<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 11, 1994
REGISTRATION NO. 33-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
WEINGARTEN REALTY INVESTORS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1464203
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2600 CITADEL PLAZA DRIVE
HOUSTON, TEXAS 77008
(713) 866-6000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
STANFORD ALEXANDER
WEINGARTEN REALTY INVESTORS
2600 CITADEL PLAZA DRIVE
HOUSTON, TEXAS 77008
(713) 866-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
-------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /x/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
BEING REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES OF BENEFICIAL INTEREST,
PAR VALUE $0.03 PER SHARE 300,020 $38.50 $11,550,770 $3,984
===========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a).
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 11, 1994
300,020 SHARES
WEINGARTEN REALTY INVESTORS
SHARES OF BENEFICIAL INTEREST
-------------------------
The 300,020 shares of beneficial interest ("Shares") of
Weingarten Realty Investors (the "Company") offered hereby (the "Offered
Shares") are being sold by the selling shareholders named herein (the "Selling
Shareholders"). The Shares are subject to certain restrictions on
transferability designed to preserve the Company's status as a real estate
investment trust for federal income tax purposes. See "Description of Shares."
The Company will receive no part of the proceeds of the sales of the Offered
Shares but will incur certain expenses, estimated at $45,000, in connection
with the offering. See "Selling Shareholders." The last reported sale price
of the Shares on the New York Stock Exchange on July 6, 1994 was $38.25 per
Share.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
-------------------------
The Selling Shareholders may from time to time sell all or a
portion of the Offered Shares in transactions on the New York Stock Exchange,
in negotiated transactions or otherwise, at prices then prevailing or related
to the then current market price or at negotiated prices. The Offered Shares
may be sold directly or through agents or broker-dealers acting as principal or
agent, or in block trades (which may involve crosses) or a distribution by one
or more underwriters on a firm commitment or best efforts basis. See "Plan of
Distribution." The Selling Shareholders and any agents or broker-dealers
participating in the distribution of the Offered Shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and any profit on the sale of Offered Shares by the
Selling Shareholders and any commissions received by any such agents or
broker-dealers may be deemed to be underwriting commissions or discounts under
the Securities Act. The Company has agreed to indemnify the Selling
Shareholders against certain liabilities, including certain liabilities that
may result from certain public disclosures of information in connection with
the registration, offering and sale of the Offered Shares.
THE OFFERED SHARES HAVE NOT BEEN REGISTERED FOR SALE BY THE
SELLING SHAREHOLDERS UNDER THE SECURITIES LAWS OF ANY STATE AS OF THE DATE OF
THIS PROSPECTUS. BROKERS OR DEALERS EFFECTING TRANSACTIONS IN THE OFFERED
SHARES SHOULD CONFIRM THE REGISTRATION THEREOF UNDER THE SECURITIES LAWS OF THE
STATES IN WHICH SUCH TRANSACTIONS OCCUR, OR THE EXISTENCE OF ANY EXEMPTION FROM
REGISTRATION.
-------------------------
The date of this Prospectus is July 11, 1994.
********************************************************************************
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
********************************************************************************
<PAGE> 3
AVAILABLE INFORMATION
Weingarten Realty Investors (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files periodic and current
reports and other information with the Securities and Exchange Commission (the
"Commission"). Information concerning trust managers and officers, their
remuneration and any material interest of such persons in transactions with the
Company, as of particular dates, is disclosed in proxy statements distributed
to shareholders of the Company and filed with the Commission. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such reports, proxy statements and other information can also be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's Regional Offices located at 500 West Madison Street (Suite
1400), Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New
York, New York 10048 and the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, on which exchange the shares of
beneficial interest, $0.03 par value (the "Shares"), of the Company are listed.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended. This Prospectus does not contain all of the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement.
-------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(File No. 1-9876) are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31,
1993;
(b) Quarterly Report on Form 10-Q for the quarter ended March
31, 1994; and
(c) The description of the Shares contained in the Company's
Registration Statement on Form 8-B.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained in a document
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed incorporated document or in an accompanying
prospectus supplement, if any, modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
-------------------------
UPON WRITTEN OR ORAL REQUEST OF ANY PERSON TO WHOM A PROSPECTUS
IS DELIVERED, INCLUDING ANY BENEFICIAL OWNER, THE COMPANY WILL PROVIDE, WITHOUT
CHARGE, A COPY OF THE DOCUMENTS WHICH HAVE BEEN INCORPORATED BY REFERENCE IN
THIS PROSPECTUS. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO M. CANDACE
DUFOUR, VICE PRESIDENT AND SECRETARY, WEINGARTEN REALTY INVESTORS, 2600 CITADEL
PLAZA DRIVE, HOUSTON, TEXAS 77008, TELEPHONE (713) 866-6000.
-2-
<PAGE> 4
THE COMPANY
The Company has owned and developed shopping centers and other
commercial real estate since its organization in 1948, with its principal
investment focus on shopping centers. From its inception, the Company has been
managed by members of its founding family. As of July 1, 1994, trust managers
and executive officers of the Company controlled 3,940,771 shares of beneficial
interest, or approximately 15.0% of the Company's outstanding Shares.
In connection with the acquisition of a tract of property in the
area of The Galleria Shopping Center in Houston, Texas, the Company has
consummated a merger (the "Merger") with Post Oak Center, Inc. ("Post Oak") and
"B" Building, Inc. ("B Building"), the owners of such property. In
consideration for the capital stock of Post Oak and B Building acquired in the
agreement of merger, the Company has issued 300,020 Shares to the former
stockholders of Post Oak and B Building, which are the Offered Shares pursuant
to this Prospectus.
The Company currently conducts its operations in a manner
intended to qualify as a real estate investment trust (a "REIT") under the
Internal Revenue Code of 1986, as amended (the "Code"). The Company's
principal executive offices are located at 2600 Citadel Plaza Drive, Houston,
Texas 77008, and its telephone number is (713) 866-6000. As used herein, the
term "Company" refers to Weingarten Realty Investors and its subsidiaries
unless the context specifically requires otherwise.
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of
the Offered Shares by the selling shareholders listed below (the "Selling
Shareholders"). The costs and expenses incurred in connection with the
registration under the Securities Act of 1933, as amended (the "Securities
Act") of the offering described herein are estimated to be $45,000 and will be
paid by the Company. Each Selling Shareholder will pay underwriters' and
brokers' discounts or commissions, if any, attributable to the sale of Offered
Shares by such party.
SELLING SHAREHOLDERS
This Prospectus relates to the sale by the Selling Shareholders
from time to time of up to 300,020 Offered Shares. The Offered Shares were
originally issued by the Company in the Merger. Pursuant to agreements entered
in connection with the Merger, 300,020 Shares were issued to the Selling
Shareholders as consideration for the acquisition of all of the capital stock
of Post Oak and B Building. In connection with the Merger, the Selling
Shareholders obtained the right to have the offer and sale of the Offered
Shares registered under the Securities Act.
Pursuant to the Agreement of Merger dated October 1, 1993, as
amended, among the Company, Post Oak, B Building and the Selling Shareholders
as shareholders of Post Oak and B Building (the "Merger Agreement"), the
Selling Shareholders received 300,020 Shares, and the Company was deemed to
have made tentative cash contributions in the amount of $170,689 to Post Oak
and B Building (subject to potential reimbursement by the Selling Shareholders
if in the future the Company's Shares exceed certain market price levels).
Liabilities of Post Oak and B Building of approximately $1.97 million were paid
by or transferred to the Company ("Transferred Liabilities") in connection
with the Merger, and the Selling Shareholders agreed to indemnify the Company
for liabilities other than the Transferred Liabilities. The Shares of the
Company issued as a portion of the consideration for the capital stock of
Post Oak and B Building were issued to the Selling Shareholders with a "price
increase guaranty" provision based on the future market price of the Shares.
In accordance with the price increase guaranty, the Company is obligated to pay
(in dollars per Share or in additional Shares) to the Selling Shareholders and
certain eligible transferees of any Selling Shareholder (including an estate,
spouse, lineal ascendant or descendant and certain trusts), as to any Shares
then held by such Selling Shareholder or such eligible transferee, the amount
by which the market price per Share is less than a stated price of
approximately $43 as of July 1, 1996, or, if the guaranty period is extended
at the option of the Company, a stated price of approximately $44.25 as of
January 1, 1997 or approximately $45.50 as of July 1, 1997.
-3-
<PAGE> 5
The following table provides certain information with respect to
the Selling Shareholders and the number of Shares owned, offered and to be
owned after the offering by each Selling Shareholder.
<TABLE>
<CAPTION>
Maximum Number
Number of number of of Shares
Shares owned Shares to be to be owned
before the sold in the after the
Selling Shareholder Offering Offering Offering(1)
------------------- ------------ ------------ -----------
<S> <C> <C> <C>
Stephen C. Grant, Trustee of the Gaylord
Johnson, Jr. 1979 Children's Trust 1,452 1,452 0
Gaylord Johnson, Jr. 40,350 40,350 0
The Estate of
Alexander Hart Sackton, deceased 51,875 51,875 0
Robert T. Sakowitz 8,413 8,413 0
Gail J. Serrell 41,921 41,921 0
Nina M. Susman 44,864 44,864 0
Texas Commerce Bank,
Trustee of the Nina Susman Trust 22,528 22,528 0
Douglas Wyatt, Trustee 11,069 11,069 0
Lynn S. Wyatt 19,459 19,459 0
Oscar S. Wyatt, Jr. 58,089 58,089 0
</TABLE>
- --------------------
(1) There is no assurance that the Selling Shareholders will sell any or all
of the Offered Shares. Pursuant to the Merger Agreement, the Selling
Shareholders have a limited put right to demand that the Company
purchase all or any part of the Offered Shares, subject to certain
conditions, in the event that the registration of the Offered Shares
under the Securities Act is not declared effective or subsequently
ceases to be effective and a subsequent registration statement is not
filed and declared effective. Such put right would obligate the Company
to purchase such Offered Shares, subject to such conditions, at a
repurchase price based on the closing price of the Company's Shares on
the New York Stock Exchange on the date on which notice of the exercise
of the put right is received or deemed received.
The Company will pay certain costs and expenses incurred in
connection with the registration under the Securities Act of the Offered Shares
offered by the Selling Shareholders including, without limitation, all
registration and filing fees, fees with respect to filings with the National
Association of Securities Dealers, Inc., fees and expenses of compliance with
securities or blue sky laws, printing expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants, fees
and expenses of other persons retained by the registrant and fees and expenses
incurred in connection with listing the Offered Shares. For information
regarding indemnification, see "Plan of Distribution."
PLAN OF DISTRIBUTION
The Selling Shareholders may from time to time sell all or a
portion of the Offered Shares on the New York Stock Exchange or in negotiated
transactions or otherwise, at prices then prevailing or related to the then
current market price or at negotiated prices. The offering price of the
Offered Shares from time to time will be determined by the Selling Shareholders
and, at the time of such determination, may be higher or lower than the market
price of the Company's Shares on the New York Stock Exchange. The Offered
Shares may be sold directly or through broker-dealers acting as principal or
agent, or in a distribution by one or more underwriters on a firm commitment or
best efforts basis. The methods by which the Offered Shares may be sold
include (a) a block trade (which may involve crosses) in which the
broker-dealer so engaged will attempt to sell the Offered Shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
-4-
<PAGE> 6
(b) purchases by a broker-dealer as principal and resale by such broker-dealer
for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and
(d) privately negotiated transactions. The Selling Shareholders and any
broker-dealers participating in the distribution of the Offered Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of the Offered Shares by the Selling Shareholders and any
commissions received by any such broker-dealers may be deemed to be
underwriting commissions under the Securities Act.
Under applicable rules and regulations under the Exchange Act,
any person engaged in a distribution of the Offered Shares may not
simultaneously engage in market making activities with respect to the Shares
for a period of nine business days prior to the commencement of such
distribution.
In order to comply with the securities laws of certain states, if
applicable, the Offered Shares will be sold in such jurisdictions only through
registered or licensed brokers. In addition, in certain states the Offered
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from applicable registration or
qualification requirements is available and complied with.
There is no assurance that the Selling Shareholders will sell any
or all of the Offered Shares offered by them.
The Company will pay certain expenses incident to the offering
and sale of the Offered Shares to the public, other than commissions and
discounts of underwriters, dealers or agents, if any, and expenses of legal
counsel of the Selling Shareholders. Under the Merger Agreement, the Selling
Shareholders, their trustees, independent executors and officers and each of
their respective successors and assigns will be indemnified by the Company
against certain liabilities, including certain liabilities that may result from
certain public disclosures of information in connection with the registration,
offering and sale of the Offered Shares, except for information supplied to the
Company in writing by such parties or by any underwriter.
DESCRIPTION OF SHARES
The Shares of the Company have a par value of $0.03 per Share.
Each Share has equal dividend and liquidation rights. The Company is
authorized to issue 150,000,000 Shares. Each Share is entitled to one vote,
and the holders do not have cumulative voting rights. The Shares have no
preference, conversion, exchange, preemptive or appraisal rights and are not
subject to redemption, assessment or further call. The Company is also
authorized to issue up to 10,000,000 preferred shares, $0.03 par value per
share ("Preferred Shares"). The Preferred Shares may be issued in one or more
series as determined by the Board of Trust Managers. The Preferred Shares of
each such series may have such preferences, conversion and other rights, voting
powers, dividends rights, or other terms or conditions as determined by the
Board of Trust Managers.
As of July 1, 1994, the Company had 26,339,799 Shares
outstanding. No Preferred Shares are outstanding.
The Company's Restated Declaration of Trust (the "Declaration")
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of the Company and that, to the extent practicable,
every written contract made by the Company shall contain a provision
exculpating shareholders of the Company from any personal liability for such
obligations. By statute, the State of Texas provides limited liability for
shareholders of a real estate investment
-5-
<PAGE> 7
trust organized under the Texas Real Estate Investment Trust Act ("REIT Act").
However, certain jurisdictions may not recognize the limited liability provided
shareholders under the REIT Act and, therefore, a shareholder may be held
personally liable to the extent that such claims are not satisfied by the
Company. Because of the uncertainty that may exist in the laws of certain
states in which the Company owns property or conducts business, wholly owned
subsidiary corporations are utilized to own properties in such states. The
bylaws of the Company provide for indemnification of shareholders by the
Company for any liabilities incurred in such capacity. The Company believes
that its operations have been conducted and will continue to be conducted in
such a way so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Company.
The bylaws provide that annual meetings of shareholders are to be
held no later than the second Tuesday of May of each year. Special meetings
currently may be called by a majority of the trust managers or upon the written
request of the holders of 10% or more of the outstanding Shares. The
shareholders have certain voting rights with respect to the election or removal
of trust managers, any amendment or alteration of the Declaration and
termination of the Company. Such actions generally require a vote of the
holders of two-thirds of the outstanding Shares, except that the amendment of
provisions of the Declaration relating to the duration of the Company, the
prohibition against engaging in non-REIT business, Share ownership requirements
and the approval of certain business combination requires the vote of at least
80% of the outstanding Shares.
The Company operates in a manner intended to qualify for
treatment as a REIT under Sections 856 to 860 of the Code. In general, a REIT
that distributes to its shareholders at least 95% of its taxable income (other
than net capital gain) for a taxable year and that meets certain other
conditions will not be taxed on income (including net capital gain) distributed
for that year. If the Company fails to qualify in any taxable year, it will be
taxed as a corporation for that year, and distributions to shareholders will
not be deductible by the Company in computing its taxable income. Under
certain circumstances, the Company also will be disqualified from being treated
as a REIT for the ensuing four taxable years.
The Shares are freely transferable except that the transfer of
Shares is restricted as described below in certain situations where a proposed
transfer could jeopardize the qualification of the Company as a REIT under the
Code. For example, the Company would lose its qualification if 50% or more in
value of the outstanding Shares, including in some circumstances Preferred
Shares and Shares which may be issued upon conversion of outstanding debt
securities, if any, were held by five or fewer individuals at any time during
the last half of its taxable year or if the number of shareholders were reduced
to fewer than 100. In order for the Company to maintain its REIT status under
the Code, the Declaration limits each person to ownership of no more than 9.2%
of the outstanding Shares. Convertible securities (whether in registered or
bearer form) are treated as if such securities had been converted in
calculating the ownership limit. As of July 1, 1994, the Company had no
outstanding convertible securities. The Declaration provides that any attempted
transfers of Shares which would cause a person to exceed the limit shall be
null and void. However, because the Code imposes broad attribution rules in
determining constructive ownership, no assurances can be given that the
restrictions of the Declaration will be effective in maintaining the Company's
REIT status. Further, owners of more than 6.5% of the Shares as of January 19,
1988 (currently only Stanford Alexander who at July 1, 1994 beneficially owned
approximately 7.2% of the outstanding shares) are exempted from the limit.
Several provisions in the Declaration may have the effect of
deterring a take-over of the Company. These provisions restrict ownership of
the Company's outstanding Shares by a single person to 9.2% of such Shares to
assist in protecting and preserving the qualification of the Company as a REIT
under the Code and include a "fair price" provision that would deter a "two-
stage" take-over transaction by requiring an 80% vote of outstanding Shares for
certain defined "business combinations" with shareholders owning more than 50%
of the Shares if the transaction is neither approved by the Board of Trust
Managers nor meets certain price and procedural conditions. In addition, the
Declaration includes provisions for the authorization of the Board of Trust
Managers to issue up to 10,000,000 Preferred Shares with such rights,
qualifications, limitations or restrictions as are stated in the Board of Trust
Managers' resolution establishing such series of Preferred Shares.
-6-
<PAGE> 8
Society National Bank is the Transfer Agent and Registrar for the
Shares of the Company. The Shares are listed on the New York Stock Exchange
(Symbol: WRI).
LEGAL OPINIONS
Certain matters with respect to the legality of the securities
offered hereby will be passed upon for the Company by Andrews & Kurth L.L.P.,
Houston, Texas.
EXPERTS
The consolidated financial statements and related financial
schedules incorporated in this Prospectus by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, have been
audited by Deloitte & Touche, independent auditors, as stated in their report
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
-7-
<PAGE> 9
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE SHARES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
-------------------------
TABLE OF CONTENTS
PAGE
----
Available Information............................................... 2
Incorporation of Certain Documents
by Reference..................................................... 2
The Company......................................................... 3
Use of Proceeds..................................................... 3
Selling Shareholders................................................ 3
Plan of Distribution................................................ 4
Description of Shares............................................... 5
Legal Opinions...................................................... 7
Experts............................................................. 7
================================================================================
================================================================================
300,020 SHARES
WEINGARTEN REALTY
INVESTORS
SHARES OF BENEFICIAL INTEREST
--------
PROSPECTUS
--------
JULY 11, 1994
================================================================================
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,984
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Printing and engraving . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,016
---------
Total* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,000
=========
</TABLE>
- --------------------
* Not including underwriters' and brokers' discounts or commissions, if any,
and legal or accounting fees, if any, attributable to the sale of offered
shares by the Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (B) of Section 9.1 of the Texas Real Estate Investment
Trust Act (the "Act") empowers a real estate investment trust to indemnify any
person who was, is, or is threatened to be made a named defendant or respondent
in any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, arbitrative, or investigative or any inquiry
or investigation that can lead to such an action, suit or proceeding because
the person is or was a trust manager, officer, employee or agent of the real
estate investment trust or is or was serving at the request of the real estate
investment trust as a trust manager, director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another real
estate investment trust, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise against
expenses (including court costs and attorney fees), judgments, penalties, fines
and settlements if he conducted himself in good faith and reasonably believed
his conduct was in or not opposed to the best interests of the real estate
investment trust and, in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful.
The Act further provides that a person may not be indemnified in
respect of a proceeding in which the person is found liable on the basis that
personal benefit was improperly received by him or in which the person is found
liable to the real estate investment trust. Indemnification pursuant to
Subsection (B) of Section 9.1 of the Act is limited to reasonable expenses
actually incurred and may not be made in respect of any proceeding in which the
person has been found liable for willful or intentional misconduct in the
performance of his duty to the real estate investment trust.
Section 15 of the Act provides that a trust manager shall not be
liable for any claims or damages that may result from his acts in the discharge
of any duty imposed or power conferred upon him by the real estate investment
trust, if, in the exercise of ordinary care, he acted in good faith and in
reliance upon the written opinion of any attorney for the real estate
investment trust. In addition, no trust manager shall be liable to the real
estate investment trust for any act, omission, loss, damage, or expense arising
from the performance of his duty under a real estate investment trust, save
only for his own willful misfeasance or malfeasance or negligence.
<PAGE> 11
Article Sixteen of the Restated Declaration of Trust of the
Company provides that the Company shall indemnify officers and trust managers,
as set forth below.
(a) The Company shall indemnify, to the extent provided in the
Company's Bylaws, every person who is or was a Trust Manager or officer
of the Company or its corporate predecessor and any person who is or was
serving at the request of the Company or its corporate predecessor as a
director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise with respect to all costs and expenses incurred
by such person as a result of such person being made or threatened to be
made a defendant or respondent in a proceeding by reason of his holding
or having held a position named above in this paragraph.
(b) If the indemnification provided in paragraph (a) is either
(i) insufficient to cover all costs and expenses incurred by any person
named in such paragraph as a result of such person being made or
threatened to be made a defendant or respondent in a proceeding by
reason of his holding or having held a position named in such paragraph
or (ii) not permitted by Texas law, the Company shall indemnify, to the
fullest extent that indemnification is permitted by Texas law, every
person who is or was a Trust Manager or officer of the Company or its
corporate predecessor and any person who is or was serving at the
request of the Company or its corporate predecessor as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise with respect to all costs and expenses incurred
by such person as a result of such person being made or threatened to be
made a defendant or respondent in a proceeding by reason of his holding
or having held a position named above in this paragraph.
The Company's Bylaws provide that the Company may indemnify any
Trust Manager or officer of the Company who was, is or is threatened to be made
a part to any suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, because the person is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company in the same or another capacity in another corporation or business
association, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred if it is determined that the person: (i) conducted
himself in good faith, (ii) reasonably believed that, in the case of conduct in
his official capacity, his conduct was in the best interests of the Company,
and that, in all other cases, his conduct was at least not opposed to the best
interests of the Company, and (iii) in the case of any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful; provided that, if the
person is found liable to the Company, the indemnification (A) is limited to
reasonable expenses actually incurred by the person in connection with the
proceeding and (B) will not be made in respect of any proceeding in which the
person shall have been found liable for willful or intentional misconduct in
the performance of his duty to the Company.
Under Section 11.4 of the Merger Agreement filed as Exhibit 10.1
hereto, as amended, the Company has agreed to indemnify, under certain
conditions, the Selling Shareholders against certain liabilities in connection
with the offering of the Offered Shares.
II-2
<PAGE> 12
ITEM 16. LIST OF EXHIBITS.
5.1 Opinion of Andrews & Kurth L.L.P. as to the legality of the
securities being registered.
10.1 Agreement of Merger by and between Weingarten Realty
Investors, WRI/Post Oak, Inc., Post Oak Center, Inc. and "B"
Building, Inc., dated October 1, 1993.
10.2 First Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated December 15, 1993.
10.3 Second Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated December 22, 1993.
10.4 Third Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated February 28, 1994.
10.5 Fourth Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated May 31, 1994.
10.6 Second Amended Price Increase Guaranty by and between
Weingarten Realty Investors and the shareholders of Post Oak
Center, Inc. and "B" Building, Inc., dated June 30, 1994.
23.1 The consent of Andrews & Kurth L.L.P. to the use of their
opinion in this Registration Statement is contained in the
opinion filed as Exhibit 5.1.
23.2 The consent of Deloitte & Touche is included in Part II of
this Registration Statement.
24.1 A power of attorney, pursuant to which amendments to this
Registration Statement may be filed, is included on the
signature pages contained in Part II of this Registration
Statement.
- --------------------
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement:
II-3
<PAGE> 13
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by referenced in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 15 of
this Registration Statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
Prospectus filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of Prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of Prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-4
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 11th day of
July, 1994.
WEINGARTEN REALTY INVESTORS
By: /s/ STANFORD ALEXANDER
____________________________________
Stanford Alexander
Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stanford Alexander and Joseph W.
Robertson, Jr., and each of them, his true and actual attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granted unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or would do in person, hereby
ratifying and confirming all that said attorney-in-fact and agents or any of
them or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ STANFORD ALEXANDER
_______________________________________________ Chairman and Trust Manager July 11, 1994
Stanford Alexander (Chief Executive Officer)
/s/ ANDREW M. ALEXANDER
______________________________________________ Executive Vice President and July 11, 1994
Andrew M. Alexander Trust Manager
/s/ MARTIN DEBROVNER
______________________________________________ President and Trust Manager July 11, 1994
Martin Debrovner
/s/ MELVIN A. DOW
______________________________________________ Trust Manager July 11, 1994
Melvin A. Dow
</TABLE>
II-5
<PAGE> 15
<TABLE>
<S> <C> <C>
/s/ STEPHEN A. LASHER
______________________________________________ Trust Manager July 11, 1994
Stephen A. Lasher
/s/ JOSEPH W. ROBERTSON, JR.
______________________________________________ Executive Vice President and July 11, 1994
Joseph W. Robertson, Jr. Trust Manager
(Chief Financial Officer)
/s/ DOUGLAS W. SCHNITZER
______________________________________________ Trust Manager July 11, 1994
Douglas W. Schnitzer
/s/ MARC J. SHAPIRO
______________________________________________ Trust Manager July 11, 1994
Marc J. Shapiro
/s/ J.T. TROTTER
______________________________________________ Trust Manager July 11, 1994
J.T. Trotter
/s/ M. CANDACE DUFOUR
______________________________________________ Vice President and Secretary July 11, 1994
M. Candace DuFour
/s/ STEPHEN C. RICHTER
______________________________________________ Vice President and Treasurer July 11, 1994
Stephen C. Richter (Principal Accounting Officer)
</TABLE>
II-6
<PAGE> 16
INDEX TO EXHIBITS
EXHIBIT
NUMBER
-------
5.1 Opinion of Andrews & Kurth L.L.P. as to the legality of the
securities being registered.
10.1 Agreement of Merger by and between Weingarten Realty
Investors, WRI/Post Oak, Inc., Post Oak Center, Inc. and "B"
Building, Inc., dated October 1, 1993.
10.2 First Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated December 15, 1993.
10.3 Second Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated December 22, 1993.
10.4 Third Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated February 28, 1994.
10.5 Fourth Amendment to Agreement of Merger by and between
Weingarten Realty Investors, WRI/Post Oak, Inc., Post Oak
Center, Inc. and "B" Building, Inc., dated May 31, 1994.
10.6 Second Amended Price Increase Guaranty by and between
Weingarten Realty Investors and the shareholders of Post Oak
Center, Inc. and "B" Building, Inc., dated June 30, 1994.
23.1 The consent of Andrews & Kurth L.L.P. to the use of their
opinion in this Registration Statement is contained in the
opinion filed as Exhibit 5.1.
23.2 The consent of Deloitte & Touche is included in Part II of
this Registration Statement.
24.1 A power of attorney, pursuant to which amendments to this
Registration Statement may be filed, is included on the
signature pages contained in Part II of this Registration
Statement.
<PAGE> 1
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
July 11, 1994 EXHIBIT 5.1
Trust Managers
Weingarten Realty Investors
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Gentlemen:
We have acted as counsel for Weingarten Realty Investors (the
"Company") in connection with the Company's Registration Statement on Form S-3
(the "Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), relating to 300,020 shares of beneficial interest in the Company, par
value $.03 per share (the "Shares"), to be offered by certain selling
shareholders of the Company (the "Selling Shareholders"). At your request,
this opinion is being furnished to you for filing as Exhibit 5.1 to the
Registration Statement.
In our capacity as your counsel in the connection referred to
above, we have examined (i) the Company's Amended and Restated Declaration of
Trust and Amended Bylaws, each as amended to date, (ii) resolutions of the
Board of Trust Managers of the Company authorizing the issuance of the Shares,
and (iii) the originals, or copies certified or otherwise identified, of
records of the Company, certificates of public officials and of representatives
of the Company, statutes and other instruments and documents as a basis for the
opinions hereinafter expressed.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications hereinafter set forth, we are of the opinion
that the Shares have been duly authorized and are validly issued, fully paid
and nonassessable.
For the purposes of this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective and (ii) all Shares will be sold in
compliance with applicable federal and state securities laws and in the manner
stated in the Registration Statement. We hereby consent to the use of this
opinion as an exhibit to the Registration Statement and to the use of our name
in the Registration Statement under the heading "Legal Matters."
Very truly yours,
Andrews & Kurth L.L.P.
<PAGE> 1
EXHIBIT 10.1
AGREEMENT OF MERGER
by and between
WEINGARTEN REALTY INVESTORS,
WRI/POST OAK, INC.,
POST OAK CENTER, INC.
and
"B" BUILDING, INC.
dated October 1, 1993
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Caption Page
- ------- ------- ----
<S> <C> <C>
I. Merger of Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Conversion of POCI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Agreed Consideration for POCI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3.1. "Agreed POCI Consideration" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3.2. "Transferred POCI Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4. Conversion of B Building Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5. Agreed Consideration for B Building Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5.1. "Agreed B Building Consideration" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5.2. "Transferred B Building Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.6. Limit on Transferred Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
II. Information Review, Inspection, Survey and Title Commitment . . . . . . . . . . . . . . . . . . . . . . . 7
2.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.1. "Appurtenances" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.2. "B Building Required Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.3. "B Building Tract" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.4. "Improvements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.5. "Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.6. "Land" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.7. "Large Tract" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.8. "Operating Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.9. "Personalty" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.10. "POCI Required Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.11. "Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.12. "Tenant Leases" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.13. "Title Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2. Information Review Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3. Physical Inspection of the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4. Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5. Title Binder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6. Objections and Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
III. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1. The Closing Place and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2. Deliveries at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.1. By POCI and B Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.2. By Newco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.3. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.3. Special Price Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
IV. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1. Representations and Warranties of POCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1.1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1.2. Certain POCI Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1.3. Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.1.4. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1.5. Authority Relative to this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1.6. Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1.7. Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1.8. No Default or Waiver of Right of POCI. . . . . . . . . . . . . . . . . . . . . . . . 20
4.1.9. Tax Returns and Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1.11. Labor Matters; Legal Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1.12. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1.13. Required Information Materials and Books and Records. . . . . . . . . . . . . . . . . 22
4.1.14. Absence of Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1.15. Supplementary Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1.16. Ground Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1.17. Contracts for Construction, Brokerage, Etc. . . . . . . . . . . . . . . . . . . . . . 22
4.1.18. No Business; No Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2. Representations and Warranties of POCI Shareholders . . . . . . . . . . . . . . . . . . . . . 23
4.2.1. Title to POCI Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2.2. Authority and Execution of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2.3. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2.4. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2.5. Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2.6. POCI Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2.7. Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2.8. Acquisition of WRI Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3. Representations and Warranties of B Building . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.3.1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.3.2. Certain B Building Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.3.3. Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3.4. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3.5. Authority Relative to this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3.6. Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.3.7. Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.3.8. No Default or Waiver of Right of B Building. . . . . . . . . . . . . . . . . . . . . 28
4.3.9. Tax Returns and Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3.11. Labor Matters; Legal Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3.12. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.13. Required Information Materials and Books and Records. . . . . . . . . . . . . . . . . 30
</TABLE>
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4.3.14. Absence of Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.15. Supplementary Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.16. Ground Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.17. Tenant Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3.18. Contracts for Construction, Brokerage, Etc. . . . . . . . . . . . . . . . . . . . . . 31
4.3.19. No Business; No Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4. Representations and Warranties of B Building Shareholders . . . . . . . . . . . . . . . . . . 32
4.4.1. Title to B Building Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4.2. Authority and Execution of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4.3. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4.4. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4.5. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4.6. B Building Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4.7. Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4.8. Acquisition of WRI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.5. Property Sold "AS-IS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.6. Newco and WRI's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6.1. Corporate and Trust Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6.2. Authority Relative to this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6.3. Issuance and Registration of WRI Shares . . . . . . . . . . . . . . . . . . . . . . . 36
4.6.4. Authorized Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.6.5. Company Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 36
4.6.6. Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6.7. Governmental Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6.8. Contracts for Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6.9. No Other Representations or Warranties. . . . . . . . . . . . . . . . . . . . . . . . 38
4.7. Limitation on Representations Made by NationsBank of Texas, N.A . . . . . . . . . . . . . . . 38
V. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1. Covenants of POCI and POCI Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.1. Business of POCI Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.2. Articles of Incorporation and By-Laws. . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.3. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.4. Benefit Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.5. Capital Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.1.6. Mortgages, Liens, Encumbrances, Etc . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.1.7. Reports, Returns and Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . 40
5.1.8. Loss or Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.1.9. Mergers, Consolidations, Acquisitions and Negotiations. . . . . . . . . . . . . . . . 40
5.1.10. Consultation with Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.1.11. Correction of Defects, Errors and Omissions . . . . . . . . . . . . . . . . . . . . . 41
5.1.12. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.1.13. Shareholders Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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5.1.14. Proxy Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.2. Covenants of B Building and B Building Shareholders . . . . . . . . . . . . . . . . . . . . . 42
5.2.1. Business of B Building Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.2. Articles of Incorporation and By-Laws . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.3. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.4. Benefit Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.5. Capital Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.6. Mortgages, Liens, Encumbrances, Etc . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2.7. Reports, Returns and Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . 43
5.2.8. Properties, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.2.9. Loss or Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.2.10. Mergers, Consolidations, Acquisitions and Negotiations. . . . . . . . . . . . . . . . 43
5.2.11. Consultation with Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.2.12. Correction of Defects, Errors and Omissions . . . . . . . . . . . . . . . . . . . . . 43
5.2.13. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2.14. Shareholders Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2.15. Proxy Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.3. Covenants of Newco and WRI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.3.1. Consent to Extension of Termination Dates of Tenant Leases. . . . . . . . . . . . . . 45
VI. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.1. Conditions Precedent to Obligations of WRI and Newco Relating to POCI . . . . . . . . . . . . 45
6.1.1.Representations and Warranties of POCI and the POCI Shareholders True at Closing . . . . 45
6.1.2. Performance of POCI and the POCI Shareholders . . . . . . . . . . . . . . . . . . . . 45
6.1.3. Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1.4. Opinion of Counsel for POCI and the POCI Shareholders . . . . . . . . . . . . . . . . 46
(ii) Capitalization and Validity of POCI Common Stock . . . . . . . . . . . . . . 46
(iii) POCI's and Its Shareholders' Authority Relative to this Agreement . . . . . 46
(iv) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(v) No Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(vi) Validity of Documents and Instruments. . . . . . . . . . . . . . . . . . . . 47
(vii) Approval of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.1.5. No Damage or Destruction or Condemnation. . . . . . . . . . . . . . . . . . . . . . . 47
6.1.6. Resignations of Officers and Directors. . . . . . . . . . . . . . . . . . . . . . . . 47
6.1.7. Delivery of Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1.8. Requirements as to POCI's Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1.9. Execution by POCI Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1.10. Changes in Title, Survey and Other Matters. . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
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<TABLE>
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6.1.11. Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1.12. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.2. Conditions Precedent to Obligations of WRI and Newco Relating to B Building . . . . . . . . . 49
6.2.1. Representations and Warranties of B Building and the B Building Shareholders
True at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.2.2. Performance of B Building and the B Building Shareholders . . . . . . . . . . . . . . 49
6.2.3. Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.2.4. Opinion of Counsel for B Building and the B Building Shareholders . . . . . . . . . . 50
6.2.5. No Damage or Destruction or Condemnation. . . . . . . . . . . . . . . . . . . . . . . 51
6.2.6. Resignations of Officers and Directors. . . . . . . . . . . . . . . . . . . . . . . . 51
6.2.7. Delivery of Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.2.8. Notices of Termination of Tenant Leases . . . . . . . . . . . . . . . . . . . . . . . 52
6.2.9. Requirements as to B Building's Liabilities . . . . . . . . . . . . . . . . . . . . . 52
6.2.10. Execution by B Building Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . 52
6.2.11. Changes in Title, Survey and Other Matters. . . . . . . . . . . . . . . . . . . . . . 52
6.2.12. Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.2.13. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.3. Conditions Precedent to Obligations of POCI and B Building . . . . . . . . . . . . . . . . . . 53
6.3.1. Newco and WRI's Representations and Warranties True at Closing. . . . . . . . . . . . 54
6.3.2. WRI's and Newco's Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.3.3. Officer's Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.3.4. Opinion of Newco's Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.3.5. Opinion of WRI's Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.3.6. Issuance of WRI Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
VII. Survival of Representations and Warranties;
Expenses; Indemnity . . . . . . . . . . . . . . . . . 56
7.1. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.2. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.3. Indemnification by POCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.4. Indemnification by B Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.5. Indemnification of WRI and Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.6. Indemnity Against Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.7. Liability of POCI Shareholders and B Building Shareholders . . . . . . . . . . . . . . . . . . 58
VIII. Termination and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.1. Best Efforts to Satisfy Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.2.1. Termination Upon Breach or Default. . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.2.2. Termination Based Upon Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
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<S> <C> <C>
IX. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
X. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.1. Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.2. Successors; Rights of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.4. Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.5. Section and Paragraph Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.6. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.7. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.8. Stock Splits, Subdivisions, Stock Dividends; Combinations . . . . . . . . . . . . . . . . . . 64
10.9. Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
XI. Registration of WRI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.1. Restrictions on Resale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2. Registration of WRI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.1. Shelf Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.2. Subsequent Shelf Registrations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.2.3. Limited Put Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.2.4. Unlegended Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.2.5. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.3. Availability of Rule 144 Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.4. Indemnification by WRI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
XII. Loan from WRI to POCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1. Loan from WRI to POCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.1. Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.2. Collateral Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.3. Due on Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.4. Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.5. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>
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<PAGE> 8
EXHIBITS
<TABLE>
<S> <C>
Exhibit "A" -- Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exhibit "B-1" -- Description of Large Tract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Exhibit "B-2" -- Description of B Building Tract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Exhibit "B-3" -- Description of Post Oak Bank Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Exhibit "C" -- Required Information Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Exhibit "D" -- Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exhibit "E" -- Surveyor's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exhibit "F" -- Tenant Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Exhibit "G" -- Prudential Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Exhibit "H" -- Price Increase Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit "I" -- Termination Dates of Tenant Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Exhibit "J" -- Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
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<PAGE> 9
GLOSSARY
<TABLE>
<S> <C>
1933 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 36
Acquiring Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Agreed Consideration for POCI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreed POCI Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreed Value of B Building Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Agreed Value of POCI Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appurtenances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B Building Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
B Building Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
B Building Required Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B Building Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B Building Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
B Building Tract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Closing Date Share Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Company Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Contract Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Ground Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Information Review Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Large Tract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Operating Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Personalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
POCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
POCI Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
POCI Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
POCI Profit and Loss Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
POCI Required Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
POCI Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
POCI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Post Oak Bank Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Relevant WRI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Required Information Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
viii
<PAGE> 10
<TABLE>
<S> <C>
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Stock Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Tenant Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Title Binder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Title Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Transferred B Building Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Transferred POCI Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Triggering Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
WRI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
WRI Per Share Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
WRI Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
</TABLE>
ix
<PAGE> 11
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement") is entered into by
and between WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust
(hereinafter called "WRI"), WRI/POST OAK, INC., a Texas corporation
(hereinafter called "Newco") (which is a wholly-owned subsidiary of WRI), POST
OAK CENTER, INC., a Texas corporation (hereinafter called "POCI"), and "B"
BUILDING, INC., a Texas corporation (hereinafter called "B Building");
W I T N E S S E T H:
I. MERGER OF COMPANIES
1.1. MERGER. Upon the terms and provisions contained in this
Agreement, WRI, Newco, POCI, and B Building agree that, on January 31, 1994, or
on such earlier date as may be designated by WRI by notice to POCI and B
Building five (5) business days prior to such date (the date on which the
following-described transactions occur being hereinafter called the "Closing
Date"), POCI shall merge into and with Newco, B Building shall merge into and
with Newco, Newco shall be the corporation surviving the merger, the separate
existence of POCI and the separate existence of B Building shall cease (such
mergers, survival and cessations being hereinafter collectively called the
"Merger"), all of which shall be reflected in Articles of Merger in the form of
Exhibit "A" attached hereto which shall be executed and filed with the
Secretary of State of Texas on the Closing Date. The Merger shall be effective
immediately upon the issuance of the Certificate of Merger by the Secretary of
State of Texas (the "Effective Time").
1.2. CONVERSION OF POCI SHARES. At the Effective Time, each share
of POCI common stock issued and outstanding immediately prior thereto (the
"POCI Shares") shall, without any action on the part of any holder thereof, be
cancelled; provided that, at the Closing (hereinafter defined), each such
shareholder of POCI shares (collectively, the "POCI Shareholders", and
individually a "POCI
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<PAGE> 12
Shareholder") receives or shall have received the Agreed POCI Consideration
(hereinafter defined) for such POCI Shareholder's POCI Shares.
1.3. AGREED CONSIDERATION FOR POCI SHARES. As full consideration
for the Merger and the cancellation of all of the POCI Shares, Newco shall
cause to be paid and/or delivered to each POCI Shareholder the Agreed POCI
Consideration.
1.3.1. "AGREED POCI CONSIDERATION" means (i) that number of
shares of beneficial interest of WRI ("WRI Shares") having a value determined
as follows: (a) the "Transferred POCI Liabilities" (hereinafter defined) shall
be subtracted from the "Agreed Value of POCI Stock" (hereinafter defined); (b)
the result obtained in clause (a) shall be divided by the total number of POCI
Shares owned by all POCI Shareholders in the aggregate; and (c) the quotient
obtained in clause (b) shall be multiplied by the number of POCI Shares owned
by the relevant POCI Shareholder on the Closing Date, rounded to the nearest
lesser whole number if the number of WRI Shares thus calculated is not a whole
number, plus, (ii) if the number of WRI Shares calculated pursuant to clause
(i) of this Section 1.3.1, prior to rounding in accordance with said clause
(i), is not a whole number, an amount of cash equal to the value of the
fractional WRI Share remaining after subtracting the calculated rounded whole
number from the calculated number prior to rounding, which cash amount shall,
in turn, be rounded to the nearest one hundredth (1/100th) dollar. For
purposes of making the calculations required under this Section 1.3.1, the
value of each WRI Share (subject to adjustment as referred to in Section 10.8
of this Agreement) shall be deemed to be the greater of (x) $42 or (y) the
average closing price of WRI Shares on the New York Stock Exchange during the
ten (10) trading days immediately preceding the date on which the last of the
parties whose signatures are called for in this Agreement, including, without
limitation, the present POCI Shareholders and the present B Building
Shareholders, execute this Agreement (such date being hereinafter referred to
as the "Contract Date") (the greater of such amounts being hereinafter referred
to as the "WRI Per Share Value"). The term "Agreed Value of POCI Stock" means
an amount equal to (x) $15 Million less (y) the total of (A) the Agreed Value
of B Building Stock (hereinafter defined) plus (B) the amount of the
Transferred POCI Liabilities (hereinafter defined) plus (C) the amount of the
Transferred B Building Liabilities (hereinafter defined).
1.3.2. "TRANSFERRED POCI LIABILITIES" means all liabilities
of POCI of any kind or character, which are identified in the memorandum
referred to below in this Section 1.3.2, subject to the limitations stated in
this Section 1.3.2. As conditions to Newco's obligation to consummate the
Merger
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<PAGE> 13
(in addition to the other conditions thereto set forth herein), as of the
Closing Date, (i) POCI must have no outstanding and unpaid liabilities of any
kind or character, other than the Transferred POCI Liabilities, plus 1993 real
estate taxes in an amount not exceeding $400,000, (ii) the Transferred POCI
Liabilities, and all documentation relating thereto and other evidence thereof,
shall have been reviewed and approved by Newco, (iii) all of the Transferred
POCI Liabilities must be prepayable at any time without premium or penalty, and
(iv) in no event may the Transferred POCI Liabilities exceed $3 million in
amount. In this regard, POCI, by written memorandum delivered to Newco on or
before November 15, 1993 (and signed and receipted for by Newco), shall
designate the Transferred POCI Liabilities and disclose the amounts thereof and
the names and addresses of each obligee thereof; provided, however, that if
additional shares of stock of POCI are issued to current POCI Shareholders in
exchange for the cancellation of indebtedness owing from POCI to such POCI
Shareholders, POCI shall provide within five (5) business days thereafter (but
not later than December 15, 1993) an updated written memorandum which shall
re-designate the Transferred POCI Liabilities.
In addition to assuming liability for the Transferred POCI Liabilities
in the Merger, Newco will assume liability for up to $400,000 in 1993 real
estate ad valorem taxes levied on the Large Tract and the Improvements on the
Large Tract. Notwithstanding any provision contained in this Agreement
relating to the obligation of WRI to pay as additional consideration $400,000
of the 1993 ad valorem taxes associated with the Large Tract and the
Improvements on the Large Tract, it is agreed that from such amount there shall
be subtracted the amount of dividends that are received by POCI Shareholders
and B Building Shareholders attributable to the fourth quarter of 1993. An
amount equal to the number of WRI Shares to be received by POCI Shareholders
and B Building Shareholders multiplied by the per share dividend paid with
respect to the third quarter of 1993 shall be used at Closing as an estimate of
the amount to be subtracted, and the actual amount and the obligations of the
parties shall be readjusted after the dividends with respect to the fourth
quarter of 1993 have been received by POCI Shareholders and B Building
Shareholders. For example, if it is estimated that $150,000 will be paid in
dividends for the fourth quarter of 1993, such amount shall be subtracted from
the WRI $400,000 ad valorem tax payment assumption, and WRI shall only be
required to pay $250,000 of such taxes. After the dividends relating to the
fourth quarter of 1993 have been received by POCI Shareholders and B Building
Shareholders, there shall be a readjustment of the obligations of the parties
hereto. For example, if it was estimated at Closing that $150,000 would be
paid in dividends, and POCI Shareholders and B
Page 3
<PAGE> 14
Building Shareholders in the aggregate receive only $125,000 in dividends, WRI
shall be obligated to pay $25,000 in cash to such shareholders within fifteen
(15) days from the date such dividends are received. Such amount shall be paid
pro rata to the POCI Shareholders and the B Building Shareholders. Similarly,
if it was estimated at Closing that $150,000 would be paid in dividends, and
POCI Shareholders and B Building Shareholders in the aggregate receive $175,000
in dividends, such shareholders shall be obligated to pay WRI $25,000 in cash
within fifteen (15) days from the date such dividends are received by POCI
Shareholders and B Building Shareholders. Each POCI Shareholder and B Building
Shareholders shall be responsible for his or her pro rata share of any refunds
owing to WRI. If any POCI Shareholder or B Building Shareholder fails or
refuses to remit to WRI any refund due under this paragraph of Section 1.3.2
then, in such event, in addition to its other remedies, WRI shall be entitled
to withhold the unpaid amount from future WRI dividends, if any, payable to
such defaulting shareholder.
The payment of such taxes up to $400,000 by Newco constitutes
additional consideration hereunder and the payment of such taxes shall not be
deemed to be Transferred POCI Liabilities; however, all such taxes in excess of
$400,000 and unpaid at Closing shall be deemed to be Transferred POCI
Liabilities. If the amount of 1993 ad valorem taxes on the Large Tract and the
Improvements thereon is not known as of the Closing Date, for purposes of this
Agreement, the parties hereto shall use as an estimate to facilitate closing
only, the amount of the 1992 ad valorem taxes. In the event that the amount of
1992 ad valorem taxes is used to facilitate closing, and the 1993 taxes are
less than the 1992 taxes, Newco shall pay to the POCI Shareholders, within
fifteen (15) days after the actual amount of 1993 ad valorem taxes is
determined, the difference between the 1992 ad valorem taxes and the amount of
1993 taxes. In the event that the amount of the 1992 ad valorem taxes is used
to facilitate closing, and the 1993 taxes are more than the 1992 taxes, the
POCI Shareholders shall pay to Newco, within fifteen (15) days after the actual
amount of ad valorem taxes is determined, the difference between the amount of
1993 ad valorem taxes and the 1992 taxes. In the event the transactions
contemplated herein are consummated, Newco and/or WRI shall be responsible for
the payment of all 1994 ad valorem taxes with respect to the Property. Such
1994 taxes shall not be prorated but shall be the sole responsibility and
obligation of Newco and/or WRI.
1.4. CONVERSION OF B BUILDING SHARES. At the Effective Time, each
share of B Building common stock issued and outstanding immediately prior
thereto (the "B Building Shares") shall, without any action on the part of any
holder thereof, be cancelled; provided that, at the Closing, each such
Page 4
<PAGE> 15
shareholder of B Building shares (collectively, the "B Building Shareholders",
and individually a "B Building Shareholder") receives or shall have received
the Agreed B Building Consideration (hereinafter defined) for such B Building
Shareholder's B Building shares.
1.5. AGREED CONSIDERATION FOR B BUILDING SHARES. As full
consideration for the Merger and the cancellation of all of the B Building
Shares, Newco shall cause to be paid and/or delivered to each B Building
Shareholder the Agreed B Building Consideration.
1.5.1. "AGREED B BUILDING CONSIDERATION" means (i) that
number of WRI Shares having a value determined as follows: (a) the Transferred
B Building Liabilities (hereinafter defined) shall be subtracted from the
"Agreed Value of B Building Stock" (hereinafter defined); (b) the result
obtained in clause (a) shall be divided by the total number of B Building
Shares owned by all B Building Shareholders in the aggregate, and (c) the
quotient obtained in clause (b) shall be multiplied by the number of B Building
Shares owned by the relevant B Building Shareholder on the Closing Date,
rounded to the nearest lesser whole number if the number of WRI Shares thus
calculated is not a whole number, plus, (ii) if the number of WRI Shares
calculated pursuant to clause (i) of this Section 1.5.1, prior to rounding in
accordance with said clause (i), is not a whole number, an amount of cash equal
to the value of the fractional WRI Share remaining after subtracting the
calculated rounded whole number from the calculated number prior to rounding,
which cash amount shall, in turn, be rounded to the nearest one hundredth
(1/100th) dollar. For purposes of making the calculations required under this
Section 1.5.1, the value of each WRI Share (subject to adjustment as referred
to in Section 10.8 of this Agreement) shall be the WRI Per Share Value as
defined in Section 1.3.1. The term "Agreed Value of B Building Stock" shall
mean a dollar amount agreed to in writing by all POCI Shareholders and all B
Building Shareholders which written agreement is delivered to Newco and WRI not
later than December 15, 1993; provided that the amount so agreed upon shall be
such that the total of (w) the Agreed Value of POCI Stock plus (x) the amount
of the Transferred POCI Liabilities plus (y) the Agreed Value of the B
Building Stock plus (z) the amount of the Transferred B Building Liabilities
shall exactly equal $15 Million.
1.5.2. "TRANSFERRED B BUILDING LIABILITIES" means all
liabilities of B Building of any kind or character, which are identified in the
memorandum referred to below in this Section 1.5.2 subject to the limitations
stated in this Section 1.5.2. As conditions to Newco's obligation to
consummate the Merger (in addition to any other conditions thereto set forth
herein), as of the Closing Date, (i) B Building must have no outstanding and
unpaid liabilities of any kind or character, other than the
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<PAGE> 16
Transferred B Building Liabilities, (ii) the Transferred B Building
Liabilities, and all documentation relating thereto and other evidence thereof,
shall have been reviewed and approved by Newco, (iii) all of the Transferred B
Building Liabilities must be prepayable at any time without premium or penalty,
and (iv) in no event shall the Transferred B Building Liabilities exceed the
amount of $3 million less the Transferred POCI Liabilities. In this regard, B
Building, by written memorandum delivered to Newco on or before November 15,
1993 and signed and receipted for by Newco, shall designate the Transferred B
Building Liabilities and disclose the amounts thereof and the names and
addresses of each obligee thereof.
1.6. LIMIT ON TRANSFERRED LIABILITIES. POCI shall be fully liable
for and shall pay and discharge on or prior to the Closing Date all of POCI's
liabilities of any kind or character existing as of the Closing Date, whether or
not such liabilities are then due and payable, liquidated or unliquidated, or
fixed or contingent, except for the Transferred POCI Liabilities and not more
than $400,000 in 1993 ad valorem taxes. B Building shall be fully liable for
and shall pay and discharge on or prior to the Closing Date all of B Building's
liabilities of any kind or character existing as of the Closing Date, whether or
not such liabilities are then due and payable, liquidated or unliquidated, or
fixed or contingent, except for the Transferred B Building Liabilities. In the
event that POCI or B Building fail to pay and discharge their respective
liabilities in excess of the Transferred POCI Liabilities, not more than
$400,000 in 1993 ad valorem taxes, and the Transferred B Building Liabilities as
aforesaid, Newco, in lieu of consummating the Merger, shall have the right to
cancel and terminate this Agreement by notice to POCI and B Building at any time
prior to actual consummation of the Merger, whereupon, Newco, POCI, and B
Building shall automatically be fully released from all claims against one
another with respect to this Agreement. If, in the aforesaid circumstances in
which Newco has a right to cancel and terminate this Agreement, Newco does not
so cancel and terminate this Agreement, such absence of cancellation and
termination shall not alter or affect the rights or remedies of Newco as against
POCI Shareholders with respect to POCI liabilities other than Transferred POCI
Liabilities and not more than $400,000 in 1993 ad valorem taxes or as against B
Building Shareholders with respect to B Building Liabilities other than
Transferred B Building Liabilities; specifically, POCI Shareholders shall be
obligated to indemnify and save and hold Newco harmless from all POCI
liabilities other than Transferred POCI Liabilities, 1993 ad valorem taxes to
the extent they exceed $400,000, and B Building Shareholders shall be obligated
to
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<PAGE> 17
indemnify and save and hold Newco harmless from all B Building Liabilities other
than Transferred B Building Liabilities.
II. INFORMATION REVIEW, INSPECTION, SURVEY AND TITLE COMMITMENT
2.1. DEFINITIONS. For the purposes of this Article II, the
following terms shall have the respective definitions set forth beside each
such term:
2.1.1. "APPURTENANCES" means all rights and appurtenances
pertaining to the Land and Improvements, including, without limitation: all
mineral rights; all rights under any reciprocal easement agreements or other
recorded or unrecorded instruments benefiting the Property; all right, title or
interest of POCI or B Building in and to easements, adjacent or contiguous
tracts, strips, gores, streets, alleys or rights-of-way; all reversionary
rights attributable to the Land; all condemnation awards made or to be made in
lieu thereof; and all awards for damage to the Land by reason of a change of
grade of any highway, street, road or avenue.
2.1.2. "B BUILDING REQUIRED ASSETS" means, collectively,
the leasehold estate under the Ground Lease in the B Building Tract, the
Improvements on the B Building Tract, the Personalty affixed to or used in
connection with the Improvements on the B Building Tract, B Building's interest
in the Appurtenances to the B Building Tract for the term of the Ground Lease,
the Tenant Leases, and all interest of B Building in the Operating Agreements
and Intangibles.
2.1.3. "B BUILDING TRACT" means that certain tract or
parcel of land described in Exhibit "B-2" attached hereto and made a part
hereof for all purposes, which tract or parcel is leased from POCI, as lessor,
to B Building, as lessee, under that certain Lease Agreement dated November 6,
1991, effective as of October 2, 1990 (the "Ground Lease").
2.1.4. "IMPROVEMENTS" means all buildings, structures and
other improvements situated on the Land, and all fixtures and other property
affixed thereto.
2.1.5. "INTANGIBLES" means all warranties, guaranties,
indemnities and claims under any of the Operating Agreements; all licenses,
permits and similar documents relating to any part of the Property; all
telephone exchanges, trade names, marks and other identifying material used by
POCI or B Building in the operation of the Property; all plans, drawings,
specifications, surveys, engineering reports and other technical descriptions
relating to any portion of the Property; all insurance contracts and policies
relating to any part of the Property; all sanitary sewer and other utility
allocation or capacity
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reservation agreements and all other property (real, personal or mixed) owned
or held by POCI or B Building which relate in any way to the design,
construction, ownership, use, leasing, maintenance, service or operation of the
Land, Improvements, Tenant Leases or Personalty.
2.1.6. "LAND" means those certain tracts or parcels of land
described in Exhibit "B-1" and Exhibit "B-2" attached hereto and made a part
hereof for all purposes fronting on Westheimer Road, Post Oak Road and McCue
Street in Houston, Texas, consisting of the Large Tract and the B Building
Tract, as herein defined.
2.1.7. "LARGE TRACT" means that certain tract or parcel of
land described in Exhibit "B-1" attached hereto and made a part hereof for all
purposes.
2.1.8. "OPERATING AGREEMENTS" means all contracts or
agreements affecting the Property, including, without limitation, maintenance,
service or utility contracts.
2.1.9. "PERSONALTY" means all of the interest of POCI and B
Building in all equipment, furnishings, furniture and other personal property
now or hereafter located on or about, or used in connection with, the Land or
Improvements.
2.1.10. "POCI REQUIRED ASSETS" means the entirety of the
Property other than the B Building Required Assets.
2.1.11. "PROPERTY" means, collectively, the Land,
Improvements, Appurtenances, Personalty, Tenant Leases, Operating Agreements
and Intangibles. The aggregate of the POCI Required Assets plus the B Building
Required Assets constitute the Property.
2.1.12. "TENANT LEASES" means all interest of the lessor or
landlord under all leases covering space on the Land or in the Improvements,
together with all prepaid rents, security deposits and other deposits made by
the tenants thereunder.
2.1.13. "TITLE COMPANY" means Stewart Title Company -
Houston Division.
2.2. INFORMATION REVIEW PERIOD. Within ten (10) day days after the
Contract Date, POCI and B Building shall deliver to Newco or alternatively make
available for inspection and copying by Newco as set forth in Section 2.7 below
the materials (the "Required Information Materials") described on Exhibit "C"
attached hereto and made a part hereof for all purposes. Newco shall have
twenty (20) days after receipt of the Required Information Materials in which
to notify POCI in writing if any Required Information Materials are not
acceptable on their face or if additional materials are requested. Newco
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shall have until December 15, 1993 (the time between the delivery of the
Required Information Materials and December 15, 1993, being hereinafter called
the "Information Review Period") within which to decide, in Newco's sole
discretion, whether POCI, B Building, and the Property are satisfactory to
Newco so as to proceed with the Closing.
Newco and/or WRI shall regularly notify POCI of its progress with
respect to negotiations with prospective tenants and shall notify POCI upon the
signing of any letters of intent or leases, but neither Newco nor WRI will be
obligated to disclose the contents of any such letter of intent or lease other
than the identity of the tenant and the square footage covered thereby. Newco
and WRI shall also agree to meet regularly with representatives of Duddlesten
Realty Advisors to apprise them of the status of negotiations with prospective
tenants.
Newco and WRI acknowledge that they have been advised by POCI that the
Improvements contain asbestos. Although POCI has advised WRI that a reputable
contractor has offered to remove all asbestos from the Improvements and
demolish all interior partitions for a contract price of $425,000, which the
contractor has stated by telephone that he would hold firm and available for
acceptance through December 31, 1993, POCI does not guarantee the
above-mentioned contract price or make any representation or warranty with
respect to such matters. Prior to the expiration of the Information Review
Period, WRI and Newco shall have the option of determining whether the asbestos
can be abated at a price acceptable to WRI and Newco, and upon such other terms
and conditions as are acceptable to WRI and Newco. During the Information
Review Period, B Building shall deliver or cause to be delivered the tenant
estoppel certificates more particularly described in Section 6.2.13., and
attached hereto as Exhibit "F".
If at any time, based upon its study of the Required Information
Materials, its physical inspection of the Property, any matter disclosed by the
Survey (hereinafter defined) or Title Binder (hereinafter defined) or any other
item deemed significant by Newco, Newco decides not to proceed with the Merger
under this Agreement, then Newco shall deliver to POCI and B Building on or
before December 15, 1993, a notice of termination of this Agreement, whereupon,
as of December 15, 1993, this Agreement shall be null and void and Newco, WRI,
POCI, B Building, the POCI Shareholders and the B Building Shareholders shall
automatically be fully released from all claims against one another with
respect to this Agreement.
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In the event Newco elects to terminate this Agreement pursuant to any
of the provisions hereof which give Newco such right of termination, Newco
and/or WRI shall immediately deliver to POCI all market studies, site plans,
surveys, soil and substrata studies, environmental site assessments,
architectural drawings, plans and specifications, engineering plans and
studies, floor plans, landscape plans, pro forma projections of income, costs,
yields, etc., and all other plans, studies and written materials of any kind
that relates to the proposed redevelopment or reconstruction of the Property;
provided, however, that Newco and WRI shall not be obligated to provide letters
of intent or leases relating to prospective tenants of the Property.
2.3. PHYSICAL INSPECTION OF THE PROPERTY. Newco shall have the
right at its own cost, risk, and liability (for itself, its engineers and other
representatives) to enter onto the Property to make a physical inspection
thereof, to examine the structure of the Improvements, to conduct soils test, to
remove ceiling tiles, to strip back carpet, to drill holes in interior walls and
columns of the Improvements, and to make such other examination as Newco shall
deem appropriate; provided, however, that if the Merger is not consummated for
any reason other than default of POCI or B Building, Newco will repair all
damage to the Improvements caused by Newco and its engineers and other
representatives. POCI and B Building (and their respective contractors,
engineers, and other representatives) will reasonably cooperate with Newco in
connection with such inspection, and will respond in writing to such reasonable
questions as Newco (or its engineers or other representatives) may ask in
connection with construction matters. Without limiting the generality of the
foregoing, Newco shall have the right to communicate with the tenants under the
Tenant Leases. Newco's physical inspection of the Property, communications with
tenants under Tenant Leases, inspection of Required Information Materials and/or
inspection of POCI's or B Building's books and records shall not, however,
constitute a waiver or relinquishment on the part of Newco of its right to rely
upon the covenants, representations and warranties made by POCI, the POCI
shareholders, B Building, and the B Building shareholders in this Agreement.
Newco agrees to indemnify and save and hold POCI and B Building harmless for any
damage, liability, cost, or expense resulting from the actions of Newco or its
contractors pursuant to the authorization granted by this Section 2.3; provided
that in the event that any claim is asserted against POCI and/or B Building,
POCI and/or B Building, as applicable, will give Newco prompt written notice
(including all particulars known to POCI and B Building) and a copy of all
correspondence or other papers relating to such claim which are in the
possession of POCI and B Building and thereupon Newco will assume the defense of
POCI and
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B Building in connection with such claims and have responsibility for and
authority over such defense. The indemnity provisions of this Section 2.3 shall
survive any termination of this Agreement.
2.4. SURVEY. POCI and B Building, at their expense shall furnish
to Newco, within thirty (30) days after the Contract Date, a Category 1A,
Condition II survey of the Property (the "Survey") to be made by R.H. McClendon
Co. showing the following: adjacent roads; building lines; a metes and bounds
description showing the beginning point, the distance and bearing of the
beginning point from a readily ascertainable point (such as a street
intersection) and the course, bearing and measured distances of all boundary
lines; monuments or stakes found and set; any building set-back lines; the
location, dimensions, square feet, number of stories and street address of all
buildings and the distance from each side of each building to the nearest
property line; physical evidence of each building, fence or hedge near any
property line; physical evidence of and location of each visible and/or
recorded easement, power line, pipeline, manhole or drain outlet; the location
of entry and exit of all utilities to and from the Land and Improvements; any
encroachment or overlapping of improvements; and the location and recording
references of all easements and other locateable encumbrances or restrictions
affecting the Property which are established by any recorded instrument. If
any easements are not susceptible of location, the Survey shall so indicate.
Such Survey shall be dated, shall contain a certificate in the form attached
hereto as Exhibit "E" or in some other form satisfactory to the Title Company
and to Newco and shall be signed and sealed by the aforesaid surveyor or
engineer.
2.5. TITLE BINDER. POCI, at POCI's expense, shall furnish to Newco
within ten (10) days after the Contract Date a title commitment (the "Title
Binder") issued by the Title Company showing title to the Property and
committing to issue the Owner's Title Policy to Newco pursuant to Section 3.2.1
of this Agreement, such Title Binder to specify all exceptions to title,
including, without limitation, easements, liens, encumbrances, restrictions,
conditions or covenants affecting the Property.
2.6. OBJECTIONS AND CURE. In the event that any exceptions appear
on the Title Binder other than the standard printed exceptions (which shall be
modified as provided in Section 3.2.1 of this Agreement), or if any matters are
disclosed by the Survey that are not acceptable to Newco, Newco shall, within
twenty (20) days after receipt of the Title Binder, the Survey and copies of
all documents referred to therein or thereon, notify POCI thereof in writing.
POCI agrees to use POCI's best efforts to cure all objections thus raised by
Newco; provided, however, that POCI shall not be obligated to institute any
litigation, action or other proceeding against any third party, or pay more
than $10,000 in the aggregate
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to cure such objections (other than objections relating to liens or other
defects voluntarily created by POCI or B Building, including those created from
and after the Contract Date, but specifically excluding any that secure all or
a portion of the Transferred POCI Liabilities or the Transferred B Building
Liabilities, which liens voluntarily created by POCI or B Building, other than
those securing the Transferred POCI Liabilities or the Transferred B Building
Liabilities, shall be released at or before Closing). In the event that POCI
and/or B Building are unable or unwilling to cure Newco's objections within
twenty (20) days after receipt of such notice, POCI shall notify Newco thereof
in writing, and thereafter Newco may either (i) extend the time during which
POCI may cure such objections, but in no event will the Closing Date be
extended beyond January 31, 1994, by result of such extension; (ii) terminate
this Agreement by written notice to POCI and B Building; (iii) accept title in
such condition as POCI can deliver, but without a reduction in the
consideration to be paid in accordance with this Agreement; or (iv) exercise
any other remedy provided herein. All remedies not expressly provided for
herein are hereby waived, provided that POCI uses its best efforts to cure any
title objections, with the limitations described above. In the event of such
termination, Newco, POCI, and B Building shall automatically be fully released
from all claims against one another with respect to this Agreement. Any
exceptions or title deficiencies or other matters that appear in the Title
Binder or on the Survey and are accepted by Newco pursuant to the terms of this
Section 2.6 including specifically, but without limitation, liens securing the
Transferred POCI Liabilities and liens securing the Transferred B Building
Liabilities, shall be included within the term Permitted Encumbrances.
2.7. BOOKS AND RECORDS. Commencing on the Contract Date and
continuing until the Closing Date, POCI and B Building shall make available, at
POCI's offices, for inspection and copying by Newco or its designated
representatives, all books, records, files, documents, tax returns (for 1987
and all subsequent years), accountant's work papers, audited financial
statements, unaudited financial statements, articles of incorporation and
amendments thereof, by-laws, minute books, stock books, and all other materials
relating to POCI, B Building, and the Property. The officers, employees, and
accountants of POCI and B Building will reasonably cooperate with Newco in
connection with Newco's inspection and examination of all such materials and
will respond in writing to such reasonable questions as Newco or its
accountants or other representatives may ask in connection with the review and
examination of such materials.
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III. CLOSING
3.1. THE CLOSING PLACE AND TIME. The Closing ("Closing") of the
Merger provided for in this Agreement shall take place at the offices of Dow,
Cogburn & Friedman, P.C., Nine Greenway Plaza, Suite 2300, Houston, Texas
77046 (or such other place as may be agreed upon in writing by Newco, POCI, and
B Building) at 10:00 A.M. on the Closing Date, provided, however, that Newco
has the right to establish an earlier Closing Date upon giving POCI and B
Building five (5) business days prior written notice of such earlier Closing
Date.
3.2. DELIVERIES AT CLOSING.
3.2.1. BY POCI AND B BUILDING. At the Closing, POCI and B
Building shall at their expense deliver to Newco the following:
(i) An updated rent roll in the form attached
hereto as Exhibit "D", including a statement, itemized in
reasonable detail, of the expenses and capitalized expenditures
for the Property for the last three (3) years completed before
the Closing Date, certified by the accountants or property
manager of POCI and B Building as of the Closing Date;
(ii) An Owner's Title Policy, in an amount equal to
the sum of the Agreed Value of POCI Stock and the Agreed Value
of B Building Stock, covering the Property and containing no
exceptions to title other than the Permitted Encumbrances and
other exceptions approved in writing by Newco, and including
the following modifications to the standard typed or printed
exceptions in the Title Binder: (a) the exception for
discrepancies, conflicts or shortages in area or boundary
lines, or encroachments or protrusions or any overlapping of
improvements shall be deleted except for the phrase "shortages
in area" (such deletion to be made at the expense of WRI and
Newco); (b) the exception for ad valorem taxes shall be
deleted except only as to taxes, standby fees and special
assessments for the year 1993, and shall indicate that such
taxes are not yet due and payable, and may also except as to
taxes and assessments for prior years due to a change in land
usage or ownership; (c) the exception for rights of parties in
possession shall except only to the rights of tenants in
possession under leases identified on a schedule attached to
the Policy, which shall be the Tenant Leases then in effect;
and (d) the exception as to restrictive covenants shall be
deleted.
(iii) Updates of the UCC searches provided as part of
the Required Information Materials;
(iv) All warranties and guaranties relating to the
Property;
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(v) Originals of all Tenant Leases, and all other
licenses, permits and governmental certificates and approvals
relating to the Property and in the possession of POCI or B
Building;
(vi) Keys to all locks on the Property;
(vii) Letters addressed to each tenant under the
Tenant Leases informing such tenant of the address for payment
of future rental payments;
(viii) Letters addressed to each utility company
providing utilities to the Property advising such company of
the change of address of the owner of the Property;
(ix) Such evidence as may be reasonably required by
Newco or the Title Company evidencing the status and capacity
of POCI and B Building and the authority of the person or
persons who are executing the various closing documents on
behalf of POCI and B Building in connection with this
Agreement;
(x) The original stock certificates of all POCI
Shares issued and outstanding on the Closing Date duly
endorsed by each registered holder thereof to Newco or, in
lieu thereof, sworn "lost share certificate" affidavits and
indemnity agreements executed by the owners of all POCI Shares
not included in the original stock certificates provided;
(xi) The POCI Articles of Incorporation, by-laws,
minute book containing minutes of all recorded meetings of
POCI stockholders and POCI directors, the POCI stock book, and
all other POCI books, records, files, and documents;
(xii) The original stock certificates of all B
Building Shares issued and outstanding on the Closing Date
duly endorsed by each registered holder thereof to Newco or,
in lieu thereof, sworn "lost share certificate" affidavits and
indemnity agreements executed by the owners of B Building
Shares not included in the original stock certificates
provided;
(xiii) The B Building Articles of Incorporation,
by-laws, minute book containing minutes of all recorded
meetings of B Building stockholders and B Building directors,
the B Building stock book, and all other B Building books,
records, files, and documents;
(xiv) Counterpart originals of the Price Increase
Guaranty executed as provided below in Section 3.2.2(iii);
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(xv) If the Prudential Insurance Company Note is
still outstanding, an estoppel certificate from Prudential
Insurance Company of America dated not more than ten (10) days
prior to Closing substantially in the form attached hereto as
Exhibit "G";
(xvi) Certified copies of resolutions of the Board of
Directors of POCI approving the merger of POCI into Newco and
certified copies of the resolutions of POCI Shareholders,
approving the merger of POCI into Newco;
(xvii) Certified copies of resolutions of the Board of
Directors of B Building approving the merger of B Building
into Newco and certified copies of the resolutions of B
Building Shareholders, approving the merger of B Building into
Newco;
(xviii) Such documentation or other items as Newco may
reasonably require in order for B Building and POCI to convey
to Newco all water and sewer capacity and other utility
capacity, if any, allocated to the Property and to cause the
records of the City of Houston and Harris County to reflect
Newco's ownership thereof; and
(xix) Confirmations from each tenant under the Tenant
Leases of the absence of any change in the tenant estoppel
certificates previously delivered by such tenant pursuant to
Sections 2.2 and 6.2.13.
3.2.2. BY NEWCO. At the Closing, WRI and Newco shall
deliver, or cause to be delivered at its expense:
(i) To each POCI shareholder the Agreed POCI
Consideration, the cash portion of which, if any, may be in
the form of cash or a cashier's check payable to the Title
Company or a wire transfer to the Title Company's bank account
or a Title Company check, and the remainder of which shall be
in the form of WRI Share certificates;
(ii) To each B Building shareholder the Agreed B
Building Consideration, the cash portion of which, if any, may
be in the form of cash or a cashier's check payable to the
Title Company or a wire transfer to the Title Company's bank
account or a Title Company check, and the remainder of which
shall be in the form of WRI Share certificates;
(iii) To each POCI shareholder and each B Building
shareholder, a counterpart original of the Price Increase
Guaranty executed by WRI in the form attached hereto as Exhibit
"H"; one counterpart original of which shall be signed by each
POCI shareholder and each B Building shareholder and
delivered to WRI; and
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(iv) Certified copies of resolutions of the Board of
Directors of Newco approving the merger of Newco with POCI and
B Building and certified copies of the resolutions of the
consent of the shareholder of Newco, approving such merger.
3.2.3. MISCELLANEOUS. POCI, B Building, and Newco and all
other parties hereto also agree to deliver, or cause to be delivered, at
Closing, all other items required to be delivered by such parties under other
terms of this Agreement, but not required to be delivered prior to the Closing
Date.
3.3. SPECIAL PRICE CONTINGENCY. In the event that the closing
price of WRI Shares on the New York Stock Exchange on the day immediately
preceding the Closing Date (the "Closing Date Share Price") is less than $38
per share (subject to adjustment as provided in Section 10.8 of this
Agreement), POCI and B Building may, at their option, elect to cancel and
terminate this Agreement by notice from POCI and B Building; provided, however
Newco shall have the right, in its discretion, to override such termination and
thereby keep this Agreement in effect by causing WRI to pay and/or deliver at
the Closing that number of WRI Shares which is equal to the Agreed POCI
Consideration plus the Agreed B Building Consideration, but calculated on the
basis of such WRI Shares being deemed to have a value per share equal to the
Closing Date Share Price in lieu of and in substitution for the value of each
WRI Share as determined in Sections 1.3.1 and 1.5.1. If, pursuant to this
Section 3.3, POCI and B Building elect to terminate and cancel this Agreement
and Newco does not override such election in accordance with this Section 3.3,
then in such event, this Agreement shall terminate, whereupon WRI, Newco, POCI,
B Building, the POCI Shareholders and the B Building Shareholders shall
automatically be fully released from all claims against one another with
respect to this Agreement.
IV. REPRESENTATIONS AND WARRANTIES
4.1. REPRESENTATIONS AND WARRANTIES OF POCI. POCI hereby
represents and warrants to Newco and WRI the following:
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4.1.1. FINANCIAL STATEMENTS. POCI has heretofore delivered
to Newco a copy of the balance sheet of POCI as of March 31, 1992 (hereinafter
called "POCI Balance Sheet") and the statement of profit and loss of POCI for
the twelve (12)-month period ending March 31, 1993 (hereinafter called the
"POCI Profit and Loss Statement"). The POCI Financial Statements (as
hereinafter defined), together with the notes thereto, are consistent with the
books of account and records of POCI; are, in all material respects, true,
correct and complete statements of its financial condition and were prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with its financial statements of prior periods; and contain and
reflect all necessary and material adjustments so as to present a fair and
accurate statement of the financial condition for the period covered by the
POCI Financial Statements. The POCI Balance Sheet and the POCI Profit and Loss
Statement are sometimes hereinafter individually and collectively referred to
as the "POCI Financial Statements." Except as set forth in the POCI Balance
Sheet or in the Schedules provided for in Section 4.1.2 hereof, POCI is not
obligated for, nor are any of its assets or properties (including, without
limitation, the Property or any part thereof or interest therein) subject to,
any liabilities (absolute or contingent), whether or not such liabilities are
normally shown or reflected on a balance sheet prepared in a manner consistent
with generally accepted accounting principles. POCI is not in default in
respect to any term or condition of any indebtedness or liability. There are
no facts in existence on the date hereof and known to any of the officers,
directors, or shareholders of POCI which might reasonably serve as the basis
for any liability or obligation of POCI not disclosed in this Agreement or in
the Schedules delivered by POCI to Newco pursuant to this Agreement.
4.1.2. CERTAIN POCI SCHEDULES. POCI has furnished to Newco
prior to the execution of this Agreement or within 7 days after such execution
will furnish the following Schedules (each of which Schedules has been or will
be signed for identification by POCI and a copy of which has been or will be
signed and receipted for by Newco), which Schedules provide the following
information with respect to POCI as of the Contract Date:
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(i) Schedule of Contracts and Commitments
listing all contracts and commitments in effect as of the
Contract Date including, without limitation, the Ground Lease;
and all contracts or commitments, whether in the ordinary
course of business or not, which involve future payments,
performance of services or delivery of goods and/or materials,
to or by POCI;
(ii) Schedule of Insurance listing all policies
and contracts of insurance, which have been in effect for any
portion of the four-year period preceding the Contract Date
showing policy limitations, expiration dates, type of coverage
and name of insurer with copies of such policies;
(iii) Schedule of Indebtedness listing all
indebtedness owed, or to which any properties or assets
(including, without limitation, the Property or any part
thereof or interest therein) are subject, including a
description of all terms thereof and all assets pledged or
otherwise subject thereto;
(iv) Schedule of Personalty listing all major
items of equipment and machinery owned by POCI affixed to or
used in the operation of the Large Tract or the Improvements
thereon;
(v) Schedule of Guarantees, Suretyship and
Contingent Liabilities listing and briefly describing all
guarantees, matters of suretyship and contingent liabilities
of POCI; and
(vi) Schedule of Changes showing changes in the
financial condition of POCI since the date of the POCI
Financial Statements. It is understood that certain of POCI's
accumulated loss carry forward as shown on its Financial
Statements will be used by POCI prior to closing in connection
with the transfer of the Post Oak Bank Property out of POCI
and will be unavailable to Newco or WRI.
All such Schedules are true, complete and accurate in all material respects and
contain all information reasonably necessary for an understanding of the
materials therein contained. Neither the requirement in this Section 4.1.2 for
delivery by POCI of the Schedules described herein nor the receipt of such
Schedules by Newco shall alter or affect the obligation of POCI to pay-off and
discharge, prior to the Closing Date, all POCI liabilities and obligations
other than the Transferred POCI Liabilities plus certain 1993 ad valorem real
estate taxes as more particularly described in Section 5.1.12.
4.1.3. CORPORATE STATUS. POCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power to carry on
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its business as it is now being conducted. POCI is not qualified to do
business as a foreign corporation in any other jurisdiction, and the nature of
the business conducted by it and the character of the properties owned by it do
not make qualification necessary in any other jurisdiction. The copies of
Articles of Incorporation of POCI and all amendments thereto effected prior to
the Contract Date (certified by the Secretary of State of Texas not more than
thirty (30) days prior to the Contract Date) and of POCI's By-Laws (certified
by the Secretary of POCI to be as amended to such Contract Date) have been
delivered to Newco and are complete and correct as of the Contract Date, and
POCI has delivered to Newco a Certificate of Good Standing of POCI issued by
the State Comptroller of the State of Texas and a Certificate of Existence of
POCI issued by the Secretary of State of the State of Texas.
4.1.4. CAPITALIZATION. The authorized capital stock of POCI
consists of Nine Hundred Sixty (960) shares of common stock, $100.00 par value,
of which, on the Contract Date, Nine Hundred Sixty (960) shares are issued and
outstanding and have been validly issued to, and are owned of record and
beneficially by, the POCI Shareholders, all of which Nine Hundred Sixty (960)
shares are fully paid and non-assessable, and, as of the Closing Date, will be
free and clear of any liens, encumbrances, options, charges and assessments,
and no shares are held in the treasury of POCI. No preferred stock of POCI is
authorized or outstanding. There are not any options, warrants or other rights
outstanding for the purchase of, nor any securities convertible into, stock of
POCI, whether issued, non-issued or held in the treasury, and all the aforesaid
conditions will continue to exist through the Closing Date, except for
additional shares which may be issued prior to the Closing to current POCI
Shareholders in exchange for the cancellation of indebtedness owing from POCI
to such POCI Shareholders of which issuance POCI shall have given WRI notice
prior to December 15, 1993, as provided in Section 1.3 of this Agreement. POCI
has no subsidiaries and has no direct or indirect ownership interest, whether
by way of stock ownership or otherwise, in any other corporation, firm,
association or other business enterprise.
4.1.5. AUTHORITY RELATIVE TO THIS AGREEMENT. POCI has all
requisite power and authority to perform its obligations as herein provided,
and neither the execution or delivery of this Agreement by POCI nor performance
by it hereunder will result in a violation or breach of any terms or provision
or constitute a default or accelerate the performance required under any
indenture, mortgage, deed of trust or other contract or agreement to which POCI
is a party or by which POCI is bound, or violate any order, writ, injunction or
decree of any court, administrative agency or governmental body binding on
POCI.
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4.1.6. ABSENCE OF CERTAIN CHANGES. Except as is set forth
in the Schedules delivered by POCI to Newco pursuant to this Agreement (copies
of which Schedules have been signed and receipted for by Newco), POCI has not
issued or agreed to issue any stock, bonds or other corporate securities or
debt instruments; granted or agreed to grant any options, warrants or other
rights calling for the issue thereof; borrowed or agreed to borrow any funds;
incurred, or become subject to, any obligation or liability (absolute or
contingent) or guaranty except obligations listed in the Schedule of Contracts
and Commitments; declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to shareholders
or purchased or redeemed, or agreed to purchase or redeem, any of its stock;
hired any employees or incurred any liability for compensation payable or to
become payable by it to any officer, employee or agent; made or permitted any
amendment or any contract, agreement or license to which it is a party; made
any commitment or incurred any liability to any labor organization; made any
accrual or arrangement for or payment of bonuses or special compensation of any
kind to any officer or employee; directly or indirectly paid or made a
commitment to pay any severance or termination pay to any officer or employee;
or made capital expenditures, or entered into commitments therefor. POCI has
no knowledge of any change contemplated in any law, ordinance, regulation or
order, or in any suits, actions, claims, investigations or proceedings, and no
knowledge of any action by a third party or any other fact or condition which
would adversely affect the use of the Property as a shopping center.
4.1.7. TITLE TO ASSETS. POCI has good and marketable title
to the POCI Required Assets, and as of the Closing Date the POCI Required
Assets shall be free from all security interests, mortgages, liens, claims, and
encumbrances, except the Permitted Encumbrances and the Transferred POCI
Liabilities, and 1993 and 1994 ad valorem taxes. POCI has advised Newco that
the Improvements (previously occupied by a Sakowitz store) contain asbestos
containing materials. The POCI Required Assets have not been used for the
storage of any hazardous substance, hazardous waste or petroleum products or
underground storage tanks.
4.1.8. NO DEFAULT OR WAIVER OF RIGHT OF POCI. There has
been no default in any respect in any obligation to be performed by POCI under
any Contract or Commitment listed in the Schedule thereof heretofore furnished,
nor has POCI waived any right under any such Contract or Commitment.
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4.1.9. TAX RETURNS AND AUDITS. POCI has filed all Federal,
State, County and local income, withholding, F.I.C.A., excise, property,
franchise and other tax returns which are required to be filed by it, and such
returns are true, correct and complete. POCI has paid all taxes which have
become due pursuant to such returns or pursuant to any assessments received by
it. POCI's fiscal year for Federal income tax purposes runs from April 1 to
March 31, and for the year ended March 31, 1993, POCI does not have in effect
an election to be taxed under Subchapter S of the Internal Revenue Code of
1986. The Federal income tax returns of POCI for any year prior to the year
ended March 31, 1993, are not, to the knowledge of POCI, undergoing any
examination or audit or other inquiry. No additional taxes, penalties or
interest for such years has been assessed or asserted (or alternatively, all
claims therefor have been settled and fully paid).
4.1.10. LITIGATION. There are no suits, actions, claims or,
to the knowledge of POCI, investigations, by any governmental body, or legal,
administrative or arbitration proceedings pending or, to the knowledge of POCI,
threatened, against or affecting POCI or any of its properties, assets or
business, or to which POCI is or might become a party, and POCI knows of no
basis or grounds for any such suit, action, claim, investigation or proceeding.
There is no outstanding order, writ, injunction or decree of any court or
governmental agency or other body against or affecting POCI or its properties
or business. POCI has no knowledge of any state of facts or the occurrence of
any event forming the basis for any lawsuit or governmental claim or proceeding
against POCI or any requirement that POCI obtain any permit, license or other
authorization to use or operate any of its properties, assets or business.
4.1.11. LABOR MATTERS; LEGAL COMPLIANCE. POCI has not
entered into any contract or agreement with a labor union or any local or
subdivision thereof, nor does POCI have knowledge of any union organizing
activity among any of its employees (contemplated or in progress or completed),
nor has POCI been charged with any unfair labor practice. POCI is in
compliance in all material respect with all applicable Federal and state laws
governing the use and operation of the Required POCI Assets, employment and
employee safety, terms and conditions of employment, wages and hours, and is
not engaged in any unfair labor practices. There are no labor strikes, no
union representation questions and no arbitration proceedings regarding labor
agreements pending or threatened against POCI.
4.1.12. INSURANCE COVERAGE. POCI maintains policies of fire,
comprehensive general liability and product liability and other forms of
insurance covering its properties and assets, in amounts
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and against such losses and risks as are reflected on the aforesaid Schedule of
Insurance, and valid policies for such insurance will be outstanding and duly
in force at least up to the time of the Closing.
4.1.13. REQUIRED INFORMATION MATERIALS AND BOOKS AND RECORDS.
The Required Information Materials are correct and complete in all material
respects. The books and records of POCI, including, without limitation, its
Minute Book and Capital Stock records, are in all material respects complete
and correct and have been maintained in accordance with good business practice.
4.1.14. ABSENCE OF EMPLOYEE BENEFIT PLANS. There are not
presently any (and as of the Closing Date there shall not be any) officer or
employee bonus, incentive compensation, profit-sharing, pension, stock
ownership, medical expense reimbursement plan, group insurance or employee
welfare or benefit plan of any nature whatsoever; and to the extent, if any,
that there has heretofore been any such plan in effect, such plan has been
terminated, required notice has been given to the Pension Benefit Guaranty
Corporation and received from such Corporation and all liabilities, if any, of
POCI with respect thereto have been fully and finally discharged and released
in writing.
4.1.15. SUPPLEMENTARY FINANCIAL DATA. On the Closing Date,
POCI will submit to Newco supplementary financial data relating to any
transaction or occurrence which might give rise to any liabilities not
described in Financial Statements or Schedules previously delivered to Newco by
POCI including the transfer of the Post Oak Bank Property which will reduce
POCI's accumulated loss carry forward, and such supplementary financial data
shall, in all material respects, be true, correct and complete.
4.1.16. GROUND LEASE. The Ground Lease is valid and
subsisting and in full force and effect in accordance with its terms and
constitutes the legal, valid, binding, and enforceable obligation of B
Building, as lessee, thereunder. Neither POCI nor B Building is in default
thereunder. POCI has not assigned, transferred, or hypothecated any of the
rights of the lessor under the Ground Lease.
4.1.17. CONTRACTS FOR CONSTRUCTION, BROKERAGE, ETC. Without
limiting any other representation or warranty made by POCI in this Agreement,
POCI expressly represents and warrants that except for the consulting agreement
and brokerage agreement with Duddlesten Realty Advisors, Inc., referred to in
Section 7.6, there is no construction contract or brokerage agreement or any
other agreement binding on POCI or the POCI Required Assets pursuant to which a
commission or any other form of compensation is payable in respect of the
Ground Lease or merger contemplated by this Agreement. POCI agrees to
indemnify and hold harmless Newco and WRI from and against any and all
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claims, demands, losses, costs, expenses, obligations, liabilities and damages
resulting from, relating to, or arising in connection with any agreement,
arrangement or understanding alleged to have been made by POCI or on its behalf
with any broker, finder, or agent in connection with this Agreement of Merger
or the transactions contemplated hereby.
4.1.18. NO BUSINESS; NO EMPLOYEES. POCI has no employees at
the present time and will have no employees on the Closing Date. For a period
of at least sixty (60) months prior to the Contract Date, POCI has not engaged
in any business operations of any kind or nature whatsoever, save and except
only management and ownership of the POCI Required Assets and the Post Oak Bank
Property (as hereinafter defined), collection of rent under the Ground Lease,
performance of the obligations of the lessor under the Ground Lease and
enforcement of the obligations of the lessee under the Ground Lease.
4.2. REPRESENTATIONS AND WARRANTIES OF POCI SHAREHOLDERS. Each
POCI Shareholder hereby severally, for himself, herself, or itself only,
represents and warrants to Newco and WRI the following:
4.2.1. TITLE TO POCI SHARES. Such POCI Shareholder is the
owner, beneficially and of record, of the POCI Shares identified on Schedule
4.2.1 attached hereto, and as of the Closing Date all such POCI Shares shall be
free and clear of all liens, encumbrances, security agreements, and pledges.
4.2.2. AUTHORITY AND EXECUTION OF AGREEMENT. Such POCI
Shareholder has all requisite power and authority to enter into this Agreement
and to sell, transfer, assign and deliver all of the POCI Shares held by such
POCI Shareholder as provided in this agreement, and such delivery will convey
to Newco the marketable title to such POCI Shares. This Agreement has been
duly executed and delivered by such POCI Shareholder and constitutes the legal,
valid and binding obligation of such POCI Shareholder enforceable against such
shareholder in accordance with its terms. Such POCI Shareholder has the full
power to transfer the POCI Shares held by such shareholder to Newco without
obtaining the consent or approval of any other person or governmental
authority.
4.2.3. NO DEFAULT. Neither the execution or delivery of
this Agreement by such POCI Shareholder nor performance of the obligations of
such shareholder under this Agreement will result in a violation or breach of
any terms or provisions of or constitute a default or accelerate the
performance required under, any agreement to which such shareholder is a party
or by which such shareholder is bound, or violate any order, writ, injunction
or decree of any court, administrative agency or governmental body binding on
such shareholder.
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4.2.4. LITIGATION. To the knowledge of such POCI
Shareholder, there are no suits, actions, claims or investigations by any
governmental body, or legal, administrative or arbitration proceedings pending
or threatened against or affecting POCI. Such POCI Shareholders knows of no
basis or grounds for any such suit, action, claim, investigation or proceeding.
4.2.5. LIABILITIES. On the Closing Date, POCI will not have
any liabilities, whether or not such liabilities are then due and payable,
liquidated or unliquidated, or fixed or contingent, except for the Transferred
POCI Liabilities, and ad valorem taxes for 1993.
4.2.6. POCI REPRESENTATIONS. To the best of the knowledge
and belief of such POCI Shareholder, the representations and warranties of POCI
which are contained in Sections 4.1.1 through Section 4.1.19, inclusive, of
this Agreement are true and correct in all material respects.
4.2.7. INFORMATION SUPPLIED. None of the information
supplied or to be supplied by such POCI Shareholder expressly for inclusion or
incorporation by reference in (i) the Shelf Registration (as defined in Section
11.2.2) will, at the time the Shelf Registration is filed with the SEC (as
defined in Section 11.2.1) and at the time it becomes effective under the
Securities Act of 1933 (the "1933 Act"), contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the proxy
materials to be provided to the POCI Shareholders in order to approve the
Merger will, at the date mailed to POCI Shareholders and at the time of the
meeting referred to therein, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading. Other than with respect to the Estate of Alexander Hart
Sackton, Deceased, such POCI Shareholder is a resident of the State of Texas.
4.2.8. ACQUISITION OF WRI SHARES. The WRI Shares to be
received by the POCI Shareholders as the Agreed POCI Consideration in the
Merger are being acquired for investment and not with a view to the
distribution or resale thereof except in compliance with the 1933 Act. Each
POCI Shareholder represents and warrants that such POCI Shareholder is, and
will take no action from and after the date hereof that would cause such POCI
Shareholder on the Closing Date not to be, an "accredited investor" within the
meaning of Rule 501 under the 1933 Act, is, and will on the Closing Date be,
able to fend for itself in the transactions contemplated hereby, is, and will
on the Closing Date be, knowledgeable and experienced in business and financial
matters and capable of evaluating the merits and risks of the investment in the
WRI Shares, is, and will on the Closing Date be, able to bear the
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economic risk of loss of its investment in WRI, and, as of the date of this
Agreement, has had the opportunity to request such information as is necessary
to verify the accuracy of the information supplied to it in connection with the
transactions contemplated hereby, has received all information requested and
has had all questions answered by WRI.
4.3. REPRESENTATIONS AND WARRANTIES OF B BUILDING. B Building
hereby represents and warrants to Newco and WRI the following:
4.3.1. FINANCIAL STATEMENTS. B Building has heretofore
delivered to Newco a copy of the balance sheet of B Building as of December 31,
1992 (hereinafter called "B Building Balance Sheet") and the statement of
profit and loss of B Building for the twelve (12)-month period ending December
31, 1992 (hereinafter called the "B Building Profit and Loss Statement"). The
B Building Balance Sheet and the B Building Profit and Loss Statement are
sometimes hereinafter individually and collectively referred to as the "B
Building Financial Statements." The B Building Financial Statements, together
with the notes thereto, are consistent with the books of account and records of
B Building; are, in all material respects, true, correct and complete
statements of its financial condition and the results of its operations as at
and for the period therein specified and were prepared in accordance with
generally accepted accounting principles applied on a basis consistent with its
financial statements of prior periods; and contain and reflect all necessary
and material adjustments so as to present a fair and accurate statement of the
results of operations and financial condition for the period covered by the B
Building Financial Statements. All of the provisions of the immediately
proceeding sentence shall also be applicable to the operating statements to be
provided as part of the Required Information Materials. Except as set forth in
the B Building Balance Sheet or in the Schedules provided for in Section 4.3.2
hereof, B Building is not obligated for, nor are any of its assets or
properties (including, without limitation, the Property or any part thereof or
interest therein) subject to, any liabilities (absolute or contingent), whether
or not such liabilities are normally shown or reflected on a balance sheet
prepared in a manner consistent with generally accepted accounting principles.
B Building is not in default in respect to any terms or conditions of any
indebtedness or liability. There are no facts in existence on the date hereof
and known to any of the officers, directors, or shareholders of B Building
which might reasonably serve as the basis for any liability or obligation of B
Building not disclosed in this Agreement or in the Schedules delivered by B
Building to Newco pursuant to this Agreement.
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4.3.2. CERTAIN B BUILDING SCHEDULES. B Building has
furnished to Newco prior to the execution of this Agreement or within 7 days
after such execution the following Schedules (each of which Schedules has been
or will be signed for identification by B Building and a copy of which has been
or will be signed and receipted for by Newco), which Schedules provide the
following information with respect to B Building as of the Contract Date:
(i) Schedule of Contracts and Commitments
listing all contracts and commitments in effect as of the
Contract Date including, without limitation, the Ground Lease
and the Tenant Leases; and all contracts or commitments,
whether in the ordinary course of business or not, which
involve future payments, performance of services or delivery
of goods and/or materials, to or by B Building;
(ii) Schedule of Insurance listing all policies
and contracts of insurance, which have been in effect for the
four-year period preceding the Closing Date, showing policy
limitations, expiration dates, type of coverage and name of
insurer with copies of such policies;
(iii) Schedule of Indebtedness listing all
indebtedness owed, or to which any properties or assets
(including, without limitation, the Property or any part
thereof or interest therein) are subject, including a
description of all terms thereof and all assets pledged or
otherwise subject thereto;
(iv) Schedule of Personalty listing all major
items of equipment and machinery owned by B Building affixed
to or used in the operation of the Improvements on the B
Building Tract;
(v) Schedule of Guarantees, Suretyship and
Contingent Liabilities listing and briefly describing all
guarantees, matters of suretyship and contingent liabilities
of B Building; and
(vi) Schedule of Changes showing changes in the
financial condition of B Building since the date of the B
Building Financial Statement.
All such Schedules are complete and accurate in all material respects and
contain all information reasonably necessary for an understanding of the
materials therein contained. Neither the requirement in this Section 4.3.2 for
delivery by B Building of the Schedules described herein nor the receipt of
such Schedules by Newco shall alter or affect the obligation of B Building to
pay-off and discharge, prior to the Closing Date, all B Building liabilities
and obligations other than the Transferred B Building Liabilities as more
particularly described in Section 5.2.13.
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4.3.3. CORPORATE STATUS. B Building is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power to carry on its business as it is
now being conducted. B Building is not qualified to do business as a foreign
corporation in any other jurisdiction, and the nature of the business conducted
by it and the character of the properties owned by it do not make qualification
necessary in any other jurisdiction. The copies of Articles of Incorporation
of B Building and all amendments thereto effected prior to the Contract Date
(certified by the Secretary of State of Texas not more than thirty (30) days
prior to the Contract Date) and of B Building's By-Laws (certified by the
Secretary of B Building to be as amended to such Contract Date) have been
delivered to Newco and are complete and correct as of the Contract Date, and B
Building has delivered to Newco a Certificate of Good Standing of B Building
issued by the State Comptroller of the State of Texas and a Certificate of
Existence of B Building issued by the Secretary of State of the State of Texas.
B Building is an S Corporation within the meaning of Section 1361 of the
Internal Revenue Code of 1986, as amended, as of the date hereof and will be an
S Corporation at the Effective Time. B Building has been an S Corporation
since March 15, 1983.
4.3.4. CAPITALIZATION. The authorized capital stock of B
Building consists of Two Hundred (200) shares of common stock, $100.00 par
value, of which, on the Contract Date, Ten (10) shares are issued and
outstanding and have been validly issued to, and are owned of record and
beneficially by, the B Building Shareholders, all of which Ten (10) shares are
fully paid and non-assessable, and, as of the Closing Date, will be free and
clear of any liens, encumbrances, options, charges and assessments, and no
shares are held in the treasury of B Building. No preferred stock of B
Building is authorized or outstanding. There are not any options, warrants or
other rights outstanding for the purchase of, nor any securities convertible
into, stock of B Building, whether issued, non-issued or held in the treasury.
B Building has no subsidiaries and has no direct or indirect ownership
interest, whether by way of stock ownership or otherwise, in any other
corporation, firm, association or other business enterprise.
4.3.5. AUTHORITY RELATIVE TO THIS AGREEMENT. B Building has
all requisite power and authority to perform its obligations as herein
provided, and neither the execution or delivery of this Agreement by B Building
nor performance by it hereunder will result in a violation or breach of any
terms or provision or constitute a default or accelerate the performance
required under any indenture, mortgage, deed of trust or other contract or
agreement to which B Building is a party or by which
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B Building is bound, or violate any order, writ, injunction or decree of any
court, administrative agency or governmental body binding B Building.
4.3.6. ABSENCE OF CERTAIN CHANGES. Except as is set forth
in the Schedules delivered by B Building to Newco pursuant to this Agreement
(copies of which Schedules have been signed and receipted for by Newco), B
Building has not issued or agreed to issue any stock, bonds or other corporate
securities or debt instruments; granted or agreed to grant any options,
warrants or other rights calling for the issue thereof; borrowed or agreed to
borrow any funds; incurred, or become subject to, any obligation or liability
(absolute or contingent) or guaranty except obligations listed in the Schedule
of Contracts and Commitments; declared or made, or agreed to declare or make,
any payment of dividends or distributions of any assets of any kind whatsoever
to shareholders or purchased or redeemed, or agreed to purchase or redeem, any
of its stock; hired any employees or incurred any liability for compensation
payable or to become payable by it to any officer, employee or agent; made or
permitted any amendment of any contract, agreement or license to which it is a
party; made any commitment or incurred any liability to any labor organization;
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind to any officer or employee; directly or indirectly
paid or made a commitment to pay any severance or termination pay to any
officer or employee; or made capital expenditures, or entered into commitments
therefor. B Building has no knowledge of any change contemplated in any law,
ordinance, regulation or order, or in any suits, actions, claims,
investigations or proceedings, and no knowledge of any action by a third party
or any other fact or condition which would adversely affect the use of the
Property as a shopping center.
4.3.7. TITLE TO ASSETS. B Building has good and marketable
title to the B Building Required Assets, and as of the Closing Date the B
Building Required Assets shall be free from all security interests, mortgages,
liens, claims, and encumbrances, except the Permitted Encumbrances and the B
Building Transferred Liabilities, and in the same condition such assets were in
as of the Contract Date, subject to ordinary wear and tear.
4.3.8. NO DEFAULT OR WAIVER OF RIGHT OF B BUILDING. There
has been no default in any respect in any obligation to be performed by B
Building under any Contract or commitment listed in the Schedule thereof
heretofore furnished, nor has B Building waived any right under any such
Contract or Commitment.
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4.3.9. TAX RETURNS AND AUDITS. B Building has filed all
Federal, State, County and local income, withholding, F.I.C.A., excise,
property, franchise and other tax returns which are required to be filed by it,
and such returns are true, correct and complete. B Building has paid all taxes
which have become due pursuant to such returns or pursuant to any assessments
received by it. B Building is on a calendar year basis for Federal income tax
purposes, and for the year ended December 31, 1992, B Building has in effect an
election to be taxed under Subchapter S of the Internal Revenue Code of 1986.
The Federal income tax returns of B Building for any year prior to the year
ended December 31, 1992, are not, to the knowledge of B Building, undergoing
any examination or audit or other inquiry. No additional taxes, penalties or
interest for such years has been assessed or asserted (or alternatively, all
claims therefor have been settled and fully paid).
4.3.10. LITIGATION. There are no suits, actions, claims or,
to the knowledge of B Building, investigations, by any governmental body, or
legal, administrative or arbitration proceedings pending or, to the knowledge
of B Building, threatened, against or affecting B Building or any of its
properties, assets or business, or to which B Building is or might become a
party, and B Building knows of no basis or grounds for any such suit, action,
claim, investigation or proceeding. There is no outstanding order, writ,
injunction or decree of any court or governmental agency or other body against
or affecting B Building or its properties or business. B Building has no
knowledge of any state of facts or the occurrence of any event forming the
basis for any lawsuit or governmental claim or proceeding against B Building or
any requirement that B Building obtain any permit, license or other
authorization to use or operate any of its properties, assets or business.
4.3.11. LABOR MATTERS; LEGAL COMPLIANCE. B Building has not
entered into any contract or agreement with a labor union or any local or
subdivision thereof, nor does B Building have knowledge of any union organizing
activity among any of its employees (contemplated or in progress or completed),
nor has B Building been charged with any unfair labor practice. B Building is
in compliance, in all material respects, with all applicable federal and state
laws governing use and operation of the Required B Building Assets, employment
and employee safety, terms and conditions of employment, wages and hours, and
is not engaged in any unfair labor practices. There are no labor strikes, no
union representation questions and no arbitration proceedings regarding labor
agreements pending or threatened against B Building.
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4.3.12. INSURANCE COVERAGE. B Building maintains policies of
fire, comprehensive general liability, product liability and workers
compensation and other forms of insurance covering its properties and assets,
in amounts and against such losses and risks as are reflected on the aforesaid
Schedule of Insurance, and valid policies for such insurance will be
outstanding and duly in force at least up to the time of the Closing.
4.3.13. REQUIRED INFORMATION MATERIALS AND BOOKS AND RECORDS.
The Required Information Materials are correct and complete in all material
respects. The books and records of B Building, including, without limitation,
its Minute Book and Capital Stock records, are in all material respects
complete and correct and have been maintained in accordance with good business
practice.
4.3.14. ABSENCE OF EMPLOYEE BENEFIT PLANS. There are not
presently any (and as of the Closing Date there shall not be any) officer or
employee bonus, incentive compensation, profit-sharing, pension, stock
ownership, medical expense reimbursement plan, group insurance or employee
welfare or benefit plan of any nature whatsoever; and to the extent, if any,
that there has heretofore been any such plan in effect, such plan has been
terminated, required notice has been given to the Pension Benefit Guaranty
Corporation and received from such Corporation and all liabilities, if any, of
B Building with respect thereto have been fully and finally discharged and
released in writing.
4.3.15. SUPPLEMENTARY FINANCIAL DATA. On the Closing Date, B
Building will submit to Newco supplementary financial data relating to any
transaction or occurrence which might give rise to any liabilities not
described in Financial Statements or Schedules previously delivered to Newco by
B Building, and such supplementary financial data shall, in all material
respects, be true, correct and complete.
4.3.16. GROUND LEASE. The Ground Lease is valid and
subsisting and in full force and effect in accordance with its terms and
constitutes the legal, valid, binding, and enforceable obligation of B
Building, as lessee, thereunder. Neither POCI nor B Building is in default
thereunder. B Building has not heretofore assigned, transferred, or
hypothecated the leasehold estate created by the Ground Lease or any of the
rights of the lessee thereunder.
4.3.17. TENANT LEASES. Subject to the lease cancellation
notices referred to below, each of the Tenant Leases, if any, affecting the B
Building Tract is valid and subsisting and in full force and effect in
accordance with its terms and constitutes the legal, valid, binding and
enforceable obligation of the tenant thereunder; to the best knowledge of B
Building neither B Building nor the tenant is in default
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thereunder, other than with respect to Pirooz & Dominique, Inc., d/b/a
Chardonnay Restaurant, which is in default solely with respect to the payment
of rent from June, 1993, to the present; each tenant has accepted the premises
covered by its Tenant Lease and is in possession of such premises in accordance
with its Tenant Lease; all initial construction and installation work required
of B Building (or any predecessor of B Building) has been fully performed, paid
for and accepted by such tenant; and no tenant has any pending litigation,
offset or counterclaim against B Building. No tenant has given any notice to B
Building of an intention to institute litigation with respect to any Tenant
Lease or terminating its tenancy. B Building owns no interest, directly or
indirectly, in any of the tenants of the Property, nor has B Building loaned
money to any tenants for tenant improvements, delinquent rent, working capital
or any other matter. Each Tenant Lease is cancelable by B Building upon sale
or redevelopment of the Property either upon one (1) year's or six (6) months'
notice to the tenant thereunder. B Building has given an effective and
appropriate notice of cancellation to each tenant under every Tenant Lease. B
Building has not assigned, transferred, or hypothecated any of the rights of
the lessor under any Tenant Lease. Notwithstanding the foregoing, pursuant to
Section 5.3.1 hereof, Newco and WRI have consented to allow B Building to
extend the termination dates of all Tenant Leases until May 29, 1994, with the
effect that each tenant shall be permitted to occupy its respective leased
premises until such date, upon the terms and conditions specified in Section
5.3.1.
4.3.18. CONTRACTS FOR CONSTRUCTION, BROKERAGE, ETC. Without
limiting any other representation or warranty made by B Building in this
Agreement, B Building expressly represents and warrants that except for the
consulting agreement and brokerage agreement with Duddlesten Realty Advisors,
Inc., referred to in Section 7.6, there is no construction contract or
brokerage agreement or any other agreement binding on B Building or the
Property pursuant to which a commission or any other form of compensation would
or could be or is payable in respect of any lease or sale affecting the
Property or any part thereof or interest therein or the merger contemplated by
this Agreement. B Building agrees to indemnify and hold harmless Newco and WRI
from and against any and all claims, demands, losses, costs, expenses,
obligations, liabilities and damages resulting from, relating to, or arising in
connection with any agreement, arrangement or understanding alleged to have
been made by B Building or on its behalf with any broker, finder, or agent in
connection with this Agreement of Merger or the transactions contemplated
hereby.
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4.3.19. NO BUSINESS; NO EMPLOYEES. B Building has no
employees at the present time and will have no employees or agents on the
Closing Date. For a period of at least twelve (12) months prior to the
Contract Date, B Building has not engaged in any business operations of any
kind or nature whatsoever, save and except only ownership of the leasehold
estate under the Ground Lease, performance of its obligations thereunder and
collection of rent under the Tenant Leases and the performance of its
obligations thereunder.
4.4. REPRESENTATIONS AND WARRANTIES OF B BUILDING SHAREHOLDERS.
Each B Building Shareholder hereby severally, for himself or herself only,
represents and warrants to Newco and WRI the following:
4.4.1. TITLE TO B BUILDING SHARES. Such B Building
Shareholder is the owner, beneficially and of record, of the B Building Shares
identified on Schedule 4.4.1 attached hereto, and as of the Closing Date all
such B Building Shares shall free and clear of all liens, encumbrances,
security agreements, and pledges.
4.4.2. AUTHORITY AND EXECUTION OF AGREEMENT. Such B
Building Shareholder has all requisite power and authority to enter into this
Agreement and to sell, transfer, assign and deliver all of the B Building
Shares held by such B Building Shareholder as provided in this agreement, and
such delivery will convey to Newco the marketable title to such B Building
Shares. This Agreement has been duly executed and delivered by such B Building
Shareholder and constitutes the legal, valid and binding obligation of such
shareholder enforceable against such shareholder in accordance with its terms.
Such B Building Shareholder has the full power to transfer the B Building
Shares held by such shareholder to Newco without obtaining the consent or
approval of any other person or governmental authority.
4.4.3. NO DEFAULT. Neither the execution or delivery of
this Agreement by such B Building Shareholder nor performance in the
obligations of such shareholder under this Agreement will result in a violation
or breach of any terms or provisions of or constitute a default or accelerate
the performance required under, any agreement to which such shareholder is a
party or by which such shareholder is bound, or violate any order, writ,
injunction or decree of any court, administrative agency or governmental body
binding on such shareholder.
4.4.4. LITIGATION. To the knowledge of such B Building
Shareholder, there are no suits, actions, claims or investigations by any
governmental body, or legal, administrative or arbitration
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proceedings pending or threatened against or affecting B Building. Such B
Building Shareholders knows of no basis or grounds for any such suit, action,
claim, investigation or proceeding.
4.4.5. LIABILITIES. On the Closing Date, B Building will
not have any liabilities, whether or not such liabilities are then due and
payable, liquidated or unliquidated, or fixed or contingent, except for the
Transferred B Building Liabilities.
4.4.6. B BUILDING REPRESENTATIONS. To the best of the
knowledge and belief of such B Building Shareholder, the representations and
warranties of B Building which are contained in Sections 4.3.1 through Section
4.3.19, inclusive, of this Agreement are true and correct in all material
respects.
4.4.7. INFORMATION SUPPLIED. None of the information
supplied or to be supplied by such B Building Shareholder expressly for
inclusion or incorporation by reference in (i) the Shelf Registration (as
defined in Section 11.2.2) will, at the time the Shelf Registration is filed
with the SEC (as defined in Section 11.2.1) and at the time it becomes
effective under the 1933 Act, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) the proxy materials to be
provided to the B Building Shareholders in order to approve the Merger will, at
the date mailed to B Building Shareholders and at the time of the meeting
referred to therein, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading. Other than with respect to the Estate of Alexander Hart
Sackton, Deceased, such B Building Shareholder is a resident of the State of
Texas.
4.4.8. ACQUISITION OF WRI SHARES. The WRI Shares to be
received by the B Building Shareholders as the Agreed B Building Consideration
in the Merger are being acquired for investment and not with a view to the
distribution or resale thereof except in compliance with the 1933 Act. Each B
Building Shareholder represents and warrants that such B Building Shareholder
is, and will take no action from and after the date hereof that would cause
such B Building Shareholder on the Closing Date not to be, an "accredited
investor" within the meaning of Rule 501 under the 1933 Act, is, and will on
the Closing Date be, able to fend for itself in the transactions contemplated
hereby, is, and will on the Closing Date be, knowledgeable and experienced in
business and financial matters and capable of evaluating the merits and risks
of the investment in the WRI Shares, is, and will on the Closing Date be, able
to bear the economic risk of loss of its investment in WRI, and, as of the date
of this Agreement, has had the opportunity to request such information as is
necessary to verify the accuracy of the
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information supplied to it in connection with the transactions contemplated
hereby, has received all information requested and has had all questions
answered by WRI.
4.5. PROPERTY SOLD "AS-IS". NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD THAT, EXCEPT AS STATED IN THE EXPRESS
WARRANTIES CONTAINED HEREIN, THE PROPERTY IS BEING DELIVERED "AS-IS" AND "WITH
ALL FAULTS, WHETHER LATENT OR PATENT" AND THAT NO WARRANTIES OF ANY NATURE
(OTHER THAN THE EXPRESS WARRANTIES CONTAINED HEREIN) ARE TO BE IMPLIED IN THIS
TRANSACTION, INCLUSIVE OF, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION,
HABITABILITY, SUITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
EXCEPT FOR THE EXPRESS WARRANTIES CONTAINED HEREIN, WRI AND NEWCO ACKNOWLEDGE
AND AGREE THAT NEITHER POCI, B BUILDING OR ANY OF THE POCI SHAREHOLDERS OR B
BUILDING SHAREHOLDERS HAVE MADE, AND DO NOT MAKE, AND SPECIFICALLY NEGATE AND
DISCLAIM ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER, WHETHER EXPRESS OR IMPLIED, ORAL OR
WRITTEN, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE,
QUALITY OR CONDITION OF THE PROPERTY INCLUDING, WITHOUT LIMITATION, THE WATER,
SOIL AND GEOLOGY THEREOF, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C)
THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH WRI
OR NEWCO MAY CONDUCT THEREON, (D) THE COMPLIANCE OF ANY OF THE PROPERTY OR ITS
OPERATIONS, OR OF ANY OPERATIONS BY WRI OR NEWCO, WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY, (E) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OF THE PROPERTY, OR THE MATERIALS OR LABOR INCORPORATED THEREIN,
(G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY, (H)
ANY OTHER MATTER WITH RESPECT TO THE PROPERTY, OR (I) THE IMPACT OF ANY FUTURE
OR CONTEMPLATED ZONING ORDINANCES. IT IS SPECIFICALLY ACKNOWLEDGED THAT, OTHER
THAN AS EXPRESSLY CONTAINED HEREIN, NEITHER POCI, B BUILDING NOR ANY
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OF THE POCI SHAREHOLDERS OR B BUILDING SHAREHOLDERS HAVE MADE AND DO NOT MAKE,
AND SPECIFICALLY DISCLAIM, ANY REPRESENTATION REGARDING COMPLIANCE WITH
APPLICABLE ENVIRONMENTAL LAWS AND/OR ANY RULES OR REGULATIONS PROMULGATED
THEREUNDER. THE PROVISIONS IN THIS SECTION SHALL SURVIVE THE CLOSING OF THIS
TRANSACTION, AND SHALL NOT BE DEEMED MERGED INTO THE FINAL DOCUMENTS EXECUTED
IN CONNECTION THEREWITH.
4.6. NEWCO AND WRI'S REPRESENTATIONS AND WARRANTIES. WRI and
Newco, jointly and severally, hereby represent and warrant to POCI, the POCI
Shareholders, B Building, and the B Building Shareholders the following:
4.6.1. CORPORATE AND TRUST STATUS. Newco is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas. WRI is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Texas. Complete
and correct copies of Newco's Articles of Incorporation are attached hereto as
Exhibit "J", and a complete and correct copy of WRI's Amended and Restated
Declaration of Trust and all amendments thereto effective prior to the Closing
Date (certified by the Secretary of State of Texas), and of Newco's and WRI's
By-Laws (certified by the Secretary of Newco to be as amended to such Closing
Date) will be delivered to POCI on the Closing Date.
4.6.2. AUTHORITY RELATIVE TO THIS AGREEMENT. The execution
of this Agreement by Newco and WRI and its delivery to POCI have been duly
authorized by the Boards of Directors of Newco and the Trust Managers of WRI,
and validly executed and delivered by WRI and Newco, no further trust or
corporate action is necessary on the part of WRI or Newco for such execution
and delivery, and no consent, approval, waiver, license or authorization is
required in connection with the execution and delivery of this Agreement by WRI
or Newco or the consummation of the transaction contemplated hereby. This
Agreement, when executed and delivered by all parties hereto, shall constitute
a legal, valid and binding obligation against WRI and Newco, enforceable
against each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity). Neither the
execution or delivery of this Agreement by WRI and Newco nor the
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performance of WRI and Newco hereunder will result in a violation or breach of
any term or provision or constitute a default or accelerate the performance
required under any indenture, mortgage, deed of trust or other contract or
agreement to which Newco is a party or by which it is bound.
4.6.3. ISSUANCE AND REGISTRATION OF WRI SHARES. The WRI
Shares which will be delivered to POCI Shareholders as the Agreed POCI
Consideration and the WRI Shares which will be delivered to B Building
Shareholders as the Agreed B Building Consideration will be fully paid and
non-assessable; will be listed on the New York Stock Exchange; and will be
represented by one or more certificates which will bear the restrictive legends
referred to in Section 11.1.
4.6.4. AUTHORIZED CAPITAL. The authorized capital stock of
WRI consists of 150,000,000 Common Shares, of which 23,447,000 Common Shares
were outstanding on March 31, 1993, and 10,000,000 shares of Preferred Stock
par value $0.03 per share (the "Preferred Shares"), of which no shares were
outstanding on March 31, 1993. All of the outstanding Common Shares have been
validly issued and are fully paid and nonassessable. Each of the outstanding
shares of capital stock of each of WRI's significant subsidiaries (as defined
in Rule 1.02(v) of Regulation S-X promulgated pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act")) is duly authorized, validly issued,
fully paid and nonassessable and owned, either directly or indirectly, by WRI
free and clear of all liens, pledges, security interests, claims or other
encumbrances.
4.6.5. COMPANY REPORTS; FINANCIAL STATEMENTS. WRI shall
deliver to POCI, B Building, the POCI Shareholders and the B Building
Shareholders on or prior to the Closing Date (i) each registration statement,
report on Form 8-K, proxy statement or information statement prepared by it
since December 31, 1992 ("Audit Date"), (ii) WRI's Annual Report on Form 10-K
for the year ended December 31, 1992, and (iii) WRI's Quarterly Reports on Form
10-Q for the periods ended March 31, 1993, and June 30, 1993, each in the form
(including exhibits) filed with the Securities and Exchange Commission (the
"SEC") (collectively, the "Company Reports"). As of their respective dates,
the Company Reports did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading. Each of the consolidated balance sheets included in
or incorporated by
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reference into the Company Reports (including the related notes and schedules)
fairly presents the consolidated financial position of WRI and its subsidiaries
as of its date and each of the consolidated statements of income and of changes
in financial position included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly presents the results
of operations, retained earnings and changes in financial position, as the case
may be, of WRI and its subsidiaries for the periods set forth therein (subject,
in the case of unaudited statements, to normal year-end audit adjustments which
will not be material to WRI and its subsidiaries taken as a whole in amount or
effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Other than the Company Reports, WRI has not filed any other
definitive reports or statements with the SEC since December 31, 1993.
4.6.6. ABSENCE OF CERTAIN CHANGES. Except as disclosed in
the Company Reports, since December 31, 1992, WRI and its subsidiaries have
conducted their respective businesses only in, and have not engaged in any
material transaction other than according to, the ordinary and usual course and
there has not been (i) any material adverse change in the financial condition,
properties, business or results of operations of WRI and its subsidiaries taken
as a whole or any development or combination of developments of which
management of WRI has knowledge which is reasonably likely to result in any
such change other than any such change resulting from changes in general
economic or business conditions; (ii) any declaration, setting aside or payment
of any dividend or other distribution with respect to the capital stock of WRI,
other than regular quarterly cash dividends on the Common Shares; or (iii) any
change by WRI in accounting principles or methods.
4.6.7. GOVERNMENTAL APPROVAL. No notices, reports or other
filings are required to be made by WRI with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
WRI from, any governmental or regulatory authorities of the United States, the
several States or any foreign jurisdiction in connection with the execution and
delivery of this Agreement by WRI and except as indicated in Section 4.4.3. the
consummation of the transactions contemplated hereby by WRI.
4.6.8. CONTRACTS FOR BROKERAGE. Newco and WRI expressly
represent and warrant that there is no brokerage agreement or any other
agreement binding on Newco or WRI pursuant to which a commission or any other
form of compensation would or could be or is payable with respect to the
purchase of the Property or any part thereof or interest therein, or the merger
contemplated by this Agreement. Newco and WRI agree to indemnify and hold
harmless POCI and B Building from and against any and all claims, demands,
losses, costs, expenses, obligations, liabilities and damages resulting from,
relating to, or arising in connection with any agreement, arrangement or
understanding alleged to
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have been made by Newco or WRI or on their behalf with any broker, finder, or
agent in connection with this Agreement of Merger or the transactions
contemplated hereby.
4.6.9. NO OTHER REPRESENTATIONS OR WARRANTIES.
Notwithstanding anything contained herein to the contrary, it is understood
that except as expressly set forth herein, neither Newco nor WRI makes any
warranties of any nature and no warranties are to be implied in this
transaction. Except for such express warranties of Newco and WRI contained
herein, POCI, the POCI Shareholders, B Building, and the B Building
Shareholders acknowledge and agree that neither Newco nor WRI has made or is
making and specifically negate and disclaim any representation, warranty,
promise, covenant, agreement, or guaranty of any kind, whether express or
implies, oral or written, concerning or with respect to (a) the value of the
WRI Shares contemplated to be delivered pursuant to this Agreement, (b) the
income to be derived from such shares (other than as set forth in the Price
Increase Guaranty), (c) any change in the market price of such shares, or (d)
the tax consequences or other legal consequences of this transaction. The
provisions under this Section shall survive the Closing of this transaction and
shall not be deemed to be merged into the final documents executed in
connection therewith.
4.7. LIMITATION ON REPRESENTATIONS MADE BY NATIONSBANK OF TEXAS,
N.A. THIS AGREEMENT IS ENTERED INTO BY NATIONSBANK OF TEXAS, N.A.
("NATIONSBANK") IN A REPRESENTATIVE CAPACITY ONLY, AND IT IS SPECIFICALLY
AGREED THAT NATIONSBANK WILL NOT INCUR ANY PERSONAL LIABILITY FOR A BREACH OF
WARRANTY OR OF ANY OTHER CONDITION, OBLIGATION, OR REPRESENTATION MADE HEREIN
AND THAT IN THE EVENT OF SUCH A BREACH OR IN THE EVENT ANY LIABILITY ARISES
HEREUNDER, NATIONSBANK SHALL BE LIABLE ONLY TO THE EXTENT SPECIFICALLY PROVIDED
FOR HEREIN AND ONLY TO THE EXTENT TO WHICH IT HOLDS ASSETS IN THE SPECIFIC
CAPACITY IN WHICH THIS AGREEMENT IS EXECUTED. THE PARTIES ACKNOWLEDGE THAT
TEXAS LAW PLACES CERTAIN RESTRICTIONS ON THE ABILITY OF INDEPENDENT EXECUTORS
TO MAKE WARRANTIES, AND THE PARTIES AGREE THAT THE WARRANTIES AND
REPRESENTATIONS MADE BY NATIONSBANK HEREIN ARE MADE ONLY TO THE EXTENT, IF ANY,
ALLOWED BY TEXAS LAW.
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V. COVENANTS
5.1. COVENANTS OF POCI AND POCI SHAREHOLDERS. POCI and POCI
shareholders covenant with and for the benefit of Newco that:
5.1.1. BUSINESS OF POCI PRIOR TO CLOSING. Between the
Contract Date and the Closing Date, POCI will not engage in any business
transactions other than the continued ownership of the POCI Required Assets and
the continued collection of rent under the Ground Lease, the performance of the
obligations of the lessor under the Ground Lease and the enforcement of the
obligations of the lessee under the Ground Lease.
5.1.2. ARTICLES OF INCORPORATION AND BY-LAWS. No change
shall be made in the Articles of Incorporation or By-Laws of POCI except
changes related to the authorization and issuance of additional shares to
current POCI Shareholders in exchange for the cancellation of indebtedness
owing by POCI to such POCI Shareholders, of which POCI shall have given WRI
notice as provided in Section 1.3 of this Agreement.
5.1.3. CAPITAL STOCK. No change shall be made in the
authorized or issued capital stock of POCI, nor shall any rights, warrants or
options relating thereto be issued, except for additional shares authorized and
issued to current POCI Shareholders in exchange for the cancellation of
indebtedness owing to such POCI Shareholders by POCI, of which POCI shall have
given WRI notice as provided in Section 1.3 of this Agreement.
5.1.4. BENEFIT PLAN. No bonus, incentive compensation,
profit-sharing, pension, stock ownership, retirement, fringe benefit, stock
option, group insurance, medical expense reimbursement plan or employee welfare
plan of any nature whatsoever shall be adopted or entered into by POCI.
5.1.5. CAPITAL ASSETS. POCI shall not enter into, renew,
extend, amend, cancel, terminate, assume or make any contract, lease, license,
obligation, commitment, purchase or sale for the acquisition, construction or
disposition by sale, exchange, assignment, transfer, conveyance, encumbrance or
otherwise of the POCI Required Assets or any part thereof or interest therein,
and will comply with all of its obligations under all existing contracts,
leases, licenses and commitments applicable to it and/or its properties. POCI
shall have the right to distribute to its shareholders prior to the Closing
Date all of the assets of POCI other than the POCI Required Assets and POCI
Transferred Liabilities and shall have the right to sell any one or more of
such assets (other than the POCI Required Assets) and distribute the net sales
proceeds to its shareholders. Without limitation of the foregoing, it is
understood that prior to
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the Closing, POCI shall distribute the tract of land currently leased to Post
Oak Bank, such property being described in Exhibit "B- 3" attached hereto and
incorporated herein (the "Post Oak Bank Property") to the POCI Shareholders or
to an affiliated company and shall have the right to sell such property and
distribute the proceeds to the POCI Shareholders. The Post Oak Bank Property
is specifically excluded from the definition of "Property".
5.1.6. MORTGAGES, LIENS, ENCUMBRANCES, ETC. POCI shall not
enter into or assume any mortgage, security agreement, pledge, conditional sale
or other title retention agreement, encumbrance or charge of any kind upon the
POCI Required Assets, or create or assume any obligation for borrowed money, or
make any loans or advances to, or assume, guarantee, endorse or otherwise
become liable with respect to the obligations, stock or dividends of, any
person, firm, association or corporation.
5.1.7. REPORTS, RETURNS AND COMPLIANCE WITH LAW. POCI shall
duly and timely file all reports or returns required to be filed with the
United States government and all jurisdictions in which POCI is qualified to do
business, and shall promptly pay when due all Federal, State and local taxes,
assessments and governmental charges, fees, interest and penalties lawfully
levied or assessed upon POCI or its properties or any part thereof, and shall
use its best efforts duly to observe and conform to all other lawful
requirements applicable to its business. With the prior written consent of
Newco, POCI shall contest in appropriate proceedings any and all taxes or
governmental assessments, charges, fees, interest, penalties or requirements
which can be contested in good faith, but in no event shall POCI be required to
expend or become liable for any costs, fees or expenses in excess of $10,000 in
connection with any such contests.
5.1.8. LOSS OR CASUALTY. POCI shall continue to maintain in
full force and effect insurance to cover the POCI Required Assets against the
risks covered by POCI as of the Contract Date, and in amounts adequate in the
reasonable judgment of the management of POCI to protect such assets, but in no
event less than in force on the Contract Date.
5.1.9. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND
NEGOTIATIONS. In no event shall POCI merge or consolidate with any other
corporation, or acquire all or substantially all of the business or assets or
stock of any other person, firm, association or corporation, or enter into
discussions or negotiations for any of the foregoing transactions.
5.1.10. CONSULTATION WITH NEWCO. POCI will consult with
Newco at all times from the Contract Date up to and including the Closing Date
with respect to any material matter affecting the POCI
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Required Assets; however, neither POCI nor Newco shall incur any liability to
each other as a result of the advice or suggestions offered by it or followed
by it in this connection.
5.1.11. CORRECTION OF DEFECTS, ERRORS AND OMISSIONS. If POCI
discovers any defect, error or omission in any Required Information Materials
or any Schedule provided to Newco under Section 4.1.2 hereof or any other
information provided by POCI to Newco in connection with this Agreement, POCI
will promptly notify Newco thereof with detailed information correcting such
defect, error or omission.
5.1.12. LIABILITIES. Prior to Closing, POCI will pay-off and
discharge all liabilities, obligations, and indebtedness, liquidated or
unliquidated, fixed or contingent, including, without limiting the generality
of the foregoing, liabilities which would be reflected as accruals in
accordance with generally accepted accounting principles whether or not then
due and payable, other than the Transferred POCI Liabilities plus 1993 ad
valorem real estate taxes in an amount up to $400,000; it being the intention
of the parties (and a covenant of POCI and the POCI shareholders and a
condition of Newco's obligations under this Agreement) that the only
liabilities, obligations, or indebtedness of POCI existing on the Closing Date
will be the Transferred POCI Liabilities plus 1993 ad valorem real estate taxes
in an amount up to $400,000. Without limiting the generality of the foregoing,
except for the Transferred POCI Liabilities and not more than $400,000 in 1993
ad valorem taxes, POCI will (prior to the Closing Date) terminate all contracts
and commitments, including, without limitation, those listed in the Schedule
referred to in clause (i) of Section 4.1.2 and pay-off and discharge the
liabilities resulting from such terminations; will (prior to the Closing Date)
pay-off and discharge all indebtedness, including, without limitation, the
indebtedness listed in the Schedule referred to in clause (iii) of Section
4.1.2; will (prior to the Closing Date) settle and be released from all
guaranties, suretyship, and contingent liabilities, including, without
limitation, those listed in the Schedule referred to in clause (v) of Section
4.1.2.
5.1.13. SHAREHOLDERS MEETING. POCI shall call a meeting of
its shareholders to be held as promptly as practicable for the purpose of
voting on the Merger. POCI will, through its Board of Directors, recommend to
its shareholders approval of the Merger.
5.1.14. PROXY MATERIALS. POCI shall have proxy materials
promptly prepared for distribution to the POCI Shareholders in relation to the
meeting of POCI Shareholders to be held to vote on the Merger. POCI will
provide WRI with a copy of such proxy materials at least five days prior to
their dissemination to the POCI Shareholders in order for WRI to have an
opportunity to review and
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object to any information contained in such proxy materials. If WRI shall
object to any information set forth in the proxy materials, POCI and WRI shall
revise such information in a mutually agreeable manner prior to their
dissemination to the POCI Shareholders.
5.2. COVENANTS OF B BUILDING AND B BUILDING SHAREHOLDERS. B
Building and B Building shareholders covenant with and for the benefit of Newco
that:
5.2.1. BUSINESS OF B BUILDING PRIOR TO CLOSING. Between the
Contract Date and the Closing Date, B Building will not engage in any business
transactions other than the continued ownership of the B Building Required
Assets and the continued collection of rent under the Tenant Leases,
performance of the obligations of the lessor under the Tenant Leases and
enforcement of the obligations of the lessee's under the Tenant Leases.
5.2.2. ARTICLES OF INCORPORATION AND BY-LAWS. No change
shall be made in the Articles of Incorporation or By-Laws of B Building.
5.2.3. CAPITAL STOCK. No change shall be made in the
authorized or issued capital stock of B Building, nor shall any rights,
warrants or options relating thereto be issued.
5.2.4. BENEFIT PLAN. No bonus, incentive compensation,
profit-sharing, pension, stock ownership, retirement, fringe benefit, stock
option, group insurance, medical expense reimbursement plan or employee welfare
plan of any nature whatsoever shall be adopted or entered into by B Building.
5.2.5. CAPITAL ASSETS. B Building shall not enter into,
renew, extend, amend, cancel, terminate, assume or make any contract, lease,
license, obligation, commitment, purchase or sale for the acquisition,
construction or disposition by sale, exchange, assignment, transfer,
conveyance, encumbrance or otherwise of B Building Required Assets or any
interest therein, and will comply with all of its obligations under all
existing contracts, leases, licenses and commitments applicable to it and/or
its properties. B Building shall have the right to distribute to its
shareholders prior to the Closing Date all of the assets of B Building other
than the B Building Required Assets and B Building Transferred Liabilities and
shall have the right to sell any one or more of such assets (other than the B
Building Required Assets) and distribute the net sales proceeds to its
shareholders.
5.2.6. MORTGAGES, LIENS, ENCUMBRANCES, ETC. B Building
shall not enter into or assume any mortgage, security agreement, pledge,
conditional sale or other title retention agreement, encumbrance or charge of
any kind upon the B Building Required Assets, or create or assume any
obligation for borrowed money, or make any loans or advances to, or assume,
guarantee, endorse or
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otherwise become liable with respect to the obligations, stock or dividends of,
any person, firm, association or corporation.
5.2.7. REPORTS, RETURNS AND COMPLIANCE WITH LAW. B Building
shall duly and timely file all reports or returns required to be filed with the
United States government and all jurisdictions in which B Building is qualified
to do business, and shall promptly pay when due all Federal, State and local
taxes, assessments and governmental charges, fees, interest and penalties
lawfully levied or assessed upon B Building or its properties or any part
thereof, and shall use its best efforts duly to observe and conform to all
other lawful requirements applicable to its business. With the prior written
consent of Newco, B Building shall contest in appropriate proceedings any and
all taxes or governmental assessments, charges, fees, interest, penalties or
requirements which can be contested in good faith, but in no event shall B
Building be required to expend or become liable for any costs, fees or expenses
in excess of $10,000 in connection with any such contents.
5.2.8. PROPERTIES, PLANT AND EQUIPMENT. B Building shall
keep and maintain in as good condition, repair and working order as they are on
the Contract Date all B Building Required Assets, causing all necessary
repairs, renewals and replacements and maintenance to be made promptly, and
shall otherwise maintain and operate the same in accordance with all applicable
laws, ordinances, regulations and orders.
5.2.9. LOSS OR CASUALTY. B Building shall continue to
maintain in full force and effect insurance in such amounts as exist as of the
Contract Date to cover all B Building Required Assets against the risks covered
by B Building as of the Contract Date.
5.2.10. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND
NEGOTIATIONS. In no event shall B Building merge or consolidate with any other
corporation, or acquire all or substantially all of the business or assets or
stock of any other person, firm, association or corporation, or enter into
discussions or negotiations for any of the foregoing transactions.
5.2.11. CONSULTATION WITH NEWCO. B Building will consult
with Newco at all times from the Contract Date up to and including the Closing
Date with respect to any material matter affecting the B Building Required
Assets; however, neither B Building nor Newco shall incur any liability to each
other as a result of the advice or suggestions offered by it or followed by it
in this connection.
5.2.12. CORRECTION OF DEFECTS, ERRORS AND OMISSIONS. If B
Building discovers any defect, error or omission in any Required Information
Materials or any Schedule provided to Newco
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under Section 4.3.2 hereof or any other information provided by POCI to Newco
in connection with this Agreement, B Building will promptly notify Newco
thereof with detailed information correcting such defect, error or omission.
5.2.13. LIABILITIES. Prior to Closing, B Building will
pay-off and discharge all liabilities, obligations, and indebtedness,
liquidated or unliquidated, fixed or contingent, including, without limiting
the generality of the foregoing, liabilities which would be reflected as
accruals in accordance with generally accepted accounting principles whether or
not then due and payable, other than the Transferred B Building Liabilities; it
being the intention of the parties (and a covenant of B Building and the B
Building shareholders and a condition of Newco's obligations under this
Agreement) that the only liabilities, obligations, or indebtedness of B
Building existing on the Closing Date will be the Transferred B Building
Liabilities. Without limiting the generality of the foregoing, except for the
Transferred B Building Liabilities, B Building will (prior to the Closing Date)
terminate all contracts and commitments, including, without limitation, those
listed in the Schedule referred to in clause (i) of Section 4.3.2 and pay-off
and discharge the liabilities resulting from such terminations; will (prior to
the Closing Date) pay-off and discharge all indebtedness, including, without
limitation, the indebtedness listed in the Schedule referred to in clause (iii)
of Section 4.3.2; will (prior to the Closing Date) settle and be released from
all guaranties, suretyship, and contingent liabilities, including, without
limitation, those listed in the Schedule referred to in clause (v) of Section
4.3.2.
5.2.14. SHAREHOLDERS MEETING. B Building shall call a
meeting of its shareholders to be held as promptly as practicable for the
purpose of voting on the Merger. B Building will, through its Board of
Directors, recommend to its shareholders approval of the Merger.
5.2.15. PROXY MATERIALS. B Building shall have proxy
materials promptly prepared for distribution to the B Building Shareholders in
relation to the meeting of B Building Shareholders to be held to vote on the
Merger. B Building will provide WRI with a copy of such proxy materials at
least five days prior to their dissemination to the B Building Shareholders in
order for WRI to have an opportunity to review and object to any information
contained in such proxy materials. If WRI shall object to any information set
forth in the proxy materials, B Building and WRI shall revise such information
in a mutually agreeable manner prior to their dissemination to the B Building
Shareholders.
5.3. COVENANTS OF NEWCO AND WRI. Newco and WRI covenant with and
for the benefit of POCI and B Building that:
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5.3.1. CONSENT TO EXTENSION OF TERMINATION DATES OF TENANT
LEASES. Notwithstanding the termination dates of Tenant Leases described in
Exhibit "I" attached hereto, Newco and WRI, subject to the conditions specified
herein, consent to allowing B Building to extend the termination dates of all
Tenant Leases until May 29, 1994, with the effect that all tenants shall be
permitted to occupy their leased premises until such date. B Building shall
also be permitted to negotiate further extensions with tenants conditioned upon
WRI terminating and not closing the merger contemplated herein. With respect
to each Tenant Lease whose termination date is being extended pursuant to this
Section, it shall be a condition precedent to Newco and WRI's consent to
allowing B Building to permit such tenants to occupy their leased premised
until May 29, 1994, that such tenants acknowledge by written agreement the
right of WRI to demolish the existing Sakowitz building and to fence off a
reasonable portion of the adjoining parking area which will be used in
connection with such demolition work. This provision shall survive the
Closing.
VI. CONDITIONS
6.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF WRI AND NEWCO RELATING
TO POCI. The obligations of Newco under this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions, any one or more of which may be waived in writing by Newco:
6.1.1. REPRESENTATIONS AND WARRANTIES OF POCI AND THE POCI
SHAREHOLDERS TRUE AT CLOSING. All representations and warranties by POCI
and/or the POCI Shareholders which are contained in this Agreement or in any
written statement which shall be delivered by POCI and/or the POCI Shareholders
to Newco pursuant to this Agreement shall be true as of the Closing as though
such representations and warranties were made at the Closing, except to the
extent that such representations and warranties were made as of a specified
date, and subject to minor matters which in the aggregate are not material in
amount and do not materially impair the continuing operation of POCI's
business.
6.1.2. PERFORMANCE OF POCI AND THE POCI SHAREHOLDERS. POCI
and each of the POCI Shareholders shall have performed and complied with all
agreements or conditions required by this Agreement to be performed and
complied with by POCI and each POCI Shareholder prior to or on the Closing
Date.
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6.1.3. OFFICERS' CERTIFICATE. POCI shall have delivered to
Newco the Certificate of POCI dated the Closing Date, certifying to the
fulfillment of the conditions specified in Section 6.1.1 and 6.1.2 of this
Agreement.
6.1.4. OPINION OF COUNSEL FOR POCI AND THE POCI
SHAREHOLDERS. POCI shall have delivered to Newco an opinion of counsel
satisfactory, in form and substance to Newco in the exercise of reasonable
judgment, dated the Closing Date, to the effect that:
(i) Organization and Good Standing of POCI. POCI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas; and POCI has all requisite
corporate power to carry on its business and to own and operate its
properties and assets now owned and operated by it.
(ii) Capitalization and Validity of POCI Common Stock.
POCI's authorized capital stock consists solely of Nine Hundred Sixty
(960) shares of common stock, $100.00 par value, of which Nine Hundred
Sixty (960) shares are issued and outstanding; provided, however, that
if additional shares are issued to current POCI Shareholders in
exchange for the cancellation of indebtedness owing from POCI to such
POCI Shareholders as contemplated by Section 1.3 of this Agreement,
the legal opinion shall state the actual number of shares outstanding
as of the date of the opinion. All of such outstanding shares have
been validly issued and are fully paid and non-assessable; further,
that said Nine Hundred Sixty (960) outstanding shares are owned of
record and, to the best of our knowledge, beneficially by the POCI
Shareholders free and clear, to the best of our knowledge, of any
liens and encumbrances.
(iii) POCI's and Its Shareholders' Authority Relative to
this Agreement. Neither the execution nor delivery or performance of
this Agreement by POCI or any POCI Shareholder violates any provision
of any indenture, agreement or other instrument of which such counsel
is aware and to which any of them is a party or by which any of them
is bound; and this Agreement has been duly executed and delivered by
POCI and each POCI Shareholder, constitutes the valid and binding
obligation of POCI and each POCI Shareholder in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(iv) Litigation. To the best of such counsel's knowledge,
there is no litigation or other proceeding or governmental
investigation pending or overtly threatened against or relating to or
which, if adversely determined, would have a material adverse effect
on POCI or the POCI Required Assets or the transactions contemplated
by this Agreement.
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(v) No Subsidiaries. POCI has no subsidiaries and has no
direct or indirect ownership interest, whether by way of stock
ownership or otherwise, in any other corporation, firm, association or
other business enterprise.
(vi) Validity of Documents and Instruments. All documents
and instruments delivered by POCI and/or its shareholders to Newco
pursuant to this Agreement have been duly executed and delivered and
are valid and enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(vii) Approval of Merger. The merger of POCI into Newco
contemplated by this Agreement has been approved by the Board of
Directors of POCI and by all POCI Shareholders, and to the best of our
knowledge no POCI Shareholder has filed a timely written objection to
such merger pursuant to applicable provisions of law.
In rendering their opinion, counsel for POCI may rely on certificates of
officers and directors of POCI and POCI Shareholders.
6.1.5. NO DAMAGE OR DESTRUCTION OR CONDEMNATION. Prior to
the Closing, there shall not have occurred any casualty to the POCI Required
Assets as a result of which the total monetary amount of any such damage or
destruction is more than $300,000 and such loss shall not be at least eighty
percent (80%) covered by valid, existing insurance underwritten by responsible
insurers. Also, prior to the Closing, there shall not have occurred any
condemnation affecting the POCI Required Assets, nor shall any such
condemnation be pending or threatened.
6.1.6. RESIGNATIONS OF OFFICERS AND DIRECTORS. Newco shall
have received appropriate written resignations, effective upon acceptance by
the Board of Directors of POCI, of all Officers and Directors of POCI. POCI
shall cause a meeting of the Board of Directors of POCI to take place on due
and timely notice or waiver of notice on the Closing Date, and, if so requested
by Newco, POCI shall cause the Directors of POCI to accept such resignations
and to fill the vacancies created by such resignations with persons designated
by Newco.
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6.1.7. DELIVERY OF MATERIALS. Newco shall have received
POCI's books of account and records, Minute Books, stock certificate books,
corporate seal and other corporate books, records and file papers.
6.1.8. REQUIREMENTS AS TO POCI'S LIABILITIES. POCI shall
have no liabilities of any kind or character as of the Closing Date other than
the Transferred POCI Liabilities plus liability for 1993 ad valorem taxes in an
amount up to $400,000 and accrued 1994 ad valorem taxes.
6.1.9. EXECUTION BY POCI SHAREHOLDERS. All shareholders of
POCI, as of the Contract Date of this Agreement, must have executed this
Agreement, and they and/or their Qualified Transferees (as defined in Exhibit
"H") shall be the only owners of shares of POCI common stock as of the Closing
Date.
6.1.10. CHANGES IN TITLE, SURVEY AND OTHER MATTERS. There
shall be no material change in the matters reflected in the Title Binder or on
the Survey, and no material change shall have occurred or be threatened which
would adversely affect the findings made by Newco during the Information Review
Period.
6.1.11. BANKRUPTCY. On the Closing Date, neither POCI nor
any of its shareholders shall have (a) applied for or consented to the
appointment of a receiver, trustee, custodian, or liquidator of itself or of
all or a substantial part of its assets; (b) filed a voluntary petition in
bankruptcy or admitted in writing that it is unable to pay its debts as they
become due; (c) made a general assignment for the benefit of creditors; (d)
filed a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws; (e) filed
an answer admitting the material allegations of, or consented to, or defaulted
in answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding; (f) taken any corporate action for the purposes of
effecting any of the foregoing; or (g) if any insolvency petition or complaint
shall be filed against POCI or any of its
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shareholders seeking bankruptcy or reorganization of it, he or she, failed is
dismiss such petition within sixty (60) days of the filing thereof.
6.1.12. ESTOPPEL CERTIFICATES. Newco shall have received
estoppel certificates from all holders of all or any portion of the Transferred
POCI Liabilities (except with respect to ad valorem taxes which are selected to
constitute Transferred POCI Liabilities) substantially in the form attached
hereto as Exhibit "G" (with such modifications as Newco in its good faith
business judgment shall require) at least five (5) days, and not more than ten
(10) days, before the Closing.
6.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF WRI AND NEWCO RELATING
TO B BUILDING. The obligations of WRI and Newco under this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived in writing by WRI
and Newco:
6.2.1. REPRESENTATIONS AND WARRANTIES OF B BUILDING AND THE
B BUILDING SHAREHOLDERS TRUE AT CLOSING. All representations and warranties by
B Building and/or the B Building Shareholders which are contained in this
Agreement or in any written statement which shall be delivered by B Building
and/or the B Building Shareholders to Newco pursuant to this Agreement shall be
true as of the Closing as though such representations and warranties were made
at the Closing, except to the extent that such representations and warranties
were made as of a specified date, and subject to minor matters which in the
aggregate are not material in amount and do not materially impair the
continuing operation of B Building's business.
6.2.2. PERFORMANCE OF B BUILDING AND THE B BUILDING
SHAREHOLDERS. B Building and each of the B Building Shareholders shall have
performed and complied with all agreements or conditions required by this
Agreement to be performed and complied with by B Building and each B Building
Shareholder prior to or on the Closing Date.
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6.2.3. OFFICERS' CERTIFICATE. B Building shall have
delivered to Newco the Certificate of B Building dated the Closing Date,
certifying to the fulfillment of the conditions specified in Section 6.2.1 and
6.2.2 of this Agreement.
6.2.4. OPINION OF COUNSEL FOR B BUILDING AND THE B BUILDING
SHAREHOLDERS. B Building shall have delivered to Newco an opinion of counsel
satisfactory, in form and substance to WRI and Newco in the exercise of
reasonable judgment, dated the Closing Date, to the effect that:
(i) ORGANIZATION AND GOOD STANDING OF B BUILDING. B
Building is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas; and B Building has all
requisite corporate power to carry on its business and to own and
operate its properties and assets now owned and operated by it.
(ii) CAPITALIZATION AND VALIDITY OF B BUILDING COMMON
STOCK. B Building's authorized capital stock consists solely of Two
Hundred (200) shares of common stock, $100.00 par value, of which Ten
(10) shares are issued and outstanding. All of such outstanding
shares have been validly issued and are fully paid and non-assessable;
further, that said Ten (10) outstanding shares are owned of record
and, to the best of our knowledge, beneficially by the B Building
Shareholders free and clear, to the best of our knowledge, of any
liens or encumbrances.
(iii) B BUILDING'S AND ITS SHAREHOLDERS' AUTHORITY
RELATIVE TO THIS AGREEMENT. Neither the execution nor delivery or
performance of this Agreement by B Building or any B Building
Shareholder violates any provision of any indenture, agreement or
other instrument of which such counsel is aware and to which any of
them is a party or by which any of them is bound; and this Agreement
has been duly executed and delivered by B Building and each B Building
Shareholder constitutes the valid and binding obligation of B Building
and each B Building Shareholder in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(iv) LITIGATION. To the best of such counsel's
knowledge, there is no litigation or other proceeding or governmental
investigation pending or overtly threatened against or relating to or
which, if adversely determined, would have a material adverse effect
on B Building or the B Building Required Assets or the transactions
contemplated by this Agreement.
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(v) NO SUBSIDIARIES. B Building has no subsidiaries
and has no direct or indirect ownership interest, whether by way of
stock ownership or otherwise, in any other corporation, firm,
association or other business enterprise.
(vi) VALIDITY OF DOCUMENTS AND INSTRUMENTS. All
documents and instruments delivered by B Building and/or its
shareholders to Newco pursuant to this Agreement have been duly
executed and delivered and are valid and enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(vii) APPROVAL OF MERGER. The merger of B Building
into Newco contemplated by this Agreement has been approved by the
Board of Directors of B Building and by all B Building Shareholders,
and to the best of our knowledge no B Building Shareholder has filed a
timely written objection to such merger pursuant to applicable
provisions of law.
In rendering their opinion, counsel for B Building may rely on certificates of
officers and directors of B Building and the B Building Shareholders.
6.2.5. NO DAMAGE OR DESTRUCTION OR CONDEMNATION. Prior to
the Closing, there shall not have occurred any casualty to any B Building
Required Assets as a result of which the total monetary amount of any such
damage or destruction is more than $300,000 and such loss shall not be at least
eighty percent (80%) covered by valid, existing insurance underwritten by
responsible insurers. Also, prior to the Closing, there shall not have
occurred any condemnation affecting the B Building Required Assets.
6.2.6. RESIGNATIONS OF OFFICERS AND DIRECTORS. Newco shall
have received appropriate written resignations, effective upon acceptance by
the Board of Directors of B Building, of all Officers and Directors of B
Building. B Building shall cause a meeting of the Board of Directors of B
Building to take place on due and timely notice or waiver of notice on the
Closing Date, and, if so requested by Newco, B Building shall cause the
Directors of B Building to accept such resignations and to fill the vacancies
created by such resignations with persons designated by Newco.
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6.2.7. DELIVERY OF MATERIALS. Newco shall have received B
Building's books of account and records, Minute Books, stock certificate books,
corporate seal and other corporate books, records and file papers.
6.2.8. NOTICES OF TERMINATION OF TENANT LEASES. B Building
shall have given to each tenant under each Tenant Lease written notice of the
termination of the Tenant Lease of such respective tenant, which terminations
shall be effective on the respective dates set forth in Exhibit "I" which is
attached hereto; B Building shall have performed all other covenants and
conditions under the Tenant Leases required to be performed prior to the
Closing Date in order for such terminations to be effective on the respective
dates shown on Exhibit "I"; and no tenant under any Tenant Lease shall be
contesting the effectiveness of any such termination notice as terminating such
respective tenant's Tenant Lease as of the date shown on Exhibit "I."
Notwithstanding the foregoing, pursuant to Section 5.3.1 hereof, Newco and WRI
have consented to allow B Building to extend the termination dates of all
Tenant Leases until May 29, 1994, with the effect that each tenant shall be
permitted to occupy its respective leased premises until such date, upon the
terms and conditions specified in Section 5.3.1.
6.2.9. REQUIREMENTS AS TO B BUILDING'S LIABILITIES. B
Building shall have no liabilities of any kind or character as of the Closing
Date other than the Transferred B Building Liabilities.
6.2.10. EXECUTION BY B BUILDING SHAREHOLDERS. All B Building
Shareholders, as of the Contract Date of this Agreement, must have executed
this Agreement, and they and/or their Qualified Transferees (as defined in
Exhibit "H") shall be the only owners of shares of B Building common stock as
of the Closing Date.
6.2.11. CHANGES IN TITLE, SURVEY AND OTHER MATTERS. There
shall be no material change in the matters reflected in the Title Binder or on
the Survey, and no material change shall have occurred or be threatened which
would adversely affect the findings made by Newco during the Information Review
Period.
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6.2.12. BANKRUPTCY. On the Closing Date, neither B Building
nor any of its shareholders shall have (a) applied for or consented to the
appointment of a receiver, trustee, custodian, or liquidator of itself or of
all or a substantial part of its assets; (b) filed a voluntary petition in
bankruptcy or admitted in writing that it is unable to pay its debts as they
become due; (c) made a general assignment for the benefit of creditors; (d)
filed a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws; (e) filed
an answer admitting the material allegations of, or consented to, or defaulted
in answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding; (f) taken any corporate action for the purposes of
effecting any of the foregoing; or (g) if any insolvency petition or complaint
shall be filed against B Building or any of its shareholders seeking bankruptcy
or reorganization of it, he or she, failed is dismiss such petition within
sixty (60) days of the filing thereof.
6.2.13. ESTOPPEL CERTIFICATES. B Building shall have
delivered the tenant estoppel certificates within the Information Review Period
and updated estoppel certificates substantially in the form attached hereto as
Exhibit "F" (with such modifications as Newco in its good faith business
judgment shall require) at least five (5) days, and not more than fifteen (15)
days, before Closing. Newco shall also have received estoppel certificates
from all holders of all or any portion of the Transferred B Building
Liabilities in the form attached hereto as Exhibit "G" (with such modifications
as Newco in its good faith business judgment shall require) at least five (5)
days, and not more than ten (10) days, before the Closing.
6.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF POCI AND B BUILDING.
All of the obligations of POCI and B Building and their respective shareholders
under this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions (any one or more of which may be
waived in writing by POCI and B Building and their respective shareholders).
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6.3.1. NEWCO AND WRI'S REPRESENTATIONS AND WARRANTIES TRUE
AT CLOSING. All representations and warranties by Newco and WRI which are
contained in this Agreement shall be true on and as of the Closing Date as
though such representations and warranties were made at Closing, except to the
extent that such representations and warranties were made as of a specified
date, and subject to minor matters which in the aggregate are not material in
amount and do not materially impair the continuing operations of Newco or WRI.
6.3.2. WRI'S AND NEWCO'S PERFORMANCE. WRI and Newco shall
have performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
6.3.3. OFFICER'S CERTIFICATES. WRI and Newco shall have
delivered to POCI and B Building Newco's certificate, dated the Closing Date,
certifying to the fulfillment of the conditions specified in Sections 6.3.1 and
6.3.2 of this Agreement.
6.3.4. OPINION OF NEWCO'S COUNSEL. WRI and Newco shall have
delivered to POCI and B Building an opinion of Newco's counsel satisfactory in
form and substance to POCI and B Building in the exercise of reasonable
judgment, dated the Closing Date, to the effect that:
(i) ORGANIZATION AND GOOD STANDING OF NEWCO. Newco is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas.
(ii) CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT.
This Agreement and all documents and instruments executed by Newco
pursuant hereto have been duly and validly executed and delivered and
such documents are valid and binding upon Newco in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Neither the execution nor delivery or performance of this Agreement by
Newco violates any provision of the Articles of Incorporation or
By-Laws of Newco or the provision of any indenture, agreement or other
instrument known to such counsel to which Newco is a party or by which
Newco is bound.
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(iii) APPROVAL OF MERGER. The merger of Newco with POCI
and B Building contemplated by this Agreement has been approved by the
Board of Directors of Newco, and by the sole shareholder of Newco, and
no shareholder of Newco has filed a timely written objection to such
merger pursuant to the applicable provisions of law.
In rendering their opinion, counsel for Newco may rely on certificates of
officers and directors of Newco.
6.3.5. OPINION OF WRI'S COUNSEL. Newco shall have caused to
be delivered to POCI and B Building an opinion of WRI's counsel satisfactory in
form and substance to POCI and B Building in the exercise of reasonable
judgment, dated the Closing Date, to the effect that:
(i) ORGANIZATION AND GOOD STANDING OF WRI. WRI is a
duly organized real estate investment trust validly existing and in
good standing under the laws of the State of Texas.
(ii) TRUST AUTHORITY RELATIVE TO THIS AGREEMENT. This
Agreement and all documents and instruments executed by WRI pursuant
hereto have been duly and validly executed and delivered and such
documents are valid and binding upon WRI in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Neither the execution nor delivery or performance of this Agreement by
WRI violates any provision of the Amended and Restated Declaration of
Trust or the By-Laws of WRI or the provisions of any indenture,
agreement or other instrument known to such counsel to which WRI is a
party or by which WRI is bound.
(iii) WRI SHARES. The WRI Shares which will be
delivered to POCI Shareholders as the Agreed POCI Consideration and
the WRI Shares which will be delivered to B Building Shareholders as
the Agreed B Building Consideration will be fully paid and
non-assessable; will be listed on the New York Stock Exchange; and
will be represented by one or more certificates which will bear the
restrictive legends referred to in Section 11.1.
(iv) AUTHORITY RELATIVE TO THE PRICE INCREASE GUARANTY.
The Price Increase Guaranty executed by WRI has been duly and validly
executed and delivered and such document is valid and binding upon WRI
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law
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or in equity). Neither the execution nor delivery or performance of
the Price Increase Guaranty by WRI violates any provision of the
Declaration of Trust or by-laws of WRI or the provision of any
indenture, agreement or other instrument known to such counsel to
which WRI is a party or by which WRI is bound.
In rendering their opinion, counsel for WRI may rely on certificates of
officers and directors of WRI.
6.3.6. ISSUANCE OF WRI SHARES. The WRI Shares which will be
delivered to POCI Shareholders as the Agreed POCI Consideration and the WRI
Shares which will be delivered to B Building Shareholders as the Agreed B
Building Consideration will be fully paid and non-assessable; will be listed on
the New York Stock Exchange; and will be represented by one or more
certificates which will bear the restrictive legends referred to in Section
11.1.
VII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
EXPENSES; INDEMNITY
7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants,
agreements, representations and warranties made hereunder or pursuant hereto or
in connection with the transactions contemplated hereby shall survive the
Closing and remain effective for a period of four (4) years regardless of any
investigation at any time made by or on behalf of either party or of any
information either party may have with respect thereto.
7.2. EXPENSES. Whether or not the transactions contemplated herein
shall be consummated, each party shall pay its own expenses incident to
preparation for entering into and carrying this Agreement into effect and for
consummating the transactions contemplated by this Agreement.
7.3. INDEMNIFICATION BY POCI. Subject to the limitations contained
in Section 7.7 hereof, POCI and each POCI Shareholder shall indemnify and hold
harmless Newco, WRI and any underwriter participating in a Shelf Registration
(as defined in Section 11.2.2.) and their respective successors and assigns
against any loss, damage or expense (including reasonable attorneys' fees and
court costs) suffered by Newco, WRI or such underwriter resulting from any
breach by POCI or any POCI Shareholder of this Agreement or any inaccuracy in
or breach of any of the representations, warranties or covenants made by POCI
or any POCI Shareholder herein or any inaccuracy or misrepresentation in the
Schedules or Certificates delivered by POCI or any POCI Shareholder at the
Closing in accordance with the provisions hereof. Such loss, damage or expense
contemplated by this Section 7.3 shall include, without limitation, the amount
of any liability of POCI for any claims, debts, liabilities or obligations,
fixed, contingent or otherwise (including Federal, State and local taxes),
attributable to any period of operation
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of POCI up to and including the Closing Date other than the Transferred POCI
Liabilities, plus 1993 ad valorem real estate taxes up to an amount of $400,000
and 1994 ad valorem taxes.
7.4. INDEMNIFICATION BY B BUILDING. Subject to the limitations
contained in Section 7.7 hereof, B Building and each B Building Shareholder
shall indemnify and hold harmless Newco, WRI and any underwriter participating
in the Shelf Registration (as defined in Section 11.2.2.) and their respective
successors and assigns against any loss, damage or expense (including
reasonable attorneys' fees and court costs) suffered by Newco, WRI or such
underwriter resulting from any breach by B Building or any B Building
Shareholder of this Agreement or any inaccuracy in or breach of any of the
representations, warranties or covenants made by B Building or any B Building
Shareholder herein or any inaccuracy or misrepresentation in the Schedules or
Certificates delivered by B Building or any B Building Shareholder at the
Closing in accordance with the provisions hereof. Such loss, damage or expense
contemplated by this Section 7.4 shall include, without limitation, the amount
of any liability of B Building for any claims, debts, liabilities or
obligations, fixed, contingent or otherwise (including Federal, State and local
taxes), attributable to any period of operation of B Building up to and
including the Closing Date other than the Transferred B Building Liabilities.
7.5. INDEMNIFICATION OF WRI AND NEWCO. WRI and Newco, jointly and
severally, shall indemnify and hold harmless POCI and B Building and their
respective successors and assigns and each POCI Shareholder and B Building
Shareholder against any loss, damage, or expense including reasonable
attorneys' fees and court costs suffered by any of such parties resulting from
any breach by WRI or Newco of this Agreement or any inaccuracy in or breach of
any of the representations, warranties, or covenants made by WRI or Newco
herein.
7.6. INDEMNITY AGAINST BROKERAGE COMMISSIONS. Subject to the
limitations contained in Section 7.7 hereof, POCI and each POCI Shareholder and
B Building and each B Building Shareholder will indemnify Newco from any claims
for any brokerage commission or finder's fee in connection with this
transaction asserted by Duddlesten Realty Advisors Corp. or Wayne Duddlesten or
any company owned by or affiliated with Wayne Duddlesten or any other party
claiming to have contracted with POCI or B Building or their respective
shareholders for any brokerage commission or finder's fee in connection with
this transaction. WRI and Newco will indemnify and hold harmless POCI and each
POCI Shareholder and B Building and each B Building Shareholder from claims for
any brokerage commission
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or finder's fee claimed by any party claiming to have contracted with WRI or
Newco for payment of any such commission or fee.
7.7. LIABILITY OF POCI SHAREHOLDERS AND B BUILDING SHAREHOLDERS.
Notwithstanding anything in this Agreement to the contrary, the maximum
liability of each POCI Shareholder with respect to all representations,
warranties, covenants, and agreements of POCI and/or POCI Shareholders will be
several and limited to the extent of any claimed liability multiplied by one
hundred twenty-five percent (125%) of such POCI Shareholder's percentage stock
ownership in POCI immediately prior to the Closing, and the maximum liability
of each B Building Shareholder with respect to all representations, warranties,
covenants, and agreements of B Building and/or B Building Shareholders will be
several to the extent of any claimed liability multiplied by one hundred
twenty-five percent (125%) of such shareholder's percentage stock ownership in
B Building immediately prior to the Closing. With respect to each claim
against POCI Shareholders, each POCI Shareholder's maximum liability with
respect to such claim shall be equal to the amount of such claim multiplied by
the product of (a) the quotient obtained by dividing the total number of POCI
Shares issued and outstanding at the Closing Date by the number of POCI Shares
owned by such POCI Shareholder at the Closing Date, and (b) one and twenty-five
hundredths (1.25). With respect to each claim against B Building Shareholders,
each B Building Shareholder's maximum liability with respect to such claim
shall be equal to the amount of such claim multiplied by the product of (a) the
quotient obtained by dividing the total number of B Building Shares issued and
outstanding at the Closing Date by the number of B Building Shares owned by
such B Building Shareholder at the Closing Date, and (b) one and twenty-five
hundredths (1.25). Notwithstanding anything contained herein to the contrary,
the maximum aggregate liability of each POCI Shareholder shall be the value of
the Agreed POCI Consideration paid to such shareholder at the Closing of this
Agreement multiplied by one hundred twenty- five percent (125%) and the maximum
aggregate liability of each B Building Shareholder shall be the value of the
Agreed B Building Consideration paid to such shareholder at the Closing of this
Agreement multiplied by one hundred twenty-five percent (125%).
VIII. TERMINATION AND OTHER REMEDIES
8.1. BEST EFFORTS TO SATISFY CONDITIONS. Subject to the
limitations on obligation to expend or incur expense or cost to cure
objections, POCI and the POCI Shareholders agree to use their best efforts to
bring about the satisfaction of the conditions specified in Section 6.1 of this
Agreement and B Building
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and the B Building Shareholders agree to use their best efforts to bring about
the satisfaction of the conditions specified in Section 6.2 of this Agreement.
WRI and Newco agree to use their best efforts to bring about the satisfaction
of the conditions specified in Section 6.3 of this Agreement.
8.2. TERMINATION. POCI, B Building, WRI, or Newco may terminate
this Agreement under the following circumstances:
8.2.1. TERMINATION UPON BREACH OR DEFAULT. Without
prejudice to other rights and remedies which POCI and B Building may have, if a
default shall be made by WRI or Newco in the observance or in the due and
timely performance of any of its covenants herein contained and such default
shall not have been cured within twenty (20) days following the receipt by WRI
or Newco of notice from POCI or B Building specifying such default, or if there
shall have been a breach by WRI or Newco of any of the warranties and
representations herein contained, POCI or B Building, may enforce specific
performance of the obligations of Newco and/or WRI under this Agreement, or may
terminate this Agreement at any time prior to the Closing. Without prejudice
to other rights and remedies which WRI or Newco may have, if a default shall be
made by POCI or any POCI Shareholder or B Building or any B Building
Shareholder in the observance or in the due and timely performance of any of
its or their covenants herein contained and such breach shall not have been
cured within twenty (20) days following receipt by POCI and B Building of
notice from WRI or Newco specifying such default, or if there shall have been a
breach by POCI or any POCI Shareholder or B Building or any B Building
Shareholder of any of the warranties and representations herein contained, WRI
or Newco may terminate this Agreement at any time prior to the Closing. In
order to exercise any such right of termination, the terminating party shall
notify the other party thereof in writing. In the event of the occurrence of
any circumstances under this Agreement pursuant to which WRI or Newco has the
right to terminate this Agreement, in lieu thereof, WRI and Newco may elect to
enforce specific performance, but without a reduction in the Agreed POCI
Consideration or in the Agreed B Building Consideration; Newco may (whether or
not Newco seeks to enforce specific performance) require that a portion of the
Agreed POCI Consideration be applied to the discharge and release of any lien
on the Property that does not secure a Transferred POCI Liability; Newco may
also (whether or not Newco seeks to enforce specific performance) require that
a portion of the Agreed B Building Consideration be applied to the discharge
and release of any lien on the B Building Required Assets that does not secure
a Transferred B Building Liability. The application of portions of the Agreed
POCI Consideration or Agreed B Building Consideration of liens
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as referred to in the immediately preceding sentence shall be accomplished by
Newco's paying to the relevant lienholder the amount of cash necessary to
release the applicable lien and then recalculating the Agreed POCI
Consideration or Agreed B Building Consideration by reducing the dollar figure
referred to in clause (a) of Section 1.3.1 (with respect to the Agreed POCI
Consideration) or clause (a) of Section 1.5.1 (with respect to the Agreed B
Building Consideration) by the amount of cash so paid for the release of any
such lien or liens. Further, in the event of the occurrence of any
circumstances permitting Newco to terminate this Agreement or enforce specific
performance, in lieu of exercising either such remedy at a particular time,
Newco may grant POCI and the POCI Shareholders and B Building and the B
Building Shareholders one or more additional periods of time of the duration
designated by Newco (not exceeding thirty (30) days in the aggregate) within
which POCI and the POCI Shareholders and B Building and the B Building
Shareholders shall perform any of the unperformed covenants, duties or
obligations of POCI and/or the POCI Shareholders and B Building and/or the B
Building Shareholders under this Agreement and cause any remaining unfulfilled
conditions under this Agreement to be fulfilled. If at the end of any such
extension period there still remains any such unperformed covenant, duty or
obligation of POCI and/or the POCI Shareholders and B Building and/or the B
Building Shareholders under this Agreement or any unfulfilled condition, Newco
may grant POCI and the POCI Shareholders and B Building and B Building
Shareholders one additional extension period (subject to the aforesaid thirty
(30) day aggregate maximum) or WRI and Newco shall be permitted to exercise the
aforesaid remedy of termination of this Agreement or its aforesaid right of
enforcing specific performance.
Further, in the event of the occurrence of any circumstance
permitting POCI and B Building to terminate this Agreement or enforce specific
performance, in lieu of exercising either such remedy at a particular time,
POCI and B Building, acting jointly, may grant Newco additional periods of time
of the duration designated by POCI and B Building jointly within which Newco
shall perform any of the unperformed covenants, duties, or obligations of Newco
under this Agreement and cause any remaining unfulfilled conditions under this
Agreement to be fulfilled. If at the end of any such extension period there
still remains any such performed covenant, duty, or obligation of Newco under
this Agreement or any unfulfilled condition, POCI and B Building, acting
jointly, may grant Newco one or more additional extension periods (subject to
the aforesaid thirty (30) day aggregate maximum) or POCI
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and B Building, acting jointly, shall be permitted to exercise the aforesaid
remedy of termination of this Agreement or their aforesaid rights of enforcing
specific performance.
8.2.2. TERMINATION BASED UPON CONDITIONS. Without prejudice
to other rights and remedies which any party may have, if the conditions of
this Agreement to be complied with or performed by the other party (or by the
shareholders of POCI or B Building, where applicable) at or before the Closing
shall not have been complied with or performed at the time required for such
compliance or performance and such non-compliance or non-performance shall not
have been waived by the party giving notice of termination, the party having
the right to require compliance with and performance of any such condition may
treat such non-compliance or non-performance as a basis for exercising any
remedy accorded such party under Section 8.2.1 preceding.
IX. ARBITRATION
In the event that any dispute should arise under or with respect to
this Agreement, the parties agree that such dispute shall be settled and
resolved by binding arbitration governed by the Federal Arbitration Act, 9
U.S.C. Section Section 1-16 inclusive and in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. In the event that
for any reason a court of competent jurisdiction determines in a final
non-appealable judgment that the Federal Arbitration Act is not applicable to
this Agreement, then, in such event, the Texas General Arbitration Act, Tex.
Rev. Civ. Stat. Ann. Arts. 224 through 238-6 shall apply to all arbitration
proceedings under this Agreement. All parties agree that if any party shall
request arbitration pursuant to this Article IX, each party will take all
appropriate action to cause the arbitration hearing to commence within thirty
(30) days after the notice requesting arbitration and further will take all
appropriate action to cause such arbitration proceeding to proceed diligently
and continuously until completion.
X. MISCELLANEOUS
10.1. ENTIRE AGREEMENT; AMENDMENT. This instrument, together with
the Schedules referred to in Section 4.1.2 and Section 4.3.2 constitutes the
entire agreement between the parties relating to the subject matter hereof. No
prior written agreements (other than the aforesaid Schedules) and no prior or
contemporaneous oral promises or representations shall be binding, it being
intended that this instrument (together with the aforesaid Schedules) merges
all such prior and contemporaneous promises and
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representations. This Agreement shall not be amended or changed except by a
written instrument signed by all undersigned parties.
10.2. SUCCESSORS; RIGHTS OF THIRD PARTIES. All terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, personal representatives, successors and
assigns of the parties hereto. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties hereto,
and their respective heirs, personal representatives, successors and assigns,
any rights or remedies under or by reason of this Agreement. This Agreement is
subject to termination or amendment by operation of the provisions herein
notwithstanding any effect that such termination or amendment might have on
persons who are not parties hereto. Neither POCI, the POCI Shareholders, B
Building, the B Building Shareholders, Newco or WRI shall have the right to
assign, transfer, or hypothecate this Agreement and any rights under this
Agreement and any attempted or purported transfer, assignment, or hypothecation
shall be null and void.
10.3. NOTICES. All notices hereunder shall be in writing and be
delivered personally or by expedited delivery service with proof of delivery or
sent by U.S. Mail with adequate postage prepaid, as registered or certified
mail, with return receipt requested, or sent by facsimile with confirmation,
addressed as follows:
If to POCI and/or any of its Post Oak Center, Inc.
shareholders: c/o Morton Susman
700 Louisiana, Suite 1600
Houston, Texas 77002
Fax: (713) 546-5252
With a copy to: Michael P. Kessler, Esq.
Weil Gotshal & Manges
700 Louisiana, Suite 1600
Houston, Texas 77002
Fax: (713) 224-9511
If to B Building and/or any "B" Building, Inc.
of its shareholders: c/o Gaylord Johnson, Jr.
11301 Richmond Avenue, Building K
Suite 111B
Houston, Texas 77082
Fax: (713) 558-1186
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If To WRI: Weingarten Realty Investors
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Attention: Chairman
Fax: (713) 866-6049
With a copy to: Melvin A. Dow, Esq.
Dow, Cogburn & Friedman, P.C.
Nine Greenway Plaza, Suite 2300
Houston, Texas 77046
Fax: (713) 940-6099
If to Newco: WRI/Post Oak, Inc.
c/o Weingarten Realty Investors
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Attention: Chairman
Fax: (713) 866-6049
With a copy to: Melvin A. Dow, Esq.
Dow, Cogburn & Friedman, P.C.
Nine Greenway Plaza, Suite 2300
Houston, Texas 77046
Fax: (713) 940-6099
Notice delivered or mailed in the manner herein specified shall be effective
for all purposes hereunder on the earlier of the date of receipt or three (3)
days after it is posted in the U.S. mail; notices given by facsimile with
confirmation shall be effective on the date received or, if received after 5:00
p.m. Central Time, on the following Business Day. Any notice given in any
other manner shall be effective only if and when received by the party to be
notified. POCI and B Building shall each have the right to change its address
for notice purposes hereunder and, therefore, the address of the POCI
Shareholders and the B Building Shareholders for notice purposes hereunder, by
giving written notice thereof to WRI and Newco in compliance with the
provisions of this Section 10.3, and WRI and Newco shall each have the right to
change its address for notice purposes hereunder by giving written notice
thereof to POCI and B Building in compliance with the provisions of this
Section 10.3.
10.4. APPLICABLE LAWS. This Agreement shall be construed and
enforceable in accordance with the internal laws of the State of Texas
(excluding its conflicts of laws rules) and the laws of the United States.
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10.5. SECTION AND PARAGRAPH HEADINGS. The section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
10.6. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.7. TIME. Time is of the essence with respect to the various
times for performance by the parties hereto. If, however, any date set forth
in this Agreement as the last date for the taking of any action hereunder shall
fall on a day when banks in Houston, Texas, are authorized to close, then the
last date for the taking of such action shall be extended to the next
succeeding day when such banks are open.
10.8. STOCK SPLITS, SUBDIVISIONS, STOCK DIVIDENDS; COMBINATIONS. If
prior to the Closing, WRI should pay a dividend or make a distribution on
existing WRI shares consisting of additional WRI Shares, subdivide its shares
into a greater number of shares, combine its shares into a smaller number of
shares, make a distribution on existing WRI Shares consisting of its capital
stock other than outstanding WRI shares, or issue by reclassification of its
existing WRI Shares any shares of its capital stock (any of such events being
hereinafter referred to as a "Stock Change"), then in such event the WRI Per
Share Value and the $38 figure referred to in Section 3.3 of this Agreement
shall be proportionately reduced or increased, as appropriate, and, in
addition, the Guaranteed POCI Increase referred to in Article I and Article II
of the Price Increase Guaranty attached hereto as Exhibit "H" and the
Guaranteed B Building Increase referred to in Article I and Article III of such
Price Increase Guaranty shall also be proportionately reduced or increased, as
appropriate. For example, without limiting the generality of the foregoing
sentence, if, prior to Closing, there should be a 2-for-1 split of WRI Shares,
and the applicable WRI Per Share Value is deemed to be $42, then the $42 figure
referred to in Section 1.3 and in Section 1.5.1 shall be reduced to $21, the
$38 figure referred to in Section 3.3 of this Agreement shall be reduced to
$19, the figure calculated pursuant to Article I(b)(5) of the Price Increase
Guaranty as the Guaranteed POCI Increase shall be reduced to one-half (1/2) of
the amount which would otherwise be computed pursuant to such Article I(b)(5)
of the Price Increase Guaranty and the figure calculated pursuant to Article
I(b)(6) of the Price Increase Guaranty as the Guaranteed B Building Increase
shall be reduced to one-half (1/2) of the amount which would otherwise be
computed pursuant to such Article I(b)(6) of the Price Increase Guaranty. If,
subsequent to the Closing, but prior to the two (2) year
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anniversary of the Closing, a Stock Change shall occur, the WRI Per Share Value
and the $38 figure referred to in Section 3.3 of this Agreement shall remain
unchanged, but the Guaranteed POCI Increase referred to in Article I and
Article II of the Price Increase Guaranty and the Guaranteed B Building
Increase referred to in Article I and Article II of the Price Increase Guaranty
shall be reduced proportionately. For example, without limiting the generality
of the foregoing, if there should be a 2-for-1 split of WRI Shares subsequent
to Closing but prior to the two (2) year anniversary date of Closing, and the
applicable WRI Per Share Value is deemed to be $42, then, in such event, the
$42 figure referred to in Section 1.3 and Section 1.5.1 of this Agreement and
the $38 figure referred to in Section 3.3 of this Agreement shall remain
unchanged, but the figure calculated pursuant to Article I(b)(5) of the Price
Increase Guaranty as the Guaranteed POCI Increase shall be reduced to one-half
of the amount which would otherwise be calculated pursuant to such Article
I(b)(5) of the Price Increase Guaranty and the figure calculated pursuant to
Article I(b)(6) of the Price Increase Guaranty as the Guaranteed B Building
Increase shall be reduced to one-half (1/2) of the amount which would otherwise
be calculated pursuant to such Article I(b)(6) of the Price Increase Guaranty.
Conversely, if prior to Closing, there should be a combination of WRI Shares
into a smaller number, then the WRI Per Share Value and the $38 figure referred
to in Section 3.3 of this Agreement shall be proportionately increased and the
Guaranteed POCI increase referred to in Article I and Article II of the Price
Increase Guaranty and the Guaranteed B Building Increase referred to in Article
I and Article III of the Price Increase Guaranty shall also be proportionately
increased. For example, without limiting the generality of the foregoing, if,
prior to Closing, there should be a combination of two existing WRI Shares into
one WRI Share, and the applicable WRI Per Share Value is deemed to be $42, then
in such event, the $42 figure referred to in Section 1.3 and Section 1.5.1 of
this Agreement shall be $84, the $38 figure referred to in Section 3.3 of this
Agreement shall be $76, the figure calculated pursuant to Article I(b)(5) of
the Price Increase Guaranty as the Guaranteed POCI Increase shall be double the
amount which would otherwise be calculated pursuant to Article I(b)(5) of the
Price Increase Guaranty and the figure calculated pursuant to Article I(b)(6)
of the Price Increase Guaranty as the Guaranteed B Building Increase shall be
double the amount which would otherwise be computed pursuant to such Article
I(b)(6). If, subsequent to Closing but prior to the two (2) year anniversary
of Closing, there should be a combination of existing WRI Shares into a smaller
number of shares, then the WRI Per Share Value and the $38 figure referred to
in Section 3.3 shall remain unchanged but the figure calculated pursuant to
Article I(b)(5) of the Price
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Increase Guaranty as the Guaranteed POCI Increase shall be proportionately
increased and the figure calculated pursuant to Article I(b)(6) of the Price
Increase Guaranty as the Guaranteed POCI Increase shall be proportionately
increase. For example, without limiting the generality of the foregoing, if
subsequent to Closing but prior to the two (2) year anniversary of Closing, two
existing WRI Shares shall be combined into one (1) single new WRI Share, and the
applicable WRI Per Share Value is deemed to be $42, then, in such event, the $42
figure referred to in Section 1.3 and Section 1.5.1 of this Agreement and the
$38 figure referred to in Section 3.3 shall remain unchanged but the figure
calculated pursuant to Article I(b)(5) of the Price Increase Guaranty as the
Guaranteed POCI Increase shall be double the amount which would otherwise be
calculated pursuant to such Article I(b)(5) of the Price Increase Guaranty and
the figure calculated pursuant to Article I(b)(6) of the Price Increase Guaranty
as the Guaranteed B Building Increase shall be double the amount which would
otherwise be calculated pursuant to such Article I(b)(6) of the Price Increase
Guaranty. During the time from the Closing through the two (2) year anniversary
of the Closing and the payment of the Required Amount (as defined in the Price
Increase Guaranty), WRI shall not voluntarily transfer or lease all or
substantially all its assets (a "Triggering Event"), to any person, firm,
corporation, or other entity (the "Acquiring Entity") if such Acquiring Entity
does not assume, in writing, the obligations of WRI to pay the Required Amount
as provided in the Price Increase Guaranty. If a Triggering Event shall occur
and the Acquiring Entity does not assume in writing the obligations of WRI to
pay the Required Amount as provided in the Price Increase Guaranty, the
Anniversary Market Price shall be revised without further agreement of the
parties to mean the average closing price of a share of common stock (share of
beneficial interest) of WRI on the New York Stock Exchange during the ten (10)
trading days immediately preceding the date of the Triggering Event, and the
Required Amount shall be paid on the date of the Triggering Event.
10.9. LIMITATION ON LIABILITY. WRI is an unincorporated trust
organized under the Texas Real Estate Investment Trust Act. Neither the
shareholders of WRI, nor its Trust Managers, officers, employees or other
agents shall be personally, corporately or individually liable, in any manner
whatsoever, for any debt, act, omission or obligation of WRI, and all persons
having claims of any kind whatsoever against WRI shall look solely to the
property of WRI for the enforcement of their rights (whether monetary or
non-monetary) against WRI.
XI. REGISTRATION OF WRI SHARES
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11.1. RESTRICTIONS ON RESALE. Each of the POCI Shareholders and
each of the B Building Shareholders covenant and agree that they shall not sell
or transfer any beneficial interest in, or otherwise dispose of any WRI Shares
received by them as the Agreed POCI Consideration or the Agreed B Building
Consideration, as the case may be, otherwise than pursuant to (i) Rule 144 of
the General Rules and Regulations (the "Regulations") under the 1933 Act; (ii)
an exemption from registration under the 1933 Act determined to be available in
the opinion of counsel acceptable to WRI, or (iii) the Shelf Registration (as
defined below).
It is further agreed that:
a. in addition to any legends that may be necessary to reflect
restrictions on transfer that may exist (i) pursuant to Rule 144 under the 1933
Act by virtue of a POCI Shareholder or a B Building Shareholder owning a
sufficient number of shares of WRI common shares to be classified as an
"affiliate" of WRI or (ii) pursuant to the applicable provisions of the WRI
Declaration of Trust which (in order to enable WRI to maintain its status as a
real estate investment trust under the provisions of the Internal Revenue Code)
limit persons to ownership of no more than 9.2% of the outstanding WRI common
shares) the following legend shall be placed on all certificates representing
ownership of WRI Shares received as the Agreed POCI Consideration or the Agreed
B Building Consideration, as the case may be, until such shares have been
transferred in accordance with the provisions hereof:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
sold or transferred unless the sale of such shares is
registered under said Act or the shares are sold pursuant to
Rule 144 or, in the opinion of counsel acceptable to
Weingarten Realty Investors, an exemption from registration is
available."
b. a stop transfer order shall be entered with the transfer agent
of WRI against the transfer of WRI Shares received as the Agreed POCI
Consideration or the Agreed B Building Consideration, as the case may be,
except in compliance with this Article XI.
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11.2. REGISTRATION OF WRI SHARES. WRI will register the WRI Shares
which are received as the Agreed POCI Consideration or the Agreed B Building
Consideration (the "Relevant WRI Shares") upon the terms, and subject to the
limitations and conditions, hereinafter set forth.
11.2.1. SHELF REGISTRATION. Within five (5) business days
after the Closing Date, WRI shall prepare and file with the Securities and
Exchange Commission (the "SEC") a registration statement for an offering to be
made by the B Building Shareholders and the POCI Shareholders (together the
"Holders" and individually a "Holder") on a continuous basis under the
Regulations covering all of the Relevant WRI Shares (the "Shelf Registration").
The Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Relevant WRI Shares for resale by such Holders
in the manner or manners designated by them (including, without limitation, one
or more underwritten offerings). WRI shall use its reasonable best efforts to
cause the Shelf Registration to be declared effective under the 1933 Act within
sixty (60) days after the Closing Date and to keep the Shelf Registration
continuously effective under the 1933 Act until the date which is two (2)
calendar years and twenty-five (25) days from the effective date of such
registration statement (or, if WRI exercises its option(s) under the Price
Increase Guaranty to extend the Initial Test Period (as defined in the Price
Increase Guaranty) to the First Extension Period (as defined in the Price
Increase Guaranty) or the Second Extension Period (as defined in the Price
Increase Guaranty), the Effectiveness Period shall be extended accordingly so
as to expire twenty-five (25) days after the expiration of the First Extension
Period or Second Extension Period if such options are exercised in accordance
with the Price Increase Guaranty (the "Effectiveness Period"), or such shorter
period ending when (i) all Relevant WRI Shares covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Shelf Registration, or (ii) in the opinion of counsel to WRI, which opinion
shall be satisfactory in form, scope and substance to each Holder affected
thereby, registration of the Relevant WRI Shares (A) is no longer required
under the 1933 Act and (B) the Holder may sell all remaining Relevant WRI
Shares in the open market without limitations as to volume and without being
required to file any forms or reports with the SEC under the 1933 Act or the
Regulations. If WRI is not able to cause the Shelf Registration to be declared
effective under the 1933 Act, the B Building Shareholders and the POCI
Shareholders shall have a Put Right (as defined in Section 11.2.3) to sell
their shares to WRI on the terms set forth in Section 11.2.3. WRI shall
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the 1933
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Act or the Regulations, or if reasonably requested by the Holders of a majority
of the Relevant WRI Shares covered by such registration statement or by any
underwriter of such Relevant WRI Shares. In connection with the registration
of any Relevant WRI Shares pursuant to this Section 11.2, WRI shall use its
reasonable best efforts to prevent the issuance of any order suspending the
effectiveness of a Shelf Registration or of any order preventing or suspending
the use of a prospectus or suspending the qualification (or exemption from
qualification) of any of the Relevant WRI Shares for sales in any jurisdiction,
and, if any such order is issued, to use its reasonable best efforts to obtain
the withdrawal of any such order at the earliest possible moment. WRI shall
also use its reasonable best efforts to register or qualify, and to cooperate
with the selling Holders of Relevant WRI Shares, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Relevant WRI
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder, or the managing
underwriters, if any, reasonably request in writing; keep each such
registration or qualification (or exemption therefrom) effective during the
period such registration statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Relevant WRI Shares covered by the
applicable Registration Statement; provided, however, that WRI shall not be
required to (A) qualify generally to do business in any jurisdiction where it
is not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject, or
(C) subject itself to taxation in any such jurisdiction.
11.2.2. SUBSEQUENT SHELF REGISTRATIONS. If the Shelf
Registration ceases to be effective for any reason at any time during the
Effectiveness Period (other than because of the sale of all of the securities
registered thereunder), WRI shall use every reasonable effort to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend
the Shelf Registration in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional
registration statement covering all of the unsold Relevant WRI Shares (a
"Subsequent Shelf Registration") for an offering to be made by the Holders on a
delayed or continuous basis under the Regulations. If a Subsequent Shelf
Registration is filed, WRI shall use its reasonable best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such registration statement
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continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Shelf
Registration was previously continuously effective. As used herein, the term
"Shelf Registration" means the initial Shelf Registration and any Subsequent
Shelf Registration(s).
11.2.3. LIMITED PUT RIGHT. Notwithstanding the provisions of
Section 11.2.1 and 11.2.2 hereof, if at any time subsequent to sixty (60) days
from the Closing and within the Effectiveness Period WRI is not able to cause
the Shelf Registration to be declared effective under the 1933 Act or if the
Shelf Registration ceases to be effective for any reason and a Subsequent Shelf
Registration is not declared effective, each of the Holders shall have the
right (the "Put Right") to give WRI Notice (the "Put Notice") demanding that
WRI repurchase from the Holders delivering a Put Notice all or any portion of
the Relevant WRI Shares owned by such Holders on the date the Put Notice is
received or deemed received pursuant to Section 10.3 hereof. The Put Notice
may be given only during the Effectiveness Period if (i) the Shelf Registration
has not yet been declared effective under the 1933 Act or (ii) if the Shelf
Registration ceases to be effective for any reason and a subsequent Shelf
Registration is not declared effective by the time the Put Notice is given.
The Put Notice shall state the number of Relevant WRI Shares which the
requesting Holder demands that WRI repurchase. If WRI receives a Put Notice,
as aforesaid, and a Shelf Registration is not effective on the date the Put
Notice is received or deemed received pursuant to Section 10.3 hereof, then WRI
will be obligated to repurchase from such requesting Holders on the 21st day
(or the first business day thereafter if such 21st day is a Saturday, a Sunday
or legal holiday in the State of Texas) after the Put Notice is received or
deemed received by WRI (the "Repurchase Date"), and such Holders will be
obligated to sell to WRI on such date, the Relevant WRI Shares as to which the
Put Notice shall have been given, at a per share price (the "Repurchase Price")
equal to the closing price of WRI common shares on the New York Stock Exchange
on the day on which the Put Notice is received or deemed received, or the next
business day if such day is a Saturday, Sunday, or legal holiday in the State
of Texas. The closing of the repurchase shall take place at the offices of
WRI, 2600 Citadel Plaza Drive, Suite 300, Houston, Texas, at 11:00 a.m. on the
Repurchase Date. At the repurchase closing, WRI will pay to such Holders the
Repurchase Price by cashier's or certified bank checks payable to such Holders
against delivery by each such Holder to WRI of certificates evidencing the
Relevant WRI Shares being repurchased by WRI pursuant to the foregoing
provisions, which certificates shall be without any legend or any restriction
on transfer other than as required under
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Section 11.1. Each certificate shall be duly endorsed by such Holder to WRI or
shall have attached thereto appropriate stock powers duly executed by or on
behalf of such Holder.
11.2.4. UNLEGENDED CERTIFICATES. WRI shall cooperate with
the selling Holders of Relevant WRI Shares and the managing underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Relevant WRI Shares to be sold, which certificates shall not bear
any restrictive legends (other than the restrictions, if any, that may exist
because of ownership by a relevant POCI Shareholder or a relevant B Building
Shareholder of other WRI common shares, e.g., restrictions on transfer that may
exist (i) pursuant to Rule 144 under the 1933 Act by virtue of a POCI
Shareholder or a B Building Shareholder owning a sufficient number of WRI
common shares to be classified as an "affiliate" of WRI, or (ii) pursuant to
the applicable provisions of the WRI Declaration of Trust which (in order to
enable WRI to maintain its status as a real estate investment trust under the
provisions of the Internal Revenue Code) limit persons to ownership of no more
than 9.2% of the outstanding WRI common shares) and shall be in a form eligible
for deposit with The Depositary Trust Company; and enable such Relevant WRI
Shares to be in such denominations and registered in such names as the managing
underwriters, if any, or Holders may reasonably request.
11.2.5. REGISTRATION EXPENSES. The following fees and
expenses incident to the performance of or compliance with this Section 11.2 by
WRI shall be borne by WRI whether or not a Shelf Registration is filed or
becomes effective: (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (B) fees and expenses of
compliance with the state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel for WRI (but not the
underwriters or the Holders) in connection with Blue Sky qualifications of the
Relevant WRI Shares)), (ii) printing expenses (including expenses of printing
certificates for Relevant WRI Shares in a form eligible for deposit with The
Depositary Trust Company and printing prospectuses), (iii) fees and
disbursements of counsel for WRI, (iv) fees and disbursements of all
independent certified public accountants for WRI, (v) internal expenses of WRI
(including all salaries and expenses of officers and employees of WRI
performing legal or accounting duties), and (vi) the fees and expenses incurred
in connection with the listing of the securities to be registered on any
securities exchange.
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Each selling Holder shall pay all underwriting discounts and
commissions or broker's commissions incurred in connection with the sale or
other disposition of Relevant WRI Shares for or on behalf of such selling
Holder's account and all fees and expenses of legal counsel for such selling
Holder.
11.3. AVAILABILITY OF RULE 144 EXEMPTION. WRI shall timely file the
reports required to be filed by it under the Securities Exchange Act of 1934
(the "Exchange Act") and the 1933 Act (including, without limitation, the
reports under Sections 13 and 15(d) of the Exchange Act referred to in Rule
144(c)(1) under the 1933 Act), and shall take such further action as is
required from time to time to enable such Holder to sell Relevant WRI Shares
without registration under the 1933 Act within the limitation of the exemption
provided by Rule 144 under the 1933 Act. WRI will furnish to any Holder of
Relevant WRI Shares, upon request made by such Holder at any time, a written
statement signed by WRI, addressed to such Holder, describing the action WRI
has taken or proposes to take to comply with the current public information
requirements of Rule 144. WRI shall, at the request of any Holder of Relevant
WRI Shares, upon receipt from such Holder of evidence reasonably satisfactory
to WRI (i) that such Holder has held such Relevant WRI Shares for a period of
not less than two (2) consecutive years, and (ii) that such Holder has not been
an affiliate (as defined in Rule 144) of WRI for more than the ninety (90)
preceding days, remove from the stock certificates representing the Relevant
WRI Shares that portion of any restrictive legend which relates to the
registration provisions of the 1933 Act.
11.4. INDEMNIFICATION BY WRI. WRI shall indemnify and hold harmless
POCI, B Building, the POCI Shareholders, the B Building Shareholders, their
trustees, independent executors, officers and each of their respective
successors and assigns (collectively, the "Indemnitees") from and against any
and all losses, expenses and damages, including, without limitation, reasonable
attorneys' fees and expenses (collectively referred to as "Claims") resulting
from any information provided, in or incorporated by reference into, the Shelf
Registration, Subsequent Shelf Registrations, supplements and addenda thereto,
periodic filings with the SEC (for example, 10-K, 10-Q and 8-K Forms) and other
public disclosures of information in connection with the registration, sale or
offering for sale of any Relevant WRI Shares, except for such information as is
supplied to WRI in writing by any of the Indemnitees or by any underwriter.
WRI shall also indemnify, and hold harmless the Indemnitees from any Claims
resulting from the failure by WRI to comply with the securities or Blue Sky
laws of such jurisdictions within the United States as any selling Holder, or
the managing underwriters, if any, reasonably request in writing.
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XII. LOAN FROM WRI TO POCI
12.1. LOAN FROM WRI TO POCI. WRI agrees to loan funds to POCI on
the terms and conditions contained in documentation which is being executed
contemporaneously with the execution of this Agreement. Such terms and
conditions are briefly summarized as follows; in the event of any inconsistency
between the following summary and the loan documentation, the loan
documentation shall supersede and control.
12.1.1. AMOUNT. The amount of the loan from WRI to POCI
shall be the amount necessary to (a) pay in full on their maturity the two
$310,000 utility notes (such funds to be advanced on or before September 30,
1993), (b) pay in full the 1993 ad valorem taxes assessed against the Property
(such funds to be advanced at least five (5) business days prior to the last
date such taxes may be paid without the payment of penalties or interest), and
(c) pay the full amount of the premium due with respect to the Mortgagee Policy
of Title Insurance described below. At its option, WRI may also advance funds
to pay in full the Prudential Insurance Company promissory note which is
secured by a first lien deed of trust against the Property. The loan from WRI
to POCI shall be evidenced by a promissory note executed and payable solely by
POCI (the "WRI Note").
12.1.2. COLLATERAL SECURITY. The WRI Note shall be secured
solely by a lien on the Property. In the event WRI elects to advance funds to
discharge the Prudential Insurance Company note, WRI's lien shall be a first
and prior lien on the Property.
12.1.3. DUE ON SALE. The WRI Note shall contain a broad form
due on sale clause such that if POCI sells the Property or enters into a merger
or other transaction involving a change of control of POCI before December 31,
1995, all principal of and interest on the WRI Note shall be payable at the
closing of such sale, merger or other transaction involving a change of control
of POCI.
12.1.4. PAYMENT TERMS. If WRI elects to close the
transactions described herein, all outstanding principal and accrued interest,
if any, under the WRI Note (except for $400,000 of the 1993 ad valorem taxes,
as adjusted pursuant to Section 1.3.2 hereof) shall become Transferred POCI
Liabilities (subject to the $3 million maximum amount described in Section
1.3.2) and will be assumed and paid by WRI. Assuming that WRI does not close,
the WRI Note shall not begin accruing interest until the date POCI is notified
in writing of WRI's termination of this Agreement, and shall accrue interest
from such date until December 31, 1994, at the Prime Rate announced from time
to time by Texas Commerce Bank National Association plus one percent (1%) per
annum, and from January 1, 1995, to December 31,
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1995, at the Prime Rate announced from time to time by Texas Commerce Bank
National Association plus two percent (2%) per annum. However, if WRI elects
to advance funds to discharge the Prudential Insurance Company note, the amount
so advanced shall accrue interest at the rates described above from the actual
date of such advance (all other sums advanced accruing interest only from the
date of termination by WRI). Interest shall accrue from the dates specified
above, but all payments shall be deferred until December 31, 1995, on which
date all principal and accrued interest on the WRI Note shall be immediately
payable in full.
12.1.5. MISCELLANEOUS. The Ground Lease from POCI to B
Building shall be subordinated to the lien that will secure the WRI Note.
Also, POCI shall be required to provide WRI with a Mortgagee Policy of Title
Insurance. In connection therewith, WRI shall loan to POCI the amount of the
premium for such title policy.
IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed on this the 1st day of October, 1993.
WRI/POST OAK, INC. POST OAK CENTER, INC.
By: /s/ STANFORD ALEXANDER By: /s/ MORTON L. SUSMAN
_________________________________ ____________________________________
Name: Stanford Alexander Name: Morton L. Susman
Title: Chairman of the Board Title: President
"Newco" "POCI"
"B" BUILDING, INC. WEINGARTEN REALTY INVESTORS
By: /s/ GAYLORD JOHNSON JR. By: /s/ STANFORD ALEXANDER
_________________________________ ____________________________________
Name: Gaylord Johnson Jr. Name: Stanford Alexander
Title: President Title: Chairman of the Board
"B Building" "WRI"
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POST OAK CENTER, INC. SHAREHOLDERS
Texas Commerce Bank, Trustee of the
Nina Susman Trust (but not in any other
capacity)
/s/ OSCAR S. WYATT, JR. By: /s/ ELLEN TIPTON
_____________________________________ ____________________________________
Oscar S. Wyatt, Jr. Name: Ellen Tipton
Title: Vice President and Trust Officer
/s/ DOUGLAS WYATT, Trustee /s/ NINA M. SUSMAN
_____________________________________ ________________________________________
Douglas Wyatt, Trustee Nina M. Susman
/s/ LYNN S. WYATT /s/ GAYLORD JOHNSON, JR.
_____________________________________ ________________________________________
Lynn S. Wyatt Gaylord Johnson, Jr.
THE ESTATE OF ALEXANDER HART SACKTON, /s/ STEVEN C. GRANT, Trustee
DECEASED ________________________________________
Steven C. Grant, Trustee of the Gaylord
Johnson, Jr. 1979 Children's Trust
By: NationsBank of Texas, N.A.,
Independent Executor (But Not in
Any Other Capacity) /s/ GAIL J. SERRELL
________________________________________
Gail J. Serrell
By: /s/ MARTIN E. TURNER
____________________________
Name: Martin E. Turner
Title: Senior Vice President
/s/ ROBERT T. SAKOWITZ
________________________________________
Robert T. Sakowitz
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"B" BUILDING, INC. SHAREHOLDERS
/s/ NINA M. SUSMAN THE ESTATE OF ALEXANDER HART SACKTON,
_____________________________________ DECEASED
Nina M. Susman
/s/ ROBERT T. SAKOWITZ By: NationsBank of Texas, N.A.,
_____________________________________ Independent Executor (But Not in
Robert T. Sakowitz Any Other Capacity)
/s/ GAYLORD JOHNSON, JR. By: /s/ MARTIN E. TURNER
_____________________________________ ____________________________
Gaylord Johnson, Jr. Name: Martin E. Turner
Title: Senior Vice President
/s/ GAIL J. SERRELL
________________________________________
Gail J. Serrell
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EXHIBIT 10.2
FIRST AMENDMENT TO AGREEMENT OF MERGER
This First Amendment to Agreement of Merger (this "Amendment")
is entered into as of December 15, 1993, by and among WEINGARTEN REALTY
INVESTORS, a Texas real estate investment trust ("WRI"), WRI/POST OAK, INC., a
Texas corporation ("Newco") (which is a wholly-owned subsidiary of WRI), POST
OAK CENTER, INC., a Texas corporation ("POCI"), "B" BUILDING, INC., a Texas
corporation ("B Building"), and the POCI Shareholders and B Building
Shareholders identified on the signature pages hereof.
WHEREAS, WRI, Newco, POCI, B Building, the POCI Shareholders,
and the B Building Shareholders have entered into that certain Agreement of
Merger, dated October 1, 1993 (the "Agreement of Merger"); and
WHEREAS, the parties hereto desire to amend the Agreement of
Merger as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. All references to "December 15, 1993" contained in
the Agreement of Merger shall be amended to read "December 22, 1993",
including, without limitation, the following:
a. Section 1.3.2., relating to the date by which
POCI shall re-designate in writing the
Transferred POCI Liabilities;
b. Section 1.5.1., relating to the date by which
a written agreement signed by all POCI
Shareholders and B Building Shareholders
agreeing to the dollar amount of the Agreed
Value of B Building Stock must be submitted
to Newco;
c. Section 2.2., relating to the deadline for
Newco to decide, in its sole discretion,
whether POCI, B Building, and the Property
are satisfactory to Newco so as to proceed
with the Closing, and the deadline for Newco
to deliver a written notice of termination if
it elects to terminate the Agreement of
Merger; and
d. Section 4.1.4., relating to the date by which
POCI shall notify Newco of the issuance of
additional shares of POCI Stock to
<PAGE> 2
current POCI Shareholders in exchange for the
cancellation of indebtedness owing from POCI
to such POCI Shareholders.
2. This Amendment may be executed in counterparts and,
as executed, shall constitute one agreement binding on all of the parties
hereto notwithstanding that all said parties are not signatory to the original
or same counterpart.
3. A facsimile, telecopy or other reproduction of this
Amendment may be executed by the parties and shall be considered valid, binding
and effective for all purposes. At the request of any party hereto, the
parties agree to execute an original of this Amendment as well as any
facsimile, telecopy or other reproduction.
4. Unless otherwise herein defined, capitalized terms
used in this Amendment shall have the same meanings as ascribed to such term in
the Agreement of Merger.
5. Except as herein amended, the Agreement of Merger
shall remain valid and subsisting in accordance with its terms. In the event
of any conflict or inconsistency between this Amendment and the Agreement of
Merger, the provisions of this Amendment shall govern and control.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
WRI/POST OAK, INC. WEINGARTEN REALTY INVESTORS
By: /s/ M. CANDACE DuFOUR By: /s/ BILL ROBERTSON JR.
________________________________ ________________________________
Name: M. Candace DuFour Name: Bill Robertson Jr.
Title: Vice President Title: Executive Vice President
2
<PAGE> 3
"B" BUILDING, INC. POST OAK CENTER, INC.
By: /s/ GAYLORD JOHNSON JR. By: /s/ MORTON L. SUSMAN
________________________________ ________________________________
Name: Gaylord Johnson Jr. Name: Morton L. Susman
Title: President Title: President
3
<PAGE> 4
POCI SHAREHOLDERS
Texas Commerce Bank, Trustee of the
Nina Susman Trust (but not in any other
capacity)
/s/ OSCAR S. WYATT, JR. By: ELLEN TIPTON
___________________________________ ____________________________________
Oscar S. Wyatt, Jr. Name: Ellen Tipton
Title: Vice President and Trust Officer
/s/ DOUGLAS WYATT, Trustee
___________________________________
Douglas Wyatt, Trustee /s/ NINA M. SUSMAN
________________________________________
Nina M. Susman
/s/ LYNN S. WYATT
___________________________________
Lynn S. Wyatt /s/ GAYLORD JOHNSON, JR.
________________________________________
Gaylord Johnson, Jr.
THE ESTATE OF ALEXANDER HART /s/ STEVEN C. GRANT, Trustee
SACKTON, DECEASED ________________________________________
Steven C. Grant, Trustee of the Gaylord
By: NationsBank of Texas, N.A., Johnson, Jr. 1979 Children's Trust
Independent Executor (But
Not in Any Other Capacity)
By: /s/ JAMES K. O'CONNELL /s/ GAIL J. SERRELL
___________________________ ________________________________________
Name: James K. O'Connell Gail J. Serrell
Title: Vice President
/s/ ROBERT T. SAKOWITZ
________________________________________
Robert T. Sakowitz
4
<PAGE> 5
B BUILDING SHAREHOLDERS
/s/ NINA M. SUSMAN THE ESTATE OF ALEXANDER HART
___________________________________ SACKTON, DECEASED
Nina M. Susman
/s/ ROBERT T. SAKOWITZ By: NationsBank of Texas, N.A.,
___________________________________ Independent Executor (But
Robert T. Sakowitz Not in Any Other Capacity)
/s/ GAYLORD JOHNSON, JR. By: /s/ JAMES K. O'CONNELL
___________________________________ _______________________________
Gaylord Johnson, Jr. Name: James K. O'Connell
Title: Vice President
/s/ GAIL J. SERRELL
________________________________________
Gail J. Serrell
5
<PAGE> 1
EXHIBIT 10.3
SECOND AMENDMENT TO AGREEMENT OF MERGER
This Second Amendment to Agreement of Merger (this
"Amendment") is entered into as of December 22, 1993, by and among WEINGARTEN
REALTY INVESTORS, a Texas real estate investment trust (hereinafter called
"WRI"), WRI/POST OAK, INC., a Texas corporation (hereinafter called "Newco")
(which is a wholly-owned subsidiary of WRI), POST OAK CENTER, INC., a Texas
corporation (hereinafter called "POCI"), "B" BUILDING, INC., a Texas
corporation (hereinafter called "B Building"), and the POCI Shareholders and B
Building Shareholders identified on the signature pages hereof.
W I T N E S S E T H:
ARTICLE I. RECITALS
WHEREAS, WRI, Newco, POCI, B Building, the POCI Shareholders,
and the B Building Shareholders have entered into that certain Agreement of
Merger, dated October 1, 1993 (the "Original Agreement");
WHEREAS, the Original Agreement was amended by that certain
First Amendment to Agreement of Merger, dated December 15, 1993 (the "First
Amendment"); and
WHEREAS, the parties hereto desire to further amend the
Original Agreement as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE II. DEFINITIONS
(a) Except as otherwise provided in this Amendment, all
terms which are defined in the Original Agreement shall, when used in this
Amendment, have the same respective meanings as are set forth for such defined
terms in the Original Agreement.
(b) All terms which are defined in Exhibit H -- Amended
(referred to below) shall have the same meanings in this Amendment as are set
forth in Exhibit H -- Amended.
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(c) The term "Amended Agreement" shall mean the Original
Agreement, as amended by the First Amendment and further amended by this
Amendment.
ARTICLE III.
EXTENSION OF INFORMATION REVIEW PERIOD AND CLOSING DATE
(a) All references to "December 15, 1993" contained in
the Original Agreement, which became references to "December 22, 1993" by
virtue of the First Amendment, shall now be amended to read "February 28,
1994," including, without limitation, the following:
(i) Section 1.3.2, relating to the date by which POCI
shall re-designate in writing the Transferred POCI Liabilities;
(ii) Section 1.5.1, relating to the date by which a
written agreement signed by all POCI Shareholders and B Building
Shareholders agreeing to the dollar amount of the Agreed Value of B
Building Stock must be submitted to Newco;
(iii) Section 2.2, relating to the deadline for Newco to
decide, in its sole discretion, whether POCI, B Building, and the
Property are satisfactory to Newco so as to proceed with the Closing,
and the deadline for Newco to deliver a written notice of termination
if it decides not to proceed with the Merger pursuant to such Section
2.2; and
(iv) Section 4.1.4, relating to the date by which POCI
shall notify Newco of the issuance of additional shares of POCI Stock
to current POCI Shareholders in exchange for the cancellation of
indebtedness owing from POCI to such POCI Shareholders;
and the First Amendment is hereby superseded and replaced, in all respects, by
this Amendment.
(b) All references to "January 31, 1994" contained in the
Original Agreement shall be amended to read "March 31, 1994," including,
without limitation, the following:
(i) Section 1.1, relating to the Closing Date; and
(ii) Section 2.6, relating to objections to title and
survey matters and the date beyond which the Closing Date may not be
extended in connection therewith.
ARTICLE IV. AMENDMENT OF PRICE INCREASE GUARANTY
The document entitled "Amended Price Increase Guaranty" which
is designated "Exhibit H -- Amended" and is attached hereto and incorporated by
reference herein for all purposes is hereby substituted for the document
entitled "Price Increase Guaranty" which was designated Exhibit "H" and was
attached to and incorporated by reference in the Original Agreement. All
references in the
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<PAGE> 3
Original Agreement to the Price Increase Guaranty or to Exhibit "H" shall be
deemed to mean and refer to the document which is entitled "Amended Price
Increase Guaranty" and is attached hereto and designated as Exhibit H --
Amended.
ARTICLE V. DIVIDEND REPAYMENT
(a) Nothing herein obligates WRI to pay any dividends
with respect to any of the Original WRI Shares (or any other shares of WRI
common stock) which are from time to time outstanding, it being recognized by
all parties that whether WRI pays any dividends and, if so, the amount thereof,
is within the sole discretion of the Board of Trust Managers of WRI. If,
however, during the Repayment Period (hereinafter defined), WRI, in its
discretion, pays any dividend with respect to its common shares, each Entitled
POCI Shareholder, Entitled B Building Shareholder, and Qualified Transferee
shall be obligated to repay to WRI an amount equal to one-half (1/2) of the
dividends paid with respect to the Original WRI Shares owned by such respective
Entitled POCI Shareholder, Entitled B Building Shareholder, or Qualified
Transferee as of the record date applicable to such dividend, in accordance
with the procedures set forth in this Article V. The dividends which are paid
on the Original WRI Shares which are owned on the applicable record dates
occurring during the Repayment Period by Entitled POCI Shareholders, Entitled B
Building Shareholders, and Qualified Transferees are referred to herein as the
"Relevant Dividends."
(b) All Relevant Dividends shall be paid in the form of
checks issued in the name of the Entitled POCI Shareholder, Entitled B Building
Shareholder, or Qualified Transferee who is the record owner of Original WRI
Shares on the relevant record date, but such checks shall be sent to Stewart
Title Company, Houston Division (the "Escrow Agent"). Upon receipt thereof,
the Escrow Agent is hereby authorized and instructed to endorse the name of the
relevant payee (the Entitled POCI Shareholder, Entitled B Building Shareholder,
or Qualified Transferee, as the case may be) upon each check received by the
Escrow Agent representing a Relevant Dividend. The Escrow Agent is further
authorized and instructed to deposit all such checks in such a non-
interest-bearing account or accounts as the Escrow Agent may, in its
discretion, elect. The Escrow Agent shall then, with reasonable promptness,
disburse an amount equal to one-half (1/2) of each Relevant Dividend so
received by the Escrow Agent to the Entitled POCI Shareholder, Entitled B
Building Shareholder, or Qualified Transferee in whose name the Relevant
Dividend check was issued, and disburse the remaining one-half (1/2) of the
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<PAGE> 4
amount of each such Relevant Dividend to WRI. In disbursing payments in
accordance with the foregoing provisions, the Escrow Agent is authorized to
mail checks representing all such payments to the appropriate recipient by
United States mail, postage prepaid, addressed to such respective recipient, in
the case of all Entitled POCI Shareholders, Entitled B Building Shareholders,
and Qualified Transferees, at such respective recipient's address as shown on
the books and records of WRI, and in the case of WRI, at 2600 Citadel Plaza
Drive, Suite 300, Houston, Texas 77008, Attention: Chairman. Each Entitled
POCI Shareholder, Entitled B Building Shareholder, and Qualified Transferee and
WRI shall have the right to change his, her, or its address for the aforesaid
purposes by giving written notice to the Escrow Agent at 2200 West Loop South,
Suite 380, Houston, Texas 77027, Attention: Ed Cutrer, sent by (i) expedited
delivery service with proof of delivery, (ii) U.S. mail with adequate postage
prepaid, as registered or certified mail, and with return receipt requested, or
(iii) facsimile transmission with confirmation, and the Escrow Agent may change
its address by giving written notice sent in one of the aforesaid manners to
the then applicable address of the relevant Entitled POCI Shareholder, Entitled
B Building Shareholder, or Qualified Transferee, or WRI.
(c) The procedures described in this Article V shall be
applicable during the Repayment Period which shall be the period that commences
on the Closing Date and terminates on whichever of the following dates is
applicable:
(i) With respect to all Original WRI Shares which are
transferred to any transferee who is not an Entitled POCI Shareholder,
an Entitled B Building Shareholder, or a Qualified Transferee by any
Entitled POCI Shareholder, Entitled B Building Shareholder, or
Qualified Transferee -- the date upon which such transfer is recorded
on the stock transfer records of WRI; and
(ii) With respect to all Original WRI Shares other than
those referred to in clause (i) immediately above -- the day following
the fourth quarterly WRI dividend record date occurring after the
Closing Date.
At such time as the Repayment Period terminates with respect to particular
Original WRI Shares pursuant to clause (i) or clause (ii) above, the escrow
arrangement established under this Article V shall terminate as to those
Original WRI Shares and all dividends subsequently paid by WRI with respect to
those Original WRI Shares shall be paid directly to the record owners of them
as reflected on the books and records of WRI on the record date applicable to
such dividends.
It is expressly understood and agreed that any Entitled POCI
Shareholder, Entitled B Building Shareholder, or Qualified Transferee who
transfers any Original WRI Shares theretofore owned
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by such respective Entitled POCI Shareholder, Entitled B Building Shareholder,
or Qualified Transferee to any transferee shall not be obligated to pay to WRI
one-half (1/2) of the Relevant Dividends that are received with respect to the
Original WRI Shares so transferred, the record date of which Relevant Dividend
occurs after the effective date of such transfer; however, if such aforesaid
transferee is himself, herself, or itself an Entitled POCI Shareholder,
Entitled B Building Shareholder, or Qualified Transferee, then such transferee
shall be obligated to refund one-half (1/2) of all dividends received by him,
her, or it with respect to the Original WRI Shares so transferred to him, her,
or it as aforesaid (as well as with respect to all other Original WRI Shares
held by such Entitled POCI Shareholder, Entitled B Building Shareholder, or
Qualified Transferee) until either clause (i) or clause (ii) above becomes
applicable. It is also recognized and agreed that pursuant to applicable
provisions of the Amended Price Increase Guaranty, the transferring Entitled
POCI Shareholder, Entitled B Building Shareholder, or Qualified Transferee
shall not be entitled to any benefits under the Amended Price Increase Guaranty
with respect to any Original WRI Shares so transferred (or with respect to any
WRI Shares owned by such respective Entitled POCI Shareholder, Entitled B
Building Shareholder, or Qualified Transferee which WRI Shares are not Original
WRI Shares).
(d) The provisions of the penultimate paragraph of
Section 1.3.2 of the Original Agreement, which entitle WRI to subtract from the
$400,000 1993 ad valorem tax obligation assumed by WRI under such provisions an
amount equal to the WRI dividends contemplated to be received by POCI
Shareholders and B Building Shareholders attributable to the fourth quarter of
1993, shall be applicable only if the Closing Date occurs prior to the record
date for the WRI dividends attributable to WRI's operations for the fourth
quarter of 1993. Conversely, if the Closing Date occurs after such record
date, the aforesaid provisions of such paragraph shall not be applicable.
ARTICLE VI. EARNEST MONEY
(a) Prior to or contemporaneously with the execution of
this Amendment, WRI will deposit into escrow, with the Escrow Agent, good funds
in the amount of $250,000, the receipt of which amount will be acknowledged by
the Escrow Agent's execution of this Amendment, and the Escrow Agent will
deposit same in such an interest-bearing account or accounts as the Escrow
Agent may, in its discretion, elect (such funds, together with all interest
earned thereon, being hereinafter called the
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"Earnest Money"). The Escrow Agent agrees to hold and disburse the Earnest
Money in accordance with the terms of this Amendment.
(b) The Earnest Money shall be paid over to POCI and B
Building jointly (to be allocated between them as they may, in their sole
discretion, agree) upon the occurrence of any of the following events:
(i) Newco exercises its right to terminate the Amended
Agreement by giving notice on or before February 28, 1994, pursuant to
the provisions of Section 2.2 of the Original Agreement, as hereby
amended;
(ii) The Merger fails to close solely by reason of a
default by WRI or Newco in any covenant contained in the Amended
Agreement and failure to cure such default within the time permitted
in Section 8.2.1 of the Original Agreement or by reason of a breach of
any representation or warranty contained in the Amended Agreement by
either WRI or Newco resulting in a termination of the Amended
Agreement by POCI or B Building pursuant to the provisions of Section
8.2.1 of the Original Agreement; provided that at such time there is
no uncured default by POCI, any POCI Shareholder, B Building, or any B
Building Shareholder and no breach of any warranty or representation
contained in the Amended Agreement by any such party and that all
conditions precedent to the obligations of WRI and Newco pursuant to
Section 6.1 and Section 6.2 of the Original Agreement shall have been
satisfied by the Closing Date; or
(iii) Any condition precedent to the obligations of POCI
and B Building as set forth in Section 6.3 of the Original Agreement
shall not have been satisfied by the Closing Date or any extension
thereof which extension results from application of the provisions of
Sections 8.2.2 and 8.2.1 of the Original Agreement.
The Earnest Money so paid over to POCI and B Building shall be considered
liquidated damages given the inconvenience and uncertainty of precisely
ascertaining the actual damages POCI and B Building will suffer on account of
the failure of the Merger to close.
(c) The Earnest Money shall be refunded to WRI upon the
occurrence of any of the following events:
(i) The closing of the Merger;
(ii) The Merger transaction fails to close by reason of a
default by POCI or any POCI Shareholder or B Building or any B
Building Shareholder in any covenant contained in the Amended
Agreement and failure to cure such default within the time permitted
in Section 8.2.1 of the Original Agreement or by reason of a breach of
any representation or warranty contained in the Amended Agreement by
any such party
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resulting in the termination of the Amended Agreement by WRI or Newco
pursuant to the provisions of Section 8.2.1 of the Original Agreement;
(iii) Any condition precedent to the obligations of WRI and
Newco relating to POCI as set forth in Section 6.1 of the Original
Agreement shall not have been satisfied by the Closing Date or any
extension thereof which extension results from application of the
provisions in Sections 8.2.2 and 8.2.1 of the Original Agreement;
(iv) Any condition precedent to the obligations of WRI and
Newco relating to B Building as set forth in Section 6.2 of the
Original Agreement shall not have been satisfied by the Closing Date
or any extension thereof which extension results from application of
the provisions in Sections 8.2.2 and 8.2.1 of the Original Agreement;
or
(v) The Amended Agreement is terminated pursuant to the
provisions of Section 3.3 of the Original Agreement.
(d) If there is not a bona fide good faith dispute as to
whether the Earnest Money should be paid over to POCI and B Building or
refunded to WRI, in accordance with the provisions of this Amendment, then
POCI, B Building, Newco, and WRI shall each confirm in writing to the Escrow
Agent to whom the Earnest Money is to be paid or refunded. In the event of any
bona fide good faith dispute as to whether the Earnest Money should be paid
over to POCI and B Building or refunded to WRI, such dispute shall be resolved
by arbitration pursuant to the provisions of Article IX of the Original
Agreement and the Earnest Money shall be paid or refunded as determined in such
arbitration.
ARTICLE VII. CONCERNING THE ESCROW AGENT
With respect to all its functions under this Amendment,
including, without limiting the generality of the foregoing, its functions
pursuant to Article V and Article VI, the following provisions shall apply:
(a) The Escrow Agent may act in reliance upon any
instrument or signature believed to be genuine and may assume that any person
purporting to give any writing, notice, advice, or instruction in connection
with the provisions hereof has been duly authorized to do so.
(b) The Escrow Agent shall have no responsibility for the
contents of any writing of the arbitrators contemplated herein and may rely
without any liability upon the contents thereof.
(c) The Escrow Agent may act relative hereto upon advice
of counsel in reference to any matter connected herewith, and shall not be
liable for any mistake of fact or error of judgment, or for any acts or
omissions of any kind unless caused by its wilful misconduct or gross
negligence.
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(d) The Escrow Agent is not a participant in or
beneficiary of the Merger or any aspect of it, and shall have no duty to
inquire beyond the terms and provisions of this Amendment.
(e) This Amendment sets forth exclusively the duties of
the Escrow Agent with respect to any and all matters pertinent hereto, all of
which are purely ministerial in nature, and no implied duties or obligations
shall be read into this Amendment against the Escrow Agent.
(f) WRI agrees to pay the Escrow Agent compensation for
its services in such amount as has been agreed upon by WRI and the Escrow
Agent, and further, WRI agrees to reimburse the Escrow Agent for all reasonable
expenses, disbursements, and advances incurred or made by the Escrow Agent in
performance of its duties hereunder (including reasonable fees, expenses, and
disbursements of its counsel).
(g) The Escrow Agent shall not be responsible or liable
in any manner whatsoever for the sufficiency, correctness, genuineness, or
validity of the subject matter of this Amendment or any part hereof or for the
transaction or transactions requiring or underlying the execution of this
Amendment, the form or execution hereof, or for the identity or authority of
any person executing this Amendment or any part hereof or depositing any sums
in connection herewith.
(h) In the event of any disagreement between any of the
parties to the Amendment, or between them or any of them and any other person,
resulting in adverse claims or demands being made in connection with the
subject matter of the escrow, or in the event that the Escrow Agent in good
faith, be in doubt as to what action it should take hereunder, or if a
substitute escrow agent is not designated as provided in subparagraph (i)
below, the Escrow Agent may, at its option, refuse to comply with any claims or
demands on it, or refuse to take any other action hereunder, so long as such
disagreement continues or such doubt exists or such substitute is not
designated, and in any such event, the Escrow Agent shall not be or become
liable in any way or to any person for its failure or refusal to act, and the
Escrow Agent shall be entitled to continue so to refrain from acting until (i)
the rights of all parties shall have been fully and finally adjudicated by a
court of competent jurisdiction, (ii) all differences shall have been adjusted
and all doubt resolved by agreement among all of the interested persons or
(iii) such substitute has been designated, and the Escrow Agent shall have been
notified thereof in writing signed by all such persons. In addition to its
foregoing rights, under the circumstances described above, the Escrow Agent may
tender into the registry of the District Court of Harris County, Texas, for any
judicial district, the Earnest Money or any other funds which the Escrow Agent
then holds by a bill in
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interpleader and upon the filing of such bill and the deposit of the Earnest
Money or other funds into the registry of such court, the Escrow Agent shall be
relieved of any further obligation with respect to such Earnest Money or such
other funds. The rights of the Escrow Agent under this paragraph are
cumulative of all other rights which it may have by law or otherwise.
(i) The Escrow Agent may resign hereunder upon ten (10)
days' prior notice to WRI, Newco, POCI, and B Building, and upon the effective
date of such resignation, the Escrow Agent shall deliver all sums then on
deposit with it pursuant to this Amendment to any substitute escrow agent
designated by WRI, Newco, POCI, and B Building, in writing. If such parties
fail to designate a substitute escrow agent within ten (10) days after the
giving of such notice, the Escrow Agent may institute a petition for
interpleader. The Escrow Agent's sole responsibility after such ten (10)-day
notice period shall be to hold the sums then on deposit with it pursuant to
this Amendment and to deliver same to a designated substitute escrow agent, if
any, or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction or arbitrators, at which time, the Escrow
Agent's obligations hereunder shall cease and terminate.
(j) WRI, Newco, POCI, and B Building and the POCI
Shareholders and B Building Shareholders hereby jointly and severally indemnify
the Escrow Agent, its officers, directors, partners, employees, and agents
against, and hold each such indemnified party harmless from, any and all
expenses, losses, damages, and claims, including, without limitation,
reasonable costs of investigation, litigation, and arbitration, tax liability,
and loss on investments, incurred by any such indemnified party in connection
with or arising out of this Amendment, except such acts or omissions as may
result from the willful misconduct or gross negligence of such indemnified
party.
ARTICLE VIII. MISCELLANEOUS
(a) This Amendment, including Exhibit H -- Amended, which
is attached hereto together with the Original Agreement, the Schedules referred
to in Section 4.1.2 and Section 4.3.2 of the Original Agreement and the
Exhibits attached to the Original Agreement (other than the Exhibit "H"
attached thereto) constitute the entire agreement between the parties relating
to the subject matter hereof and they are in full force and effect and valid
and subsisting in accordance with their terms. No other written agreements
(other than as aforesaid), and no prior or contemporaneous oral promises or
representations shall be binding, it being intended that this Amendment
(including Exhibit H -- Amended)
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and the Original Agreement (including the aforesaid Schedules and Exhibits)
merge all other prior and contemporaneous promises and representations.
(b) The Amended Agreement shall not be amended or changed
except by a written instrument signed by all undersigned parties, except that
an amendment which does not affect the obligations or rights of the Escrow
Agent shall be effective if executed by all of the undersigned parties other
than the Escrow Agent.
(c) This Amendment may be executed in counterparts and,
as executed, shall constitute one agreement binding on all of the parties
hereto notwithstanding that all said parties are not signatory to the original
or same counterpart.
(d) A facsimile, telecopy, or other reproduction of this
Amendment may be executed by the parties and shall be considered valid,
binding, and effective for all purposes. At the request of any party hereto,
the parties agree to execute an original of this Amendment as well as any
facsimile, telecopy, or other reproduction.
(e) In the event of any conflict or inconsistency between
this Amendment and either the Original Agreement or the First Amendment, the
provisions of this Amendment shall govern and control.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
WEINGARTEN REALTY INVESTORS POST OAK CENTER, INC.
By: /s/ BILL ROBERTSON, JR. By: /s/ MORTON L. SUSMAN
________________________________ ____________________________________
Name: Bill Robertson, Jr. Name: Morton L. Susman
Title: Executive Vice President Title: President
"WRI" "POCI"
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WRI/POST OAK, INC. "B" BUILDING, INC.
By: /s/ M. CANDACE DuFOUR By: /s/ GAYLORD JOHNSON JR.
________________________________ __________________________________
Name: M. Candace DuFour Name: Gaylord Johnson Jr.
Title: Vice President Title: President
"Newco" "B Building"
STEWART TITLE COMPANY,
HOUSTON DIVISION
By: /s/ MARY T. RITCHIE
________________________________
Name: Mary T. Ritchie
Title: Commercial Escrow Officer
"Escrow Agent"
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POST OAK CENTER, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of Post Oak Center, Inc., and hereby consents to the foregoing
Second Amendment to Agreement of Merger.
TEXAS COMMERCE BANK, TRUSTEE OF THE
/s/ OSCAR S. WYATT, JR. NINA SUSMAN TRUST (BUT NOT IN ANY OTHER
___________________________________ CAPACITY)
Oscar S. Wyatt, Jr.
By: /s/ ELLEN TIPTON
/s/ DOUGLAS WYATT, Trustee ____________________________________
___________________________________ Name: Ellen Tipton
Douglas Wyatt, Trustee Title: Vice President and Trust Officer
/s/ LYNN S. WYATT /s/ NINA M. SUSMAN
____________________________ ________________________________________
Lynn S. Wyatt Nina M. Susman
THE ESTATE OF ALEXANDER HART /s/ GAYLORD JOHNSON, JR.
SACKTON, DECEASED ________________________________________
Gaylord Johnson, Jr.
BY: NATIONSBANK OF TEXAS, N.A., /s/ STEVEN C. GRANT, Trustee
INDEPENDENT EXECUTOR (BUT NOT IN ________________________________________
ANY OTHER CAPACITY) STEVEN C. GRANT, TRUSTEE OF THE GAYLORD
JOHNSON, JR. 1979 CHILDREN'S TRUST
By: /S/ JAMES K. O'CONNELL /s/ GAIL J. SERRELL
_______________________________ ________________________________________
Name: James K. O'Connell Gail J. Serrell
Title: Vice President
/s/ ROBERT T. SAKOWITZ
________________________________________
Robert T. Sakowitz
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"B" BUILDING, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of B Building, Inc., and hereby consents to the foregoing Second
Amendment to Agreement of Merger.
/s/ NINA M. SUSMAN THE ESTATE OF ALEXANDER HART SACKTON,
____________________________________ DECEASED
Nina M. Susman
/s/ ROBERT T. SAKOWITZ BY: NATIONSBANK OF TEXAS, N.A.,
____________________________________ INDEPENDENT EXECUTOR (BUT NOT IN ANY
Robert T. Sakowitz OTHER CAPACITY)
/s/ GAYLORD JOHNSON, JR.
____________________________________
Gaylord Johnson, Jr. By: /s/ JAMES K. O'CONNELL
___________________________________
Name: James K. O'Connell
Title: Vice President
/s/ GAIL J. SERRELL
_______________________________________
Gail J. Serrell
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EXHIBIT 10.4
THIRD AMENDMENT TO AGREEMENT OF MERGER
This Third Amendment to Agreement of Merger (this "Amendment")
is entered into as of February 28, 1994, by and among WEINGARTEN REALTY
INVESTORS, a Texas real estate investment trust (hereinafter called "WRI"),
WRI/POST OAK, INC., a Texas corporation (hereinafter called "Newco") (which is
a wholly-owned subsidiary of WRI), POST OAK CENTER, INC., a Texas corporation
(hereinafter called "POCI"), "B" BUILDING, INC., a Texas corporation
(hereinafter called "B Building"), and the POCI Shareholders and B Building
Shareholders identified on the signature pages hereof.
W I T N E S S E T H:
ARTICLE I. RECITALS
WHEREAS, WRI, Newco, POCI, B Building, the POCI Shareholders,
and the B Building Shareholders have entered into that certain Agreement of
Merger, dated October 1, 1993 (the "Original Agreement");
WHEREAS, the Original Agreement was amended by that certain
First Amendment to Agreement of Merger, dated December 15, 1993 (the "First
Amendment") and was further amended by that certain Second Amendment to
Agreement of Merger dated December 22, 1993 (the "Second Amendment"); and
WHEREAS, the parties hereto desire to further amend the
Original Agreement as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE II. DEFINITIONS
(a) Except as otherwise provided in this Amendment, all
terms which are defined in the Original Agreement and the Second Amendment
shall, when used in this Amendment, have the same
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respective meanings as are set forth for such defined terms in the Original
Agreement and the Second Amendment.
(b) The term "Amended Agreement" shall mean the Original
Agreement, as amended by the First Amendment and the Second Amendment and as
further amended by this Amendment.
ARTICLE III.
EXTENSION OF INFORMATION REVIEW PERIOD AND CLOSING DATE
(a) All references to "December 15, 1993" contained in
the Original Agreement, which became references to "December 22, 1993" by
virtue of the First Amendment, and became references to February 28, 1994 by
virtue of the Second Amendment, shall now be amended to read March 31, 1994,"
and, if WRI makes the Second Supplemental Earnest Money Deposit (as defined in
Article IV of this Amendment), shall be further amended to read "April 30,
1994." The provisions of the Original Agreement in which the aforesaid
date-changes shall be made include, without limitation, the following:
(i) Section 1.3.2, relating to the date by which POCI
shall re-designate in writing the Transferred POCI Liabilities;
(ii) Section 1.5.1, relating to the date by which a
written agreement signed by all POCI Shareholders and B Building
Shareholders agreeing to the dollar amount of the Agreed Value of B
Building Stock must be submitted to Newco;
(iii) Section 2.2, relating to the deadline for Newco to
decide, in its sole discretion, whether POCI, B Building, and the
Property are satisfactory to Newco so as to proceed with the Closing,
and the deadline for Newco to deliver a written notice of termination
if it decides not to proceed with the Merger pursuant to such Section
2.2; and
(iv) Section 4.1.4, relating to the date by which POCI
shall notify Newco of the issuance of additional shares of POCI Stock
to current POCI Shareholders in exchange for the cancellation of
indebtedness owing from POCI to such POCI Shareholders.
(b) All references to "January 31, 1994" contained in the
Original Agreement which became references to "March 31, 1994" by virtue of the
Second Amendment, shall now be amended to read "April 30, 1994," and, if WRI
makes the Second Supplemental Earnest Money Deposit (as defined in Article IV
of this Amendment), shall be further amended to read "May 31, 1994." The
provisions of the Original Agreement in which the aforesaid date-changes shall
be made include, without limitation, the following:
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(i) Section 1.1, relating to the Closing Date; and
(ii) Section 2.6, relating to objections to title and
survey matters and the date beyond which the Closing Date may not be
extended in connection therewith.
ARTICLE IV. EARNEST MONEY
(a) Prior to or contemporaneously with the execution of
this Amendment, WRI will deposit into escrow, with the Escrow Agent, good funds
in the amount of $125,000 (the "First Supplemental Earnest Money Deposit"), the
receipt of which amount will be acknowledged by the Escrow Agent's execution of
this Amendment.
(b) WRI shall have the option, in its sole discretion, to
make a further deposit into escrow, with the Escrow Agent, of good funds in the
amount of $125,000 (the "Second Supplemental Earnest Money Deposit") at any
time on or before March 31, 1994, the receipt of which Second Supplemental
Earnest Money Deposit (if such deposit is made) will be acknowledged by the
Escrow Agent's execution of a document substantially in the form of Exhibit Z
which is attached hereto and incorporated by reference for all purposes. In
the event that WRI makes the Second Supplemental Earnest Money Deposit, the
date March 31, 1994 shall be amended to read "April 30, 1994," as more
particularly provided in Article III(a) of this Amendment, and the date April
30, 1994 shall be amended to read "May 31, 1994," as more particularly provided
in Article III(b) of this Amendment.
(c) The First Supplemental Earnest Money Deposit and the
Second Supplemental Earnest Money Deposit (if such latter deposit is made)
shall constitute additional Earnest Money and, as such, shall be deposited,
held, paid over to POCI and B Building or refunded to WRI in the same manner
and under the same terms and conditions as are applicable to the original
Earnest Money which was deposited with the Escrow Agent pursuant to the
provisions of the Second Amendment. Further, all provisions of Article VII of
the Second Amendment concerning the Escrow Agent shall apply with respect to
the Escrow Agent's handling of the First Supplemental Earnest Money Deposit and
the Second Supplemental Earnest Money Deposit (if such latter deposit is made).
ARTICLE V. MISCELLANEOUS
(a) This Amendment, including Exhibit Z, which is
attached hereto together with the Original Agreement, the Schedules referred to
in Section 4.1.2 and Section 4.3.2 of the Original
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Agreement and the Exhibits attached to the Original Agreement (other than the
Exhibit H attached thereto) and the Second Amendment, including Exhibit H --
Amended, which is attached thereto, constitute the entire agreement between the
parties relating to the subject matter hereof, and they are in full force and
effect and valid and subsisting in accordance with their terms. No other
written agreements (other than as aforesaid), and no prior or contemporaneous
oral promises or representations shall be binding, it being intended that this
Amendment (including Exhibit Z) and the Original Agreement (including the
aforesaid Schedules and Exhibits) and the Second Amendment (including Exhibit H
- -- Amended) merge all other prior and contemporaneous promises and
representations relating to the mergers described in such documents.
Contemporaneously with the execution of the Second Amendment, WRI made a loan
to POCI and B Building subordinated its rights as lessee under a lease to the
liens securing the loan made by WRI. Contemporaneously with execution of this
Amendment, WRI and POCI are modifying certain provisions of such
first-mentioned loan, and WRI is making an additional loan to POCI, and B
Building is subordinating its aforesaid rights as lessee to the revisions made
in such first loan and to liens securing such second loan. The loan documents
relating to such loans, including, without limitation, those referred to in
Exhibit X, which is attached hereto and incorporated by reference herein, are
not merged in this Amendment, and such loan documents are in full force and
effect and valid and subsisting in accordance with their terms.
(b) The Amended Agreement shall not be amended or changed
except by a written instrument signed by all undersigned parties, except that
an amendment which does not affect the obligations or rights of the Escrow
Agent shall be effective if executed by all of the undersigned parties other
than the Escrow Agent.
(c) This Amendment may be executed in counterparts and,
as executed, shall constitute one agreement binding on all of the parties
hereto notwithstanding that all said parties are not signatory to the original
or same counterpart.
(d) A facsimile, telecopy, or other reproduction of this
Amendment may be executed by the parties and shall be considered valid,
binding, and effective for all purposes. At the request of any party hereto,
the parties agree to execute an original of this Amendment as well as any
facsimile, telecopy, or other reproduction.
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(e) In the event of any conflict or inconsistency between
this Amendment and either the Original Agreement or the First Amendment or the
Second Amendment, the provisions of this Amendment shall govern and control.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
WEINGARTEN REALTY INVESTORS POST OAK CENTER, INC.
By: /s/ STANFORD ALEXANDER By: /s/ MORTON L. SUSMAN
__________________________________ __________________________________
Name: Stanford Alexander Name: Morton L. Susman
Title: Chairman/CEO Title: President
"WRI" "POCI"
WRI/POST OAK, INC. "B" BUILDING, INC.
By: /s/ STANFORD ALEXANDER By: /s/ GAYLORD JOHNSON JR.
__________________________________ __________________________________
Name: Stanford Alexander Name: Gaylord Johnson Jr.
Title: Chairman/CEO Title: President
"Newco" "B Building"
STEWART TITLE COMPANY,
HOUSTON DIVISION
By: /s/ EDWARD S. CUTRER
__________________________________
Name: Edward S. Cutrer
Title: Senior Vice President
"Escrow Agent"
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POST OAK CENTER, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of Post Oak Center, Inc., and hereby consents to the foregoing
Third Amendment to Agreement of Merger.
TEXAS COMMERCE BANK, TRUSTEE OF THE
/s/ OSCAR S. WYATT, JR. NINA SUSMAN TRUST (BUT NOT IN
_____________________________________ ANY OTHER CAPACITY)
Oscar S. Wyatt, Jr.
/s/ DOUGLAS WYATT, Trustee By: /s/ ELLEN TIPTON
_____________________________________ ___________________________________
Douglas Wyatt, Trustee Name: Ellen Tipton
Title: Vice President and Trust Officer
/s/ LYNN S. WYATT /s/ NINA M. SUSMAN
_____________________________________ ________________________________________
Lynn S. Wyatt Nina M. Susman
THE ESTATE OF ALEXANDER HART /s/ GAYLORD JOHNSON, JR.
SACKTON, DECEASED ________________________________________
Gaylord Johnson, Jr.
BY: NATIONSBANK OF TEXAS, N.A.,
INDEPENDENT EXECUTOR (BUT NOT IN ANY /s/ STEVEN C. GRANT, Trustee
OTHER CAPACITY) ________________________________________
Steven C. Grant, Trustee of the Gaylord
Johnson, Jr. 1979 Children's Trust
By: /s/ JAMES K. O'CONNELL
_____________________________________ /s/ GAIL J. SERRELL
Name: James K. O'Connell ________________________________________
Title: Vice President Gail J. Serrell
/s/ ROBERT T. SAKOWITZ
________________________________________
Robert T. Sakowitz
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"B" BUILDING, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of B Building, Inc., and hereby consents to the foregoing Third
Amendment to Agreement of Merger.
/s/ NINA M. SUSMAN THE ESTATE OF ALEXANDER HART SACKTON,
___________________________________ DECEASED
Nina M. Susman
/s/ ROBERT T. SAKOWITZ BY: NATIONSBANK OF TEXAS, N.A.,
___________________________________ INDEPENDENT EXECUTOR (BUT NOT IN ANY
Robert T. Sakowitz OTHER CAPACITY)
/s/ GAYLORD JOHNSON, JR.
___________________________________
Gaylord Johnson, Jr. By: /s/ JAMES K. O'CONNELL
___________________________________
Name: James K. O'Connell
Title: Vice President
/s/ GAIL J. SERRELL
________________________________________
Gail J. Serrell
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EXHIBIT 10.5
FOURTH AMENDMENT TO AGREEMENT OF MERGER
This Fourth Amendment to Agreement of Merger (this
"Amendment") is entered into as of May 31, 1994, by and among WEINGARTEN REALTY
INVESTORS, a Texas real estate investment trust (hereinafter called "WRI"),
WRI/POST OAK, INC., a Texas corporation (hereinafter called "Newco") (which is
a wholly-owned subsidiary of WRI), POST OAK CENTER, INC., a Texas corporation
(hereinafter called "POCI"), "B" BUILDING, INC., a Texas corporation
(hereinafter called "B Building"), and the POCI Shareholders and B Building
Shareholders identified on the signature pages hereof.
W I T N E S S E T H:
ARTICLE I. RECITALS
WHEREAS, WRI, Newco, POCI, B Building, the POCI Shareholders,
and the B Building Shareholders have entered into that certain Agreement of
Merger, dated October 1, 1993 (the "Original Agreement");
WHEREAS, the Original Agreement was amended by that certain
First Amendment to Agreement of Merger, dated December 15, 1993 (the "First
Amendment") and was further amended by that certain Second Amendment to
Agreement of Merger dated December 22, 1993 (the "Second Amendment") and that
certain Third Amendment to Agreement of Merger dated February 28, 1994 (the
"Third Amendment"); and
WHEREAS, the parties hereto desire to further amend the
Original Agreement as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE II. DEFINITIONS
(a) Except as otherwise provided in this Amendment, all
terms which are defined in the Original Agreement, the Second Amendment and the
Third Amendment shall, when used in this
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Amendment (the "Fourth Amendment"), have the same respective meanings as are
set forth for such defined terms in the Original Agreement, the Second
Amendment and the Third Amendment.
(b) The term "Amended Agreement" shall mean the Original
Agreement, as amended by the First Amendment, the Second Amendment, the Third
Amendment and this Fourth Amendment.
ARTICLE III. AGREED POCI CONSIDERATION,
AGREED B BUILDING CONSIDERATION AND OWNER'S TITLE POLICY
(a) The first sentence of Section 1.3.1 of the Original
Agreement, which defines the term "Agreed POCI Consideration," is hereby
amended to read as follows:
"AGREED POCI CONSIDERATION" means (i) that number of shares of
beneficial interest of WRI ("WRI Shares") determined as follows: (a)
the "Agreed Value of POCI Stock" (hereinafter defined) shall be
divided by the total number of POCI Shares owned by all POCI
Shareholders in the aggregate; (b) the quotient obtained in clause (a)
shall be multiplied by the number of POCI Shares owned by the relevant
POCI Shareholder on the Closing Date; and (c) the result obtained from
the calculation in clause (b) shall be divided by the WRI Per Share
Value (hereinafter defined), and the number thus obtained shall be
rounded to the nearest lesser whole number if the number of WRI Shares
thus calculated is not a whole number, plus, (ii) if the number of WRI
Shares calculated pursuant to clause (i) of this Section 1.3.1, prior
to rounding in accordance with said clause (i), is not a whole number,
an amount of cash equal to the fraction remaining after subtracting
the calculated rounded whole number from the calculated number prior
to rounding multiplied by the WRI Per Share Value, which cash amount
shall, in turn, be rounded to the nearest one hundredth (1/100th)
dollar.
(b) Section 1.5.1 of the Original Agreement, relating to
Agreed B Building Consideration, shall be revised in the following two ways:
(i) The first sentence thereof, which defines the term
"Agreed B Building Consideration" is hereby amended to read as
follows:
"AGREED B BUILDING CONSIDERATION" means (i) that
number of WRI Shares determined as follows: (a) the "Agreed
Value of B Building Stock" (hereinafter defined) shall be
divided by the total number of B Building Shares owned by all
B Building Shareholders in the aggregate; (b) the quotient
obtained in clause (a) shall be multiplied by the number of B
Building Shares owned by the relevant B Building Shareholder
on the Closing Date; and (c) the result obtained from the
calculation in clause (b) shall be divided by the WRI Per
Share Value, and the number thus obtained shall be rounded to
the nearest lesser whole number if the number of WRI Shares
thus calculated is not a whole number, plus, (ii) if the
number of WRI Shares calculated pursuant to clause (i) of this
Section 1.5.1, prior to rounding in accordance with said
clause (i), is not
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a whole number, an amount of cash equal to the fraction
remaining after subtracting the calculated rounded whole
number from the calculated number prior to rounding multiplied
by the WRI Per Share Value, which cash amount shall, in turn,
be rounded to the nearest one hundredth (1/100th) dollar.
(ii) The term "Agreed Value of B Building Stock" contained
in the last sentence of Section 1.5.1 is hereby amended to read as
follows:
The term "Agreed Value of B Building Stock" shall
mean a dollar amount agreed to in writing by all POCI
Shareholders and all B Building Shareholders which written
agreement is delivered to Newco and WRI not later than April
30, 1994, less the Transferred B Building Liabilities;
provided that the amount so agreed upon shall be such that the
total of (w) the Agreed Value of POCI Stock plus (x) the
amount of the Transferred POCI Liabilities plus (y) the Agreed
Value of the B Building Stock plus (z) the amount of the
Transferred B Building Liabilities shall exactly equal $15
Million.
(c) The amount of the Owner's Title Policy required to be
delivered by POCI and B Building pursuant to the provisions of Section 3.2.1
(ii) shall be revised by deleting the phrase "an amount equal to the sum of the
Agreed Value of POCI Stock and the Agreed Value of B Building Stock" and
inserting in lieu thereof the phrase "an amount equal to the product of the
total number of WRI Shares issued to POCI Shareholders and "B" Building
Shareholders on the Closing Date multiplied by the per share closing price on
the New York Stock Exchange of WRI Shares on the day before the Closing Date.
ARTICLE IV.
EXTENSION OF CLOSING DATE
(a) All references to "January 31, 1994" contained in the
Original Agreement, which became references to "March 31, 1994" by virtue of
the Second Amendment, and which thereafter became references to "April 30,
1994" (upon deposit of the First Supplemental Earnest Money Deposit) and to
"May 31, 1994" (upon deposit of the Second Supplemental Earnest Money Deposit),
both by virtue of the Third Amendment, are now hereby amended to read "July 8,
1994." The provisions of the Original Agreement in which the aforesaid
date-changes shall be made include, without limitation, the following:
(i) Section 1.1, relating to the Closing Date; and
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<PAGE> 4
(ii) Section 2.6, relating to objections to title and
survey matters and the date beyond which the Closing Date may not be
extended in connection therewith.
(b) The extension of the Closing Date which is effected
pursuant to subparagraph (a) of this Article IV has been agreed to by the
undersigned parties in order to allow POCI and B Building additional time to
fulfill certain conditions precedent to the obligations of WRI and Newco to
close the transactions contemplated by the Amended Agreement which conditions
have not heretofore been fulfilled, specifically including the conditions
precedent referred to in Sections 6.2.1 (with specific reference to Section
4.3.17) 6.2.2 (with specific reference to Section 5.3.1), 6.2.8, 6.2.11 and
6.2.13 of the Original Agreement. The non-fulfillment of such conditions
precedent has resulted from the facts that: (i) B Building has been unable to
deliver the estoppel certificates required by Section 6.2.13 of the Original
Agreement; (ii) certain of the tenants under the Tenant Leases are contesting
the effectiveness of the termination notices sent by B Building to such
tenants; and (iii) such tenants failed to vacate their respective premises by
May 29, 1994. It shall be conditions precedent to the obligations of WRI and
Newco under the Amended Agreement that: on or prior to noon on June 30, 1994
all tenants under the Tenant Leases shall have vacated their respective leased
premises; no tenant shall be asserting any claim or cause of action against
POCI and/or B Building either with respect to its respective Tenant Leases or
otherwise, or, alternatively, that POCI and "B" Building shall have furnished
to WRI and Newco indemnity agreements with respect to such claims and causes of
action which indemnity agreements are satisfactory to WRI and Newco in their
exclusive discretion; and on the Closing Date (as hereby revised) all
conditions precedent to the obligations of WRI and Newco under the Amended
Agreement (other than the requirement set forth in Section 6.2.13 that B
Building deliver updated estoppel certificates, which requirement is waived as
to any tenant under the Tenant Leases who shall have vacated its leased
premises on or prior to the Closing Date) shall have been fulfilled, including
the conditions precedent referred to in this subparagraph (b) which are not
expressly waived herein.
ARTICLE V. SETTLEMENT CONTRIBUTION; REIMBURSEMENT OBLIGATIONS
(a) Reference is made for all purposes to the Second
Amended Price Increase Guaranty dated June 30, 1994 by and between WRI,
WRI/Post Oak, Inc., the Entitled POCI Shareholders and the Entitled B Building
Shareholders therein identified. All terms which are defined in the Second
Amended Price Increase Guaranty shall have the same respective meanings herein,
as are set forth in the Second Amended Price Increase Guaranty.
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<PAGE> 5
(b) WRI and WRI/Post Oak, Inc. are jointly deemed to have
made a contribution to B Building and POCI in the amount of $170,689.25 (the
"Tentative Settlement Contribution") by virtue of the following: (i) the
payment to B Building, shortly before Closing, of the sum of $4,168.96 and the
payment to POCI shortly before Closing of the sum of $73,763.29 (the aggregate
of such payments being $77,932.25), the receipt of which is hereby acknowledged
by B Building and POCI; (ii) the fact that WRI and WRI/Post Oak, Inc. have not
required B Building and POCI to pay $35,753.00 toward 1994 real estate taxes
for the Property (estimated to be the amount of 1994 taxes applicable to the
month of June, 1994, but which amount is not subject to adjustment, regardless
of the actual amount of such 1994 taxes); (iii) the fact that WRI has not
required the Entitled POCI Shareholders and Entitled B Building Shareholders
who will receive Original WRI Shares at the Closing to refund to WRI $57,004,
which represents one-third (1/3) of the estimated first quarterly dividend
after Closing which such Entitled POCI Shareholders and Entitled B Building
Shareholders will receive (which refund, if required, would be in addition to
the refund by such shareholders of one-half (1/2) of the first four quarterly
dividends received after Closing which such shareholders are already obligated
to refund to WRI pursuant to the provisions of the Third Amendment). The
Tentative Settlement Contribution shall be adjusted upward by the amount, if
any, by which one-third (1/3) of the first quarterly dividend payable with
respect to all Original WRI Shares issued to Entitled POCI Shareholders and
Entitled B Building Shareholders at the Closing exceeds the estimated divided
amount referred to in (iii) above or will be reduced by the amount, if any, by
which such actual dividend is less than such estimated dividend referred to in
clause (iii) above. The Tentative Settlement Contribution, as so adjusted, is
referred to herein as the Final Settlement Contribution. Attached hereto as
Exhibit I is a list of Entitled POCI Shareholders and Entitled B Building
Shareholders, with a percentage figure stated opposite the name of each such
Shareholder, which percentage corresponds to the percentage of Original WRI
Shares being issued to such respective Shareholder at the Closing (the
"Applicable Percentage"). The dollar amount which is calculated by multiplying
the Final Settlement Contribution by the Applicable Percentage listed on
Exhibit I is referred to as the Potential Reimbursement Obligation of each
respective Entitled POCI Shareholder and each Entitled B Building Shareholder
listed in Exhibit I.
(c) If the Tentative Settlement Contribution is adjusted
either upward or downward, as aforesaid, WRI, WRI/Post Oak and Morton Susman
will sign a memorandum confirming the amount of the Final Settlement
Contribution which shall have resulted from such adjustment. The execution of
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such Memorandum by Morton Susman shall be final and binding on all Entitled
POCI Shareholders and all Entitled B Building Shareholders. Each Entitled POCI
Shareholder and each Entitled B Building Shareholder hereby irrevocably names
and appoints Morton Susman as his, her or its agent and attorney-in-fact with
full power to execute any such Memorandum within the judgment of said agent and
attorney-in-fact; this power shall be deemed to be a power coupled with an
interest. Exhibit I also shows the number of Original WRI shares issued to
each respective Entitled POCI Shareholder and each respective Entitled B
Building Shareholder (the "Relevant Share Number").
(d) If the Twenty-Four Month Market Price exceeds the
total of (i) $38.00 plus (ii) the per share Guaranteed B Building 24-Month
Increase (the positive difference, if any, between the total of clauses (i) and
(ii) and the Twenty-Four Month Market Price being herein referred to as the
"Twenty-Four Month Per Share B Building Excess"), and if WRI does not exercise
its option to extend the Test Period for the First Extension Period, then each
Entitled B Building Shareholder shall be obligated to pay to WRI an amount
equal to the product of the Twenty-Four Month Per Share B Building Excess
multiplied by the Relevant Share Number (applicable to such Entitled B Building
Shareholder), but not in excess of the Potential Reimbursement Obligation
applicable to such Entitled B Building Shareholder.
(e) If the Thirty Month Market Price exceeds the total of
(i) $38.00 plus (ii) the per share Guaranteed B Building 30-Month Increase (the
positive difference, if any, between the total of clauses (i) and (ii) and the
Thirty Month Market Price being herein referred to as the "Thirty Month Per
Share B Building Excess"), and if WRI does not exercise its option to extend
the Test Period for the Second Extension Period, then each Entitled B Building
Shareholder shall be obligated to pay to WRI an amount equal to the product of
the Thirty Month Per Share B Building Excess multiplied by the Relevant Share
Number (applicable to such Entitled B Building Shareholder), but not in excess
of the Potential Reimbursement Obligation applicable to such Entitled B
Building Shareholder.
(f) If the Thirty-Six Month Market Price exceeds the
total of (i) $38.00 plus (ii) the per share Guaranteed B Building 36-Month
Increase (the positive difference, if any, between the total of clauses (i) and
(ii) and the Thirty-Six Month Market Price being herein referred to as the
"Thirty-Six Month Per Share B Building Excess"), then each Entitled B Building
Shareholder shall be obligated to pay to WRI an amount equal to the product of
the Thirty-Six Month Per Share B Building Excess multiplied by the Relevant
Share Number (applicable to such Entitled B Building Shareholder), but not
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in excess of the Potential Reimbursement Obligation applicable to such Entitled
B Building Shareholder.
(g) If the Twenty-Four Month Market Price exceeds the
total of (i) $38.00 plus (ii) the per share Guaranteed POCI 24-Month Increase
(the positive difference, if any, between the total of clauses (i) and (ii) and
the Twenty-Four Month Market Price being herein referred to as the "Twenty-Four
Month Per Share POCI Excess"), and if WRI does not exercise its option to
extend the Test Period for the First Extension Period, then each Entitled POCI
Shareholder shall be obligated to pay to WRI an amount equal to the product of
the Twenty-Four Month Per Share POCI Excess multiplied by the Relevant Share
Number (applicable to such Entitled POCI Shareholder), but not in excess of the
Potential Reimbursement Obligation applicable to such Entitled POCI
Shareholder.
(h) If the Thirty-Month Market Price exceeds the total of
(i) $38.00 plus (ii) the per share Guaranteed POCI 30-Month Increase (the
positive difference, if any, between the total of clauses (i) and (ii) and the
Thirty Month Market Price being herein referred to as the "Thirty Month Per
Share POCI Excess"), and if WRI does not exercise its option to extend the Test
Period for the Second Extension Period, then each Entitled POCI Shareholder
shall be obligated to pay to WRI an amount equal to the product of the Thirty
Month Per Share POCI Excess multiplied by the Relevant Share Number (applicable
to such Entitled POCI Shareholder), but not in excess of the Potential
Reimbursement Obligation applicable to such Entitled POCI Shareholder.
(i) If the Thirty-Six Month Market Price exceeds the
total of (i) $38.00 plus (ii) the per share Guaranteed POCI 36-Month Increase
(the positive difference, if any, between the total of clauses (i) and (ii) and
the Thirty-Six Month Market Price being herein referred to as the "Thirty-Six
Month Per Share POCI Excess"), then each Entitled POCI Shareholder shall be
obligated to pay to WRI an amount equal to the product of the Thirty-Six Month
Per Share POCI Excess multiplied by the Relevant Share Number (applicable to
such Entitled POCI Shareholder), but not in excess of the applicable Potential
Reimbursement Obligation.
(j) The Potential Reimbursement Obligation of the
Entitled B Building Shareholders and the Entitled POCI Shareholders shall not
accrue following expiration of the thirty-sixth (36th) full calendar month
following the Closing Date, but any Potential Reimbursement Obligation
liability which accrues through and including the periods referred to in
Paragraphs (d) through (i) inclusive of this Article V shall continue to be
enforceable until fully paid and discharged.
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(k) The obligation of each Entitled POCI Shareholder and
each Entitled B Building Shareholder to pay up to his, her or its respective
Potential Reimbursement Obligation in the circumstances stated in this Article
shall continue in full force and effect notwithstanding the fact that such
respective Entitled POCI Shareholder and Entitled B Building Shareholder shall
have transferred or disposed of all or any portion of the Original WRI Shares
issued to such Entitled POCI Shareholder or Entitled B Building Shareholder.
All amounts payable by any Entitled POCI Shareholder or any Entitled B Building
Shareholder pursuant to the provisions of this Article shall be payable, in
cash, at the offices of Weingarten Realty Investors, 2600 Citadel Plaza Drive,
Suite 300, Houston, Harris County, Texas 77008, within fifteen (15) days after
notice from WRI to the respective Entitled POCI Shareholder or the respective
Entitled B Building Shareholder at the last address of such respective
Shareholder as shown on the books and records of WRI. All amounts which become
due under this Article and which are not paid when due shall bear interest from
their due date until paid at the maximum non-usurious rate permitted by law,
and in the event that WRI retains an attorney to enforce the obligation of any
Entitled POCI Shareholder or any Entitled B Building Shareholder to pay any
amounts which are due under this Article after delinquency, WRI shall be
entitled to recover, in addition to all other amounts and interest recoverable
hereunder, court costs and reasonable attorneys' fees. In the event of any
dispute with respect to any of the matters referred to in this Article, such
dispute shall be resolved by arbitration pursuant to the provisions of the
Second Amended Price Increase Guaranty.
ARTICLE VI. MISCELLANEOUS
(a) The Amended Agreement shall not be amended or changed
except by a written instrument signed by all undersigned parties, except that
an amendment which does not affect the obligations or rights of the Escrow
Agent shall be effective if executed by all of the undersigned parties other
than the Escrow Agent.
(b) This Amendment may be executed in counterparts and,
as executed, shall constitute one agreement binding on all of the parties
hereto notwithstanding that all said parties are not signatory to the original
or same counterpart.
(c) A facsimile, telecopy, or other reproduction of this
Amendment may be executed by the parties and shall be considered valid,
binding, and effective for all purposes. At the request of any party hereto,
the parties agree to execute an original of this Amendment as well as any
facsimile, telecopy, or other reproduction.
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(d) In the event of any conflict or inconsistency between
this Amendment and either the Original Agreement or the First Amendment or the
Second Amendment, the provisions of this Amendment shall govern and control.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
WEINGARTEN REALTY INVESTORS POST OAK CENTER, INC.
By: /s/ BILL ROBERTSON, JR. By: /s/ MORTON L. SUSMAN
________________________________ ___________________________________
Name: Bill Roberton, Jr. Name: Morton L. Susman
Title: Executive Vice President Title: President
"WRI" "POCI"
WRI/POST OAK, INC. "B" BUILDING, INC.
By: /s/ BILL ROBERTSON, JR. By: /s/ GAYLORD JOHNSON, JR.
________________________________ ___________________________________
Name: Bill Robertson, Jr. Name: Gaylord Johnson, Jr.
Title: Executive Vice President Title: President
"Newco" "B Building"
STEWART TITLE COMPANY,
HOUSTON DIVISION
By: /s/ EDWARD S. CUTRER
________________________________
Name: Edward S. Cutrer
Title: Senior Vice President
"Escrow Agent"
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POST OAK CENTER, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of Post Oak Center, Inc., and hereby consents to the foregoing
Fourth Amendment to Agreement of Merger.
TEXAS COMMERCE BANK, TRUSTEE OF THE
/s/ OSCAR S. WYATT, JR. NINA SUSMAN TRUST (BUT NOT IN
___________________________________ ANY OTHER CAPACITY)
Oscar S. Wyatt, Jr.
/s/ DOUGLAS WYATT, Trustee By: /s/ ELLEN TIPTON
___________________________________ ____________________________________
Douglas Wyatt, Trustee Name: Ellen Tipton
Title: Vice President and Trust Officer
/s/ LYNN S. WYATT /s/ NINA M. SUSMAN
___________________________________ ________________________________________
Lynn S. Wyatt Nina M. Susman
/s/ GAYLORD JOHNSON, JR.
THE ESTATE OF ALEXANDER HART ________________________________________
SACKTON, DECEASED Gaylord Johnson, Jr.
BY: NATIONSBANK OF TEXAS, N.A., /s/ STEVEN C. GRANT, Trustee
INDEPENDENT EXECUTOR (BUT NOT IN ANY ________________________________________
OTHER CAPACITY) Steven C. Grant, Trustee of the Gaylord
Johnson, Jr. 1979 Children's Trust
By: /s/ JAMES K. O'CONNELL
________________________________ /s/ GAIL J. SERRELL
Name: James K. O'Connell _______________________________________
Title: Vice President Gail J. Serrell
/s/ ROBERT T. SAKOWITZ
________________________________________
Robert T. Sakowitz
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"B" BUILDING, INC. SHAREHOLDERS
Each undersigned represents that he, she, or it is a
shareholder of B Building, Inc., and hereby consents to the foregoing Fourth
Amendment to Agreement of Merger.
/s/ NINA M. SUSMAN THE ESTATE OF ALEXANDER HART SACKTON,
___________________________________ DECEASED
Nina M. Susman
/s/ ROBERT T. SAKOWITZ BY: NATIONSBANK OF TEXAS, N.A.,
___________________________________ INDEPENDENT EXECUTOR (BUT NOT IN ANY
Robert T. Sakowitz OTHER CAPACITY)
/s/ GAYLORD JOHNSON, JR.
___________________________________
Gaylord Johnson, Jr. By: /s/ JAMES K. O'CONNELL
____________________________________
Name: James K. O'Connell
Title: Vice President
/s/ GAIL J. SERRELL
________________________________________
Gail J. Serrell
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<PAGE> 1
EXHIBIT 10.6
SECOND AMENDED PRICE INCREASE GUARANTY
This Agreement made and entered into by and between WEINGARTEN
REALTY INVESTORS, a Texas real estate investment trust ("WRI"), the undersigned
ENTITLED POCI SHAREHOLDERS (herein defined), and the undersigned ENTITLED B
BUILDING SHAREHOLDERS (herein defined).
W I T N E S S E T H:
ARTICLE A. REFERENCES AND DEFINITIONS
1. Reference is made for all purposes to (a) that
certain Agreement of Merger dated October 1, 1993 by and between WRI, WRI/POST
OAK, INC., a Texas corporation, POST OAK CENTER, INC. ("POCI"), a Texas
corporation, the shareholders of POCI identified therein, "B" BUILDING, INC.
("B Building"), a Texas corporation, and the shareholders of B Building
identified therein (the "Original Agreement"), (b) that certain First Amendment
to Agreement of Merger dated December 15, 1993 by and between WRI, WRI/Post
Oak, Inc., POCI, the shareholders of POCI identified therein, B Building, and
the shareholders of B Building identified therein, (all such parties being
referred to as the "Agreement Signatories") (the "First Amendment"), (c) that
certain Second Amendment to Agreement of Merger dated December 22, 1993, by and
between the Agreement Signatories ("Second Amendment"), which Second Amendment
replaced and superseded the First Amendment in all respects, (d) that certain
Third Amendment to Agreement of Merger dated February 28, 1994, by and between
the Agreement Signatories (the "Third Amendment"), and (e) that certain Fourth
Amendment to Agreement of Merger dated May 31, 1994, by and between the
Agreement Signatories. The Original Agreement, as amended by the First
Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment
is referred to herein as the "Merger Agreement." All terms which are defined
in the Merger Agreement shall, when used in this document, have the same
respective meanings as are set forth in the Merger Agreement unless otherwise
defined herein.
2. The following terms, when used herein, shall have the
respective meanings set forth below:
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<PAGE> 2
a. The term "Closing Date Market Price" shall
mean $38 per share of common stock (share of beneficial interest) of
WRI, irrespective of whether the actual market price of WRI common
stock on the New York Stock Exchange on the Closing Date is more than
$38 per share or less than $38 per share.
b. The term "Entitled B Building Shareholder"
shall have the meaning set forth in Article C.
c. The term "Entitled POCI Shareholder" shall
have the meaning set forth in Article B.
d. The term "First Extension Period" shall mean
the period of time which commences on the day following the expiration
of the Initial Test Period and ends on the last day of the 30th full
calendar month after the Closing Date.
e. The term "Guaranteed Aggregate 24-Month
Increase" shall mean $1,500,100. The Guaranteed Aggregate 24-Month
Increase shall be allocated between the Guaranteed POCI 24-Month
Increase and the Guaranteed B Building 24-Month Increase in proportion
to the ratio of (x) the number of Original WRI Shares issued to
Entitled POCI Shareholders at the Closing to (y) the number of
Original WRI Shares issued to Entitled B Building Shareholders at the
Closing, as herein provided.
f. The term "Guaranteed Aggregate 30-Month
Increase" shall mean $1,875,130. The Guaranteed Aggregate 30-Month
Increase shall be allocated between the Guaranteed POCI 30-Month
Increase and the Guaranteed B Building 30-Month Increase in proportion
to the ratio of (x) the number of Original WRI Shares issued to
Entitled POCI Shareholders at the Closing to (y) the number of
Original WRI Shares issued to Entitled B Building Shareholders at the
Closing, as herein provided.
g. The term "Guaranteed Aggregate 36-Month
Increase" shall mean $2,250,150. The Guaranteed Aggregate 36-Month
Increase shall be allocated between the Guaranteed POCI 36-Month
Increase and the Guaranteed B Building 36-Month Increase in proportion
to the ratio of (x) the number of Original WRI Shares issued to
Entitled POCI Shareholders at the Closing to (y) the number of
Original WRI Shares issued to Entitled B Building Shareholders at the
Closing, as herein provided.
h. The term "Guaranteed B Building 24-Month
Increase" shall mean $94,840 in the aggregate for all Original WRI
Shares issued to the Entitled B Building Shareholders at the Closing
(18,968 shares) or $5.00 for each such share.
i. The term "Guaranteed B Building 30-Month
Increase" shall mean $118,555 in the aggregate for all Original WRI
Shares issued to the Entitled B Building Shareholders at the Closing
(18,968 shares) or $6.25 for each such share.
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<PAGE> 3
j. The term "Guaranteed B Building 36-Month
Increase" shall mean $142,260 in the aggregate for all Original WRI
Shares issued to the Entitled B Building Shareholders at the Closing
(18,968 shares) or $7.50 for each such share.
k. The term "Guaranteed POCI 24-Month Increase"
shall mean $1,405,260 in the aggregate for all Original WRI Shares
issued to the Entitled POCI Shareholders at the Closing (281,052
shares) or $5.00 for each such share.
l. The term "Guaranteed POCI 30-Month Increase"
shall mean $1,756,575 in the aggregate for all Original WRI Shares
issued to the Entitled POCI Shareholders at the Closing (281,052
shares) or $6.25 for each such share.
m. The term "Guaranteed POCI 36-Month Increase"
shall mean $2,107,890 in the aggregate for all Original WRI Shares
issued to the Entitled POCI Shareholders at the Closing (281,052
shares) or $7.50 for each such share.
n. The term "Initial Test Period" shall mean the
period of time which commences on the day following the Closing Date
and ends on the last day of the 24th full calendar month after the
Closing Date.
o. The term "Original WRI Shares" shall mean the
shares of WRI common stock (shares of beneficial interest) which are
issued to the Entitled POCI Shareholders at the Closing as the Agreed
POCI Consideration plus the shares of WRI common stock (shares of
beneficial interest) which are issued to the Entitled B Building
Shareholders at the Closing as the Agreed B Building Consideration.
p. The term "Qualified Transferee" shall mean
each transferee of Original WRI Shares provided that (1) such
transferee either received a transfer of the Original WRI Shares from
an Entitled POCI Shareholder or an Entitled B Building Shareholder
subsequent to the Closing or prior to the Closing received POCI shares
from an Entitled POCI Shareholder or B Building shares from an
Entitled B Building Shareholder and at the Closing received Original
WRI Shares as either the Agreed POCI Consideration with respect to the
POCI shares so received by such transferee or as the Agreed B Building
Consideration with respect to the B Building shares so received by
such transferee, (2) such transferee is the estate, spouse, or lineal
ascendant or descendant of either the transferor Entitled POCI
Shareholder or the transferor Entitled B Building Shareholder or a
trust for the benefit of such spouse or lineal ascendant or descendant
or a family-owned partnership or a family-controlled corporation of a
family of which such transferor Entitled POCI Shareholder or
transferor Entitled B Building Shareholder is a member, and (3) such
transferee furnishes to WRI affidavits and other documentation which
is satisfactory to WRI, in the reasonable exercise of judgment, to
establish the qualification of such transferee under clauses (1) and
(2) above. Without limitation of the foregoing, and in further
expansion of the foregoing, with respect to any Entitled POCI
Shareholder or Entitled B Building Shareholder that is an estate or a
trust, the term "Qualified Transferee" shall include the devisees of
such estate, including trusts, or the beneficiaries of such trust,
Page 3 of 19 Pages
<PAGE> 4
including other trusts. If such devisee or beneficiary is an
individual, the term "Qualified Transferee" shall include the estate,
spouse, and lineal ascendants and descendants of such devisee or
beneficiary, a trust for the benefit of such devisee or beneficiary, a
trust for a spouse or a lineal ascendant or descendent of such devisee
or beneficiary, and a family-owned partnership or a family-controlled
corporation of a family of which such devisee or beneficiary, or such
devisee's or beneficiary's spouse or lineal ascendant or descendent is
a member. If such devisee or beneficiary is a trust, the term
"Qualified Transferee" shall include the beneficiaries of such trust,
the estates, spouses, and lineal ascendants and descendants of such
beneficiaries, another trust for the benefit of such beneficiaries,
their spouses or lineal ascendants or descendants, and a family-owned
partnership or a family-controlled corporation of a family of which
such beneficiaries, their spouses or lineal ascendants or descendants
are a member.
q. The term "Relevant Required Amount" shall
mean either the Required POCI Amount -- 24 Months, the Required POCI
Amount -- 30 Months, the Required POCI Amount -- 36 Months, the
Required B Building Amount -- 24 Months, the Required B Building
Amount -- 30 Months, or the Required B Building Amount -- 36 Months,
whichever may be applicable pursuant to the provisions of Article B
and Article C, respectively.
r. The term "Required B Building Amount -- 24
Months" shall have the meaning set forth in Article C.1.
s. The term "Required B Building Amount -- 30
Months" shall have the meaning set forth in Article C.2.
t. The term "Required B Building Amount -- 36
Months" shall have the meaning set forth in Article C.3.
u. The term "Required POCI Amount -- 24 Months"
shall have the meaning set forth in Article B.1.
v. The term "Required POCI Amount -- 30 Months"
shall have the meaning set forth in Article B.2.
w. The term "Required POCI Amount -- 36 Months"
shall have the meaning set forth in Article B.3.
x. The term "Second Extension Period" shall mean
the period of time which commences on the day following the expiration
of the First Extension Period and ends on the last day of the 36th
full calendar month after the Closing Date.
y. The term "Test Period" shall mean whichever
of the following is applicable: (1) the Initial Test Period if WRI
does not exercise its option for the First Extension Period; (2) the
period of time which commences on the day following the Closing Date
and ends on the last day of First Extension Period if WRI exercises
its
Page 4 of 19 Pages
<PAGE> 5
option for the First Extension Period, but not the Second Extension
Period (i.e., the aggregate time period which consists of the Initial
Test Period plus the First Extension Period); and (3) the period of
time which commences on the day following the Closing Date and ends on
the last day of the Second Extension Period if WRI exercises its
options for both the First Extension Period and the Second Extension
Period (i.e., the aggregate time period which consists of the Initial
Test Period plus the First Extension Period plus the Second Extension
Period).
z. The term "Thirty Month Market Price" shall
mean the average closing price of a share of common stock (share of
beneficial interest) of WRI on the New York Stock Exchange during the
ten (10) trading days immediately preceding the last day of the 30th
full calendar month after the Closing Date (including such last day if
it is a trading day).
aa. The term "Thirty-Six Month Market Price"
shall mean the average closing price of a share of common stock (share
of beneficial interest) of WRI on the New York Stock Exchange during
the ten (10) trading days immediately preceding the last day of the
36th full calendar month after the Closing Date (including such last
day if it is a trading day).
ab. The term "Twenty-Four Month Market Price"
shall mean the average closing price of a share of common stock (share
of beneficial interest) of WRI on the New York Stock Exchange during
the ten (10) trading days immediately preceding the last day of the
24th full calendar month after the Closing Date (including such last
day if it is a trading day).
ARTICLE B. POCI PRICE INCREASE GUARANTY
1. WRI hereby agrees with each POCI shareholder listed
on Exhibit I attached hereto who executes a counterpart of this Agreement
(individually referred to as an "Entitled POCI Shareholder" and collectively as
the "Entitled POCI Shareholders") that if the Twenty-Four Month Market Price
does not exceed the Closing Date Market Price by an amount at least equal to
the per share Guaranteed POCI 24-Month Increase, then, in such event, WRI will,
at its option, either (i) pay to each Entitled POCI Shareholder or his or her
Qualified Transferee a cash amount equal to the number of Original WRI Shares
still held by such shareholder on the last day of the Initial Test Period
multiplied by the difference (i.e., the shortfall) between the per share
Guaranteed POCI 24-Month Increase and the excess, if any, of the Twenty-Four
Month Market Price over the Closing Date Market Price (such amount being
referred to as the "Required POCI Amount -- 24 Months" as to such respective
Entitled POCI Shareholder) or (ii) deliver to each Entitled POCI Shareholder or
his or her
Page 5 of 19 Pages
<PAGE> 6
Qualified Transferee (a) that number of shares of WRI common stock (shares of
beneficial interest) equal to the quotient derived by dividing the Required
POCI Amount -- 24 Months as to such respective Entitled POCI Shareholder by the
Twenty-Four Month Market Price and rounding such quotient to the nearest lesser
whole number, if such quotient is not a whole number, plus, if such quotient is
not a whole number, (b) a check of WRI payable to such Entitled POCI
Shareholder or Qualified Transferee equal to the proportional part of the
Twenty-Four Month Market Price represented by the fractional share remaining
after the rounding provided for in clause (a), or (iii) within fifteen (15)
days after the end of the Initial Test Period, give notice to each Entitled
POCI Shareholder that WRI exercises its option (hereby granted) to extend the
Test Period until the end of the First Extension Period.
2. WRI hereby further agrees with each Entitled POCI
Shareholder that if WRI shall have exercised its option for the First Extension
Period and the Thirty Month Market Price does not exceed the Closing Date
Market Price by an amount at least equal to the per share Guaranteed POCI
30-Month Increase, then, in such event, WRI will, at its option, either (i) pay
to each Entitled POCI Shareholder or his or her Qualified Transferee a cash
amount equal to the number of Original WRI Shares still held by such
Shareholder on the last day of the First Extension Period multiplied by the
difference (i.e., the shortfall) between the per share Guaranteed POCI 30-Month
Increase and the excess, if any, of the Thirty Month Market Price over the
Closing Date Market Price (such amount being referred to as the "Required
Amount -- 30 Months" as to such respective Entitled POCI Shareholder) or (ii)
deliver to each Entitled POCI Shareholder or his or her Qualified Transferee
(a) that number of shares of WRI common stock (shares of beneficial interest)
equal to the quotient derived by dividing the Required POCI Amount -- 30 Months
as to such respective Entitled POCI Shareholder by the Thirty Month Market
Price and rounding such quotient to the nearest lesser whole number, if such
quotient is not a whole number, plus, if such quotient is not a whole number,
(b) a check of WRI payable to such Entitled POCI Shareholder or Qualified
Transferee equal to the proportional part of the Thirty Month Market Price
represented by the fractional share remaining after the rounding provided for
in clause (a), or (iii) within fifteen (15) days after the end of the First
Extension Period, give notice to each Entitled POCI Shareholder that WRI
exercises its option (hereby granted) to extend the Test Period until the end
of the Second Extension Period.
Page 6 of 19 Pages
<PAGE> 7
3. WRI hereby further agrees with each Entitled POCI
Shareholder that if WRI shall have exercised its option for both the First
Extension Period and the Second Extension Period and the Thirty-Six Month
Market Price does not exceed the Closing Date Market Price by an amount at
least equal to the per share Guaranteed POCI 36-Month Increase, then, in such
event, WRI will, at its option, either (i) pay to each Entitled POCI
Shareholder or his or her Qualified Transferee a cash amount equal to the
number of Original WRI Shares still held by such Shareholder on the last day of
the Second Extension Period multiplied by the difference (i.e., the shortfall)
between the per share Guaranteed POCI 36-Month Increase and the excess, if any,
of the Thirty-Six Month Market Price over the Closing Date Market Price (such
amount being referred to as the "Required POCI Amount -- 36 Months" as to such
respective Entitled POCI Shareholder) or (ii) deliver to each Entitled POCI
Shareholder or his or her Qualified Transferee (a) that number of shares of WRI
common stock (shares of beneficial interest) equal to the quotient derived by
dividing the Required POCI Amount -- 36 Months as to such respective Entitled
POCI Shareholder by the Thirty-Six Month Market Price and rounding such
quotient to the nearest lesser whole number, if such quotient is not a whole
number, plus, if such quotient is not a whole number, (b) a check of WRI
payable to such Entitled POCI Shareholder or Qualified Transferee equal to the
proportional part of the Thirty- Six Month Market Price represented by the
fractional share remaining after the rounding provided for in clause (a). It
is understood and agreed that WRI shall not have any option to extend the Test
Period beyond the last day of the Second Extension Period.
ARTICLE C. B BUILDING PRICE INCREASE GUARANTY
1. WRI hereby agrees with each B Building shareholder
listed on Exhibit II attached hereto who executes a counterpart of this
Agreement (individually referred to as an "Entitled B Building Shareholder" and
collectively as the "Entitled B Building Shareholders") that if the Twenty-Four
Month Market Price does not exceed the Closing Date Market Price by an amount
at least equal to the per share Guaranteed B Building 24-Month Increase, then,
in such event, WRI will, at its option, either (i) pay to each Entitled B
Building Shareholder or his or her Qualified Transferee a cash amount equal to
the number of Original WRI Shares still held by such Shareholder on the last
day of the Initial Test Period multiplied by the difference (i.e., the
shortfall) between the per share Guaranteed
Page 7 of 19 Pages
<PAGE> 8
B Building 24-Month Increase and the excess, if any, of the Twenty-Four Month
Market Price over the Closing Date Market Price (such amount being referred to
as the "Required B Building Amount -- 24 Months" as to such respective Entitled
B Building Shareholder) or (ii) deliver to each Entitled B Building Shareholder
or his or her Qualified Transferee (a) that number of shares of WRI common
stock (shares of beneficial interest) equal to the quotient derived by dividing
the Required B Building Amount -- 24 Months as to such respective Entitled B
Building Shareholder by the Twenty-Four Month Market Price and rounding such
quotient to the nearest lesser whole number, if such quotient is not a whole
number, plus, if such quotient is not a whole number, (b) a check of WRI
payable to such Entitled B Building Shareholder or Qualified Transferee equal
to the proportional part of the Twenty-Four Month Market Price represented by
the fractional share remaining after the rounding provided for in clause (a),
or (iii) within fifteen (15) days after the end of the Initial Test Period,
give notice to each Entitled B Building Shareholder that WRI exercises its
option (hereby granted) to extend the Test Period until the end of the First
Extension Period.
2. WRI hereby further agrees with each Entitled B
Building Shareholder that if WRI shall have exercised its option for the First
Extension Period and the Thirty Month Market Price does not exceed the Closing
Date Market Price by an amount at least equal to the per share Guaranteed B
Building 30-Month Increase, then, in such event, WRI will, at its option,
either (i) pay to each Entitled B Building Shareholder or his or her Qualified
Transferee a cash amount equal to the number of Original WRI Shares still held
by such Shareholder on the last day of the First Extension Period multiplied by
the difference (i.e., the shortfall) between the per share Guaranteed B
Building 30-Month Increase and the excess, if any, of the Thirty Month Market
Price over the Closing Date Market Price (such amount being referred to as the
"Required B Building Amount -- 30 Months" as to such respective Entitled B
Building Shareholder) or (ii) deliver to each Entitled B Building Shareholder
or his or her Qualified Transferee (a) that number of shares of WRI common
stock (shares of beneficial interest) equal to the quotient derived by dividing
the Required B Building Amount -- 30 Months as to such respective Entitled B
Building Shareholder by the Thirty Month Market Price and rounding such
quotient to the nearest lesser whole number, if such quotient is not a whole
number, plus, if such quotient is not a whole number, (b) a check of WRI
payable to such Entitled B Building Shareholder or Qualified Transferee equal
to the proportional part of the Thirty Month Market Price represented by the
Page 8 of 19 Pages
<PAGE> 9
fractional share remaining after the rounding provided for in clause (a), or
(iii) within fifteen (15) days after the end of the First Extension Period,
give notice to each Entitled B Building Shareholder that WRI exercises its
option (hereby granted) to extend the Test Period until the end of the Second
Extension Period.
3. WRI hereby further agrees with each Entitled B
Building Shareholder that if WRI shall have exercised its option for both the
First Extension Period and the Second Extension Period and the Thirty-Six Month
Market Price does not exceed the Closing Date Market Price by an amount at
least equal to the per share Guaranteed B Building 36-Month Increase, then, in
such event, WRI will, at its option, either (i) pay to each Entitled B Building
Shareholder or his or her Qualified Transferee a cash amount equal to the
number of Original WRI Shares still held by such Shareholder on the last day of
the Second Extension Period multiplied by the difference (i.e., the shortfall)
between the per share Guaranteed B Building 36-Month Increase and the excess,
if any, of the Thirty-Six Month Market Price over the Closing Date Market Price
(such amount being referred to as the "Required B Building Amount -- 36 Months"
as to such respective Entitled B Building Shareholder) or (ii) deliver to each
Entitled B Building Shareholder or his or her Qualified Transferee (a) that
number of shares of WRI common stock (shares of beneficial interest) equal to
the quuotient derived by dividing the Required B Building Amount -- 36 Months
as to such respective Entitled B Building Shareholder by the Thirty-Six Month
Market Price and rounding such quotient to the nearest lesser whole number, if
such quotient is not a whole number, plus, if such quotient is not a wholel
number, (b) a check of WRI payable to such Entitled B Building Shareholder or
Qualified Transferee equal to the proportional part of the Thirty-Six Minth
Market Price represented by the fractional share remaining after the rounding
provided for in clause (a). It is understood and agreed that WRI shall not
have any option to extend the Test Period beyond the last day of the Second
Extension Period.
ARTICLE D. MECHANICS OF CLOSING
1. Within ninety (90) days after the end of the Initial
Test Period if WRI shall not have exercised its option for the First Extension
Period, or within ninety (90) days after the end of the First Extension Period
if WRI shall have exercised its option for the First Extension Period but shall
not have exercised its option for the Second Extension Period, or within ninety
(90) days after the end of
Page 9 of 19 Pages
<PAGE> 10
the Second Extension Period if WRI shall have exercised its options for both
the First Extension and the Second Extension Period, each Entitled POCI
Shareholder, each Entitled B Building Shareholder, and each Qualified
Transferee shall submit to WRI at its address as stated below an affidavit
which states such person's name, address, the number of Original WRI Shares
such person owned as of the last day of Test Period, i.e., the last to occur of
the last day of the Initial Test Period (if WRI shall not have exercised its
option for the First Extension Period) or the last day of the First Extension
Period (if WRI shall have exercised its option for the First Extension Period
but not the Second Extension Period) or the last day of the Second Extension
Period (if WRI shall have exercised its option for both the First Extension
Period and the Second Extension Period), and (in the case of Qualified
Transferees only) all relevant facts on the basis of which such party claims to
be a Qualified Transferee. If requested by WRI, each Entitled POCI
Shareholder, each Entitled B Building Shareholder and each Qualified Transferee
will display to WRI at WRI's office (at the address designated herein for
notices) original WRI stock certificates corroborating ownership of the number
of Original Shares stated in the applicable affidavit to be owned by each
respective Entitled POCI Shareholder, Entitled B Building Shareholder or
Qualified Transferee, as the case may be. In the event of any conflict between
the statements in any such affidavit and the information contained in the stock
records of WRI or in the event of any other dispute as to the accuracy or
sufficiency of any such affidavit, the parties shall attempt to resolve such
conflict between themselves but if they are unable to resolve such conflict
within a time satisfactory to either party the matter shall be submitted to
arbitration pursuant to Article F of this Agreement.
2. In the event that WRI elects to pay the Relevant
Required Amount in cash, WRI shall within the later to occur of (a) fifteen
(15) days after the receipt by WRI of the applicable affidavit referred to in
Article D.1 (if there is no arbitration then pending with respect to
circumstances referred to in Article D.1) or (b) fifteen (15) days after the
decision of the arbitrators (if there is such arbitration pending on the 15th
day after the receipt by WRI of the aforesaid Affidavit) deliver its good and
sufficient check made payable to the Entitled POCI Shareholder or Entitled B
Building Shareholder or Qualified Transferee who is entitled to receive such
check, at the address shown on the books and records of WRI, by United States
certified or registered mail, postage prepaid, return receipt requested (such
good and sufficient check being deemed to be "cash" for the purposes of this
Agreement).
Page 10 of 19 Pages
<PAGE> 11
3. In the event that WRI elects to pay the Relevant
Required Amount by issuance of shares of WRI common stock (shares of beneficial
interest), WRI shall within the later to occur of (a) fifteen (15) days after
the receipt by WRI of the applicable affidavit referred to in Article D.1 (if
there is no arbitration then pending with respect to circumstances referred to
in Article D.1) or (b) fifteen (15) days after the decision of the arbitrators
(if there is such arbitration pending on the 15th day after the receipt by WRI
of the aforesaid Affidavit) issue to each Entitled POCI Shareholder, Entitled B
Building Shareholder, and Qualified Transferee who is entitled to receive a
Relevant Required Amount the number of shares of WRI common stock (shares of
beneficial interest) to which such Entitled POCI Shareholder, Entitled B
Building Shareholder, or Qualified Transferee is entitled pursuant to the
provisions of the Agreement, rounded to the next lower whole number in the
event that the calculation referred to in Article B or Article C would (but for
this provision) result in the issuance of a fractional share to such Entitled
POCI Shareholder, Entitled B Building Shareholder, or Qualified Transferee plus
(in each case in which such rounding occurs) a good and sufficient check issued
by WRI payable to such Entitled POCI Shareholder, Entitled B Building
Shareholder, or Qualified Transferee in an amount equal to the proportional
part of the Twenty-Four Month Market Price, or Thirty Month Market Price, or
Thirty-Six Month Market Price (whichever may be applicable) represented by such
fractional shares. Certificates representing such shares and such check (if
applicable) shall be sent to the respective Entitled POCI Shareholder, Entitled
B Building Shareholder, or Qualified Transferee at the address of such party as
shown on the applicable affidavit referred to in Article D.1, by United States
certified or registered mail, postage prepaid, return receipt requested.
ARTICLE E. CERTAIN LIMITATIONS
It is expressly understood and agreed that the obligations of
WRI as set forth in Article B, Article C, and Article D of this Agreement apply
only with respect to Original WRI Shares which are still owned on the last day
of the applicable Test Period by an Entitled POCI Shareholder, Entitled B
Building Shareholder, or Qualified Transferee to whom such Original WRI Shares
were issued at the Closing (or, in the case of a Qualified Transferee, which
were received by such Qualified Transferee from an Entitled POCI Shareholder or
Entitled B Building Shareholder who received such Original WRI Shares at the
Closing). WRI shall not have any obligation to pay the Relevant Required
Page 11 of 19 Pages
<PAGE> 12
Amount (either by issuance of its checks or by issuance of shares of WRI common
stock (shares of beneficial interest)) or any other obligation of any kind with
respect to Original WRI Shares which shall have been transferred in any manner
to any party other than a Qualified Transferee or with respect to any shares of
WRI common stock (shares of beneficial interest) acquired by any party
(including an Entitled POCI Shareholder or Entitled B Building Shareholder or
Qualified Transferee) other than by issuance as the Agreed POCI Consideration
or Agreed B Building Consideration in connection with the mergers consummated
pursuant to the Merger Agreement. It is further expressly understood and
agreed that WRI shall not, under any circumstances, be obligated either to pay
in cash or to issue WRI Shares for more than the Relevant Required Amount.
ARTICLE F. ARBITRATION
In the event that any dispute should arise under or with
respect to this Agreement, the parties agree that such dispute shall be settled
and resolved by binding arbitration governed by the Federal Arbitration Act, 9
U.S.C. Section Section 1-16 inclusive and in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. In the event that
for any reason a court of competent jurisdiction determines in a final
non-appealable judgment that the Federal Arbitration Act is not applicable to
this Agreement, then, in such event, the Texas General Arbitration Act, Tex.
Rev. Civ. Stat. Ann. Arts. 224 through 238-6 shall apply to all arbitration
proceedings under this Agreement. All parties agree that if either party shall
request arbitration pursuant to this Article F, each party will take all
appropriate action to cause the arbitration hearing to commence within thirty
(30) days after the notice requesting arbitration and further will take all
appropriate action to cause such arbitration proceeding to proceed diligently
and continuously until completion.
ARTICLE G. MISCELLANEOUS
1. ENTIRE AGREEMENT; AMENDMENT. This instrument
constitutes the entire agreement between the parties relating to a guarantee of
an increase in the market price of WRI common shares. No prior written
agreements and no prior or contemporaneous oral promises or representations
relating to such subject shall be binding, it being intended that this
instrument merges all
Page 12 of 19 Pages
<PAGE> 13
such prior and contemporaneous promises and representations. This Agreement
shall not be amended or changed except by a written instrument signed by all
undersigned parties.
2. SUCCESSORS; RIGHTS OF THIRD PARTIES. All terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective heirs, personal representatives,
successors and assigns of the parties hereto. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person, other than the
parties hereto, and their respective heirs, personal representatives,
successors and assigns, any rights or remedies under or by reason of this
Agreement. This Agreement is subject to termination or amendment by operation
of the provisions herein, notwithstanding any effect that such termination or
amendment might have on persons who are not parties hereto. Neither the
Entitled POCI Shareholders nor the Entitled B Building Shareholders nor any
Qualified Transferee shall have the right to assign, transfer, or hypothecate
this Agreement or any rights under this Agreement to any party other than a
Qualified Transferee, and any attempted or purported transfer, assignment, or
hypothecation other than to a Qualified Transferee shall be null and void.
3. NOTICES. All notices hereunder shall be in writing
and be delivered personally or by expedited delivery service with proof of
delivery or sent by U.S. Mail with adequate postage prepaid, as registered or
certified mail, with return receipt requested at the following respective
addresses:
To each Entitled POCI At such party's address as from time to
Shareholder: time shown on the books and records of WRI
With a copy to: Michael P. Kessler, Esq.
Weil Gotshal & Manges
700 Louisiana, Suite 1600
Houston, Texas 77002
To each Entitled At such party's address as from time to
B Building Shareholder: time shown on the books and records of WRI
With a copy to: Michael P. Kessler, Esq.
Weil Gotshal & Manges
700 Louisiana, Suite 1600
Houston, Texas 77002
Page 13 of 19 Pages
<PAGE> 14
To WRI: Weingarten Realty Investors
2600 Citadel Plaza Drive
Suite 300
Houston, Texas 77008
Attention: Chairman
With a copy to: Melvin A. Dow, Esq.
Dow, Cogburn & Friedman, P.C.
Nine Greenway Plaza, Suite 2300
Houston, Texas 77046
Notice delivered or mailed in the manner herein specified shall be effective
for all purposes hereunder on the earlier of the date of receipt or three (3)
days after it is posted in the U.S. mail; any notice given in any other manner
shall be effective only if and when received by the party to be notified.
4. APPLICABLE LAWS. This Agreement shall be construed
and enforceable in accordance with the internal laws of the State of Texas
(excluding its conflicts of laws rules) and the laws of the United States.
5. ARTICLE AND PARAGRAPH HEADINGS. The article and
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
6. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
7. STOCK SPLITS, SUBDIVISIONS, STOCK DIVIDENDS;
COMBINATIONS. If prior to the last day of the Test Period, WRI should pay a
dividend or make a distribution on existing WRI shares in additional WRI
shares, subdivide its shares into a greater number of shares, or make a
distribution on existing WRI shares of its capital stock other than outstanding
WRI shares, the per share Guaranteed POCI 24-Month Increase, the per share
Guaranteed POCI 30-Month Increase, or the per share Guaranteed POCI 36-Month
Increase (whichever may be applicable) referred to in Article A and Article B
of this Agreement, and the per share Guaranteed B Building 24-Month Increase,
the per share Guaranteed B Building 30-Month Increase, or the per share
Guaranteed B Building 36-Month Increase (whichever may be applicable) referred
to in Article A and Article C of this Agreement shall be
Page 14 of 19 Pages
<PAGE> 15
reduced proportionately. For example, without limiting the generality of the
foregoing, if there should be a 2-for-1 split of WRI shares prior to the last
day of the Initial Test Period, then in such event, the per share Guaranteed
POCI 24-Month Increase shall be reduced to one-half of the amount which would
otherwise (absent such split) be applicable pursuant to such Article A.2.k of
this Agreement and the figure applicable pursuant to Article A.2.h of this
Agreement as the per share Guaranteed B Building 24-Month Increase shall be
reduced to one-half (1/2) of the amount which would otherwise (absent such
split) be applicable pursuant to such Article A.2.h of this Agreement.
Conversely, if prior to the last day of the Test Period, there should be a
combination of WRI Shares into a smaller number of shares, the per share
Guaranteed POCI 24-Month Increase, the per share Guaranteed POCI 30-Month
Increase and the per share Guaranteed POCI 36-Month Increase (whichever may be
applicable) referred to in Article A and Article B of this Agreement and the
per share Guaranteed B Building 24-Month Increase, the per share Guaranteed B
Building 30-Month Increase and the per share Guaranteed B Building 36-Month
Increase (whichever may be applicable) referred to in Article A and Article C
of this Agreement shall each be proportionately increased. For example,
without limiting the generality of the foregoing, if, prior to the last day of
the Initial Test Period, there should be a combination of two existing WRI
shares into one WRI share, the figure applicable pursuant to Article A.2.k of
this Agreement as the per share Guaranteed POCI 24-Month Increase shall be
double the amount which would otherwise (absent such combination) be applicable
pursuant to Article A.2.k of this Agreement and the figure applicable pursuant
to Article A.2.h of this Agreement as the per share Guaranteed B Building
24-Month Increase shall be double the amount which would otherwise (absent such
combination) be applicable pursuant to such Article A.2.h of this Agreement.
8. LIMITATION ON LIABILITY. WRI is an unincorporated
trust organized under the Texas Real Estate Investment Trust Act. Neither the
shareholders of WRI, nor its Trust Manager, officers, employees or other agents
shall be personally, corporately or individually liable, in any manner
whatsoever, for any debt, act, omission or obligation of WRI, and all persons
having claims of any kind whatsoever against WRI shall look solely to the
property of WRI for the enforcement of their rights (whether monetary or
non-monetary) against WRI.
9. EXAMPLE. As an example illustrating (but not
limiting the applicability) of the provisions of this Agreement, assume the
following:
Page 15 of 19 Pages
<PAGE> 16
a. that the Twenty-Four Month Market Price is
$42 per WRI Share; and
b. that the number of Original WRI Shares held
by a hypothetical Entitled POCI Shareholder as of the last day of the
Initial Test Period is 5,000 shares.
The assumed Twenty-Four Month Market Price ($42 per WRI Share)
exceeds the Closing Date Market Price (stipulated to be $38 per share) by $4
per share. Thus, the Twenty-Four Month Market Price ($42 per WRI Share) did
not exceed the Closing Date Market Price (stipulated to be $38 per WRI Share)
by at least the Guaranteed 24-Month POCI Increase ($5.00 per WRI Share), nor
did the Twenty-Four Month Market Price exceed the Closing Date Market Price by
at least the Guaranteed B Building Increase (also $5.00 per share). The
shortfall, in each case, would be $5.00 - $4 = $1.00 per WRI Share.
Within fifteen (15) days after WRI receives from an Entitled
POCI Shareholder or an Entitled B Building Shareholder or a Qualified
Transferee (as the case may be), the affidavit referred to in Article D.1, if
WRI does not exercise its option for the First Extension Period, WRI will pay
either cash or issue additional WRI Shares as herein stated to each Entitled
POCI Shareholder, each Entitled B Building Shareholder, and each Qualified
Transferee in an amount equal to the product of $1.00 multiplied by the number
of Original WRI Shares owned by such respective Entitled POCI Shareholder,
Entitled B Building Shareholder or Qualified Transferee as of the last day of
the Initial Test Period, such product being either referred to as the Required
POCI Amount -- 24 Months as to such respective Entitled POCI Shareholder or
such respective Qualified Transferee, or referred to as the Required B Building
Amount -- 24 Months as to such respective Entitled B Building Shareholder or
such respective Qualified Transferee, as the case may be.
In this example, the hypothetical Entitled POCI Shareholder
owns 5,000 Original WRI Shares as of the last day of the Initial Test Period
and therefore would either be entitled to receive 5,000 x $1.00 = $5,000 in
cash, or, alternatively, WRI would have the right to issue to such Entitled
POCI Shareholder the number of WRI Shares, the Twenty-Four Month Market Price
of which ($42 by assumption) is equal to the Required POCI Amount -- 24 Months
as to such Entitled POCI Shareholder.
Page 16 of 19 Pages
<PAGE> 17
Such number of WRI Shares would be $5,000 / 42 = 119.05. Certificates would be
issued for 119 shares, and cash in the amount of $2.10 ($42 x.05) would be paid
with respect to the fractional share.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement this the 30th day of June, 1994.
WEINGARTEN REALTY INVESTORS
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
"WRI"
Page 17 of 19 Pages
<PAGE> 18
ENTITLED POCI SHAREHOLDERS
Texas Commerce Bank, Trustee of the
Nina Susman Trust (but not in any other
capacity)
___________________________________ By:_____________________________________
OSCAR WYATT, JR. Name:___________________________________
Title: Vice President and Trust Officer
___________________________________
DOUGLAS WYATT, TRUSTEE
________________________________________
NINA M. SUSMAN
___________________________________
LYNN S. WYATT
________________________________________
GAYLORD JOHNSON, JR.
THE ESTATE OF ALEXANDER HART
SACKTON, DECEASED ________________________________________
STEVEN C. GRANT, TRUSTEE OF THE GAYLORD
By: NationsBank of Texas, N.A., JOHNSON, JR. 1979 CHILDREN'S TRUST
Independent Executor (But
Not in Any Other Capacity) ________________________________________
GAIL J. SERRELL
By:___________________________
Name:_________________________
Title:________________________ ________________________________________
ROBERT T. SAKOWITZ
Page 18 of 19 Pages
<PAGE> 19
ENTITLED B BUILDING SHAREHOLDERS
___________________________________ THE ESTATE OF ALEXANDER HART
NINA M. SUSMAN SACKTON, DECEASED
By: NationsBank of Texas, N.A.,
___________________________________ Independent Executor (But
ROBERT T. SAKOWITZ Not in Any Other Capacity)
___________________________________ By:________________________________
GAYLORD JOHNSON, JR. Name:______________________________
Title:_____________________________
_______________________________________
GAIL J. SERRELL
Page 19 of 19 Pages
