Loans
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.
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
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- --------------------------- -----------------------------
-73-
<PAGE>
Secretary Its: SVP and CFO
--------------------
[CORPORATE SEAL]
GUARANTORS:
----------
ATTEST: WEEKS CORPORATION
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- ---------------------------- --------------------------------
Secretary Its: SVP and CFO
----------------------------
[CORPORATE SEAL]
WEEKS GP HOLDINGS, INC.
ATTEST:
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- ---------------------------- ---------------------------------
Secretary Its: SVP and CFO
--------------------------
[CORPORATE SEAL]
WEEKS LP HOLDINGS, INC.
ATTEST:
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- ---------------------------- --------------------------------
Secretary Its: SVP and CFO
-------------------------
[CORPORATE SEAL]
AGENT:
-----
WACHOVIA BANK, N.A.,
as Agent
By: /s/ Steven B. Wood
--------------------------------
Its: Senior Vice President
----------------------------
[BANK SEAL]
BANKS:
-----
-74-
<PAGE>
Commitment Share: WACHOVIA BANK, N.A.
44.4445%
Address: By: /s/ Steven B. Wood
191 Peachtree Street, N.E. --------------------------------
Atlanta, Georgia 30303
Its: Senior Vice President
----------------------------
Date:
[BANK SEAL]
Commitment Share: FIRST UNION NATIONAL BANK
24.4444%
Address: By: /s/ John A. Schissel
999 Peachtree Street, N.E. --------------------------------
Suite 610
Atlanta, Georgia 30309 Its: Director
----------------------------
Date:
[BANK SEAL]
Commitment Share: COMMERZBANK A.G. -
10.0000% ATLANTA AGENCY
Address: By: /s/ Douglas P. Traynor
2 World Financial Center --------------------------------
New York, New York 10281-1050
Its: Vice President
----------------------------
By: /s/ James J. Henry
--------------------------------
Its: Senior Vice President
----------------------------
Date:
[BANK SEAL]
Commitment Share: MELLON BANK, N.A.
10.0000%
Address: By: /s/ B. H. Henderson III
1735 Market Street, 4th Floor --------------------------------
Philadelphia, PA 19103
Its: Vice President
----------------------------
Date:
[BANK SEAL]
Commitment Share: NATIONSBANK, N.A.
11.1111%
Address: By: /s/ Kevin M. Brown
--------------------------------
-75-
<PAGE>
600 Peachtree Street, N.E.
GA 1-006-6-25 Its: Vice President
Atlanta, Georgia 30308 ------------------------
Date:
[BANK SEAL]
-76-
<PAGE>
- --------------------------------------------------------------------------------
SWING CREDIT AGREEMENT
By and Among
WACHOVIA BANK, N.A.,
AS SWING BANK,
AND
WEEKS REALTY, L.P.,
AS BORROWER,
and
WEEKS CORPORATION, WEEKS GP HOLDINGS, INC.
AND WEEKS LP HOLDINGS, INC.,
AS GUARANTORS,
IN THE MAXIMUM AMOUNT OF
$20,000,000
JULY 1, 1998
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE NO.
--------
<S> <C>
ARTICLE I DEFINITIONS AND CONSTRUCTION............................... 1
1.01 TERMS IN SYNDICATED CREDIT AGREEMENT....................... 1
1.02 OTHER DEFINED TERMS........................................ 2
"ADVANCE REQUEST"................................................. 2
"AGREEMENT"........................................................ 2
"AUTHORIZED SIGNATORY"............................................. 2
"AVAILABLE SWING CREDIT"........................................... 2
"EXPIRATION DATE".................................................. 2
"LIBOR RATE"....................................................... 2
"SWING CREDIT FACILITY"............................................ 2
"SWING LINE COMMITMENT"............................................ 2
"SWING LINE COMMITMENT PERIOD"..................................... 2
"SWING LINE DEFAULT"............................................... 3
"SWING LINE MASTER NOTE"........................................... 3
"SWING LOAN DOCUMENTS"............................................. 3
"SWING LOAN GUARANTIES"............................................ 3
"SWING LOANS"...................................................... 3
"SWING OBLIGATIONS"................................................ 3
"SYNDICATED CREDIT AGREEMENT"...................................... 3
"SYNDICATED CREDIT OBLIGATIONS".................................... 3
"WEEKLY LIBOR INDEX RATE".......................................... 4
1.03 REFERENCES.................................................. 4
1.04 USE OF DEFINED TERMS........................................ 4
1.05 TERMINOLOGY; CONSTRUCTION................................... 4
ARTICLE II SWING CREDIT FACILITY...................................... 4
2.01 SWING LINE OF CREDIT........................................ 4
2.02 EXPIRATION; EXTENSION....................................... 4
2.03 RATE OF INTEREST............................................ 5
2.04 NOTICE AND MANNER OF BORROWING.............................. 6
2.05 INTEREST PAYMENTS........................................... 6
2.06 MATURITY.................................................... 6
2.07 PERMITTED PREPAYMENT OF SWING LOANS......................... 6
2.08 DEFAULT RATE OF INTEREST.................................... 6
2.09 FACILITY FEE................................................ 7
2.10 USE OF PROCEEDS............................................. 7
2.11 COSTS; ILLEGALITY; CAPITAL ADEQUACY......................... 7
ARTICLE III CONDITIONS TO SWING CREDIT FACILITY....................... 8
3.01 BORROWER'S AUTHORITY........................................ 8
3.02 GUARANTORS' AUTHORITY....................................... 8
3.03 CONDITIONS TO SYNDICATED CREDIT FACILITY.................... 9
3.04 REPRESENTATIONS AND WARRANTIES.............................. 9
3.05 SWING LINE MASTER NOTE...................................... 9
3.06 SWING LOAN GUARANTIES....................................... 9
3.07 OPINION OF COUNSEL.......................................... 9
3.08 CERTIFICATE OF INCUMBENCY................................... 9
3.09 OTHER DOCUMENTATION......................................... 9
3.10 GENERAL CONDITIONS.......................................... 9
<PAGE>
ARTICLE IV CONDITIONS TO SWING LOANS.................................. 9
4.01 REPRESENTATIONS AND WARRANTIES.............................. 9
4.02 AVAILABLE SWING CREDIT...................................... 10
4.03 NO MATERIAL ADVERSE CHANGE.................................. 10
4.04 FULL COMPLIANCE............................................. 10
4.05 NO DEFAULT; NO CLAIMS....................................... 10
4.06 INCUMBENCY.................................................. 10
ARTICLE V REPRESENTATIONS AND WARRANTIES............................. 10
5.01 REPRESENTATIONS AND WARRANTIES IN
SYNDICATED CREDIT AGREEMENT.............................. 10
5.02 POWER AND AUTHORITY......................................... 10
5.03 ENFORCEABILITY.............................................. 11
5.04 VIOLATION OF ORGANIZATIONAL DOCUMENTS....................... 11
5.05 CONFLICTS................................................... 11
5.06 MISREPRESENTATIONS.......................................... 11
ARTICLE VI AFFIRMATIVE COVENANTS...................................... 11
6.01 AFFIRMATIVE COVENANTS IN
SYNDICATED CREDIT AGREEMENT.............................. 12
6.02 INSPECTION.................................................. 12
ARTICLE VII NEGATIVE COVENANTS........................................ 12
ARTICLE VIII FINANCIAL COVENANTS...................................... 12
ARTICLE IX SWING LINE DEFAULT......................................... 12
9.01 NONPAYMENT OF SWING OBLIGATIONS............................. 12
9.02 BREACH OF WARRANTY OR REPRESENTATION........................ 12
9.03 BREACH OF COVENANTS......................................... 13
9.04 SWING LOAN GUARANTIES....................................... 13
9.05 DEFAULTS UNDER SYNDICATED CREDIT AGREEMENT.................. 13
ARTICLE X RIGHTS AND REMEDIES......................................... 13
10.01 PRIOR TO SWING LINE DEFAULT................................. 13
10.02 UPON SWING LINE DEFAULT..................................... 13
10.03 CURE OF DEFAULTS............................................ 13
10.04 COSTS OF COLLECTION......................................... 14
10.05 SETOFF...................................................... 14
ARTICLE XI FEES AND EXPENSES; INDEMNIFICATION......................... 15
11.01 FEES AND EXPENSES........................................... 15
11.02 INDEMNIFICATION............................................. 15
ARTICLE XII TERM...................................................... 16
ARTICLE XIII MISCELLANEOUS............................................ 16
13.01 CUMULATIVE RIGHTS; NON-WAIVER............................... 16
13.02 NO OBLIGATION TO THIRD PARTIES.............................. 16
13.03 SUCCESSORS AND ASSIGNS...................................... 17
13.04 GOVERNING LAW............................................... 17
13.05 SURVIVAL OF OBLIGATIONS..................................... 17
13.06 ENTIRE AGREEMENT............................................ 17
13.07 INVALIDITY.................................................. 17
13.08 CHANGES IN FORMS............................................ 17
<PAGE>
13.09 NOTICES..................................................... 17
13.10 TIME OF THE ESSENCE......................................... 19
13.11 EXECUTION IN COUNTERPARTS................................... 19
13.12 CONFLICT WITH MANDATE LETTER................................ 19
13.13 MISCELLANEOUS............................................... 19
</TABLE>
<PAGE>
TABLE OF EXHIBITS
-----------------
Exhibit A - Advance Request
Exhibit B - Swing Line Master Note
Exhibit C - Swing Loan Guaranty
<PAGE>
SWING CREDIT AGREEMENT
----------------------
THIS SWING CREDIT AGREEMENT (the "AGREEMENT") is made and entered into as
---------
of July 1, 1998, by and between 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"), and WACHOVIA BANK, N.A., a national banking
---------
association ("SWING BANK").
----------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower desires to borrow, repay and reborrow money from Swing
Bank, on the terms and conditions set forth herein; and
WHEREAS, Swing Bank is willing to make loans to Borrower, in amounts which
do not exceed at any one time the principal sum outstanding of $20,000,000.00,
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 loans will be to the direct financial interest and advantage
of Guarantors, and in order to induce Swing Bank to enter into this Agreement
and to make loans to Borrower pursuant to its terms, Guarantors have agreed to
guaranty the full and prompt payment and performance when due of the Swing
Obligations (as defined herein), to become parties to this Agreement and to
become bound by the terms and conditions hereof;
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
----------------------------
1.01 TERMS IN SYNDICATED CREDIT AGREEMENT. Unless otherwise stated in
------------------------------------
this Agreement, capitalized terms defined in the Syndicated Credit Agreement and
<PAGE>
used but not otherwise defined in this Agreement shall have the meanings
ascribed to such terms in the Syndicated Credit Agreement, unless the context
otherwise requires.
1.02 OTHER 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:
"ADVANCE REQUEST" shall mean a request for a Swing Loan, in the form of
---------------
Exhibit A, which is attached hereto and incorporated herein by reference.
- ---------
"AGREEMENT" shall mean this Swing Credit Agreement, together with any
---------
amendments or supplements hereto and schedules or exhibits hereto.
"AUTHORIZED SIGNATORY" shall mean, with respect to a person, such senior
--------------------
officer of such person as may be duly authorized and designated in writing by
such person to execute documents, agreements and instruments, including the
Swing Loan Documents, on behalf of such person.
"AVAILABLE SWING CREDIT" shall mean the amount, if any, by which the Swing
----------------------
Line Commitment exceeds the unpaid principal balance of the Swing Loans.
"EXPIRATION DATE" shall mean the date which is 364 days after the date of
---------------
this Agreement or such later date to which the expiration of the Swing Credit
Facility may be extended pursuant to the provisions of Section 2.02.
"LIBOR RATE" shall mean an interest rate which, as of the date of this
----------
Agreement, is equal to the sum of (a) the Weekly LIBOR Index Rate determined as
of 11:00 a.m., London time, on the second Eurodollar Business Day immediately
preceding the first Domestic Business Day of the calendar week in which the date
of this Agreement occurs, plus (b) the Applicable Margin, and which, after the
date of this Agreement, shall be adjusted on the first Domestic Business Day of
each calendar week to reflect changes, if any, in the Weekly LIBOR Index Rate
determined as of 11:00 a.m., London time, on the second Eurodollar Business Day
immediately preceding the first Domestic Business Day of such calendar week.
"SWING CREDIT FACILITY" shall mean the swing credit facility established by
---------------------
Swing Bank for the benefit of Borrower pursuant to Article II.
"SWING LINE COMMITMENT" shall mean $20,000,000.
---------------------
-2-
<PAGE>
"SWING LINE COMMITMENT PERIOD" shall mean the period of time commencing on
----------------------------
the date of this Agreement and continuing through and including the original
Expiration Date (determined before any extension of the Expiration Date shall be
effected hereunder).
"SWING LINE DEFAULT" shall mean any of the events or conditions described
------------------
in Article IX.
"SWING LINE MASTER NOTE" shall mean Borrower's Swing Line Master Note, made
----------------------
payable to the order of Swing Bank and in the form of Exhibit B, evidencing the
---------
Swing Loans, as amended from time to time.
"SWING LOAN DOCUMENTS" shall mean this Agreement, the Swing Line Master
--------------------
Note, and all other documents, agreements, certificates, and reports called for
herein or executed in connection herewith or contemplated hereby.
"SWING LOAN GUARANTIES" shall mean, collectively, an unconditional guaranty
---------------------
of payment and performance, in the form of Exhibit C, which is attached hereto
---------
and incorporated herein by reference, executed by each Guarantor, in favor of
Swing Bank, whereby such Guarantor unconditionally guaranties the payment and
performance when due of all Swing Obligations of Borrower to Swing Bank, and a
"SWING LOAN GUARANTY" shall mean any such unconditional guaranty.
- --------------------
"SWING LOANS" shall mean all advances made by Swing Bank under the Swing
-----------
Credit Facility. A "SWING LOAN" shall mean an individual advance made by Swing
----------
Bank under the Swing Credit Facility.
"SWING OBLIGATIONS" shall mean the aggregate amount of all indebtedness,
-----------------
liabilities and obligations of Borrower to Swing Bank 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
Swing Bank evidenced by the Swing Line Master Note and any extensions or
renewals thereof; all principal and interest owing under any of the foregoing;
all Swing Bank's fees, 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
Swing Bank's charges, expenses, and costs of collection of any or all of the
foregoing, including reasonable attorneys' fees actually incurred.
"SYNDICATED CREDIT AGREEMENT" shall mean that certain Syndicated Credit
---------------------------
Agreement, dated as of May [ ], 1998, by and among Borrower, as borrower,
Guarantors, as guarantors, Agent, as agent for Banks, and Banks.
-3-
<PAGE>
"SYNDICATED CREDIT OBLIGATIONS" shall mean the Obligations (as defined in
-----------------------------
the Syndicated Credit Agreement).
"WEEKLY LIBOR INDEX RATE" shall mean the interest rate denominated as Swing
-----------------------
Bank's "Weekly LIBOR Index Rate" and set by Swing Bank from time to time in its
sole discretion, taking into account the prevailing London Interbank Offered
Rate (LIBOR), as published by the BBA and reported by Telerate (Screen 3750)
(or, in the absence or unavailability of Telerate (Screen 3750), as such rate is
determined by Swing Bank by any other means available to Swing Bank), for a term
of seven (7) days, and such other factors as Swing Bank shall deem relevant.
1.03 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.
1.04 USE OF DEFINED TERMS. All terms defined in this Agreement shall
--------------------
have the same defined meanings when used in any of the other Swing Loan
Documents, unless otherwise defined therein or unless the context shall require
otherwise.
1.05 TERMINOLOGY; CONSTRUCTION. 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 Swing 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
----------
SWING CREDIT FACILITY
---------------------
2.01 SWING LINE OF CREDIT. Upon the satisfaction of each of the
--------------------
conditions of Article III, Swing Bank shall extend a line of credit to Borrower
under which Swing Bank will, subject to the conditions of Article IV and all
other terms and conditions of this Agreement, from time to time at Borrower's
request, make Swing Loans to Borrower in amounts not to exceed the Available
Swing Credit, which may be borrowed, repaid and reborrowed, from time to time,
in one or more borrowings prior to the Expiration Date. The Swing Loans made by
Swing Bank shall be evidenced by the Swing Line Master Note.
-4-
<PAGE>
2.02 EXPIRATION; EXTENSION. The Swing Credit Facility shall expire on
---------------------
the Expiration Date, at which time the principal amount of all Swing Loans then
outstanding and all accrued but unpaid interest thereon shall be due and payable
in full. The expiration of the Swing Credit Facility may be extended only in
accordance with the following:
(a) Borrower may, in its sole discretion, give written notice to Swing
Bank, no sooner than 90 days and no later than 60 days before the then effective
Expiration Date, of its request to extend the expiration of the Swing Credit
Facility for a term ending 364 days after the then effective Expiration Date.
In the event that Swing Bank receives any such written request, Swing Bank may,
no later than 45 days before the then effective Expiration Date, give written
notice to Borrower of its determination, in its sole discretion, to make an
offer or not to make an offer to Borrower to extend the expiration of the Swing
Credit Facility for a term ending 364 days after the then effective Expiration
Date, and, if it shall have determined to make such an offer, the terms and
conditions of the offer and the amount of the extension fee which Swing Bank
shall require in consideration of the extension.
(b) In the event that, no later than the then effective Expiration
Date, Borrower (i) accepts in writing the offer in accordance with those terms
and conditions set forth by Swing Bank in such written notice, (ii) pays Swing
Bank the extension fee required by Swing Bank, and (iii) executes and delivers
to Swing Bank an amendment to the Swing Line Master Note and such other
amendments, instruments or other documents required by Swing Bank as a condition
to the extension, all in form and substance acceptable to Swing Bank, the
Expiration Date shall thereupon be extended to the last day of the 364 day term
for which such extension shall have been offered.
(c) In the event that (i) Borrower fails to give written notice to
Swing Bank, before 60 days before the then effective Expiration Date, of its
request to extend the expiration of the Swing Credit Facility, or (ii) Swing
Bank fails, before 45 days before the then effective Expiration Date, to respond
to such a written notice from Borrower, or (iii) Swing Bank gives written notice
to Borrower of its determination, in its sole discretion, not to make an offer
to Borrower to extend the Swing Credit Facility, or (iv) Swing Bank offers to
extend the Expiration Date, before 45 days before the then effective Expiration
Date but Borrower does not accept the offer, pay the stipulated extension fee,
and execute and deliver the documents required as a condition to the extension,
all on or before the then effective Expiration Date, the Swing Credit Facility
shall not be extended, and the principal amount of all Swing Loans then
outstanding and all accrued but unpaid interest thereon shall be due and payable
in full on such Expiration Date.
-5-
<PAGE>
2.03 RATE OF INTEREST. Interest shall accrue on the unpaid principal
----------------
amount of the Swing Line Master Note at the LIBOR Rate. Notwithstanding any
provision of this Agreement to the contrary, if Swing Bank 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 Swing Bank of obtaining United
States dollar deposits in the Interbank Eurodollar Market plus the Applicable
Margin, then Swing Bank shall promptly notify Borrower, and the principal amount
of the Swing Line Master Note shall thereafter accrue interest at the Floating
Rate.
2.04 NOTICE AND MANNER OF BORROWING. (a) Borrower shall give Swing
------------------------------
Bank an Advance Request prior to 10:00 a.m. (Atlanta, Georgia time) on the
Banking Day on which the Swing Loan is to be made.
(b) Upon receipt by Swing Bank of an Advance Request, such Advance
Request shall not thereafter be revocable by Borrower.
(c) Unless Swing Bank determines that any applicable condition
specified in Article IV hereof has not been satisfied, Swing Bank will make the
funds available to Borrower by crediting a checking account maintained by
Borrower with Swing Bank.
(d) All Advance Requests shall specify the date, amount, and such
other information called for in the form of the Advance Request. Any such
notice which Swing Bank believes in good faith to have been given by a duly
authorized agent of Borrower shall be deemed given by Borrower.
2.05 INTEREST PAYMENTS. Beginning on the first (1st) day of the first
-----------------
(1st) month after the initial Swing Loan is made and continuing on the first
(1st) day of each month thereafter so long as there is any principal amount or
accrued and unpaid interest outstanding under the Swing Line Master Note,
accrued and unpaid interest on the unpaid principal amount of the Swing Line
Master Note shall be due and payable. Interest payable on the Swing Line Master
Note shall be computed on the basis of a hypothetical year of 360 days for the
actual number of days elapsed.
2.06 MATURITY. The entire unpaid principal amount of the Swing Line
--------
Master Note, together with all accrued and unpaid interest thereon, shall be due
and payable on the Expiration Date.
2.07 PERMITTED PREPAYMENT OF SWING LOANS. All or part of the
-----------------------------------
outstanding principal amount of any Swing Loan may be prepaid at any time
without penalty or premium.
-6-
<PAGE>
2.08 DEFAULT RATE OF INTEREST. If a Swing Line Default shall occur,
------------------------
then, at the option of Swing Bank, interest shall accrue on the unpaid principal
amount of the Swing Loans from and after the date of such occurrence through and
including the date on which such Swing Line Default shall have been cured at
rates of interest equal to the rates otherwise applicable to such Swing Loans
plus an additional two percent (2.00%) per annum (200 basis points).
2.09 FACILITY FEE. A Facility Fee, which shall be computed as set forth
------------
below, shall be due and payable on the effective date of this Agreement and
shall be deemed fully earned and nonrefundable when paid. The Facility Fee
shall be computed by (a) multiplying the Swing Line Commitment by .10% (10
basis points), (b) dividing the product so obtained by 360, and (c) multiplying
the quotient so obtained by the actual number of days in the Swing Line
Commitment Period.
2.10 USE OF PROCEEDS. Proceeds of the Swing Loans shall be used
---------------
solely for those purposes for which the proceeds of the Loans may be used as set
forth in Section 2.09 of the Syndicated Credit Agreement.
2.11 INCREASED COSTS; ILLEGALITY; CAPITAL ADEQUACY. (a) If Swing Bank
---------------------------------------------
should suffer any increased cost in connection with any Swing 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 Swing 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),
Swing 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) repay in full
the Swing Line Master Note and request Swing Bank to terminate this Agreement;
or (ii) continue to borrow from Swing Bank under the terms of this Agreement and
pay Swing Bank, on subsequent interest payment dates, such additional amounts as
will compensate Swing Bank, from the date of receipt of certification, for such
increased costs.
(b) 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 Swing Bank with any
request or directive (whether or not having the force of law) of any
governmental authority shall, in the determination of Swing Bank (which
determination shall be made in good faith and shall be deemed prima facie
----- -----
correct) make it unlawful or impractical for Swing
-7-
<PAGE>
Bank to make, fund or maintain any Swing Loan, Swing Bank shall promptly, upon
becoming aware of such event, notify Borrower, whereupon Borrower shall, within
thirty (30) days after such notice, pay Swing Bank in full such amounts as will
compensate Swing Bank for any losses (not including lost profits) or expenses
which Swing Bank shall have sustained or incurred as a result of such event (and
the determination of which by Swing Bank shall be deemed prima facie correct, as
----- -----
certified by Swing Bank).
(c) If, after the date hereof, the adoption of any applicable law,
rule or regulation regarding capital adequacy, or 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 Swing 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 Swing Bank or any person or entity in Control of Swing Bank and
Swing Bank determines that the amount of said capital is increased by or based
upon Swing Bank's obligations hereunder, then Swing Bank will promptly notify
Borrower thereof, and from time to time, within 30 days after demand by Swing
Bank, Borrower shall pay to Swing Bank such additional amount or amounts as will
compensate Swing Bank in light of such circumstances, to the extent that Swing
Bank reasonably determines such increase in capital is allocable to its
obligations hereunder.
(d) Swing Bank shall deliver to Borrower a certificate setting forth
in reasonable detail the calculations of any additional amounts required in
order to compensate Swing Bank under subparagraphs (a), (b) and (c) of this
Section 2.11. In determining any such amounts, Swing Bank may use any
reasonable averaging and attribution method, provided that Swing Bank shall use
--------
such methods in good faith, and such methods and the resulting charges to
Borrower shall be in accordance with those generally used by Swing Bank for this
purpose.
ARTICLE III
-----------
CONDITIONS TO SWING CREDIT FACILITY
-----------------------------------
The obligation of Swing Bank to extend the Swing Credit Facility and to
make the initial Swing Loan thereunder is subject to the satisfaction of the
following conditions:
3.01 BORROWER'S AUTHORITY. Swing Bank shall have received a
--------------------
Certificate of General Partner of Borrower, in form and substance acceptable to
Swing Bank, authorizing the execution, delivery and performance of this
Agreement, together with such other papers, certifications or other documents as
Swing Bank may require to
-8-
<PAGE>
evidence that Borrower has the legal power and authority to enter into this
Agreement and consummate the transactions contemplated hereby.
3.02 GUARANTORS' AUTHORITY. Swing Bank 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 Swing Loan Guaranty executed by it,
together with such other papers, certifications or corporate documents of
Guarantors, as Swing Bank may require to evidence that each such Guarantor has
the power and authority to enter into this Agreement, the Swing Loan Guaranty
executed by it, and the transactions contemplated hereby.
3.03 CONDITIONS TO SYNDICATED CREDIT FACILITY. Each of the
----------------------------------------
conditions set forth in Article IV of the Syndicated Credit Agreement shall have
been met.
3.04 REPRESENTATIONS AND WARRANTIES. The representations and warranties
------------------------------
of Borrower set forth in Article delivered pursuant hereto or in connection
herewith shall be true and correct in all material respects.
3.05 SWING LINE MASTER NOTE. Swing Bank shall have received the
----------------------
original of the Swing Line Master Note, duly executed and delivered by Borrower.
3.06 SWING LOAN GUARANTIES. Swing Bank shall have received the
---------------------
original Swing Loan Guaranties, duly executed and delivered by Guarantors.
3.07 OPINION OF COUNSEL. Swing Bank shall have received a
------------------
favorable opinion letter from King & Spalding, counsel for Borrower, in form and
substance satisfactory in form and substance to Swing Bank and its counsel.
3.08 CERTIFICATE OF INCUMBENCY. Swing Bank shall have received an
-------------------------
original Certificate of Incumbency from Borrower and each Guarantor with respect
to the Authorized Signatory of each such party.
3.09 OTHER DOCUMENTATION. Swing Bank shall have received such other
-------------------
loan documentation as deemed reasonably necessary or desirable by Swing Bank or
its counsel, satisfactory in form and substance to Swing Bank, providing for the
Swing Loans to be made.
3.10 GENERAL CONDITIONS. Each of the conditions set forth in Article
------------------
IV shall have been satisfied.
-9-
<PAGE>
ARTICLE IV
----------
CONDITIONS TO SWING LOANS
-------------------------
The obligation of Swing Bank to make any Swing Loan is subject to the
satisfaction of the following conditions at the time of the request for the
Swing Loan:
4.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
------------------------------
contained in this Agreement and in the Syndicated Credit Agreement shall have
been true and correct in all material respects when made, and such
representations and warranties and those made by or on behalf of Borrower in
connection with the Swing Loan shall remain true and correct in all material
respects, except as otherwise disclosed in writing pursuant to the Syndicated
Credit Agreement to Swing Bank.
4.02 AVAILABLE SWING CREDIT. The amount of the Swing Loan shall not
----------------------
exceed the Available Swing Credit.
4.03 NO MATERIAL ADVERSE CHANGE. The financial condition of Weeks
--------------------------
Corporation and the Subsidiaries (all of the foregoing taken as a whole), and of
Borrower (standing alone) shall not have materially adversely changed from its
or their financial conditions, respectively, as of the date of this Agreement.
4.04 FULL COMPLIANCE. Borrower and Weeks Corporation shall be in full
---------------
compliance with all the terms and conditions of this Agreement and the
Syndicated Credit Agreement.
4.05 NO DEFAULT; NO CLAIMS. No Swing Line Default or an event that upon
---------------------
notice or lapse of time or both, would constitute a Swing Line Default shall
have occurred, and there will be no claim, action, suit or proceeding pending or
threatened against Weeks Corporation or any Subsidiary that would result in a
material adverse change in the financial condition, assets, or operations of
Weeks Corporation and the Subsidiaries (all of the foregoing taken as a whole)
or of Borrower (standing alone).
4.06 INCUMBENCY. The Authorized Signatories of each party executing and
----------
delivering any document to Swing Bank in connection with the Swing Loan shall be
as set forth in the applicable Certificate of Incumbency delivered to Swing Bank
pursuant to Section 3.08 or as subsequently modified and reflected in an updated
Certificate of Incumbency delivered to Swing Bank.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Swing Bank to enter into the Swing Loan Documents and to
make or extend Swing Loans as contemplated
-10-
<PAGE>
hereby, Borrower represents and warrants to Swing Bank, each of which
representations and warranties is deemed to be material, that:
5.01 REPRESENTATIONS AND WARRANTIES IN SYNDICATED CREDIT AGREEMENT. All
-------------------------------------------------------------
of the representations and warranties contained in the Syndicated Credit
Agreement are true and correct in all material respects as of the date hereof.
5.02 POWER AND AUTHORITY. Borrower and Guarantors each has full right,
-------------------
power and authority to enter into the Swing 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.
5.03 ENFORCEABILITY. The Swing 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 principles affecting the rights and remedies of creditors
generally and except as may be limited by general principles 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 Swing Loan Documents.
5.04 VIOLATION OF ORGANIZATIONAL DOCUMENTS. The execution, delivery and
-------------------------------------
performance of the Swing Loan Documents will not violate the provisions of the
Articles of Incorporation or By-Laws of Weeks Corporation, Construction, Realty,
GP Holdings or LP Holdings, or the partnership agreements or certificates of
Borrower, Development or Financing.
5.05 CONFLICTS. The execution, delivery and performance of the Swing 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 Swing 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.
5.06 MISREPRESENTATIONS. No representation or warranty by Borrower made
------------------
herein and no statement or certificate to be furnished to Swing Bank pursuant
hereto in connection with the
-11-
<PAGE>
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 VI
----------
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees with Swing Bank that from and after the date
hereof, and so long as any Swing Obligations remain outstanding or this
Agreement remains in effect, that:
6.01 AFFIRMATIVE COVENANTS IN SYNDICATED CREDIT AGREEMENT. Borrower
----------------------------------------------------
shall abide by all affirmative covenants contained in Article VIII of the
Syndicated Credit Agreement.
6.02 INSPECTION. Borrower shall permit Swing Bank or any persons duly
----------
designated by it to call at its place of business at any reasonable time, and
without hindrance or delay, to inspect, audit, check and make extracts from its
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.
ARTICLE VII
-----------
NEGATIVE COVENANTS
------------------
Borrower covenants and agrees with Swing Bank that from and after the date
hereof, and so long as any Swing Obligations remain outstanding or this
Agreement remains in effect, that Borrower shall abide by all negative covenants
contained in Article IX of the Syndicated Credit Agreement.
ARTICLE VIII
------------
FINANCIAL COVENANTS
-------------------
Borrower covenants and agrees with Swing Bank that from and after the date
hereof, and so long as any amount remains outstanding on the Swing Obligations
or this Agreement remains in effect, that Borrower shall abide by the financial
covenants contained in Article X of the Syndicated Credit Agreement.
ARTICLE IX
----------
SWING LINE DEFAULT
------------------
Each of the following shall constitute a Swing Line Default hereunder:
-12-
<PAGE>
9.01 NONPAYMENT OF SWING OBLIGATIONS. Failure of Borrower to make any
-------------------------------
payment of principal or interest on the Swing Obligations when due;
9.02 BREACH OF WARRANTY OR REPRESENTATION. Any representation or
------------------------------------
warranty made by Borrower in the Swing Loan Documents or other statement
furnished at any time hereunder or in connection with the Swing Loan Documents
is untrue in any material respect when made or furnished;
9.03 BREACH OF COVENANTS. Default by Borrower under, or in the
-------------------
observance or performance of any of the covenants contained in, this Agreement
or the other Swing Loan Documents;
9.04 SWING LOAN GUARANTIES. The termination or revocation of any Swing
---------------------
Loan Guaranty, the denial or disaffirmation by any Guarantor of its obligations
under a Swing Loan Guaranty or any provision of a Swing Loan Guaranty, or if any
Swing Loan Guaranty shall otherwise cease to be in full force or effect; and
9.05 DEFAULTS UNDER SYNDICATED CREDIT AGREEMENT. A Default shall occur
------------------------------------------
and such Default shall continue beyond any applicable cure period provided
therefor under the Syndicated Credit Agreement (provided that the cure of any
--------
such Default to the satisfaction of Agent shall constitute a cure for purposes
of this Section 9.05).
ARTICLE X
---------
RIGHTS AND REMEDIES
-------------------
10.01 PRIOR TO SWING LINE DEFAULT. Before or after the occurrence of a
---------------------------
Swing Line Default, Swing Bank may examine, audit or inspect any of Borrower's
books and records, wherever located, at any reasonable time or times, and may
enter upon its premises for such purposes. Borrower shall assist Swing Bank in
whatever way reasonably necessary to make each such examination, audit and
inspection. Swing Bank, from time to time, at its option, may perform any
agreement of Borrower hereunder or under any of the Swing Loan Documents which
Borrower shall fail to perform, and Borrower agrees to reimburse forthwith Swing
Bank for all expenses of Swing Bank in connection with the foregoing, together
with interest thereon at the Floating Rate from the date incurred until
reimbursed.
10.02 UPON SWING LINE DEFAULT. Upon the occurrence of any Swing Line
-----------------------
Default, Swing Bank may terminate this Agreement and may declare the Swing
Obligations, notwithstanding any provisions thereof, without demand or notice of
any kind, immediately due and payable, whereupon the Swing Obligations shall
become immediately due and payable and may be collected forthwith; and Swing
Bank may exercise from time to time any
-13-
<PAGE>
rights and remedies available to it under the Swing Loan Documents and
applicable law.
10.03 CURE OF DEFAULTS. Anything herein contained to the contrary
----------------
notwithstanding, the provisions of this Section 10.03 shall not apply to any
Swing Line Default consisting of a failure to comply with any Sections of
Articles VII or VIII, to any Swing Line Default consisting of a failure to repay
the Swing Line Master Note on the maturity date thereof, to any Swing Line
Default consisting of a failure to make any payment of principal on the Swing
Obligations when due, to any Swing Line Default under Section 9.04 or 9.05, or
to any Swing Line 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 Swing Line Default which consists of failure to
make a payment of interest on the Swing Obligations when due, Swing Bank will
not, on account of said Swing Line Default, accelerate the maturity of any Swing
Obligations, exercise any other rights or remedies under the Swing Loan
Documents, or institute any court action under this Agreement or any of the
Swing Loan Documents if, within three (3) Domestic Business Days after the date
of occurrence of said Swing Line Default, Borrower makes such payment to Swing
Bank. In the event of the occurrence of a Swing Line Default of a type set forth
in Section 9.03 pertaining to covenants set forth in this Agreement or in the
other Swing Loan Documents, other than those covenants set forth in Articles VII
and VIII hereof, Swing Bank will not, on account of said Swing Line Default,
accelerate the maturity of any Swing Obligations, exercise any other rights or
remedies under the Swing Loan Documents, or institute any court action under
this Agreement or any of the Swing 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 Swing Bank, or (ii) the date a Key Executive otherwise has actual
knowledge of any such Swing Line Default, or (b) in the case of any covenants
set forth in the other Swing Loan Documents, within any applicable grace period
provided for therein, Borrower fully cures said Swing Line Default. Except as
specifically set forth in this Section 10.03, 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 10.03 shall not be applicable during the pendency
of any bankruptcy proceedings affecting Borrower or any Guarantor.
10.04 COSTS OF COLLECTION. Borrower agrees to pay all costs of Swing Bank
-------------------
of collection of the Swing Obligations and enforcement of rights hereunder, and,
if collected by or through an attorney, reasonable attorneys' fees actually
incurred and also other legal and court expenses.
10.05 SETOFF. As security for the full payment and performance of the
------
-14-
<PAGE>
Swing Obligations, Borrower hereby assigns, conveys, and grants a security
interest to Swing Bank in all property in which Borrower has an interest which
is in or comes into the possession, control or custody of Swing Bank (including,
but not limited to, balances, credits, deposits, accounts and monies). Borrower
hereby agrees that Swing Bank may, upon the occurrence of any Swing Line
Default, without notice, apply any balances, credits, deposits, accounts, monies
or other indebtedness now or hereafter owing by Swing Bank to Borrower in
satisfaction of any Swing Obligation, whether or not such Swing Obligation is
then due and payable.
ARTICLE XI
----------
FEES AND EXPENSES; INDEMNIFICATION
----------------------------------
11.01 FEES AND EXPENSES. Borrower and Guarantors shall provide, at their
-----------------
expense, to Swing Bank all documents, instruments, assurances, and certificates
as Swing Bank may deem necessary to consummate the transactions contemplated
hereby. Borrower shall be obligated to Swing Bank to pay all reasonable fees,
expenses and costs incurred by Swing Bank in connection with the preparation,
negotiation, and entering into of the Swing Loan Documents and the
administration of the Swing Loans, 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 Swing Bank and upon
notice to Borrower, be charged to the Swing Line Master Note as advances
thereunder. In the event Swing Bank pays any of the costs or expenses under
this Section 11.01, Borrower shall reimburse Swing Bank promptly upon demand,
and all such sums shall bear interest at the default rate of interest set forth
in Section 2.08.
11.02 INDEMNIFICATION. At all times prior to and after the consummation
---------------
of the transactions contemplated by this Agreement, Borrower agrees to hold
harmless Swing Bank, its respective directors, officers, employees, agents,
affiliates, successors and assigns from and indemnify Swing Bank, its 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
-15-
<PAGE>
Swing Loan Documents, and any of the transactions contemplated by this
Agreement, except to the extent such losses, damages, costs or expenses are due
to the wilful misconduct or gross negligence of Swing Bank or any other such
indemnitee. At the request of Swing Bank, Borrower will indemnify any assignee
to whom Swing Bank transfers or sells all or any portion of its interest in the
Loans or participation therein on terms substantially similar to the terms set
forth above. Swing Bank 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 XII
-----------
TERM
----
When executed by each of the parties hereto, this Agreement shall be
effective on the date first above written and shall continue in full force and
effect until all Swing Obligations have been paid and satisfied in full, unless
sooner terminated by Agent upon a Swing Line Default. Upon termination,
Borrower shall continue to perform all of their obligations hereunder incurred
prior to termination, including, without limitation, all obligations under
Article II, which shall survive the termination of this Agreement.
ARTICLE XIII
------------
MISCELLANEOUS
-------------
13.01 CUMULATIVE RIGHTS; NON-WAIVER. No delay or omission by Swing
-----------------------------
Bank to exercise any right, power or remedy accruing upon any Swing Line Default
shall exhaust or impair any such right, power or remedy or shall be construed to
be a waiver of any such Swing Line Default, or acquiescence therein, and every
right, power and remedy given by this Agreement to Swing Bank may be exercised
from time to time and as often as may be deemed expedient by Swing Bank. No
consent or waiver, expressed or implied, by Swing Bank to or of any Swing Line
Default shall be deemed or construed to be a consent or waiver to or of any
other Swing Line Default. No delay, indulgence, departure, act or omission by
Swing Bank or any holder of the Swing Line Master Note shall release, discharge,
modify, change or otherwise affect the original liability under the Swing Line
Master Note or any other obligation of Borrower, or any maker, surety or
guarantor, or preclude Swing Bank or such holder from exercising any right,
privilege or power granted herein or alter the security title, security interest
or lien hereof. Swing Bank 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
-16-
<PAGE>
whatsoever securing the Swing 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 Swing Bank 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
Swing Loan Documents or now or hereafter existing at law, in equity or by
statute.
13.02 NO OBLIGATION TO THIRD PARTIES. The Swing Loan Documents are
------------------------------
made solely for the benefit of Swing Bank. No tenant in any of the properties
of Borrower, nor any party involved with the construction of any improvements on
any part of such properties nor any other party whatsoever shall have standing
to bring any action against Swing Bank as the result of the Swing Loan
Documents, or to assume that Swing Bank will exercise any remedies provided
herein, and no party other than Swing Bank shall be deemed to be a beneficiary
of any provision of the Swing Loan Documents, any and all of which may be freely
waived in whole or in part by Swing Bank in its discretion at any time. Nothing
contained in this Section 13.02 is intended to deprive Borrower of the benefit
of any covenant by Swing Bank in favor of Borrower contained in the Swing Loan
Documents.
13.03 SUCCESSORS AND ASSIGNS. 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 its rights under this Agreement.
13.04 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.
13.05 SURVIVAL OF OBLIGATIONS. All representations, warranties and
-----------------------
covenants contained herein shall survive the execution and delivery of the Swing
Line Master Note or any other documents contemplated hereby.
13.06 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
----------------
of the parties hereto with respect to the subject matter hereof.
13.07 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.
-17-
<PAGE>
13.08 CHANGES IN FORMS. Swing Bank reserves the right to make
----------------
reasonable changes in the forms of all certificates and other documents to be
executed and delivered by Borrower hereunder.
13.09 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 United States Mail, first class postage and charges prepaid, addressed
to such party at the following address, or to such other address 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) 717-3310
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) 717-3310
If to Weeks Corporation,
to: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
ATTN: Chief Financial Officer
Facsimile No.: (770) 717-3310
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) 717-3310
-18-
<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) 717-3310
If to Swing Bank,
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
Any such notice shall be deemed given as of the date so delivered personally, or
three (3) 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.
13.10 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
-------------------
13.11 EXECUTION IN COUNTERPARTS. This Agreement 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.
13.12 CONFLICT WITH MANDATE LETTER. In the event of inconsistencies or
----------------------------
conflict between the terms and provisions of this Agreement and the terms and
provisions of the Mandate Letter, the terms and provisions of this Agreement
shall prevail.
13.13 MISCELLANEOUS. The Swing Loan Documents may be changed, waived,
-------------
discharged or terminated only by an instrument, in writing, signed by the party
against whom enforcement of such change, waiver, discharge or termination is
sought. Nothing
-19-
<PAGE>
contained in the Swing Loan Documents shall be construed to create an agency,
partnership or joint venture between Borrower and Swing Bank. Wherever in the
Swing Loan Documents it is indicated that the approval, consent or determination
of Swing Bank is to be given or made at the option or in the discretion or
judgment of Swing Bank without reference to a standard of reasonableness, then
Swing Bank 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 Swing Line Master Note
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 Swing Bank limiting rates of interest which may be charged or
collected by Swing Bank. 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 Swing Bank, 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 Swing Bank in writing that
the Borrower elects to have such excess sum returned to it forthwith. All
exhibits referred to in the Swing Loan Documents are by such reference
incorporated into the Swing Loan Documents as if fully set forth therein.
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.
By: WEEKS GP HOLDINGS, INC., its
sole general partner
ATTEST: By: David P. Stockert
---------------------------------
/s/ Elizabeth C. Belden Its: SVP and CFO
- --------------------------- --------------------------
Secretary Date:
[CORPORATE SEAL]
GUARANTORS:
----------
ATTEST: WEEKS CORPORATION
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- --------------------------- ---------------------------------
Secretary Its: SVP and CFO
-----------------------------
[CORPORATE SEAL]
WEEKS GP HOLDINGS, INC.
ATTEST:
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- --------------------------- --------------------------------
Secretary Its: SVP and CFO
-------------------------
[CORPORATE SEAL]
WEEKS LP HOLDINGS, INC.
ATTEST:
/s/ Elizabeth C. Belden By: /s/ David P. Stockert
- --------------------------- --------------------------------
Secretary Its: SVP and CFO
-------------------------
[CORPORATE SEAL]
SWING BANK:
----------
WACHOVIA BANK, N.A.
By: /s/ Steven B. Wood
--------------------------------
Its: Senior Vice President
----------------------------
Date:
---------------------------
[BANK SEAL]
-20-
<PAGE>
EXHIBIT 10.4
TENTH AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS TENTH AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WEEKS REALTY, L.P. (the "Amendment") is entered into as
of April 3, 1998, by and among WEEKS GP HOLDINGS, INC., a Georgia corporation
(the "General Partner"), WEEKS CORPORATION, a Georgia corporation (the
"Company"), and SANFORD H. ORKIN, an individual resident of the State of
Georgia, and BARBARA H. ORKIN, an individual resident of the State of Georgia,
not individually, but solely (i) as Trustee of the Sherri Orkin Life Trust U/A
with Sanford H. Orkin dated December 27, 1973, (ii) as Trustee of the Laurie
Orkin Life Trust U/A with Sanford H. Orkin dated December 27, 1973, (iii) as
Trustee of the Michael Orkin Life Trust U/A with Sanford H. Orkin dated December
27, 1973, and (iv) as Trustee of the Kenneth Orkin Life Trust U/A with Sanford
H. Orkin dated December 27, 1973 (Sanford H. Orkin and Barbara H. Orkin are
collectively referred to hereafter as the "Contributors" and "Contributor" shall
hereafter mean any one of the Contributors).
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
<PAGE>
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, the
Eighth Amendment to the Partnership Agreement dated January 9, 1998, and the
Ninth Amendment to the Partnership Agreement dated January 22, 1998 (the
"Partnership Agreement"). Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Partnership Agreement.
Pursuant to the agreements and instruments listed or referred to on Exhibit
A hereto (the ("Transaction Documents"), and the transactions effected by the
Transaction Documents, effective as of the date hereof the Contributors have
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 Contributors as Limited Partners of the
Partnership, and the Contributors wish 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
-2-
<PAGE>
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Admission. The Contributors are hereby admitted to the Partnership as
---------
Limited Partners, effective as of the date hereof, and each of the Contributors
hereby agrees to be bound by the Partnership Agreement, including, but not
limited to, the transfer restrictions contained in Article IX thereof.
2. Capital Contributions. The Contributors are 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 each of the Contributors, which shall be such property's initial Gross Asset
Value, are shown on Exhibit B.
3. Initial Partnership Units; Rights.
---------------------------------
(a) The Partnership Units attributable to the Partnership Interests of
the Contributors, effective upon their admission as Limited Partners at the
date hereof, are as set forth on Exhibit B hereto, and the Partnership
Agreement is hereby amended to reflect the Contributors' having such
Partnership Units.
(b) The Partnership does hereby grant to each of the Contributors, and
each of them does hereby accept, the right, but not the obligation (herein
such rights being sometimes referred to as the "Rights"), to require the
Partnership to redeem all or a portion of the Partnership Units issued to
them pursuant to the Transaction Documents, on the terms and subject to the
conditions and restrictions contained in Exhibit D hereto. The Rights are
governed solely by this Amendment and Exhibit D hereto, and none of the
Contributors shall have any rights with respect to the "Rights" provided
for in Section 11.1 and Exhibit B-1 to the Partnership Agreement. The
Rights granted hereunder may be exercised by any one or more of the
Contributors, on the terms and subject to the
-3-
<PAGE>
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 Contributors as Limited Partners at the date hereof, the Percentage
Interests of the Contributors have been reflected on Exhibit C hereto, and the
Partnership Agreement is hereby amended accordingly.
5. Future Contributions. The parties acknowledge that, pursuant to and
--------------------
subject to the terms and conditions of the Transaction Documents, the
Contributors may make additional Capital Contributions. Concurrently with any
such additional Capital Contribution, 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 B-2," "Exhibit C-1," "Exhibit
C-2," and so on and shall identify the Capital Contribution to which each
relates) that will, respectively, reflect (to the extent determinable at such
time) the Capital Contribution made by the Contributors at that time, the
initial Gross Asset Value of any property other than money included in such
Capital Contribution, the additional Partnership Units attributable to the
Partnership Interest associated with such Capital Contribution, and the
resulting restated Percentage Interests of all of the Partners. Such
supplements shall be in accordance with the terms of the Transaction Documents.
The Partnership Agreement shall be deemed to be amended as reflected in each
such supplement to this Amendment.
6. Proration of Distributions. Notwithstanding any contrary provision of
--------------------------
the Partnership Agreement, including, without limitation, Section 6.2 thereof,
the Contributors agree that the distribution of Net Operating Cash Flow made for
the calendar quarter in which the Partnership Units are issued, by reason of
each Capital Contribution made pursuant to the
-4-
<PAGE>
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.
7. Tax Considerations.
------------------
(a) During the five-year period commencing on the date hereof, the
General Partner agrees that in the event it elects to cause the Partnership to
sell or otherwise convey any of the properties contributed to the Partnership
pursuant to this Amendment (each, a "Contributed Property"), the General Partner
will structure any such sale or conveyance of a Contributed Property as a tax-
deferred like-kind exchange under Section 1031 of the Internal Revenue Code, as
amended (the "Code"), to the extent such sale or conveyance would result in the
recognition of gain for federal income tax purposes by one or more of the
Contributors; provided, however, that, so long as the General Partner and the
Partnership comply with the terms and provisions of subparagraph (c) below, the
foregoing limitation shall not apply to the Company or the Partnership and shall
not be binding on any successor in interest to the Company or the Partnership if
the Company or the Partnership (i) agrees to sell all or substantially all of
its assets (collectively, a "Bulk Sale") or (ii) agrees to any merger,
consolidation, reorganization, liquidation or similar transaction (collectively,
a "Merger").
(b) During the period between the fifth (5th) anniversary of the date
hereof and the tenth (10th) anniversary of the date hereof, the General Partner
agrees that in the event it elects to cause the Partnership to sell or otherwise
convey any Contributed Property, the Partnership hereby agrees to provide
reasonable advance notice to the Contributors of any such sale or other
conveyance and, together with the Contributors, to use commercially reasonable,
good faith efforts to structure any such sale or conveyance of a Contributed
Property in a manner
-5-
<PAGE>
which the Contributors believe will avoid any substantial adverse federal income
tax consequences to Contributors resulting from such transaction; provided,
however, that, so long as the General Partner and the Partnership comply with
the terms and provisions of subparagraph (c) below, the foregoing limitation
shall not apply to the Company or the Partnership and shall not be binding on
any successor in interest to the Company or the Partnership if the Company or
the Partnership (i) agrees to a Bulk Sale or (ii) agrees to a Merger. If, after
such commercially reasonable, good faith efforts as provided in the immediately
preceding sentence, the General Partner determines in good faith, after taking
into consideration the objectives of both the Partnership and the Contributors,
that it is not in the best interest of the Partnership to structure such
transaction in a manner which the Contributors believe will achieve the
objective of avoiding any substantial adverse federal income tax consequences to
the Contributors resulting from such transaction, the General Partner may cause
the Partnership to consummate such transaction, without the consent of the
Contributors, it being acknowledged, however that in no event shall this
sentence or such consummation without the consent of the Contributors be deemed
a waiver or release by the Contributors of any rights or remedies available to
them for any failure by the Partnership to consider in a commercially
reasonable, good faith manner Contributors' tax objectives in structuring the
transaction as described above. Notwithstanding the foregoing, the Partnership
expressly acknowledges and agrees that in respect of any proposed sale of the
Contributed Property or any portion thereof during the period between the fifth
(5th) anniversary of the date hereof and the tenth (10th) anniversary of the
date hereof, that is not incident to a Bulk Sale or Merger: (x) the Partnership
shall reserve with its prospective purchaser the right to consummate the sale by
means of a tax-deferred exchange under Section 1031 of the Code; (y) the
Partnership shall reserve with its prospective purchaser the right to convey the
Contributed Property or applicable portion thereof to Contributors or any of the
persons or entities composing Contributors (the "Contributor Parties") prior to
the consummation of such sale so that such sale is consummated by the
Contributor Parties; and (z) at the option of the Contributor Parties, the
Partnership shall convey the Contributed Property or applicable portion thereof
to the Contributor Parties prior to the consummation of such sale, provided that
(A) the Contributor Parties pay to the Partnership an amount equal to the net
-6-
<PAGE>
proceeds that would have been received by the Partnership in connection with
such sale (which payment may be made, at the sole option and election of the
Contributor Parties, by the payment of cash, by the tender of Partnership Units
for redemption at their fair market value at the date of tender, or any
combination of the foregoing in any proportion), and (B) the Contributor Parties
assume the obligations of the Partnership under the applicable documents to
consummate the sale. The Contributors shall be responsible for any Georgia
Realty Transfer Tax liability accruing to the Partnership as a result of the
transfers described in the immediately preceding sentence.
(c) During the ten (10)-year period commencing on the date hereof, the
Partnership hereby agrees to provide reasonable advance notice to the
Contributors of any such proposed Bulk Sale or Merger and, together with the
Contributors, to use commercially reasonable, good faith efforts to structure
the transaction in a manner which the Contributors believe will avoid any
substantial adverse federal income tax consequences to the Contributors
resulting from such transaction. If, after such commercially reasonable, good
faith efforts, the General Partner determines in good faith, after taking into
consideration the objectives of both the Partnership and the Contributors, that
it is not in the best interest of the Partnership to structure such transaction
in a manner which would achieve the objective of avoiding any substantial
adverse federal income tax consequences to the Contributors resulting from such
Bulk Sale or Merger, the General Partner may cause the Partnership to consummate
the Bulk Sale or Merger, without the consent of the Contributors, it being
acknowledged, however that in no event shall this sentence or such consummation
without the consent of the Contributors be deemed a waiver or release by the
Contributors of any rights or remedies available to them for any failure by the
Partnership to consider in a commercially reasonable, good faith manner
Contributors' tax objectives in structuring the proposed Bulk Sale or Merger as
described above.
(d) Contributors acknowledge and agree that the Partnership and the
General Partner have made no representations or assurances to the Contributors
of the tax consequences of any course of action taken under paragraphs 7(a),
7(b) or 7(c) hereof at the request of
-7-
<PAGE>
Contributors designed to minimize or avoid substantial adverse financial federal
income tax consequences to Contributors and the Contributors bear the risk
thereof entirely.
8. 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.
-8-
<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: /s/ Forrest W. Robinson
----------------------------
Name:
Title: President/COO
CONTRIBUTORS:
/s/ Sanford H. Orkin
-------------------------------------
SANFORD. H. ORKIN, individually
/s/ Barbara H. Orkin
-------------------------------------
BARBARA H. ORKIN, as Trustee of the Sherri Orkin Life
Trust U/A with Sanford H. Orkin, dated December, 1973,
(ii) as Trustee of the Laurie Orkin Life Trust U/A with
Sanford H. Orkin, dated December 27, 1973, (iii) as
Trustee of the Michael Orkin Life Trust U/A with
Sanford H. Orkin, dated December 27, 1973, and (iv) as
Trustee of the Kenneth Orkin Life Trust U/A with
Sanford H. Orkin, dated December 23, 1973
-9-
<PAGE>
Solely to evidence its agreement to its undertakings
in Exhibit D hereto:
WEEKS CORPORATION
By: /s/ Forrest R. Robinson
----------------------------------
Name:
Title: President/COO
-10-
<PAGE>
ELEVENTH AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS ELEVENTH AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WEEKS REALTY, L.P. (the "Amendment") is entered into as
of the 26th day of May, 1998, by and among WEEKS GP HOLDINGS, INC., a Georgia
corporation (the "General Partner"), WEEKS CORPORATION, a Georgia corporation
(the "Company"), and THE FUTRELL PROPERTIES LIMITED PARTNERSHIP NO. 1, a North
Carolina limited partnership (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 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 22, 1998, and the
<PAGE>
Tenth Amendment to the Partnership Agreement dated as of April 3, 1998
(collectively, the "Partnership Agreement"). Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Partnership
Agreement.
Pursuant to the agreements and instruments listed or referred to on Exhibit
A hereto (the ("Transaction Documents"), and the transactions effected by the
Transaction Documents, effective as of the date hereof 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 its agreement as to certain matters relating to its becoming a
Limited Partner 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:
-2-
<PAGE>
1. Admission. The Contributor is hereby 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. 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.
---------------------------------
(a) 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's having such
Partnership Units.
(b) 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.
-3-
<PAGE>
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 Interest
of the Contributor has been reflected on Exhibit C hereto, and the Partnership
Agreement is hereby amended accordingly.
5. Future Contributions. The parties acknowledge that, pursuant to and
--------------------
subject to the terms and conditions of the Transaction Documents, the
Contributor may make additional Capital Contributions. Concurrently with any
such additional Capital Contribution, 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 B-2," "Exhibit C-1," "Exhibit
C-2," and so on and shall identify the Capital Contribution to which each
relates) that will, respectively, reflect (to the extent determinable at such
time) the Capital Contribution made by the Contributor at that time, the initial
Gross Asset Value of any property other than money included in such Capital
Contribution, the additional Partnership Units attributable to the Partnership
Interest associated with such Capital Contribution, and the resulting restated
Percentage Interests of all of the Partners. Such supplements shall be in
accordance with the terms of the Transaction Documents. The Partnership
Agreement shall be deemed to be amended as reflected in each such supplement to
this Amendment.
6. Adjustments to Partnership Units. The parties acknowledge that the
--------------------------------
Transaction Documents provide for adjustments to the Partnership Units of the
Contributor in certain circumstances, and further provide that the Contributor's
Partnership Interests and Units, and the resulting restated Percentage Interests
of all of the Partners, may not be capable of determination at the time a
Capital Contribution is made after the date hereof. At the times of adjustment
and final determination provided for in the Transaction Documents, the General
Partner shall supplement this Amendment by executing and attaching hereto either
-4-
<PAGE>
additional supplements to Exhibits B and C (in the form described above), or
amended and restated versions of prior supplements to Exhibits B and C, as
applicable. Such supplements shall be in accordance with the terms of the
Transaction Documents. The Partnership Agreement shall be deemed to be amended
as reflected in each such supplement to this 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
each Capital Contribution made pursuant to the Transaction Documents shall be
equal to the amount of Net Operating Cash Flow otherwise distributable with
respect to such Partnership Units under the terms of the Partnership Agreement,
multiplied by a fraction, the numerator of which is the number of calendar days
beginning on the date 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.
8. Representations and Warranties.
------------------------------
(a) Contributor's Representations. The Contributor hereby reaffirms
-----------------------------
and makes to each of the Partnership and the General Partner those
representations and warranties contained in the Contract for the Purchase
and Sale of Real and Personal Property identified in Exhibit A hereto. In
addition, the Contributor hereby represents and warrants to the Partnership
and the General Partner that (i) Contributor is acquiring the Partnership
Units for 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) 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
-5-
<PAGE>
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 the Contributor's 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.
(b) 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 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.
(c) 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."
(d) 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.
-6-
<PAGE>
(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 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
-7-
<PAGE>
anniversary of the last issuance of Units pursuant to the Transaction Documents
(the "Survival Period").
10. Indemnification.
---------------
(a) The Contributor hereby 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.
(b) 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.
(c) 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
indemnification, and if such right is exercised, the parties shall
cooperate in the defense of such action or proceeding.
(d) 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 contained in this Agreement.
Nothing contained herein shall limit any remedy the Partnership (or any
affiliate of the Partnership including, without limitation, any affiliate
-8-
<PAGE>
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.
---------------------
(a) 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 of the Contributor 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.
(b) In the event the General Partner asserts that the Contributor has
an indemnification obligation to the Partnership, the Company or the
General Partner under 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
-9-
<PAGE>
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 its
dispute as to the indemnification obligation and fails to make payment
within thirty (30) days after delivery of an Indemnification Notice or (ii)
has an indemnification obligation to the Partnership or the General Partner
under paragraph 10 hereof as determined 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 Contributors), and, in the case of shares of
Common Stock, on the Current Per Share Common Stock Price computed as of
the date immediately preceding such deemed acquisition) to the amount
recoverable from the 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
-10-
<PAGE>
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.
(c) 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 Contributor's Collateral.
13. Restriction on Transfer. In connection with the security interests
-----------------------
granted by the Contributor under paragraph 11 hereof, the Contributor agrees
-11-
<PAGE>
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 Contributor's 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 Contributor's 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 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.
-12-
<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: /s/ Forrest R. Robinson
---------------------------------
Name:
Title: President/COO
CONTRIBUTOR:
THE FUTRELL PROPERTIES LIMITED PARTNERSHIP NO. 1, A
NORTH CAROLINA LIMITED PARTNERSHIP
By: /s/ Glenn E. Futrell
--------------------------------------
Glenn E. Futrell
General Partner
By: /s/ Phyllis J. Futrell
--------------------------------------
Phyllis J. Futrell
General Partner
Address:
-----------------------------
-----------------------------
-----------------------------
Solely to evidence its agreement to its undertakings in
Exhibit D hereto:
WEEKS CORPORATION
By: /s/ Forrest R. Robinson
--------------------------------------
Name:
------------------------------------
Title: President/COO
-----------------------------------
-13-
<PAGE>
EXHIBIT 10.6
TWELFTH AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS TWELFTH AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WEEKS REALTY, L.P. (the "Amendment") is entered into as
of the 3rd day of June 1998, by and among WEEKS GP HOLDINGS, INC., a Georgia
corporation (the "General Partner"), WEEKS CORPORATION, a Georgia corporation
(the "Company"), and THOMAS M. BECKMAN and THOMAS B. FOWLER, JR. (Beckman and
Fowler are collectively referred to hereafter as the "Contributors" and
"Contributor" shall hereafter mean any one of the Contributors).
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, the Eighth Amendment to the Partnership Agreement dated January 9, 1998,
the Ninth Amendment to the Partnership Agreement dated January 22, 1998, the
Tenth Amendment to the Partnership Agreement dated April 3, 1998, and the
Eleventh Amendment to the Partnership Agreement dated May 26,1998, (the
"Partnership Agreement"). Capitalized terms used herein without definition
shall have the meanings ascribed to them in the Partnership Agreement.
Pursuant to the agreements and instruments listed or referred to on Exhibit
-------
A hereto (the ("Transaction Documents"), and the transactions effected by the
- -
Transaction Documents, effective as of the date hereof the Contributors have
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
<PAGE>
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 Contributors as Limited Partners of the
Partnership, and the Contributors wish 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 Contributors are hereby admitted to the Partnership as
---------
Limited Partners, effective as of the date hereof, and each of the Contributors
hereby agrees to be bound by the Partnership Agreement, including, but not
limited to, the transfer restrictions contained in Article IX thereof.
2. Capital Contributions. The Contributors are 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 each of the Contributors, which shall be such property's initial Gross Asset
Value, are shown on Exhibit B.
---------
3. Initial Partnership Units; Rights.
---------------------------------
(a) The Partnership Units attributable to the Partnership Interests of
the Contributors, effective upon their admission as Limited Partners at the
date hereof, are as set forth on Exhibit B hereto, and the Partnership
---------
Agreement is hereby amended to reflect the Contributors' having such
Partnership Units.
(b) The Partnership does hereby grant to each of the Contributors, and
each of them does hereby accept, the right, but not the obligation (herein
such rights being sometimes referred to as the "Rights"), to require the
Partnership to redeem all or a portion of the Partnership Units issued to
them pursuant to the Transaction Documents, on the terms and subject to the
conditions and restrictions contained in Exhibit D hereto. The Rights are
---------
governed solely by this Amendment and Exhibit D hereto, and none of the
---------
Contributors shall have any rights with respect to the "Rights" provided
for in Section 11.1 and Exhibit B-1 to the Partnership Agreement. The
-----------
Rights granted hereunder may be exercised by any one or more of the
Contributors, on the terms and subject to the conditions and restrictions
contained in Exhibit D hereto, upon delivery to the Partnership
---------
<PAGE>
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 Contributors as Limited Partners at the date hereof, the Percentage
Interests of the Contributors have been reflected on Exhibit C hereto, and the
---------
Partnership Agreement is hereby amended accordingly.
5. Future Contributions. The parties acknowledge that, pursuant to and
--------------------
subject to the terms and conditions of the Transaction Documents, the
Contributors may make additional Capital Contributions. Concurrently with any
such additional Capital Contribution, 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 B-2," "Exhibit C-1," "Exhibit
----------- ----------- ----------- -------
C-2," and so on and shall identify the Capital Contribution to which each
- ---
relates) that will, respectively, reflect (to the extent determinable at such
time) the Capital Contribution made by the Contributors at that time, the
initial Gross Asset Value of any property other than money included in such
Capital Contribution, the additional Partnership Units attributable to the
Partnership Interest associated with such Capital Contribution, and the
resulting restated Percentage Interests of all of the Partners. Such
supplements shall be in accordance with the terms of the Transaction Documents.
The Partnership Agreement shall be deemed to be amended as reflected in each
such supplement to this Amendment.
6. Adjustments to Partnership Units. The parties acknowledge that the
--------------------------------
Transaction Documents provide for adjustments to the Partnership Units of the
Contributors in certain circumstances, and further provide that the
Contributors' Partnership Interests and Units, and the resulting restated
Percentage Interests of all of the Partners, may not be capable of determination
at the time a Capital Contribution is made after the date hereof. At the times
of adjustment and final determination provided for in the Transaction Documents,
the General Partner shall supplement this Amendment by executing and attaching
hereto either additional supplements to Exhibits B and C (in the form described
----------------
above), or amended and restated versions of prior supplements to Exhibits B and
--------------
C, as applicable. Such supplements shall be in accordance with the terms of the
- -
Transaction Documents. The Partnership Agreement shall be deemed to be amended
as reflected in each such supplement to this Amendment.
7. Proration of Distributions. Notwithstanding any contrary provision of
--------------------------
the Partnership Agreement, including, without limitation, Section 6.2 thereof,
the Contributors agree that the distribution of Net Operating Cash Flow made for
the calendar quarter in which the Partnership Units are issued, by reason of
each Capital Contribution made pursuant to the Transaction Documents shall be
equal to the amount of Net Operating Cash Flow otherwise distributable with
respect to such Partnership Units under the terms of the Partnership Agreement,
multiplied by a fraction, the numerator of which is the number of calendar days
beginning on the date of issuance of the Partnership Units and ending on the
last day of such
<PAGE>
calendar quarter and the denominator of which is the total number of days in the
calendar quarter in which the Partnership Units are issued.
8. Representations and Warranties.
------------------------------
(a) Contributors' Representations. The Contributors, jointly and
-----------------------------
severally, hereby reaffirm and make to each of the Partnership and the
General Partner those representations and warranties contained in the
Contribution Agreement identified in Exhibit A attached hereto. In
addition, the Contributors, jointly and severally, hereby represent and
warrant to the Partnership and the General Partner that (i) each such
Contributor is acquiring the Partnership Units for such 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 such Contributor is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation
D promulgated under the Securities Act; (iii) each such 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 such Contributor's
representations as expressed herein; (iv) each such 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) each such 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) each such Contributor has such
knowledge and experience in financial and business matters, or has been
adequately advised by such Contributor's financial representatives, that
such Contributor is capable of evaluating the merits and risks of the
purchase of the Partnership Units pursuant to this Agreement and of
protecting such Contributor's interests in connection herewith.
(b) No Liens. The Contributors, jointly and severally, represent and
--------
warrant to the Partnership and the General Partner that at the date hereof
none of the Partnership Units issued or issuable to the Contributors
pursuant to the Transaction Documents, and none of the shares of Common
Stock that may be acquired by the Contributors upon exercise of Rights, is
subject to any Lien, other than the security interest created by paragraph
11 hereof.
(c) Definition. All of the representations, warranties, covenants and
----------
agreements of each of the Contributors referred to in this paragraph 8 are
referred to collectively as the "Representations and Warranties."
(d) General Partner Representations. The General Partner represents
-------------------------------
and warrants to each of the Contributors as follows:
<PAGE>
(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 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 respective Contributor or before the
first anniversary of the last issuance of Units pursuant to the Transaction
Documents (the "Survival Period").
10. Indemnification.
---------------
(a) The Contributors, jointly and severally, indemnify and hold
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.
<PAGE>
(b) 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
Contributors.
(c) If a claim for indemnification is asserted by the Partnership, the
Company or the General Partner against the Contributors, the Contributors
shall have the right, at their 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
indemnification, and if such right is exercised, the parties shall
cooperate in the defense of such action or proceeding.
(d) 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 contained in this Agreement.
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.
---------------------
(a) Each of the Contributors hereby grants to the Partnership a lien
upon and a continuing security interest in the Partnership Units issued to
each of them pursuant to the Transaction Documents and the shares of Common
Stock acquired by each of them upon exercise of Rights with respect to such
Partnership Units (the "Collateral"), which shall be security for the
indemnification obligations of the Contributors under paragraph 10 hereof.
Except as otherwise provided in this Amendment, the indemnification
obligations of the Contributors hereunder with respect to breaches of
Representations and Warranties shall be payable out of the Contributors
entire Collateral; provided, however, that the Contributors may satisfy all
or any part of such indemnification obligation of the Contributors in cash
if the Contributors so elect. Any Transfer by a Contributor of its
Collateral shall be subject to the lien and security interest granted
hereby.
(b) In the event the General Partner asserts that the Contributors
have an indemnification obligation to the Partnership, the Company or the
General Partner under paragraph 10 hereof, the General Partner shall
deliver written notice (the "Indemnification Notice") to the Contributors
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 Contributors deliver written
notice to the General Partner indicating that the Contributors dispute the
circumstances giving
<PAGE>
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 Contributors pursuant to such Article
XIV. If, after receiving timely notice of a dispute hereunder from the
Contributors, the General Partner fails to so submit the matter for
arbitration within twenty (20) days after receipt of such notice from the
Contributors, then the Contributors shall be relieved of the claimed
indemnification obligation described in the Indemnification Notice. In the
event the Contributors (i) receive an Indemnification Notice and fail to
timely deliver notice to the General Partner of their dispute as to the
indemnification obligation and fail to make payment within thirty (30) days
after delivery of an Indemnification Notice or (ii) have 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 do 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 Contributors, to have acquired from the
Contributors 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 Contributors), and, in the case of
shares of Common Stock, on the Current Per Share Common Stock Price
computed as of the date immediately preceding such deemed acquisition) to
the amount recoverable from the Contributors under paragraph 10 hereof. In
the event the Partnership shall have acquired from the Contributors any
Collateral pursuant to this paragraph 11, the General Partner shall deliver
written notice to the Contributors within ten (10) days thereafter
identifying the specific Collateral acquired and, if such Collateral
consists of Partnership Units, the Percentage Interests of the Contributors
following such acquisition. Unless and until the Partnership shall have
acquired from the Contributors 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. Each
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.
(c) 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
<PAGE>
the Contributors prior to such date, then on the first day immediately
following the resolution of such Notice of Breach) the Contributors 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 Contributors, shall promptly execute and deliver any
document or instrument reasonably requested by the Contributors 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 any Contributor shall not be
limited to such Contributor's Collateral.
13. Restriction on Transfer. In connection with the security interests
-----------------------
granted by each Contributor under paragraph 11 hereof, each of the Contributors
agrees that any shares of Common Stock and any portion of such Contributor's
Partnership Interests included in the Collateral shall not be Transferred
without the consent of the General Partner; provided, however, that each of the
Contributors 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 a Contributor's 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 a Contributor included in such Contributor's 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
Contributors prior to such date, then on the first day immediately following the
resolution of such Notice of Breach) the Contributors 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 Contributors, shall
promptly execute and deliver any document or instrument reasonably requested by
the Contributors 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.
<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: /s/ Forrest W. Robinson, President
__________________________________
Forrest W. Robinson, President
CONTRIBUTORS:
/s/ THOMAS M. BECKMAN
_______________________________ (SEAL)
THOMAS M. BECKMAN
Address:
/s/ THOMAS B. FOWLER, JR.
_______________________________ (SEAL)
THOMAS B. FOWLER, JR.
Address:
Solely to evidence its agreement to its
undertakings in Exhibit D hereto:
---------
WEEKS CORPORATION
\s\ Forrest W. Robinson, Vice President
By:_______________________________________
Forrest W. Robinson, Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 432
<SECURITIES> 0
<RECEIVABLES> 9,020
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,146,391
<DEPRECIATION> 77,470
<TOTAL-ASSETS> 1,230,999
<CURRENT-LIABILITIES> 0
<BONDS> 552,675
0
0
<COMMON> 0
<OTHER-SE> 427,634
<TOTAL-LIABILITY-AND-EQUITY> 1,230,999
<SALES> 0
<TOTAL-REVENUES> 69,019
<CGS> 0
<TOTAL-COSTS> 49,340
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 13,377
<INCOME-PRETAX> 21,248
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<NET-INCOME> 21,248
<EPS-PRIMARY> 0.60
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