<PAGE>
As filed with the Securities and Exchange Commission on April 27, 1995.
Registration Statement No. 33-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM S-2
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 (I.R.S. EMPLOYER
JURISDICTION OF INCORPORATION IDENTIFICATION NO.)
OR ORGANIZATION)
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) 868-6000
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
____________
COPIES TO:
ROBERT V. JEWELL
ANDREWS & KURTH L.L.P.
4200 TEXAS COMMERCE TOWER
HOUSTON, TEXAS 77002
(713) 220-4200
____________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective and from time to
time.
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, check the following box. / /
If the Registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. / /
____________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be Registered Registered Offering Price Per Share Aggregate Offering Price Registration
<S> <C> <C> <C> <C>
COMMON SHARES OF BENEFICIAL 162,500 $34.75 $5,646,875 $1,948.00
INTEREST, PAR VALUE $0.03 PER
SHARE
</TABLE>
____________
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>
WEINGARTEN REALTY INVESTORS
CROSS-REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN THE PROSPECTUS OF THE
INFORMATION REQUIRED BY PART I OF FORM S-2
<TABLE>
<CAPTION>
ITEM NO. FORM S-2 LOCATION OR HEADING IN PROSPECTUS
<S> <C> <C>
1. Forepart of the Registration Statement Facing Page; Cross-Reference Sheet;
and Outside Front Cover Page of Outside Front Cover Page of Prospectus
Prospectus
2. Inside Front and Outside Back Cover Pages Available Information; Inside Front Cover Page of
of Prospectus Prospectus; Table of Contents
3. Summary Information, Risk Factors and The Company
Ratio of Earnings to Fixed Charges
4. Use of Proceeds Description of the Transaction
5. Determination of Offering Price Description of the Transaction
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Description of the Transaction
9. Description of Securities to be Description of Shares
Registered
10. Interests of Named Experts and Counsel Not Applicable
11. Information with Respect to the Outside Front Cover Page of Prospectus
Registrant
12. Incorporation of Certain Information by Incorporation of Certain Documents by Reference
Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act
Liabilities
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR +
+ MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS +
+ OF ANY SUCH STATE. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 26, 1995
PROSPECTUS
162,500
WEINGARTEN REALTY INVESTORS
COMMON SHARES OF BENEFICIAL INTEREST
THIS PROSPECTUS RELATES TO THE ISSUANCE BY WEINGARTEN REALTY INVESTORS
(THE "COMPANY") TO ROTHSCHILD PROPERTY INVESTORS L.P. ("ROTHSCHILD") OF AN
AGGREGATE OF 162,500 COMMON SHARES OF BENEFICIAL INTEREST OF THE COMPANY, PAR
VALUE $0.03 PER SHARE (THE "SHARES") IN PAYMENT OF THE CONSIDERATION FOR THE
ASSETS TO BE ACQUIRED PURSUANT TO THE TERMS OF A PURCHASE AND SALE AGREEMENT,
DATED AS OF MARCH 28, 1995 BETWEEN THE COMPANY AND ROTHSCHILD. THE ASSETS TO BE
ACQUIRED COMPRISE A SHOPPING CENTER LOCATED IN ALBUQUERQUE, NEW MEXICO.
THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY
DESIGNED TO PRESERVE THE COMPANY'S STATUS
AS A REAL ESTATE INVESTMENT TRUST.
SEE "DESCRIPTION OF SHARES."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS MUST BE ACCOMPANIED BY THE COMPANY'S
ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED
DECEMBER 31, 1994
THE DATE OF THIS PROSPECTUS IS APRIL , 1995.
<PAGE>
AVAILABLE INFORMATION
Weingarten Realty Investors (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "1934 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 the Commission's Regional Offices located at 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661 and at 7 World Trade Center, New
York, New York 10048 and at the offices of the New York Stock Exchange, Inc. 20
Broad Street, New York, New York 10005, on which exchange the Common Shares of
Beneficial Interest, $0.03 par value, of the Company (the "Shares") are listed.
The Company furnishes to its securities holders annual reports containing
audited financial statements and interim reports containing unaudited financial
statements.
The Company has filed with the Commission a registration statement on Form
S-2 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"1993 Act"). 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, 1994.
(b) 1994 Annual Report to Shareholders; provided, however, that
the letter to Company shareholders appearing on pages 2-9 of such
Annual Report shall not be deemed incorporated by reference in this
Prospectus or in any Company filing under the 1933 Act or the 1934
Act, except to the extent the Company specifically incorporates such
letter by reference, and shall not otherwise be deemed filed under
such acts.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 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 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,
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.
<PAGE>
THE COMPANY
Weingarten Realty Investors (the "Company") has owned and developed shopping
centers and other commercial real estate since its organization in 1948. The
Company's investment focus has been and continues to be on shopping centers. As
of March 3, 1995, Trust Managers and executive officers of the Company
controlled 4,184,082 Common Shares or approximately 15.9% of the outstanding
Shares.
Initially, the Company grew primarily through development of properties,
with 91 of the 161 operating properties having been developed by the Company.
With respect to these projects, the Company acquired the raw land, constructed
buildings and leased the store spaces. The Company generally develops new
projects only when it has leases in place with financially strong and viable
anchor retailers. More recently, the Company has expanded its property base
primarily through acquisitions of properties previously developed by other
parties which satisfy investment criteria similar to those applicable to new
developments. Management believes that the majority of the Company's growth in
the immediate future will continue to result from acquisitions, due to the
continuing over-supply of developed real estate projects, the current lack of
capital for most of the Company's competitors to finance new investments and the
prevailing market discount from reproduction costs for new projects. As part of
its acquisition strategy, the Company seeks under-managed properties in good
locations, the value of which can be enhanced through remerchandising and
renovating. Geographically, the Company considers expansion in areas where it
currently has a presence or where it can acquire within a reasonable time frame
a sufficient number of properties that meet its investment criteria.
An equally important part of the Company's strategy has been to improve the
cash flow and value of its existing portfolio through: (i) maximizing rental
revenues, occupancy and retail sales, (ii) operating the properties in the most
cost effective manner and (iii) renovating and remerchandising the tenant mix
with respect to selected properties.
Management believes that its overall debt structure is conservative. Based
upon the approximately $1 billion market value of the Company's equity at
December 31, 1994, the Company's debt represented less than 18.6% of its total
market capitalization. The Company's ratio of funds from operations before
interest expense to fixed charges for the year ended December 31, 1994 was
approximately 6.10 to 1.0.
The Company conducts its operations in order to qualify as 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 predecessors unless the
context otherwise specifically requires.
DESCRIPTION OF THE TRANSACTION
The Shares registered pursuant to the Registration Statement of which this
Prospectus forms a part are being issued to Rothschild Property Investors L.P.
("Rothschild"), the owner of the assets described below, in payment of the
purchase price (the "Purchase Price") for the assets to be acquired pursuant to
the transaction described below.
The Company has entered into a Purchase and Sale Agreement, dated as of
March 28, 1995 (the "Agreement"), with Rothschild to acquire a parcel of land,
together with all buildings, structures and improvements situated thereon,
located in Albuquerque, New Mexico, and known as the Valle del Sol Shopping
Center. The Agreement provides that the Company will pay the Purchase Price by
issuing 162,500 Shares (the "Purchase Shares") to Rothschild. The expenses of
the registration of the Purchase Shares are to be borne by the Company.
<PAGE>
In connection with the issuance of the Purchase Shares in payment of the
Purchase Price, the Company has granted to Rothschild, and certain of its
affiliates which may receive such Purchase Shares, the right to require the
Company to repurchase any of the Purchase Shares owned by Rothschild on
the one-year anniversary of the Closing Date, as defined in the Agreement. Not
earlier than the one-year anniversary, and not later than 10 days after such
anniversary, Rothschild shall state the number of Purchase Shares which it
demands that the Company repurchase. If so requested, the Company will be
obligated to repurchase such Purchase Shares at a per share price of $39.06. The
repurchase obligation terminates upon transfer of the Purchase Shares, subject
to certain limited exceptions.
DESCRIPTION OF SHARES
GENERAL
The Shares are issued pursuant to the Declaration of Trust. The Shares, par
value $.03 per share, are equal with respect to distribution and liquidation
rights, are not convertible, have no preemptive rights to subscribe for
additional Shares, are nonassessable (except as described under "Shareholder
Liability" below) and are transferable in the same manner as shares of a
corporation. Each shareholder is entitled to one vote in person or by proxy
for each Shares registered in his name and has the right to vote on the election
or removal of Trust Managers, amendments to the Declaration of Trust, proposals
to terminate, reorganize, merge or consolidate the Company or to sell or dispose
of substantially all of the Company's property and with respect to certain
business combinations. The Company will have perpetual existence unless and
until dissolved and terminated. Except with respect to the foregoing matters,
no action taken by the shareholders at any meeting shall in any way bind the
Trust Managers. The Shares offered by the Company will be, when issued, fully
paid and nonassessable (except as described under "Shareholder Liability"
below).
Several provisions in the Declaration of Trust may have the effect of
deterring a take-over of the Company. These provisions restrict ownership of
the Company's outstanding equity securities by a single person to not more than
9.8% of such securities 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 securities entitled to vote thereon for certain defined "business
combinations" with shareholders owning more than 50% of the equity securities
considered for such purposes if the transaction is neither approved by the Board
of Trust Managers nor meets certain price and procedural conditions.
REIT QUALIFICATION
The Company operates in a manner intended to qualify it for treatment as a
REIT under Sections 856 through 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 as a REIT in any taxable year, it will be
taxed as a corporation for that year, and distributions to its 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. Failure to qualify as a REIT could
result in the Company incurring indebtedness and perhaps liquidating investments
in order to pay its taxes.
Among the requirements which must be met in order for the Company to qualify
as a REIT is that no more than 50% in value of the outstanding capital shares,
including in some circumstances capital shares into which outstanding securities
might be converted, may be owned actually or constructively by five or fewer
individuals or certain other entities at any time during the last half of the
Company's taxable year. To assist
<PAGE>
the Company in meeting this requirement, the Declaration of Trust limits persons
to ownership of not more than 9.8% of the outstanding equity securities of the
Company, including Shares. Convertible securities (whether in registered or
bearer form) are treated as if such securities had been converted in calculating
the ownership limit. The Declaration of Trust provides that any attempted
transfers of Shares that 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 of Trust 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 December 31, 1994
beneficially owned approximately 7.7% of the outstanding Shares) are exempted
from the limit. Without shareholder approval, the Company may issue an unlimited
number of securities, warrants, rights or other options to purchase Shares and
other securities convertible into Shares.
SHAREHOLDER LIABILITY
The Declaration of Trust provides that no shareholder shall be personally
liable for the acts and obligations of the Company and that the funds and
property of the Company shall be solely liable for such acts or obligations.
The Declaration of Trust provides that, to the extent practicable, each written
instrument creating an obligation of the Company shall contain a provision to
that effect. By statute, the State of Texas provides limited liability for
shareholders of a REIT organized under the REIT Act. However, certain
jurisdictions may not recognize the limited liability provided to 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 carries public liability insurance that the Trust
Managers consider adequate. Thus, any risk of personal liability to
shareholders is limited to situations in which the Company's assets plus its
insurance coverage would be insufficient to satisfy the claims against the
Company and its shareholders. 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.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Shares is KeyCorp
Shareholder Services, Inc. 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 statement
schedules incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K and Annual Report to Shareholders for the year ended
December 31, 1994 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports which are incorporated herein by reference,
and have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING, OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SHARES TO ANY PERSON IN ANY JURISDICTION TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE MAKING OF ANY SALES HEREUNDER
SHALL IMPLY THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SUBSEQUENT TO THE DATE HEREOF.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
----
Available Information 2
Incorporation of Certain
Documents by Reference 2
The Company 3
Description of the Transaction 3
Description of Shares 4
Legal Opinions 5
Experts 5
</TABLE>
162,500
WEINGARTEN REALTY
INVESTORS
COMMON SHARES OF BENEFICIAL INTEREST
----------------------------------------
PROSPECTUS
----------------------------------------
APRIL , 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration fee................................ $ 1,948
NASD fee............................................ 0
Accounting fees and expenses........................ 2,000
Legal fees and expenses............................. 10,000
Printing and engraving.............................. 0
Blue Sky fees and expenses (including legal fees)... 0
Miscellaneous....................................... 1,052
-------
Total....................................... $15,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUST MANAGERS AND OFFICERS.
Subsection (B) of Section 9.1 of the Texas Real Estate Investment 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 an 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.
Article Sixteen of the Declaration of Trust 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
1
<PAGE>
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
party to any suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, because the person is or was a Trust Manager,
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, or is found liable
on the basis that personal benefit was improperly received by the person, 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.
ITEM 16. LIST OF EXHIBITS.
Except as indicated below, all Exhibits have been previously filed.
5.1* -- Opinion of Andrews & Kurth L.L.P. as to the legality of the
securities being registered.
10.1 -- 1988 Share Option Plan of the Company, as amended (filed as
Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1990 and incorporated herein by
reference).
10.3 -- 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. dated December
28, 1984, payable to the Company in the original principal amount
of $3,150,000 (filed as Exhibit 10.8 to the Company's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by
reference).
10.4 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc.
in the original principal amount of $3,150,000 (filed as Exhibit
10.9 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.4.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
that certain Trust Indenture, dated December 28, 1984, between WRI
Holdings, Inc. and Texas Commerce Bank National Association, as
Trustee, relating to the 16% Mortgage Bonds Due 1994 of WRI
Holdings, Inc. in the original principal amount of $3,150,000
(filed as Exhibit 10.5.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1989 and incorporated herein
by reference).
10.4.2 -- Supplemental Indenture of Trust, dated February 22, 1995, between
WRI Holdings, Inc. and Texas Commerce Bank National Association
relating to the 16% Mortgage Bonds due December 28, 1994 of WRI
Holdings, Inc. in the original principal amount of $3,150,000
(filed as Exhibit 10.4.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1994 and incorporated herein
by reference).
10.5 -- 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December
28, 1984, payable to the Company in the original principal amount
of $16,682,000 (filed as Exhibit 10.10 to the Company's
Registration Statement on Form S-4 (No. 33-19730) and incorporated
herein by reference).
10.6 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $16,682,000 (filed as Exhibit
10.11 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
2
<PAGE>
10.6.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $16,682,000 (filed as Exhibit
10.7.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.7 -- Second Amended Promissory Note, as restated, effective as of
January 1, 1992, executed by WRI Holdings, Inc., pursuant to which
it may borrow up to the principal sum of $20,000,000 from the
Company.
10.8 -- 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December
28, 1984, payable to the Company in the original principal amount
of $7,000,000 (filed as Exhibit 10.13 to the Company's
Registration Statement on Form S-4 (No. 33-19730) and incorporated
herein by reference).
10.9 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $7,000,000 (filed as Exhibit
10.14 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.9.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $7,000,000 (filed as Exhibit
10.10.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.10 -- Agreement Correcting Trust Indenture, dated February 11, 1985,
relating to 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in
the original principal amount of $7,000,000 (filed as Exhibit
10.15 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.11 -- Amended and Restated Loan Agreement of $80,000,000 dated February
5, 1986, between the Company and Texas Commerce Bank National
Association (filed as Exhibit 10.16 to the Company's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by
reference).
10.12 -- First, Second and Waiver and Third Amendment to the Amended and
Restated Loan Agreement of $80,000,000 dated February 5, 1986,
between the Company and Texas Commerce Bank National Association
(filed as Exhibit 10.13 to the Company's Annual Report on Form 10-
K for the year ended December 31, 1989 and incorporated herein by
reference).
10.14 -- Second Amendment to Note Purchase Agreement, dated July 27, 1994,
amending Loan Agreement, dated August 6, 1987, and as amended on
March 31, 1991, between the Company and Life and Accident
Insurance Company for $4,000,000, American General Life Insurance
Company of Delaware for $4,000,000, Republic National Life
Insurance Company for $3,000,000 and American Amicable Life
Insurance Company of Texas for $2,000,000 (filed as Exhibit
10.15.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference).
10.15 -- The Savings and Investment Plan for Employees of the Company, as
amended (filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (No. 33-25581) and incorporated herein by
reference).
10.16 -- Fifth Amendment to Savings and Investment Plan for Employees of
Weingarten Realty (filed as Exhibit 4.1.1 to the Company's Post-
Effective Amendment No. 1 to Registration Statement on Form S-8
(No. 33-25581) and incorporated herein by reference).
10.17 -- Loan Agreement of $20,000,000 (as amended, supplemented and
restated) dated October 1, 1990, between the Company and Barclays
Bank PLC (filed as Exhibit 10.21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1990 and incorporated
herein by reference).
10.17.1 -- Agreement and Amendment to Loan Agreement dated as of March 31,
1993 between the Company and Barclays Bank PLC, amending certain
provisions of the Loan Agreement of $20,000,000 dated October 1,
1990.
10.18 -- Promissory Note and Line of Credit Loan Agreement in the amount of
$5,000,000, effective as of May 13, 1991, between the Company, as
payee, and Leisure Dynamics, Inc. as maker (filed as Exhibit 10.22
to the Company's Annual Report on Form 10-K for the year ended
3
<PAGE>
December 31, 1991 and incorporated herein by reference).
10.19 -- Promissory Note in the amount of $12,000,000 between the Company,
as payee, and Plaza Construction, Inc., as maker (filed as Exhibit
10.23 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1991 and incorporated herein by reference).
10.19.1 -- Sixth Renewal and Extension of Promissory Note in the amount of
$12,000,000, effective as of December 1, 1994, between the
Company, as payee, and Plaza Construction, Inc., as maker (filed
as Exhibit 10.20.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 and incorporated herein by
reference).
10.20 -- Amended and Restated Master Swap Agreement dated as of January 29,
1992, between the Company and Texas Commerce Bank National
Association (filed as Exhibit 10.24 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992 and incorporated
herein by reference).
10.20.1 -- Rate Swap Transaction, dated as of May 15, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.20.2 -- Rate Swap Transaction, dated as of June 24, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.20.3 -- Rate Swap Transaction, dated as of July 2, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.3 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.21 -- Credit Agreement dated as of November 22, 1994 between the Company
and Texas Commerce Bank National Association as Agent and
individually as a Bank, First Interstate Bank of Texas N.A. and
the Banks defined therein, together with Amendment No. 1 to such
Credit Agreement dated as of January 31, 1995 (filed as Exhibit 10
to the Company's Registration Statement on Form S-3 (No. 33-57659)
and incorporated herein by reference).
10.22 -- Revolving Credit Note, dated November 22, 1994, between the
Company and Texas Commerce Bank National Association in the amount
of $110,000,000 (filed as Exhibit 10.23 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.23 -- Revolving Credit Note, dated November 22, 1994, between the
Company and First Interstate Bank of Texas N.A. in the amount of
$40,000,000 (filed as Exhibit 10.24 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994 and incorporated
herein by reference).
10.24 -- Note Purchase Agreement, dated April 1, 1994, between The Variable
Annuity Life Insurance Company, American General Life Insurance
Company and the Company in the amount of $30,000,000 (filed as
Exhibit 10.25 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 and incorporated herein by
reference).
10.25 -- The 1993 Incentive Share Plan of the Company (filed as Exhibit 4.1
to the Company's Registration Statement on Form S-8 (No. 33-52437)
and incorporated herein by reference).
10.26* -- Form of Purchase and Sale Agreement, dated March 28, 1995, among
Weingarten Realty Investors and Rothschild Property Investors L.P.
11.1 -- Computation of Net Income Per Common and Common Equivalent Shares
(filed as Exhibit 11.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).
13.1* -- The Weingarten Realty Investors 1994 Annual Report to
Shareholders.
24.1* -- 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.
24.2* -- The consent of Deloitte & Touche is included in Part II of this
Registration Statement.
25.1* -- Power of attorney, pursuant to which amendments to this
Registration Statement may be filed, is included in Part II of
this Registration Statement.
* Filed with this report
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
4
<PAGE>
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-2 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 26TH DAY OF APRIL,
1995.
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 hereby constitutes and appoints Stanford Alexander and Joseph W.
Robertson, Jr., and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him, and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file this Registration Statement under the Securities Act of 1933,
as amended, and any or all amendments (including, without limitation, post-
effective amendments), with all exhibits and any and all documents required to
be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do if personally present, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
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.
Signature Title Date
--------- ----- ----
/s/ Stanford Alexander
- -------------------------- Chairman and Trust Manager April 26, 1995
Stanford Alexander (Chief Executive Officer)
/s/ Andrew M. Alexander
- -------------------------- Executive Vice President/ April 26, 1995
Andrew M. Alexander Asset Management and
Trust Manager
6
<PAGE>
/s/ Martin Debrovner
- -------------------------- President, Chief Operating April 26, 1995
Martin Debrovner Officer and Trust Manager
/s/ Melvin A. Dow
- -------------------------- Trust Manager April 26, 1995
Melvin A. Dow
/s/ Stephen A. Lasher
- -------------------------- Trust Manager April 26, 1995
Stephen A. Lasher
/s/Joseph W. Robertson, Jr.
- -------------------------- Executive Vice President and April 26, 1995
Joseph W. Robertson, Jr. Trust Manager
(Chief Financial Officer)
/s/ Douglas W. Schnitzer
- -------------------------- Trust Manager April 26, 1995
Douglas W. Schnitzer
/s/ Marc J. Shapiro
- -------------------------- Trust Manager April 26, 1995
Marc J. Shapiro
/s/ J. T. Trotter
- -------------------------- Trust Manager April 26, 1995
J. T. Trotter
/s/ Stephen C. Richter
- -------------------------- Vice President and Treasurer April 26, 1995
Stephen C. Richter (Principal Accounting Officer)
7
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
WEINGARTEN REALTY INVESTORS:
We consent to the incorporation by reference in this Registration Statement on
Form S-2 of Weingarten Realty Investors of our report dated February 22, 1995,
appearing in the Annual Report on Form 10-K and the Annual Report to
shareholders of Weingarten Realty Investors for the year ended December 31, 1994
and to the reference to us under the heading "Experts" in the Prospectus, which
is part of this Registration Statement on Form S-2.
DELOITTE & TOUCHE LLP
Houston, Texas
April 26, 1995
<PAGE>
EXHIBIT INDEX
Except as indicated below, all Exhibits have been previously filed.
5.1* -- Opinion of Andrews & Kurth L.L.P. as to the legality of the
securities being registered.
10.1 -- 1988 Share Option Plan of the Company, as amended (filed as
Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1990 and incorporated herein by
reference).
10.3 -- 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. dated December
28, 1984, payable to the Company in the original principal amount
of $3,150,000 (filed as Exhibit 10.8 to the Company's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by
reference).
10.4 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc.
in the original principal amount of $3,150,000 (filed as Exhibit
10.9 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.4.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
that certain Trust Indenture, dated December 28, 1984, between WRI
Holdings, Inc. and Texas Commerce Bank National Association, as
Trustee, relating to the 16% Mortgage Bonds Due 1994 of WRI
Holdings, Inc. in the original principal amount of $3,150,000
(filed as Exhibit 10.5.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1989 and incorporated herein
by reference).
10.4.2 -- Supplemental Indenture of Trust, dated February 22, 1995, between
WRI Holdings, Inc. and Texas Commerce Bank National Association
relating to the 16% Mortgage Bonds due December 28, 1994 of WRI
Holdings, Inc. in the original principal amount of $3,150,000
(filed as Exhibit 10.4.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1994 and incorporated herein
by reference).
10.5 -- 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December
28, 1984, payable to the Company in the original principal amount
of $16,682,000 (filed as Exhibit 10.10 to the Company's
Registration Statement on Form S-4 (No. 33-19730) and incorporated
herein by reference).
10.6 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $16,682,000 (filed as Exhibit
10.11 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
<PAGE>
10.6.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $16,682,000 (filed as Exhibit
10.7.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.7 -- Second Amended Promissory Note, as restated, effective as of
January 1, 1992, executed by WRI Holdings, Inc., pursuant to which
it may borrow up to the principal sum of $20,000,000 from the
Company.
10.8 -- 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December
28, 1984, payable to the Company in the original principal amount
of $7,000,000 (filed as Exhibit 10.13 to the Company's
Registration Statement on Form S-4 (No. 33-19730) and incorporated
herein by reference).
10.9 -- Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $7,000,000 (filed as Exhibit
10.14 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.9.1 -- First Supplemental Indenture of Trust between WRI Holdings, Inc.
and Texas Commerce Trust Company of New York, as Trustee, amending
Trust Indenture, dated December 28, 1984, between WRI Holdings,
Inc. and Texas Commerce Bank National Association, as Trustee,
relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc.
in the original principal amount of $7,000,000 (filed as Exhibit
10.10.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.10 -- Agreement Correcting Trust Indenture, dated February 11, 1985,
relating to 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in
the original principal amount of $7,000,000 (filed as Exhibit
10.15 to the Company's Registration Statement on Form S-4 (No. 33-
19730) and incorporated herein by reference).
10.11 -- Amended and Restated Loan Agreement of $80,000,000 dated February
5, 1986, between the Company and Texas Commerce Bank National
Association (filed as Exhibit 10.16 to the Company's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by
reference).
10.12 -- First, Second and Waiver and Third Amendment to the Amended and
Restated Loan Agreement of $80,000,000 dated February 5, 1986,
between the Company and Texas Commerce Bank National Association
(filed as Exhibit 10.13 to the Company's Annual Report on Form 10-
K for the year ended December 31, 1989 and incorporated herein by
reference).
10.14 -- Second Amendment to Note Purchase Agreement, dated July 27, 1994,
amending Loan Agreement, dated August 6, 1987, and as amended on
March 31, 1991, between the Company and Life and Accident
Insurance Company for $4,000,000, American General Life Insurance
Company of Delaware for $4,000,000, Republic National Life
Insurance Company for $3,000,000 and American Amicable Life
Insurance Company of Texas for $2,000,000 (filed as Exhibit
10.15.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference).
10.15 -- The Savings and Investment Plan for Employees of the Company, as
amended (filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (No. 33-25581) and incorporated herein by
reference).
10.16 -- Fifth Amendment to Savings and Investment Plan for Employees of
Weingarten Realty (filed as Exhibit 4.1.1 to the Company's Post-
Effective Amendment No. 1 to Registration Statement on Form S-8
(No. 33-25581) and incorporated herein by reference).
10.17 -- Loan Agreement of $20,000,000 (as amended, supplemented and
restated) dated October 1, 1990, between the Company and Barclays
Bank PLC (filed as Exhibit 10.21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1990 and incorporated
herein by reference).
10.17.1 -- Agreement and Amendment to Loan Agreement dated as of March 31,
1993 between the Company and Barclays Bank PLC, amending certain
provisions of the Loan Agreement of $20,000,000 dated October 1,
1990.
10.18 -- Promissory Note and Line of Credit Loan Agreement in the amount of
$5,000,000, effective as of May 13, 1991, between the Company, as
payee, and Leisure Dynamics, Inc. as maker (filed as Exhibit 10.22
to the Company's Annual Report on Form 10-K for the year ended
<PAGE>
December 31, 1991 and incorporated herein by reference).
10.19 -- Promissory Note in the amount of $12,000,000 between the Company,
as payee, and Plaza Construction, Inc., as maker (filed as Exhibit
10.23 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1991 and incorporated herein by reference).
10.19.1 -- Sixth Renewal and Extension of Promissory Note in the amount of
$12,000,000, effective as of December 1, 1994, between the
Company, as payee, and Plaza Construction, Inc., as maker (filed
as Exhibit 10.20.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 and incorporated herein by
reference).
10.20 -- Amended and Restated Master Swap Agreement dated as of January 29,
1992, between the Company and Texas Commerce Bank National
Association (filed as Exhibit 10.24 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992 and incorporated
herein by reference).
10.20.1 -- Rate Swap Transaction, dated as of May 15, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.20.2 -- Rate Swap Transaction, dated as of June 24, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.20.3 -- Rate Swap Transaction, dated as of July 2, 1992, between the
Company and Texas Commerce Bank National Association (filed as
Exhibit 10.24.3 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by
reference).
10.21 -- Credit Agreement dated as of November 22, 1994 between the Company
and Texas Commerce Bank National Association as Agent and
individually as a Bank, First Interstate Bank of Texas N.A. and
the Banks defined therein, together with Amendment No. 1 to such
Credit Agreement dated as of January 31, 1995 (filed as Exhibit 10
to the Company's Registration Statement on Form S-3 (No. 33-57659)
and incorporated herein by reference).
10.22 -- Revolving Credit Note, dated November 22, 1994, between the
Company and Texas Commerce Bank National Association in the amount
of $110,000,000 (filed as Exhibit 10.23 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.23 -- Revolving Credit Note, dated November 22, 1994, between the
Company and First Interstate Bank of Texas N.A. in the amount of
$40,000,000 (filed as Exhibit 10.24 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994 and incorporated
herein by reference).
10.24 -- Note Purchase Agreement, dated April 1, 1994, between The Variable
Annuity Life Insurance Company, American General Life Insurance
Company and the Company in the amount of $30,000,000 (filed as
Exhibit 10.25 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 and incorporated herein by
reference).
10.25 -- The 1993 Incentive Share Plan of the Company (filed as Exhibit 4.1
to the Company's Registration Statement on Form S-8 (No. 33-52437)
and incorporated herein by reference).
10.26* -- Form of Purchase and Sale Agreement, dated March 28, 1995, among
Weingarten Realty Investors and Rothschild Property Investors L.P.
11.1 -- Computation of Net Income Per Common and Common Equivalent Shares
(filed as Exhibit 11.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).
13.1* -- The Weingarten Realty Investors 1994 Annual Report to
Shareholders.
24.1* -- 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.
24.2* -- The consent of Deloitte & Touche is included in Part II of this
Registration Statement.
25.1* -- Power of attorney, pursuant to which amendments to this
Registration Statement may be filed, is included in Part II of
this Registration Statement.
* Filed with this report
<PAGE>
EXHIBIT 5.1
April 26, 1995
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-2 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of an aggregate of 162,500 Shares of Beneficial Interest,
par value $0.03 per share ("Shares"), of the Company.
As the basis for the opinions hereinafter expressed, we have examined such
statutes, regulations, corporate records and documents, certificates of public
officials and other instruments as we have deemed necessary or advisable for
purposes of this opinion. In such examination, we have assumed the authenticity
of all documents submitted to us as originals and the conformity with the
original documents of all documents submitted to us as copies.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that:
(1) The 162,500 Shares of the Company to be issued as described in the
Registration Statement are duly and validly authorized.
(2) Upon the issuance by the Company of the Shares as described in the
Registration Statement, such Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Opinions" therein.
Very truly yours,
ANDREWS & KURTH L.L.P.
<PAGE>
EXHIBIT 10.26
PURCHASE AND SALE AGREEMENT
---------------------------
THIS AGREEMENT (hereinafter sometimes called the "Agreement") by and
between ROTHSCHILD PROPERTY INVESTORS L.P., a Delaware limited partnership
(hereinafter called "Seller"), and WEINGARTEN REALTY INVESTORS, a Texas real
estate investment trust (hereinafter called "Buyer") is entered into as of the
Effective Date (as herein defined).
W I T N E S S E T H:
1. PROPERTY
Subject to the terms and provisions of this Agreement, Seller hereby
agrees to sell and convey to Buyer and Buyer agrees to purchase from Seller the
following:
(a) That certain tract or parcel of land described in Exhibit "A"
attached hereto and incorporated by reference herein for all purposes
(hereinafter called the "Land") and located at the northwest corner of Rio
Bravo Blvd., SW and Isleta Blvd., SW, in Albuquerque, New Mexico;
(b) All buildings, structures, and improvements situated on the Land
and all fixtures and other property affixed thereto (hereinafter called the
"Improvements") and known as Valle del Sol Shopping Center;
(c) All the rights and appurtenances pertaining to the Land and
Improvements, including any mineral rights, rights under any reciprocal
easement agreements or other recorded or unrecorded instruments benefiting
the Property (as hereinafter defined), any right, title, or interest of
Seller in and to easements, adjacent or contiguous tracts, strips, gores,
streets, alleys, or rights-of-way, any reversionary rights attributable to
the Land, any condemnation awards made or to be made in lieu thereof, and
any awards for damage to the Land by reason of a change of grade of any
highway, street, road, or avenue (hereinafter called the "Appurtenances");
(d) All equipment, furnishings, furniture, and other tangible personal
property (herein sometimes called the "Personal Property") owned by Seller
now or hereafter located on or about, or used in connection with, the Land
or Improvements;
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(e) The interest of the lessor or landlord under all leases, use, and
occupancy agreements covering space on the Land or in the Improvements
(hereinafter called the "Tenant Leases"), together with all prepaid rents,
security deposits, utility deposits, and other deposits made by the tenants
under the Tenant Leases; and
(f) All of the following to the extent they relate to or arise out of
the design, construction, ownership, use, leasing, maintenance, service, or
operation of the Land, Improvements, Tenant Leases, or Personal Property:
(i) contracts or agreements such as maintenance, service, or utility
contracts (hereinafter called the "Operating Agreements"), to the extent
they are in Seller's possession and to the extent that Buyer elects to take
assignment thereof, (ii) warranties, guaranties, indemnities (each to the
extent they are in Seller's possession), and claims, (iii) development
rights, governmental approvals, licenses, permits, or similar documents, to
the extent they are in Seller's possession, (iv) telephone exchanges, trade
names (including, but not limited to, "Valle del Sol Shopping Center"),
marks, all goodwill attributable to or associated with such trade names and
marks, and other identifying material used by Seller in the operation of
the Property, (v) plans, drawings, specifications, surveys, engineering
reports, environmental reports and audits, government or regulatory
compliance reports, such as, American with Disabilities Act compliance
reports, equipment manuals, and other technical manuals and descriptions,
all to the extent they are in Seller's possession, and (vi) other property
(real, personal, or mixed, tangible or intangible), owned or held by Seller
to the extent Buyer elects to take assignment thereof (collectively, all
such property described in this subparagraph (f) being called the
"Intangible Property").
The Land, the Improvements, the Appurtenances, the Personal Property,
the Tenant Leases, the Intangible Property, and all the other aforesaid
property, rights, and appurtenances are hereinafter collectively called the
"Property."
2. PURCHASE PRICE; PUT AGREEMENT; STOCK CHANGES
(a) PURCHASE PRICE: The term "WRI Shares" means common shares of
beneficial interest par value $0.03 per share, of Buyer (frequently
referred to as "common stock"). Subject to adjustment as provided in
Paragraph 2(d), the Purchase Price for the Property shall be 162,500 WRI
Shares, which shall be fully paid and non-assessable and shall be
registered under the Securities Act of 1933 and listed on the New York
Stock Exchange. The WRI Shares which constitute the Purchase Price are
herein referred to as the "Subject WRI Shares".
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(b) PUT OPTION:
(i) If the Closing occurs, then, at its option, Seller shall have
the right to require Buyer to purchase from Seller the Subject WRI Shares
(or any portion thereof) upon compliance by Seller with the following
requirements, each of which shall be a condition precedent to the right of
Seller to require Buyer to purchase the Subject WRI Shares (or any portion
thereof) and a condition precedent to the obligation of Buyer to purchase
such shares:
(A) Not earlier than the first anniversary of the Closing
Date (hereinafter defined) i.e., one year after the Closing Date, and
not later than ten (10) days after the first anniversary of the
Closing Date, Seller shall give notice to Buyer that Seller elects to
exercise its option to require Buyer to purchase the Subject WRI
Shares (or any portion thereof) from Seller, which notice shall state
the number of Subject WRI Shares which Seller elects to require Buyer
to purchase (the "Put Notice"); and
(B) On the fifth (5th) business day after the giving of the
Put Notice, Seller shall deliver to Buyer at Buyer's office at 2600
Citadel Plaza Drive, Suite 300, Houston, Texas, certificates
representing the Subject WRI Shares (as to which the Put Notice shall
have been given), duly endorsed to Buyer or with separate stock powers
duly endorsed to Buyer with no legends other than those specified in
Paragraph 2(b);
such right being referred to herein as the "Put Option".
Upon compliance by Seller with the conditions precedent described in
clauses (A) and (B) above, Buyer will pay to Seller at Buyer's aforesaid
office, or by wire transfer pursuant to such wiring instructions as Seller
may provide to Buyer, the sum of $39.06 per share for each of the Subject
WRI Shares purchased by Buyer (the "Put Consideration"); such payment to be
made by cashier's check or certified check payable to Seller or by wire
transfer as aforesaid.
(ii) Except as provided in Clause (A) or Clause (B) of this Paragraph
2(b)(ii), Seller shall not have the right to transfer, assign, pledge or
hypothecate the Put Option, and any attempt to do any of the foregoing
shall be null and void and of no force or effect.
(A) In the event that on one occasion, in a bona fide loan
transaction, Seller should, at its option, pledge all or a portion of
the Subject WRI Shares to a state or national bank and such pledgee
should thereafter foreclose such pledge and become the owner of the
pledged Subject WRI Shares, then, in such event, such bank shall
succeed to the rights of Seller with respect
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to the Put Option as it applies to the Subject WRI Shares which shall
have been foreclosed on, as aforesaid.
(B) In the event that Seller makes a distribution of any of
the Subject WRI Shares to its partners, Property Associates II L.P. or
Public Employees Retirement System of Ohio, such partner-distributees
shall succeed to the rights of Seller with respect to the Put Option
as it applies to the Subject WRI Shares so distributed to such
partner-distributees. Further, in the event that the aforesaid
Property Associates II L.P. should make a distribution of any of the
Subject WRI Shares to its general partner, Rothschild North America
Inc., such partner-distributee shall succeed to the rights of Seller
with respect to the Put Option as it applies to the Subject WRI Shares
so distributed to such partner-distributee. In the event of such
distributions, Property Associates II L.P., Public Employees
Retirement System of Ohio and Rothschild North America Inc. are
referred to herein as "Qualified Partner-Distributees."
No transferee of any of the Subject WRI Shares (other than a bank which
shall have foreclosed a pledge on Subject WRI Shares as described in Clause
(A) above or a Qualified Partner-Distributee which shall have received a
distribution of Subject WRI Shares as described in Clause (B) above) shall
have any rights with respect to the Put Option, and, further, such bank or
Qualified Partner-Distributee, under the aforesaid circumstances, shall
have rights with respect to the Put Option only with respect to the Subject
WRI Shares acquired by it or them in the manner described in Clause (A) or
Clause (B), but not with respect to any other WRI Shares. Nothing
contained in this Paragraph 2(b)(ii) shall be construed or interpreted to
prohibit Seller from using the Subject WRI Shares as security for a margin
brokerage account.
(iii) It is expressly understood and agreed that the Put Option
applies only with respect to the initial certificates which are issued to
Seller as the Subject WRI Shares. In the event that Seller should now own
or hereafter acquire any other WRI Shares, irrespective of how such other
WRI Shares may have been or may be acquired by Seller, Seller shall not
have any Put Option with respect to such other WRI Shares.
(c) STOCK CHANGES: If prior to the Closing, Buyer should pay a
dividend or make a distribution on existing WRI Shares consisting of
additional WRI Shares, subdivide its WRI Shares into a greater number of
shares, combine its WRI 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; (i) the
number of WRI Shares which will constitute the Purchase Price shall be
proportionately reduced or proportionately increased as appropriate, and in
addition, (ii) the $39.06 per share Put Consideration
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referred to in Paragraph 2(d) shall 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, then the number of WRI Shares which will constitute the
Purchase Price will be 325,000 WRI Shares and the Put Consideration shall
be $19.53 per share. As a further example, without limiting the generality
of the first sentence of this Paragraph 2(d), if, prior to Closing there
should be a reverse split pursuant to which 2 WRI Shares are consolidated
into 1 share, then the Purchase Price shall be 81,250 shares and the Put
Consideration shall be $78.12 per share. If, subsequent to the Closing, a
Stock Change shall occur, then the number of WRI Shares which constitute
the Purchase Price shall remain unchanged, but the Put Consideration shall
be increased or reduced proportionately. For example, without limiting the
generality of the foregoing, if, subsequent to Closing, there should be a
2-for-1 split of WRI Shares, then the Put Consideration shall be $19.53.
As a further example, without limiting the generality of the foregoing, if
subsequent to the Closing, there should be a reverse split pursuant to
which 2 WRI shares are consolidated into 1 share, then the Put
Consideration shall be $78.12 per share.
3. INFORMATION REVIEW PERIOD
Seller has delivered or shall make available to Buyer the materials
described in Exhibit "B" attached hereto and incorporated by reference herein
for all purposes (hereinafter called the "Required Information Materials")
including, but not limited to, a current rent roll in the form attached hereto
as Exhibit "C" and certified to be true and correct by Seller. That portion of
the Required Information Materials to be delivered to Buyer pursuant to Exhibit
"B" on or before the Delivery Date shall be collectively called the "Deliverable
Materials". Except for those items listed on Exhibit B-1 attached hereto,
Seller has delivered to Buyer the Deliverable Materials. Seller acknowledges,
however, that Buyer has not reviewed the Tenant Leases, the Title Commitment, or
the title exception documents listed in the Title Commitment, and therefore,
upon such review, Buyer may discover certain omitted documents or pages which
Seller may hereafter be required to furnish. Buyer shall have a period of sixty
(60) days after the Effective Date (which 60-day period is hereinafter called
the "Information Review Period") within which to review the Required Information
Materials and make the physical inspection of the Property which is referred to
in Paragraph 4 and decide, in Buyer's sole discretion, whether the Property is
satisfactory to Buyer so as to proceed with the Closing, as referred to herein.
Both parties hereby agree that, if requested by the other party hereto, they
promptly will confirm in writing the date on which the Information Review Period
will expire. Although Buyer shall be permitted to conduct its due diligence up
to and including the last day of the Information Review Period, Seller has
requested, and Buyer has agreed, that Buyer shall use reasonable efforts to
complete its inspection of the Property prior to the expiration of the
Information Review Period. If Buyer decides to proceed, as aforesaid, then
within the Information Review Period, Buyer will deliver to Seller a notice of
such decision (hereinafter called the "Approval Notice"). If at any time during
the Information Review Period, based upon its study of the
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Required Information Materials, its physical inspection of the Property, or any
other item deemed significant by Buyer, Buyer decides not to proceed to purchase
the Property under this Agreement, then Buyer shall not deliver an Approval
Notice; whereupon, at the expiration of the Information Review Period, this
Agreement shall be null and void, the Earnest Money (as defined in Paragraph 5
hereof) plus all accrued interest thereon shall be immediately returned to
Buyer, and neither Buyer nor Seller shall have any further obligation or
liability hereunder (other than with respect to obligations hereunder that
expressly survive the termination of this Agreement).
4. PHYSICAL INSPECTION OF PROPERTY
Buyer shall have the right (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 soil tests,
and to make such other examinations as Buyer shall deem appropriate. Seller
will (a) request that all tenants and parties in possession of any portion of
the Property, and (b) cause Seller's contractor, engineer and agents to,
cooperate with Buyer, its employees, agents, and representatives in connection
with such inspection and to respond in writing to such reasonable questions as
Buyer (or its employees, agents, engineers and representatives) may ask in
connection with construction matters. Without limiting the generality of the
foregoing, Buyer shall have the right to communicate with the tenants under the
Tenant Leases pursuant to the terms of this Paragraph. Commencing on the
Effective Date, and continuing until the earlier of the Closing Date or
termination of this Agreement, Seller shall make available at Seller's office
(during Seller's normal business hours), for inspection and copying by Buyer or
Buyer's designated representatives, all books and records relating to the
Property. All such inspections and reviews of records shall be subject to
reasonable prior arrangements made by Buyer with Seller, and such inspections
and reviews shall not interfere with the operations of Seller or the tenants or
parties in possession of any portions of the Property.
Buyer's entry onto the Property to conduct such tests and inspections
of the Property shall be at Buyer's sole risk, subject to the rights of persons
in possession of the Property. Buyer shall indemnify and defend Seller and hold
Seller harmless from and against all loss, liability, damage, injury, and claims
including, without limitation, costs of court and reasonable attorneys' fees,
resulting from Buyer's testing or inspection of the Property, and Buyer shall
immediately restore, to the extent possible, any portion of the Property
disturbed by any such tests or inspections to the condition existing immediately
prior to such test or inspection procedure; provided, however, this indemnity
shall not include, and shall specifically exclude, any loss, liability, damage,
injury, and claims arising out of or resulting from, in whole or in part, (a)
any latent defect in, on, or under the Property, (b) the negligence, gross
negligence, or willful misconduct of Seller, or Seller's agents,
representatives, contractors, or employees, or (c) the discovery by Buyer, or
its agents, representatives, contractors, or employees of the presence of any
toxic or hazardous substance in, on, or under the Property, which condition
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must be remediated under applicable Environmental Laws (as that term is
hereinafter defined). The indemnity, defense and repair obligations of Buyer
under this Paragraph 4 shall survive the closing of this transaction (or if this
transaction does not close, the termination of this Agreement) for a period of
six months commencing on the Closing Date (as hereinafter defined), or if the
transaction does not close, the date this Agreement is terminated. Upon the
expiration of such six-month period, this indemnity shall automatically
terminate without the necessity of any notice, and Buyer shall be conclusively
deemed released from any liability or obligations under this indemnity.
5. EARNEST MONEY
Within three business days after a counterpart or counterparts of this
Agreement executed by Seller and Buyer are delivered to Stewart Title Guaranty
Company (the "Title Company") at their national office located at 1980 Post Oak
Boulevard, Houston, Texas 77056, Buyer will deposit with the Title Company the
sum of Fifty Thousand and no/100 Dollars ($50,000.00) (the "Earnest Money"),
which shall be held in escrow by the Title Company and shall only be disbursed
in accordance with the terms of this Agreement. The Title Company shall deposit
the Earnest Money in one or more interest bearing accounts with a bank or other
financial institution acceptable to Buyer. The Earnest Money plus all interest
to accrue thereon shall be fully insured throughout the term of this Agreement
by the Federal Deposit Insurance Corporation. Interest earned on the Earnest
Money shall accrue for the benefit of Buyer and shall not be deemed a portion of
the Earnest Money. Upon the closing of this transaction, the Earnest Money plus
any accrued interest thereon shall be returned to Buyer. In the event this
transaction does not close, the Title Company shall disburse the Earnest Money
as provided in this Agreement and shall pay immediately to Buyer all interest
accrued on the Earnest Money. Additionally, concurrently with the execution of
this Agreement, Buyer shall deliver to Seller the sum of One Hundred and no/100
Dollars ($100.00) ("Inspection Fee") as consideration for Buyer's information
review and property inspection rights set forth herein, which Inspection Fee
shall remain the property of Seller in all instances.
If the transaction contemplated by this Agreement is closed or if it
is not closed for some reason other than default of Buyer, then in either of
such events, the Earnest Money together with all interest accrued thereon shall
be returned to Buyer. If all conditions precedent to Buyer's obligations
hereunder are satisfied and Seller fully complies with all terms and provisions
of this Agreement, but the transaction contemplated by this Agreement is not
closed solely by reason of default on the part of Buyer, then, in such event,
this Agreement shall be deemed terminated, the Title Company shall deliver the
Earnest Money to Seller, pursuant to the provisions of Paragraph (h)..3 of this
Agreement, and neither Buyer nor Seller shall have any further obligation or
liability under this Agreement (other than with respect to obligations hereunder
that expressly survive the termination of this Agreement).
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6. SURVEY; TITLE BINDER
Seller shall deliver to Buyer within ten (10) days after the Effective
Date a survey, (hereinafter called the "Survey") of the Property to be made by
Albuquerque Surveying Company, Inc. prepared in accordance with the current
minimum standard detail requirements for an urban survey as adopted by the
American Land Title Association ("ALTA") and the American Congress on Surveying
and Mapping ("ACSM") and sufficient to enable the Title Company to delete the
standard printed survey exception in the Owner's Title Policy. In addition to
and without limiting the foregoing, the Survey shall show the following:
adjacent roads; building lines; a metes and bounds description showing the
beginning point, its distance and bearing 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 setback
lines; location, dimensions, area, number of stories, and street address of all
buildings and the distance from each side of each building to the property line;
all change in grade within buildings and/or in finished-floor elevations of
buildings; location and total number of parking spaces (including and
designating handicap spaces); physical evidence of any building, fence, or hedge
near any property line; physical evidence and location of any possible and each
actual public and private easement and utility line and/or poles, and of each
pipeline, manhole, and 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 or
other locatable 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 "D" or in some
other form satisfactory to the Title Company and Buyer, and shall be signed and
sealed by the aforesaid surveyor or engineer. Seller shall bear the cost of the
Survey; provided, however, that Buyer shall bear that portion of the cost of the
Survey attributable to Buyer's survey requirements which are in addition to the
current survey standards adopted by the ALTA and ACSM. If the Survey shows any
encroachments, overlapping of improvements, or other conditions not acceptable
to Buyer, Buyer shall have the right to terminate this Agreement by written
notice to Seller on or before the expiration of the Information Review Period,
whereupon the Earnest Money and accrued interest thereon will be refunded to
Buyer, and neither Buyer nor Seller shall have any further obligation or
liability under this Agreement (other than with respect to any obligations
hereunder that expressly survive the termination of this Agreement).
Seller, at Seller's expense, shall furnish to Buyer within ten (10)
days after the Effective Date a title commitment (hereinafter called the "Title
Binder") issued by the Title Company, showing title to the Property and
committing to issue the Owner's Title Policy to Buyer pursuant to Paragraph
(h)(a)(iv) 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. If any
exceptions appear on the Title Binder, other than the standard printed
exceptions (which shall be modified as provided in Paragraph (h)(a)(iv) of this
Agreement) that are not acceptable to Buyer, Buyer shall, within ten
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(10) days after receipt of the Title Binder, the Survey, and copies of all
documents referred to therein, notify Seller in writing of such fact. Seller
shall bear the costs to cure all such objections which Seller, in its
discretion, elects to cure (provided, however, that Seller shall be obligated to
have discharged and released on or before Closing all liens against the Property
and shall be obligated to cure on or before Closing such other defects in
Seller's title caused or created by Seller from and after the Effective Date,
or, at Buyer's option, Buyer may subtract from the Purchase Price at Closing the
amount of any such liens which Seller is obligated to have released and the
amount necessary to cure any such other title defects caused or created by
Seller on or after the Effective Date). If Seller is unable or unwilling to
cure such title objections (except for those liens and title defects which
Seller is obligated to cure pursuant to the immediately preceding sentence) on
or before the earlier to occur of: (a) two (2) days prior to the expiration of
the Information Review Period, or (b) ten (10) days after receipt of such
notice, Buyer may at any time on or before the expiration of the Information
Review Period, either terminate this Agreement by written notice to Seller, or
waive such objections and accept such title as Seller can deliver. In the event
of such termination, the parties shall have no further right or other obligation
hereunder (other than with respect to obligations hereunder that expressly
survive the termination of this Agreement), and the Earnest Money and accrued
interest thereon shall be returned to Buyer. Those exceptions or title
deficiencies that appear on the Title Binder and are accepted by Buyer pursuant
to the terms of this Paragraph 6 shall constitute the "Permitted Encumbrances."
7. COVENANTS OF SELLER
Seller covenants and agrees with Buyer that, between the date hereof and the
date of Closing:
(a) Seller will cause the Property to be maintained and operated in a
good and workmanlike manner in accordance with all applicable laws, and
will keep the Improvements and Personal Property in as good order and
operating condition as existed on the Effective Date, ordinary wear and
tear excepted, causing all necessary repairs, renewals, and replacements to
be made promptly.
(b) Seller will continue to operate the Property in the usual and
customary manner and will not enter into any lease, use, or occupancy
agreement affecting any portion of the Property or extend, renew, amend,
cancel, or terminate any Tenant Leases without the prior written approval
of Buyer, will not credit or apply any security, utility, or other deposits
to any Delinquent Rents (as hereinafter defined), and will comply with all
the obligations of the lessor under all such Tenant Leases.
(c) If Seller discovers any material defect, error, or omission in any
Required Information Materials, Seller will promptly give Buyer notice with
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detailed information sufficient to correct the defect, error, or omission
in the Required Information Materials.
(d) Seller will not sell, exchange, assign, transfer, convey,
encumber, or otherwise dispose of all or any part of the Property or any
interest therein, or permit or negotiate for any of the foregoing;
provided, however, Seller may sell or dispose of the Personal Property in
the ordinary course of its business.
(e) Seller will not, without the prior written consent of Buyer, enter
into any service, maintenance, or management agreement with respect to the
Property which is not terminable on or before the date of Closing.
(f) Seller will cause the Property to be covered by fire and extended
coverage casualty insurance in an amount at least equal to the full
replacement value of the Property together with loss of rents coverage for
the twelve month period following the date of such casualty.
(g) Seller will not, without the prior written consent of Buyer,
consent to any assignment, sublease, mortgage, or other encumbrance by any
tenant of its interest in its Tenant Lease, except if the terms of the
Tenant Lease require Seller to give such consent.
(h) Seller shall not, without the prior written consent of Buyer,
assign, transfer, make subject to any lien or encumbrance, or hypothecate
any rents or the right of Seller to any rents due or to become due under
the Tenant Leases, or any other rights of Seller under the Tenant Leases.
Buyer shall not unreasonably withhold its written consent where Buyer's consent
is required pursuant to any provision of this Paragraph 7, and Buyer's consent
shall be deemed to have been denied if Buyer fails to deliver written notice of
Buyer's approval of such matter within five (5) days after delivery to Buyer of
a request for consent together with all documents reasonably required by Buyer
to evaluate such request.
8. REPRESENTATIONS AND WARRANTIES
(a) SELLER'S REPRESENTATIONS AND WARRANTIES: Seller hereby disclaims
all representations and warranties that are not otherwise specifically
contained in this Agreement, and Buyer hereby accepts this Agreement and
will accept the Deed (as hereafter defined) at Closing subject to the
following:
EXCEPT FOR THE WARRANTY OF TITLE TO BE CONTAINED IN THE DEED AND
THE EXPRESS LIMITED WARRANTIES PROVIDED IN THIS
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AGREEMENT AND TO BE PROVIDED IN THE CLOSING DOCUMENTS, BUYER ACKNOWLEDGES
AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES
AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, 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, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER
MAY CONDUCT THEREON, THE SUITABILITY OF THE PROPERTY FOR CONSTRUCTION OF
IMPROVEMENTS OR THE AVAILABILITY OF UTILITIES TO THE PROPERTY, (D) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY,
INCLUDING, WITHOUT LIMITATION, BUILDING, FIRE AND SAFETY CODES, (E) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE
QUALITY, STATE OF REPAIR OR LACK OF REPAIR OR CONDITION OF THE PROPERTY,
AND (H) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY OR THE AREA IN WHICH
IT IS LOCATED. EXCEPT FOR THE EXPRESS LIMITED WARRANTIES PROVIDED IN THIS
PARAGRAPH AND TO BE PROVIDED IN THE CLOSING DOCUMENTS, SELLER HAS NOT MADE,
DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING
WHETHER THE PROPERTY DOES OR DOES NOT CONTAIN ANY HAZARDOUS, TOXIC OR
REGULATED MATERIALS, INCLUDING SOLID WASTE, AS DEFINED BY THE U.S.
ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR
REGARDING WHETHER THE PROPERTY COMPLIES WITH ANY ENVIRONMENTAL PROTECTION,
POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS, OR
THE DISPOSAL OR EXISTENCE, IN OR ON THE PROPERTY, OF ANY HAZARDOUS
SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE
COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, AND REGULATIONS
PROMULGATED THEREUNDER, OR HAZARDOUS, TOXIC OR OTHER DANGEROUS SUBSTANCES
THE STORAGE, USE, DISPOSAL OR TRANSPORTATION OF WHICH IS GOVERNED OR
REGULATED BY ANY LOCAL, STATE OR FEDERAL LAW OR REGULATION. EXCEPT FOR THE
EXPRESS WARRANTY OF TITLE TO BE CONTAINED IN THE DEED, THE EXPRESS LIMITED
WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT AND TO BE PROVIDED IN THE
CLOSING DOCUMENTS, AND
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THE REQUIRED INFORMATION MATERIALS, BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, BUYER IS
RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER
ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED BY
SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES
AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION
OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION EXCEPT FOR THE EXPRESS WARRANTY OF TITLE
TO BE CONTAINED IN THE DEED, THE EXPRESS LIMITED WARRANTIES SET FORTH IN
THIS AGREEMENT AND TO BE PROVIDED IN THE CLOSING DOCUMENTS. SELLER IS NOT
LIABLE FOR OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION
THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR
OTHER PERSON, UNLESS CONTAINED IN THIS AGREEMENT, IN THE CLOSING DOCUMENTS,
OR IN A DULY EXECUTED WRITTEN AMENDMENT HERETO SIGNED BY JAMES E. QUIGLEY
III AS AUTHORIZED REPRESENTATIVE OF SELLER. OTHER THAN AS ABOVE PROVIDED,
THE SALE OF THE PROPERTY IS MADE ON AN "AS IS" CONDITION AND BASIS "WITH
ALL FAULTS." IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN
ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL OF THE PROPERTY IS SOLD
BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. THIS DISCLAIMER
SHALL BE INCLUDED IN THE BILL OF SALE TO BE EXECUTED BY SELLER AND BUYER AT
CLOSING.
As the sole and exclusive representations of Seller in connection with
this Agreement, (except for any other representations and warranties of
Seller expressly contained in this Agreement), Seller hereby represents and
warrants to Buyer the following:
(i) The Tenant Leases, the current rent roll, and the schedule of
capital expenditures each delivered or to be delivered to Buyer in
accordance with Article 3 hereof and Exhibit "B" attached hereto are
and will be true, correct, accurate, and complete and do not or will
not omit to state any fact or condition, the omission of which makes
any of such documents misleading. All other Required Information
Materials (excluding the Tenant Leases, rent roll, and schedule of
capital expenditures) are and will be true, correct, accurate, and
complete in all material respects and will not omit to state any
material fact or condition,
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the omission of which makes any of such materials materially
misleading. All financial reports which are included in the Required
Information Materials are and will be prepared in accordance with
generally accepted accounting principles, consistently applied, except
with regard to depreciation and interest expense.
(ii) To the best of Seller's current, actual knowledge (as
hereinbelow defined), the location, construction, occupancy,
operation, and use of the Property (including any improvements and
equipment forming any part thereof) do not violate any applicable law,
statute, ordinance, rule, regulation, order, or determination of any
governmental authority or any board of fire underwriters (or similar
body), or any restrictive covenant or deed restriction or zoning
ordinance or classification affecting the Property, including, without
limitation, all applicable building codes, flood disaster laws, and
health and environmental laws and regulations (hereinafter sometimes
collectively called "Applicable Laws").
(iii) To the best of Seller's current, actual knowledge, the
Property and Seller are not currently subject to any existing,
pending, or threatened investigation or inquiry by any governmental
authority or to any remedial obligations under any Applicable Laws
pertaining to health or the environment ("Environmental Laws"); and
Seller has no knowledge or any reason to believe Buyer will be
required to obtain any permits, licenses, or similar authorizations to
occupy, operate, or use any portion of the Property by reason of any
Environmental Laws.
(iv) To the best of Seller's current, actual knowledge, there are
no changes contemplated in any of the Applicable Laws or of any
judicial or administrative action, any action by adjacent landowners,
or any fact or condition relating to the Property which would
adversely affect, prevent, or limit use of the Property as a retail
shopping center.
(v) Except as set forth on Schedule 8(a)(v) attached hereto,
neither Seller nor the tenant is in default under any of the Tenant
Leases; 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 Seller has been fully performed, paid for, and accepted by such
tenant; and no tenant of a Tenant Lease has any pending litigation,
offset, or counterclaim against Seller. No tenant has given any
notice to Seller of intention of instituting litigation with respect
to any Tenant Lease or terminating its tenancy. No tenant under a
Tenant Lease has any free rent or other rental concession
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which will be effective after the Effective Date hereof. Seller owns
no interest, directly or indirectly, in any of the tenants of the
Property, nor has Seller loaned money to any tenants for tenant
improvements, delinquent rent, working capital, or any other matter.
(vi) Except as disclosed in the Title Binder, none of the
landlord's interest in the Tenant Leases and none of the rents or
other amounts payable thereunder have been assigned, pledged, or
encumbered.
(vii) No brokerage or leasing commissions or other compensation
is due or payable with respect to or on account of any of the Tenant
Leases or any extension or renewal thereof.
(viii) To the best of Seller's current, actual knowledge, the
Land has not been contaminated by or used for the storage or disposal
of any hazardous substances, hazardous waste, or petroleum, except as
set forth in the updated Phase I environmental report prepared by
Western Technologies, Inc., and except for any substances or materials
used by tenants in the ordinary course of their respective businesses
and in compliance with all applicable Environmental Laws. To the best
of Seller's current, actual knowledge, neither the Land nor the
Improvements contain any building material having asbestos-containing
materials as a component part, any underground storage tanks, or any
other environmental conditions that a prudent and cautious shopping
center owner or buyer would remove or remediate.
(ix) There is no pending or, to the best of Seller's current
actual knowledge, threatened litigation (including, without
limitation, any condemnation or notice of condemnation) affecting or
related to the Property or any of the Tenant Leases.
(x) This Agreement has been executed by each person or entity
that has an ownership interest in the Property, and there is no
requirement that any person or entity that has not signed this
Agreement grant any consent or take any other action in order to
enable Seller to have the right to convey the Property as contemplated
by this Agreement.
(xi) There are no oral agreements affecting the Property.
(xii) There are no agreements with any other person relating to
the sale or other conveyance of the Property.
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(xiii) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and authorized to do business in New Mexico as a foreign limited
partnership. Seller has the requisite power and authority and legal
right to execute, deliver, and perform its obligations contained in
this Agreement, and all agreements executed or to be executed on
behalf of Seller in connection with this Agreement, and to carry on
its business as now being conducted.
(xiv) This Agreement has been duly executed and delivered by
Seller and constitutes the legal, valid, and binding obligation of
Seller enforceable against Seller in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally.
(xv) The execution, delivery, and performance by Seller of this
Agreement and compliance with the terms and provisions hereof do not
and will not (a) violate or conflict with, or result in a breach of,
or require any consent under (i) the limited partnership agreement of
Seller, (ii) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any governmental or regulatory
authority or arbitrator, or (iii) any agreement or instrument to which
Seller is a party or by which it or any of its property is bound or
subject, or (b) constitute a default under any such agreement or
instrument.
(xvi) Seller has all requisite power and authority and the legal
right to own, pledge, mortgage, convey and operate its properties and
assets, and to conduct its business substantially as now or currently
proposed to be conducted.
(xvii) There are no legal or arbitral proceedings, and no
proceedings by or before any governmental or regulatory authority,
pending or threatened against or affecting Seller or any properties or
rights of Seller which (a) purport to affect the legality, validity,
binding effect or enforceability of this Agreement or (b) if adversely
determined, would have a material adverse effect on the business,
condition (financial or otherwise), operations, prospects, or
properties of Seller.
(xviii) No authorization, consent, or approval of, or filing or
registration with, any governmental or regulatory authority is
required for the execution, delivery, and performance by Seller of
this Agreement or any closing documents to which Seller is or will be
a party.
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(xix) The performance of any action required by this Agreement
is not restrained or enjoined (either temporarily, preliminarily, or
permanently), and no condition has been imposed by any court upon any
of the foregoing transactions that would have a material adverse
effect on the performance of any action required by this Agreement or
the enforceability of this Agreement. All representations and
warranties of Seller provided in subparagraphs 8(a)(xiii) through
(xix), inclusive, are made to the best of Seller's current, actual
knowledge.
The foregoing limited representations and warranties shall be
deemed to be repeated by Seller at the Closing and shall survive the
Closing; provided, however, such limited representations and warranties
shall only survive for a period of eighteen (18) months after the Closing
Date. Seller agrees to indemnify, defend, and hold Buyer harmless from and
against, and to reimburse Buyer with respect to, any and all claims,
demands, causes of action, losses, damages, liabilities, costs, and
expenses (including reasonable attorney's fees and court costs) of any and
every kind or character, known or unknown, fixed or contingent, asserted
against or incurred by Buyer at any time and from time to time by reason of
or arising out of (i) the breach of any representation or warranty of
Seller set forth herein, or (ii) any Premises Liability Claims brought
against Buyer for losses which occurred, or which are alleged to have
occurred, before the Closing; provided, however, such agreement to
indemnify, defend, and hold harmless with respect to the breach of any
representation or warranty of Seller (other than those set forth in
Paragraphs 7[b], 7[d], and 7[h] hereof) shall be subject to the limitations
set forth in Paragraph 11(a)(v)(B) of this Agreement. For purposes of this
Agreement, the term "Premises Liability Claims" shall mean those claims
brought by third parties against landowners due to an unsafe or allegedly
unsafe condition upon the Property owned by landowner, such as, "slip and
fall" claims, "trip and fall" claims, and claims of liability for the
criminal or negligent acts of others while on the Property.
For purposes of this Agreement, Seller's "current, actual
knowledge" shall expressly exclude constructive, implied and imputed
knowledge, and shall mean only that James E. Quigley III, the authorized
representative of Seller, has no actual awareness at the time he signs this
Agreement of any facts that he knows would render any of the above
representations untrue, without any obligation to conduct any independent
investigation of any kind whatsoever, and without any obligation to review
Seller's own records or interview its personnel. Seller represents and
warrants to Buyer that Mr. Quigley supervises the management of the
Property and is the person who, in the ordinary course of business, would
be made aware of matters of a material nature relating to the Property if
such matters were reported to Seller. Seller further represents and
warrants to Buyer that Mr. Quigley is the person to whom, in the ordinary
course of business, any notices of a material nature relating to the
Property would be routed.
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(b) BUYER'S REPRESENTATIONS AND WARRANTIES: Buyer makes each of the
following representations and warranties to the best of its current actual
knowledge (as hereinbelow defined). For purposes of this Agreement,
Buyer's "current actual knowledge" shall expressly exclude constructive,
implied and imputed knowledge and shall mean only Stanford Alexander,
Martin Debrovner, Joseph W. Robertson, Jr., M. Candace DuFour, and Andrew
M. Alexander, the senior officers of Buyer, have no actual awareness at the
time of execution of this Agreement of any facts that such respective
person knows would render any of the above representations or warranties
untrue, without any obligation to conduct any independent investigation of
any kind whatsoever, and without obligation to review Buyer's own records
or interview its personnel; such representations and warranties being as
follows:
(i) Buyer is a real estate investment trust duly organized,
validly existing and in good standing under the laws of the State of
Texas. Buyer has the requisite trust power and authority and legal
right to execute, deliver, and perform its obligations contained in
this Agreement, and all agreements executed or to be executed on
behalf of Buyer in connection with this Agreement, and to carry on its
business as now being conducted.
(ii) This Agreement has been duly executed and delivered by Buyer
and constitutes the legal, valid, and binding obligation of Buyer
enforceable against Buyer in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally; provided, however, that
Buyer's ability to deliver the subject WRI Shares in accordance with
the provisions of this Agreement is contingent upon the Securities and
Exchange Commission having determined that the registration statement
which Buyer files under the Securities Act of 1933 (the "1933 Act")
with respect to the Subject WRI Shares shall have become effective
prior to the Closing Date.
(iii) The execution, delivery, and performance by Buyer of this
Agreement and compliance with the terms and provisions hereof do not
and will not (a) violate or conflict with, or result in a breach of,
or require any consent under (i) the Declaration of Trust of Buyer,
(ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any governmental or regulatory authority or
arbitrator, including, without limitation, any State or Federal
securities laws (except as stated in Paragraph 8(b)(ii) of this
Agreement with respect to registration of the Subject WRI Shares under
the 1933 Act), or (iii) any agreement or instrument to which Buyer is
a party or by which it or any
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of its property is bound or subject, or (b) constitute a default under
any such agreement or instrument.
(iv) Buyer has all requisite power and authority and the legal
right to own, pledge, mortgage, convey and operate its properties and
assets, and to conduct its business substantially as now or currently
proposed to be conducted.
(v) There are no legal or arbitral proceedings, and no
proceedings by or before any governmental or regulatory authority,
pending or threatened against or affecting Buyer or any properties or
rights of Buyer which (a) purport to affect the legality, validity,
binding effect or enforceability of this Agreement or (b) if adversely
determined, would have a material adverse effect on the business,
condition (financial or otherwise), operations, prospects, or
properties of Buyer.
(vi) No authorization, consent, or approval of, or filing or
registration with, any governmental or regulatory authority is
required for the execution, delivery, and performance by Buyer of this
Agreement or any closing documents to which Buyer is or will be a
party, (except as stated in Paragraph 8(b)(ii) of this Agreement with
respect to registration of the Subject WRI Shares under the 1933 Act).
(vii) The performance of any action required by this Agreement
is not restrained or enjoined (either temporarily, preliminarily, or
permanently), and no condition has been imposed by any court upon any
of the foregoing transactions that would have a material adverse
effect on the performance of any action required by this Agreement or
the enforceability of this Agreement.
(viii) As of the Closing, the Subject WRI Shares will have been
duly and validly authorized and issued by Buyer and will have been
fully paid for and will be non-assessable, free and clear of any
liens, claims or other encumbrances. As of the Closing, the Subject
WRI Shares will not be subject to any restrictions on transfer; except
for provisions of Buyer's Declaration of Trust which (in order to
enable Buyer to maintain its status as a real estate investment trust
under the provisions of the Internal Revenue Code) limit transfers
which would result in the proposed transferees owning more than 9.8%
of the outstanding WRI Shares.
The foregoing representations and warranties shall be deemed to be
repeated by Buyer at the Closing and shall survive the Closing; provided,
however, such representations and warranties shall only survive for a period of
eighteen (18) months after the Closing Date. Buyer
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agrees to indemnify, defend, and hold Seller harmless from and against, and to
reimburse Seller with respect to, any and all claims, demands, causes of action,
losses, damages, liabilities, costs, and expenses (including reasonable
attorney's fees and court costs) of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Seller at any time
and from time to time by reason of or arising out of (i) the breach of any
representation or warranty of Buyer set forth herein, or (ii) any Premises
Liability Claims brought against Seller for losses which occurred, or which are
alleged to have occurred, after the Closing.
9. CONDITIONS TO BUYER'S OBLIGATIONS
It shall be a condition precedent to Buyer's obligation to consummate
the purchase of the Property hereunder that on the Closing Date (as hereinafter
defined), all the following conditions shall exist:
(a) Seller shall have performed each covenant to have been performed
by Seller hereunder within the time specified.
(b) There shall be no change in the matters reflected in the Title
Binder.
(c) There shall be no change in the matters reflected in the Survey.
(d) All municipal and utility services shall be available to the
Property.
(e) No material change shall have occurred or be threatened with
respect to the Property which would adversely affect the findings made in
the Information Review Period referred to in Paragraph 3.
(f) The Improvements and the equipment forming a part of the Property
shall be in the same condition as existed at the expiration of the
Information Review Period. No damage from fire or other casualty shall
have affected the Improvements. No condemnation affecting the Property
shall have occurred or be pending or threatened.
(g) There shall be no litigation pending or threatened affecting the
Property.
(h) Except for McCrory's, on the Closing Date, neither Seller nor any
Anchor Tenant (as hereinafter defined) shall have filed a petition under
any section of the Bankruptcy Code, as amended, or under any similar law or
statute of the United States or any State thereof, nor shall Seller or any
Anchor Tenant have been adjudged bankrupt or insolvent, nor shall any
rearrangement of its
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debts have been requested by Seller or any Anchor Tenant; neither Seller
nor any Anchor Tenant shall be insolvent and no receiver or trustee shall
have been appointed for Seller or any of Seller's assets, or for an Anchor
Tenant or any of the assets of an Anchor Tenant. For purposes hereof, the
term "Anchor Tenant" shall mean Albertson's, Blockbuster, McCrory's, and
Walgreens. Buyer hereby acknowledges that Buyer is aware that McCrory's
has filed a petition under the Bankruptcy Code, which petition is pending
as of the Effective Date of this Agreement and may be pending as of the
Closing Date. Buyer shall have no right to terminate or extend this
Agreement based upon the pendency of McCrory's bankruptcy proceedings
(other than any rights that Buyer may have to elect not to deliver the
Approval Notice prior to the expiration of the Information Review Period).
(i) No Anchor Tenant shall be in default under its Tenant Lease.
(j) There shall not have been any breach of any of the representations
and warranties made by Seller herein.
(k) Buyer shall receive estoppel certificates from all tenants under
all Tenant Leases (other than McCrory's) with each estoppel certificate
being in the form attached hereto as Exhibit "E" (with such modifications
as Buyer in its good-faith business judgment shall suggest to clarify
ambiguities and errors in the Tenant Leases delivered to Buyer by Seller)
at least three (3) business days (and not more than thirty [30] days)
before the Closing. Seller shall use its diligent efforts to deliver to
Buyer at least three (3) business days (and not more than thirty [30] days)
before Closing an estoppel certificate executed by McCrory's in a form
acceptable to Buyer. If Seller is not able, after its diligent efforts, to
deliver such estoppel certificate executed by McCrory's, Seller shall
execute and deliver to Buyer at Closing an estoppel certificate in the form
of Exhibit "F" attached hereto modified to reflect that McCrory's is in
bankruptcy and has not affirmed its Tenant Lease and to clarify any
ambiguities and errors in the McCrory's Tenant Lease. In addition to the
McCrory's estoppel, if (i) Seller is unable, after its diligent efforts, to
obtain such estoppel certificates from certain tenants under the Tenant
Leases, namely, P.N.M. Public Service Company of New Mexico, Great Western
Jewelry, Inc. dba The Jewelry Works, W. A. Heard dba MailBoxes, Etc., JRL
Corporation dba No Appointment Family Haircutters, Factory Optical Outlet,
and Madelyn Jones dba Common Market (herein such tenants being collectively
called the "Non-Anchor Tenants"), and (ii) provided that the total leased
space covered by the Tenant Leases of Uncooperative Non-Anchor Tenants (as
hereinafter defined) does not exceed 2,800 square feet, in the aggregate,
then Buyer, in lieu of the estoppel certificate or certificates from such
Uncooperative Non-Anchor Tenants, shall accept an estoppel certificate from
Seller for each of the Uncooperative Non-Anchor Tenants in the form of
Exhibit F
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hereto (with such modifications as Buyer in its good faith judgment
shall suggest to clarify ambiguities and errors in the Tenant Leases of
such Uncooperative Non-Anchor Tenants). For purposes of this Paragraph
9(k), the term "Uncooperative Non-Anchor Tenants" shall mean Non-Anchor
Tenants who fail, neglect, or refuse to deliver to Buyer or Seller at least
three (3) business days prior to the Closing Date an executed estoppel
certificate in the form provided in this Paragraph 9(k).
(l) Each covenant of Seller provided in this Agreement shall be a
condition precedent to Buyer's obligation to consummate the purchase of the
Property hereunder.
(m) The Registration Statement which Buyer shall have filed under the
1933 Act relating to the Subject WRI Shares shall have become effective and
such shares shall have been listed on the New York Stock Exchange.
If any one of the above conditions is not satisfied, Buyer, at its option, may
waive such condition in writing, extend the Closing Date for a period of time
not to exceed thirty (30) days to allow Seller an opportunity to satisfy such
condition, or terminate this Agreement by written notice thereof to Seller, in
which last event the parties shall have no further right or obligation hereunder
(other than with respect to obligations hereunder that expressly survive the
termination of this Agreement), and the Earnest Money plus all accrued interest
thereon shall be returned to Buyer. With respect to the condition set forth in
Paragraph 9(m) of this Agreement, Buyer agrees to use reasonable efforts to
obtain an effective registration of the Subject WRI Shares and to list the
Subject WRI Shares on the New York Stock Exchange.
10. CLOSING
Provided that all conditions precedent to the Closing have been
satisfied, and this Agreement has not otherwise been rightfully terminated
pursuant to its terms, the closing of the conveyance and purchase of the
Property (herein called the "Closing") shall occur on or before fifteen (15)
days after the last day of the Information Review Period, but in no event shall
the Closing occur after May 31, 1995, at a time and on a date designated by
Buyer (the "Closing Date"). Buyer shall give at least three (3) days prior
notice to Seller of the Closing Date and the time scheduled for the Closing.
The Closing shall take place at the offices of the Title Company unless Seller
and Buyer otherwise agree. At the Closing, the following shall occur:
(a) Seller shall deliver to Buyer the following (any of the following
to be executed by Seller shall be collectively called the "Closing
Documents"):
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(i) a Special Warranty Deed (the "Deed") conveying good and
marketable title to the Property to Buyer free of any exceptions other
than the Permitted Encumbrances;
(ii) an Assignment of Tenant Leases assigning, transferring,
conveying, and delivering unto Buyer with special warranty of title
the entire right, title, and interest of the landlord or lessor under
the Tenant Leases and tenancies that affect the Property, including,
without limitation, all security deposits existing as of the Closing
Date, said Assignment of Tenant Leases to include (1) Seller's
indemnification of Buyer for liabilities, losses, damages, costs, and
expenses incurred with respect to any action or cause of action
accruing prior to the Closing Date under the Tenant Leases; (2)
Buyer's indemnification of Seller for liabilities, losses, damages,
costs, and expenses incurred with respect to any action or cause of
action accruing from and after the Closing Date under the Tenant
Leases, except for any liabilities, losses, damages, costs, and
expenses arising out of the actions of the Seller; and (3) an updated
rent roll certified by Seller as of the Closing Date;
(iii) a Bill of Sale with special warranty of title conveying
all Personal Property to Buyer free and clear of any exceptions other
than the Permitted Encumbrances;
(iv) at Seller's expense, an Owner's Title Policy in the amount
of $6,347,250 noting no exceptions other than the Permitted
Encumbrances and other exceptions approved in writing by Buyer, and
including the following modifications to the standard typed or printed
exceptions in the Title Binder: (1) the restrictive covenants
exception shall be deleted if the Title Binder does not list any
restrictive covenants as exceptions to title; (2) the standard
exception for current taxes shall except only to taxes for the year in
which the Closing occurs and shall indicate that such taxes are not
yet due and payable; (3) the exception for any discrepancies,
conflicts, encroachments, or any overlapping of improvements shall be
deleted; (4) 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 a
schedule of the Tenant Leases and (5) the Owner's Title Policy shall
include an endorsement insuring against the existence of any liens for
services, labor, or materials, whether or not filed of record;
(v) current UCC searches dated within ten (10) days of the
Closing Date (provided Buyer delivers Seller at least 10 days prior
notice of the Closing Date) from the Office of the Secretary of State
of New
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Mexico, and the county clerk of the county in which the Property is
situated showing no financing statements affecting any of the
Property;
(vi) an assignment of all Intangibles including, but not limited
to, warranties and guaranties relating to construction of the
Property;
(vii) executed originals of all Tenant Leases, the Certificate
of Occupancy, and all other licenses, permits, and governmental
certificates and approvals relating to the Property;
(viii) keys to all locks on the Property that are in Seller's
possession;
(ix) letters addressed to each tenant under the Tenant Leases
advising of the change of ownership of the Property and informing such
tenants to make future rental payments to Buyer;
(x) letters to all utility companies advising of the change of
ownership of the Property.
(xi) an affidavit from Seller and any other parties required
pursuant to Section 1445 of the Internal Revenue Code and/or
regulations relating thereto stating, under the penalty of perjury,
(1) that neither Seller nor any other party so swearing is a foreign
person, (2) the U.S. Taxpayer identification number of Seller and such
other parties, if any, and (3) such other information as may be
required by regulations enacted by the U.S. Department of the Treasury
in connection with Section 1445 of the Internal Revenue Code. An
executed counterpart of this affidavit will be furnished to the
Internal Revenue Service and Buyer at Closing;
(xii) assignment of the right to use all names including, but
not limited to, "Valle del Sol Shopping Center", and logos used by
Seller in connection with the Property;
(xiii) such evidence as may be reasonably required by Buyer or
the Title Company evidencing the status and capacity of Seller and the
authority of the person or persons who are executing the various
closing documents on behalf of Seller in connection with this
Agreement;
(xiv) such affidavits, indemnities, and other documents as the
Title Company may require from Seller as a condition to issuing the
Owner's Title Policy in accordance with Paragraph 10(a)(iv); and
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(xv) Such other documents as Seller and Buyer may have agreed to
deliver at the Closing. All closing documents shall be prepared by
Buyer and shall be consistent with this Agreement and with custom and
usage for similar type transactions, and the documents described in
Paragraphs 10(a)(i), (ii), (iii), (vi), (ix), (x), (xi), (xii), (xiv)
and (xv) shall be reasonably acceptable to Seller and Seller's
counsel.
(b) Buyer shall deliver the Subject WRI Shares issued in the "street
name" Rothschild Inc. to the Seller, and the Title Company shall return to
Buyer the Earnest Money and all accrued interest thereon.
(c) Rents, common area charges, escalations, and other tenant
reimbursements (other than security deposits) payable under the Tenant
Leases (collectively, the "Rents") for the Property or portions thereof
shall be prorated as of 11:59 p.m. on the day prior to the Closing Date,
except that no proration shall be made for Rents delinquent as of 11:59
p.m. on the day prior to the Closing Date (hereinafter called the
"Delinquent Rents"). Buyer shall have no liability to Seller for the
Delinquent Rents, and shall have no obligation to collect the Delinquent
Rents; provided, however, Buyer agrees to use reasonable efforts to collect
any delinquent common area maintenance, tax, and insurance expenses from
Walgreen Hastings Co. attributable to the calendar year 1994, the amount of
such delinquent expenses being evidenced in the year-end adjustment bill
prepared by Seller and sent to Walgreen Hastings Co. Buyer, however, shall
not be required to file a lawsuit against Walgreen Hastings Co. to collect
such delinquent amounts unless Buyer's reasonable efforts to collect such
sums have failed and Seller has agreed in writing and in a form and
substance reasonably acceptable to Buyer to reimburse Buyer for all costs
and expenses including, without limitation, reasonable attorney's fees,
incurred by Buyer in connection with such litigation. Seller shall deliver
to Buyer on or before the Closing a copy of such year-end adjustment bill
for 1994 together with such supporting documentation requested by Buyer.
Seller shall not contact any tenants from and after the Closing Date.
Amounts collected by Buyer from tenants owing Delinquent Rents shall be
applied first to current amounts owed by such tenant and accruing on or
after the Closing Date, then to any Delinquent Rents owing for the rent
period during which the Closing occurred (such amount to be prorated
between Buyer and Seller as provided herein), and the remainder, if any, to
Delinquent Rents owing prior to the rent period during which the Closing
occurred. Any such amounts applicable to Delinquent Rents received by
Buyer shall be promptly forwarded to Seller. All security deposits
received by Seller from any tenant under an existing Tenant Lease shall be
paid over to Buyer. If the actual Rents received attributable to the
calendar month in which the Closing occurs differs from the amount of Rents
for such month upon which the proration of Rents at Closing was calculated,
then within thirty (30) days after the end of
Page 24 of 34
<PAGE>
the calendar month in which the Closing occurs, Seller and Buyer shall
adjust the proration of the Rents attributable to such calendar month based
on the actual Rents received for such month, and Seller or Buyer, as the
case may be, shall pay to the other any amount required as a result of such
adjustment. The covenant in the immediately preceding sentence shall
survive the Closing.
(d) General real estate taxes for the then current year relating to
the Property (except those taxes payable by the tenants directly to the
respective taxing authority) shall be prorated as of 11:59 p.m. on the day
prior to the Closing Date. If the Closing shall occur before the tax rate
is fixed for the then current year, the apportionment of taxes shall be
made on the basis of the tax rate for the immediately preceding year
applied to the latest assessed valuation of the Property, provided that, if
the taxes actually due for the current year are more or less than the taxes
for the preceding year, then within thirty (30) days after the issuance of
the then current year's tax bill, Seller and Buyer shall adjust the
proration of such taxes and Seller or Buyer, as the case may be, shall pay
to the other any amount required as a result of such adjustment; this
covenant shall not merge with the deed delivered hereunder but shall
survive the Closing. All special taxes or assessments assessed prior to
the Closing Date shall be paid by Seller, and those assessed after the
Closing Date shall be paid by Buyer.
(e) All other income from, and expenses of, the Property, including
but not limited to public utility charges, interest, maintenance charges,
and service charges, shall be prorated as of 11:59 p.m. on the day prior to
the Closing Date. To the extent that information for any such proration is
not available at the Closing, the parties shall effect such proration
within ninety (90) days after Closing. If, however, the proration of
percentage rental from any tenant or any other item of income or expense
cannot be made within ninety (90) days after the Closing, then the
proration of such item for each such tenant shall be made within ten (10)
days after the information relating to such item becomes available.
Percentage rents for each Tenant Lease shall be prorated on the basis of
the number of days lapsed during the tenant's percentage rent period as of
11:59 p.m. on the day prior to the Closing Date and not on the basis of the
amount of the tenant's sales which accrued during such percentage rent
period as of 11:59 p.m. on the day prior to the Closing Date. The
provisions of this subparagraph (e) shall survive the Closing.
(f) Possession of the Property shall be delivered to Buyer, subject
only to the rights of tenants under those Tenant Leases (i) listed on the
current rent roll described as item A(vii) on Exhibit "B" attached hereto,
and (ii) approved in writing by Buyer in accordance with Paragraph 7(b) of
this Agreement.
Page 25 of 34
<PAGE>
(g) Any escrow fee charged by the Title Company shall be paid one-half
(1/2) by Seller and one-half (1/2) by Buyer. Seller shall pay the fee for
recording the warranty deed and any other documents recorded in this
transaction, the cost of the Survey (except for that portion of the cost of
the Survey to be paid by Buyer pursuant to Paragraph 6 hereof), the premium
for the Owner's Title Policy and for any required endorsements thereto, and
the costs and fees of the Title Company incurred in connection with the
issuance of the Title Binder and the Owner's Title Policy. Each party
shall be responsible for the payment of its own attorney's fees incurred in
connection with this transaction. Any other costs payable at the Closing
shall be allocated to Buyer and Seller as is customary in the county in
which the Property is located.
11. REMEDIES
(a) If Seller should fail or refuse to perform any of Seller's
obligations hereunder, Buyer may, at its option and as Buyer's sole and
exclusive remedies, exercise any one or more of the following remedies:
(i) obtain a refund of the Earnest Money, with interest accrued thereon;
(ii) enforce specific performance; (iii) waive Seller's performance of such
obligations and close the purchase of the Property; (iv) credit against the
Purchase Price at Closing the amount of any liens against the Property as
is provided in Paragraph 6 of this Agreement; or (v) pursue a claim for
damages against Seller under the following conditions, and none other:
(A) if Seller breaches any of its obligations under Paragraphs
7(b), 7(d), or 7(h), Buyer may pursue a claim for damages against
Seller without limitation on the amount thereof; or
(B) if there is a breach of any representations or warranties of
Seller provided in this Agreement or to be provided in the
Closing Documents (except the warranty of title to be provided in
the Deed) and the damages incurred by Buyer resulting therefrom,
in the aggregate, equal or exceed $100,000.00, then Buyer may
pursue a claim for damages against Seller, at any time and from
time to time, provided that (1) any such claim or claims must be
filed on or before the date eighteen (18) months after the
Closing Date (or if this transaction does not close, the date
eighteen [18] months after the termination of this Agreement),
and (2) the total amount of damages claimed for all breaches of
representations and warranties of Seller (excluding warranty of
title) shall not exceed $500,000.00 in the aggregate. The
limitations on damages set forth in this Paragraph 11(a)(v)(B),
however, shall not, in any manner or to any extent, limit,
diminish, waive, reduce, or negate any action, claims, or rights
of Buyer
Page 26 of 34
<PAGE>
arising out of or resulting from a breach of Seller's warranty of
title to be provided in the Deed or any other Closing Documents.
(b) If Seller shall have complied with all Seller's covenants and
obligations hereunder and all the conditions of Buyer's obligations
hereunder shall have been timely fulfilled but Buyer defaults and fails and
refuses to close the purchase of the Property as herein contemplated,
Seller's sole and exclusive remedy shall be to receive the Earnest Money;
it being acknowledged and agreed by Seller and Buyer that the Earnest Money
to which Seller may be entitled under this Paragraph 11(b) is a reasonable
forecast of just compensation for the harm that could be caused by Buyer's
default, that the harm that could be caused to Seller by such default is
one that is difficult or impossible to accurately ascertain or predict, and
that the payment of the Earnest Money to Seller upon Buyer's default shall
constitute full satisfaction and accord of Buyer's obligations under this
Agreement. Seller hereby waives and releases any claim for specific
performance and all claims or remedies other than Seller's right to receive
the Earnest Money in accordance with the terms of this Paragraph 11(b).
(c) Notwithstanding the terms of Paragraph 11(a)(v)(B) hereof, if
Buyer has current, actual knowledge at the time of Closing that there is a
breach of any representation, warranty or covenant of Seller in this
Agreement or to be included in the Closing Documents and nonetheless Buyer
elects to close this transaction, Buyer shall be deemed to have waived such
breach of representation, warranty or covenant and shall not be entitled to
recover damages from Seller for such breach of representation, warranty or
covenant waived by Buyer; provided, however, such waiver shall not waive,
limit, hinder, or negate the right of Buyer to recover damages for any
other breach of representation, warranty or covenant pursuant to the terms
of this Paragraph 11.
12. BROKER
Each party hereto represents to the other that such respective party
has not authorized any broker or finder to act on its behalf in connection with
the sale and purchase hereunder. Each party hereto agrees to indemnify, defend,
and hold harmless the other party from and against any and all claims, losses,
damages, costs, or expenses (including, but not limited to, reasonable
attorney's fees) of any kind or character arising out of or resulting from any
agreement, arrangement, or understanding alleged to have been made by such party
with any broker or finder in connection with this Agreement or the transaction
contemplated hereby. This Paragraph (h)..(3) shall survive the Closing or any
earlier termination of this Agreement.
Page 27 of 34
<PAGE>
13. NOTICE
Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery, (b) overnight courier or
delivery service with proof of delivery, (c) United States mail, postage
prepaid, registered or certified mail, or (d) prepaid telegram or telecopy
(provided that such telegram or telecopy is confirmed by mail in the manner
previously described), addressed as follows:
To Seller: Rothschild Property
Investors L.P.
c/o Rothschild Realty Inc.
1251 Avenue of the Americas, 51st Floor
New York, New York 10020
Attention: Mr. James E. Quigley III
Telecopy: (212) 403-3520
With a copy to: J. William Boyar, Esq.
Boyar, Simon & Miller
4265 San Felipe
Houston, Texas 77027
Telecopy: (713) 552-1758
To Buyer: Weingarten Realty Investors
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Attention: President
Telecopy: (713) 866-6049
With a copy to: Weingarten Realty Management
Company
2600 Citadel Plaza Drive, Suite 300
Houston, Texas 77008
Attention: Mark D. Stout, Esq.
Assistant Counsel
Telecopy: (713) 866-6049
or to such other address or to the attention of such other person as hereafter
shall be designated in writing by the applicable party in a notice sent in
accordance with these notice provisions. Any such notice or communication shall
be deemed to have been given at the time of personal delivery or, in the case of
certified or registered mail, two (2) days after deposited in the custody of the
United States Postal Service, or in the case of overnight courier or delivery
service, as of the date of first attempted delivery at the address and in the
manner provided herein, or, in the case of telegram or telecopy, upon receipt,
provided that if such notice or other communication is received by personal
delivery, or is received by telegram or telecopy on a day which is not a
business day, or after 5:00 p.m. on any business day at the addressee's
location,
Page 28 of 34
<PAGE>
such notice or communication shall be deemed to be duly received by the
recipient at 9:00 a.m. on the first business day thereafter.
14. MISCELLANEOUS
(a) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, and their heirs, successors, and assigns.
Whenever in this Agreement a reference is made to any of the parties
hereto, such reference shall be deemed to include a reference to the heirs,
legal representatives, successors, and assigns of such parties. Buyer
shall not have the right to assign all or any portion of the rights and
obligations of Buyer under this Contract to any person or entity, except
upon having received the prior written consent of Seller; provided,
however, that, so long as (i) the assignee assumes the obligations and
liabilities of Buyer hereunder, in a written document addressed to and
delivered to Seller, and (ii) the consideration to be paid to Seller
remains the Subject WRI Shares, Buyer may assign its rights under this
Contract, without Seller's prior consent, to any entity which is a
subsidiary of Buyer. No such assignment shall relieve the Buyer originally
named herein from its joint and several liability for the obligations and
liabilities of "Buyer" hereunder. Seller shall not be obligated to
recognize any such assignment until it has received a fully executed copy
thereof, together with the assumption agreement executed by the assignee in
favor of Seller. Except for assignments expressly permitted above, any
purported assignment hereof by Buyer without Seller's written consent shall
be null and void as concerns all parties, including the purported assignee,
at the option of Seller.
(b) The titles of the Articles of this Agreement shall have no effect
and shall neither limit nor amplify the provisions of the Agreement itself.
(c) This Agreement constitutes the entire agreement between the
parties and supersedes and replaces all prior and contemporaneous
agreements, representations, and understandings between Buyer and Seller,
whether written or oral, including, but not limited to, that certain
letter-of-intent dated February 3, 1995, to Seller from Buyer. This
Agreement shall not be amended or changed except by written instrument
signed by the party to be charged therewith.
(d) Time is of the essence with respect to the various times for
performance by Seller and Buyer.
(e) This Agreement is the result of negotiations between the parties
and, accordingly, shall not be construed for or against either party
regardless of which party drafted this Agreement or any portion thereof.
Page 29 of 34
<PAGE>
(f) It is not intended by this Agreement to, and nothing contained in
this Agreement shall, create any partnership, joint venture, or other
similar arrangement between Seller and Buyer. No term or provision of this
Agreement is intended to, or shall, be for the benefit or any person, firm,
corporation, or other entity not a party hereto (including, without
limitation, any broker), and no such party shall have any right or cause of
action hereunder.
(g) The terms and provisions of this Agreement shall be governed by
and construed in accordance with the laws of the State of New Mexico and
applicable federal law.
(h) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN HARRIS COUNTY, TEXAS, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THIS
AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH PARTY
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(i) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT IN ANY JURISDICTION SET FORTH ABOVE.
(j) Except as herein expressly provided, no waiver by a party of any
breach of this Agreement or of any warranty or representation hereunder by
the other party shall be deemed to be a waiver of any other breach by the
other party (whether preceding or succeeding and whether of the same or
similar nature), and no acceptance of payment or performance by a party
after any breach by the other party shall be deemed to be a waiver of any
breach of this Agreement or of any representation or warranty hereunder by
such other party, whether the first party knows of such breach at the time
it accepts such payment or performance. No failure or delay by a party to
exercise any right it
Page 30 of 34
<PAGE>
may have by reason of the default of the other party shall operate as a
waiver of default or modification of this Agreement or shall prevent the
exercise of any right by the first party while the other party continues to
be so in default.
(k) Each section of this Agreement constitutes a separate agreement
between the parties. In the event that any provision of this Agreement,
which would not deprive the parties, or either of them, of the benefit of
the bargain, is deemed to be illegal, invalid, or unenforceable on its face
or as applied, then such provision shall be deemed severed herefrom to the
extent illegal, invalid, and unenforceable.
(l) Buyer is an unincorporated trust organized under the Texas Real
Estate Investment Trust Act. Neither the shareholders of Buyer, 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 Buyer, and all persons having claims
of any kind whatsoever against Buyer shall look solely to the property of
Buyer for the enforcement of their rights (whether monetary or non-
monetary) against Buyer.
(m) If any date set forth in this Agreement as the last date for the
taking of any action hereunder shall fall on a Saturday, Sunday, or a
federal holiday (a federal holiday being a day on which the United States
Postal Service does not deliver first class mail), then the last date for
taking such action shall be extended to the next succeeding day that is not
a Saturday, Sunday, or federal holiday.
(n) The date upon which Buyer and the Title Company each receives a
counterpart original of this Agreement duly executed by Seller and Buyer
shall be the "Effective Date" of this Agreement for all purposes.
(o) This instrument, when signed by Buyer, shall constitute an offer
which shall automatically expire and be of no force or effect at 5:00 p.m.
(central standard time) on March 24, 1995, unless prior to such date and
time counterparts of this instrument are executed by Seller and delivered
to Buyer and the Title Company.
(p) If more than one party constitutes "Seller," as that term is
defined in this Agreement, then all parties constituting Seller shall be
and are jointly and severally liable for each and every obligation of
Seller, of whatever nature, under the terms of this Agreement.
(q) Neither this Agreement nor any memorandum hereof will be filed of
record in the property records of any jurisdiction.
(r) SELLER AND BUYER EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND
Page 31 of 34
<PAGE>
CLAIMS THAT EACH MAY NOW HAVE, OR TO WHICH EACH MAY OTHERWISE IN THE FUTURE
BE OR BECOME ENTITLED, UNDER THE NEW MEXICO UNFAIR PRACTICES ACT, SECTION
57-12-1 ET SEQ., NEW MEXICO STATUTES ANNOTATED (1978) (REFERRED TO HEREIN
AS THE "ACT"), ARISING OUT OF ANY ACT, CONDUCT OR OMISSION OF EACH, ITS
EMPLOYEES OR AGENTS, HERETOFORE OR HEREAFTER TAKEN, DONE OR OMITTED TO BE
DONE IN CONNECTION WITH THE TRANSACTION DESCRIBED IN THIS AGREEMENT, OR
SUBSEQUENT RELATED TRANSACTIONS. SELLER AND BUYER EACH ACKNOWLEDGES AND
REPRESENTS THAT IT IS A BUSINESS CONSUMER WITH EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT ENABLES IT TO EVALUATE THE MERITS AND RISKS OF THIS
TRANSACTION, THAT IT IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION AND THAT IT HAS BEEN REPRESENTED BY COMPETENT LEGAL COUNSEL OF ITS
CHOICE.
15. DIVIDEND REPAYMENT
At the Closing, Buyer and Seller will prorate the first quarterly
dividend contemplated to be payable with respect to the Subject WRI Shares after
the Closing Date as follows: The number of days which will have ensued between
the record date for the immediately preceding dividend on WRI Shares and the
Closing Date shall be calculated. Such number shall be the numerator of a
fraction, the denominator of which shall be 90. Such fraction shall be
multiplied by the dollar amount which is equal to the contemplated next
quarterly dividend on the Subject WRI Shares. Seller shall pay to Buyer at the
Closing an amount equal to the product of such multiplication. Thereafter,
Seller (or any other holder of the Subject WRI Shares) shall be entitled to
receive and retain the next quarterly dividend paid on the Subject WRI Shares
after the Closing Date, as well as all subsequent dividends so paid with respect
to such Subject WRI Shares. If the assumption as to the amount of the
contemplated next quarterly dividend or any other assumption used by Seller and
Buyer in making the proration referred to in this Paragraph is subsequently
determined to have been erroneous, then the parties will make such adjusting
payment (either from Seller to Buyer or from Buyer to Seller, as the case may
be) as may be appropriate to effectuate a proper proration in accordance with
the intention of the parties as indicated above.
[END OF PAGE]
Page 32 of 34
<PAGE>
EXECUTED by Buyer this 20th day of March, 1995.
WEINGARTEN REALTY INVESTORS
By:_________________________
M. Candace DuFour
Vice President
"BUYER"
EXECUTED by Seller this ____ day of March, 1995.
ROTHSCHILD PROPERTY INVESTORS L.P.
By: PROPERTY ASSOCIATES II, L.P., a Delaware limited
partnership, its General Partner
By: ROTHSCHILD NORTH AMERICA INC., a Delaware
corporation, its General Partner
By:________________________________________
James E. Quigley III, who is Attorney-in-
Fact for John D. McGurk, who is Attorney-
in-Fact for Rothschild North America
Inc., General Partner of Property
Associates II, L.P., General Partner of
Rothschild Property Investors L.P.
"SELLER"
MSMISC\VALLESOL\P&SAGMT4.WRI
Page 33 of 34
<PAGE>
RECEIPT OF TITLE COMPANY
The undersigned Title Company hereby acknowledges receipt of (1) a
counterpart of this Agreement, and (2) the Earnest Money referred to in
Paragraph 5 of the Agreement. The Title Company agrees to hold and disburse
the Earnest Money in accordance with the provisions of this Agreement. The
Title Company further agrees that it shall be responsible for all reporting to
the Internal Revenue Service relating to the transaction contemplated by this
Agreement that is required under Section 6045 of the Internal Revenue Code of
1986, as amended.
EXECUTED as of the _____ day of March, 1995.
STEWART TITLE GUARANTY COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
"TITLE COMPANY"
MSMISC\VALLESOL\P&SAGMT4.WRI
Page 34 of 34
<PAGE>
EXHIBIT 13.1
WEINGARTEN
REALTY
INVESTORS
ACQUISITIONS
NEW DEVELOPMENT
RENOVATIONS
ANNUAL[1994] REPORT
<PAGE>
WEINGARTEN REALTY INVESTORS [WRI] IS AN EQUITY-BASED REAL ESTATE INVESTMENT
TRUST (REIT). HEADQUARTERED IN HOUSTON, WRI FOCUSES PRIMARILY ON THE
DEVELOPMENT, ACQUISITION, AND LONG-TERM OWNERSHIP OF ANCHORED NEIGHBORHOOD AND
COMMUNITY SHOPPING CENTERS IN THE SOUTHWEST. AT THE CLOSE OF 1994, OUR
PORTFOLIO INCLUDED 161 INCOME PRODUCING PROPERTIES TOTALING 16.3 MILLION SQUARE
FEET IN EIGHT STATES.
FOUNDED IN 1948, WE RESTRUCTURED TO A REIT AND WENT PUBLIC IN 1985. OUR
PERFORMANCE AS A PUBLIC COMPANY HAS BEEN AMONG THE BEST IN OUR INDUSTRY. THIS
IS A PRODUCT OF NEARLY 50 YEARS OF REAL ESTATE EXPERIENCE (IN BOTH GROWTH AND
RECESSIONARY CYCLES) COMBINED WITH A SEASONED MANAGEMENT TEAM FOCUSED ON
SPECIFIC SEGMENTS OF REAL ESTATE. IN ADDITION TO DEVELOPING AND ACQUIRING
PROPERTIES, WE ADD VALUE TO THEM THROUGH CONSISTENT, HIGH-QUALITY OPERATIONS
THAT INCORPORATE RENOVATION, RETAILER RECYCLING, AND ON-GOING PROPERTY
MANAGEMENT. WE CONDUCT BUSINESS WITH A COMMITMENT -- AS A COMPANY AND AS
INDIVIDUALS -- TO INTEGRITY, FAIRNESS, AND PROFESSIONALISM.
OUR OBJECTIVE IS TO MAXIMIZE LONG-TERM RETURNS TO SHAREHOLDERS,
EMPLOYEES, AND TENANTS, AS WELL AS TO THE COMMUNITIES IN WHICH WE OPERATE. AND
THAT, IN FACT, IS HOW IT HAS WORKED THROUGHOUT OUR HISTORY. OUR COMMON SHARES
ARE TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL WRI.
<PAGE>
FINANCIAL HIGHLIGHTS Weingarten Realty Investors
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts 1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Revenues $120,793 $103,282 $ 89,959
-------- -------- --------
Funds from Operations:
Net Income $ 43,788 $ 36,249 $ 20,081
Depreciation and Amortization 26,842 23,382 21,291
Extraordinary Charge 1,167
(Gains) Loss on Sales of Property
and Securities 234 (1,631) (1,807)
-------- -------- --------
Funds from Operations $ 70,864 $ 58,000 $ 40,732
======== ======== ========
Property (at cost) $735,134 $634,814 $540,671
Weighted Average Number of Common
Shares Outstanding 26,190 24,211 17,503
Per Share:
Net Income $ 1.67 $ 1.50 $ 1.15
Cash Dividends $ 2.28 $ 2.16 $ 2.04
</TABLE>
FUNDS FROM OPERATIONS
In millions of dollars
94 --------------------------------- 70.9
93 ------------------------ 58.0
92 --------------- 40.7
91 ------------ 36.4
90 ---------- 33.9
DIVIDENDS PER SHARE
In dollars
94 --------------------------------- 2.28
93 ----------------------------- 2.16
92 -------------------------- 2.04
91 ------------------------1.92
90 ---------------------- 1.88
PORTFOLIO GROWTH
Building area, in millions of square feet
94 --------------------------------- 16.3
93 ---------------------------- 15.0
92 ----------------------- 13.5
91 -------------------- 12.6
90 ---------------- 11.5
TOTAL ASSETS BEFORE DEPRECIATION
In millions of dollars
94 --------------------------------- 873
93 --------------------------- 770
92 -------------------- 623
91 ----------------- 575
90 -------------- 534
RENTAL REVENUES
In millions of dollars
94 --------------------------------- 112.2
93 ------------------------ 95.8
92 ------------------- 85.2
91 -------------- 76.5
90 --------- 67.7
CAPITAL STRUCTURE
In millions of dollars
DECEMBER 31, 1994
Total debt--------------> 230
Total market capitalization------ 999
1
<PAGE>
TO OUR SHAREHOLDERS
WE ARE PROUD TO REPORT THAT 1994 WAS AN EXCELLENT YEAR FOR OUR COMPANY.
GROWTH OCCURRED IN EVERY AREA OF THE COMPANY'S OPERATIONS. IN THE 12 MONTHS
ENDED DECEMBER 31, 1994:
.We invested approximately $100 million in acquisitions, new development, and
the growth of our existing portfolio.
.Rental revenues increased 17.2% to $112.2 million.
.Net income of $43.8 million increased 20.8%. On a per share basis, net
income rose to $1.67 -- an 11.3% increase from the prior year.
.Funds from operations (FFO) were $70.9 million, up 22.2% over 1993. We
generated $2.71 per share in 1994, compared to $2.40 in 1993, for an increase
of 12.9%.
.We paid shareholders $2.28 per share in dividends, up from $2.16 in 1993.
.We culminated our first decade (1985-1994) as a public equity REIT by
extending our uninterrupted record of annual dividend increases to 10
consecutive years. (Over this period WRI's annual total return to investors
averaged 15.5%, compared to 9.7% for the National Association of Real Estate
Investment Trusts' (NAREIT) All Equity Index for public equity REITs and 11.5%
for the Standard & Poor's 500 Index).
.We entered into a new, unsecured credit agreement totaling $150 million.
Each of these highlights underscores 1994's excellent performance. And
while it is important to note that FFO for the year benefited from some
non-recurring items totaling $1.3 million (about $0.05 per share), the 10.8%
increase in FFO per share over 1993, excluding these unusual items, is
respectable in its own right.
Given our operating gains, how do we explain the price performance of
WRI's shares in 1994? We believe we are experiencing certain market conditions
that have put pricing pressure on the entire REIT industry, including our own
shares. Two contributing factors to this situation are: 1) a rise in interest
rates that pulled investment capital out of real estate stocks and into
alternative investments; and 2) a dramatic increase in the number of public
REITs (which has doubled in two years) that spread available investment capital
over a much broader base, creating more supply than demand. Nevertheless, we are
firm in our conviction that the strength of our balance sheet, and a seasoned
management team, combined with the investment discipline of having well
positioned real estate assets, will continue to differentiate us as a quality
company. Real estate is not a quarter-to-quarter business, and this is not a
short-term oriented company. Our growth potential, goals, and strategy go well
beyond that. Hence, we are enthusiastic about WRI's accomplishments in 1994 and
optimistic about our future.
OUR STRONG PORTFOLIO GREW EVEN STRONGER Altogether, WRI acquired and/or
expanded 11 properties totaling nearly 1.2 million square feet of retail and
industrial space. At the end of the year, our portfolio of 161 income-producing
properties included 141
2
<PAGE>
PUEBLO ANOZIRA SHOPPING CENTER, TEMPE, ARIZONA
[PHOTO APPEARS HERE]
Acquired this year, Pueblo Anozira's 149,000 square feet of retail space is 96%
leased and is anchored by a 61,000-square foot Fry's Food and Drug. WRI plans to
develop additional pad buildings on this 17.7-acre project.
3
<PAGE>
THE VILLAGE ARCADE, HOUSTON, TEXAS
[PHOTO APPEARS HERE]
Since opening in early 1992, The Village Arcade has been among Houston's most
successful specialty retail centers. Phase II of The Village Arcade broke ground
during the fourth quarter of 1994 and will more than double the size of this
award-winning center when completed in late 1995.
4
<PAGE>
neighborhood and community shopping centers, with the balance in industrial
(16), residential (3), and office space (1). We also commenced development of
two retail projects for approximately 300,000 square feet in Houston.
Rental revenues for the year increased to $112.2 million from 1993's
$95.8 million, through a combination of acquisition, new development, and rental
rate increases from existing properties. Our leasing team renewed and re-leased
491 spaces totaling 1.5 million square feet at an average rental rate increase
of 6%. Occupancy was 92.7% in the shopping center division and 91.9% for the
entire portfolio. Same store sales for our retailers were relatively unchanged
from 1993, in line with the national retail market.
Property acquisitions during the year continued at an aggressive pace.
We acquired seven retail shopping centers and two industrial complexes adding
over 1.1 million square feet to our portfolio. Four of these retail centers are
in the Phoenix metropolitan area, bringing WRI's retail developments in that
city to six. We also purchased a major shopping center in Oklahoma City, our
fourth property in that market. The balance of our growth occurred in San
Antonio and Houston.
WRI began construction on two new developments and completed second
phases on two existing properties in Houston. Construction was completed on our
244,000 square foot Northwest Crossing Shopping Center anchored by Marshall's,
Boot Town, Michael's, and a 116,000-square foot Target (corporately owned). An
additional 52,000-square foot final phase will open in early 1995. This center,
a joint venture, is currently 97% leased.
We also began construction on the 87,000-square foot, Phase II expansion
of Cypress Pointe Shopping
[GRAPHIC]
Residential neighborhoods surrounding the area known as The Village have made
the transition from some of Houston's oldest to some of its most upscale and
cohesive communities. Centered within these oak-lined boulevards just west of
Rice University and The Texas Medical Center, The Village Arcade has become the
new symbol of community for these neighborhoods. Its classical architecture and
human-scale streetscape recall the town centers and marketplaces of small-town
America. Yet, The Village
Arcade's exciting mix of retail and dining makes it very much a response to
today's busy, demanding shopper. Shops such as Eddie Bauer and The Limited Group
will soon join The Gap in anchoring the 191,000 square feet of retail space. The
center's open-air orientation will feature escalators in the central courtyard
leading from street-level to second-story shops. And long-time Houston residents
will even get a nostalgic tug from a replica of the marquee of the vintage
Village Theater.
[END OF GRAPHIC]
5
<PAGE>
BRYANT SQUARE SHOPPING CENTER, OKLAHOMA CITY, OKLAHOMA
[PHOTO APPEARS HERE]
In mid-1994, WRI remerchandised and remodeled Bryant Square with a new anchor
retailer, Academy Sporting Goods. Academy's 52,000-square foot store, with its
100,000-item, $1-million inventory, is the chain's first outside of Texas. The
Oklahoma City center is 270,000 square feet and includes other major retailers
such as CR Anthony, Eckerd Drugs, Michael's and Beall Brothers.
6
<PAGE>
Center. Prior to year end, 16,000 square feet of this new space was leased
and on-line, while the remaining space opened in January, 1995. The completed
center will aggregate 283,000 square feet, anchored by Kroger, Venture
(corporately owned), CompUSA, Baby Superstore, and Office Max.
In October, we began development of a 107,000-square foot addition to
The Village Arcade with signed leases totaling over 61,000 square feet with such
retailers as The Limited Group, Eddie Bauer, and Banana Republic. This
enormously successful specialty retail center is in the heart of the Rice
University - Texas Medical Center area.
During the second quarter, WRI purchased 11.6 acres directly across from
The Galleria, Houston's world renowned retail center. By the end of the year,
construction was underway on our 190,000-square foot Post Oak Centre, of which
90,000 square feet is pre-leased. When complete in late 1995, Post Oak Centre
will represent one of WRI's flagship developments, with a diverse mix of
retailers, including Barnes & Noble, Marshall's, and CompUSA. This high-profile
location is in the midst of nearly 30 million square feet of office space, and
a daytime population of some 220,000 people.
WRI also completed construction on two mini-warehouse storage facilities
(128,000 square feet), which utilized excess unimproved land previously sitting
idle. Our 50% joint venture partner, an experienced mini-warehouse operator,
will manage these facilities.
WE UPGRADED AN ALREADY HEALTHY CAPITAL STRUCTURE Our capital structure
remained strong and healthy, as reflected in our continued "A+" Standard &
Poor's rating and our recently announced "A2" rating from Moody's. At the end
of 1994, WRI's total debt was $229.6 million, a very manageable 18.6% debt to
total capitalization ratio, well below the REIT industry's average of 41%. Our
cash flow covered our interest payments over six times for the year. Our
average cost of debt for 1994 was 6.8%, compared to 8.1% for 1993.
In November, we replaced our two existing secured
[GRAPHIC]
When our long-time tenant and regional supermarket chain Appletree downsized,
WRI replaced the seven vacated stores with Kroger, Fiesta, Randalls, and
Gerland's supermarkets. The transition, which was completed in early 1994, has
continued to provide an uninterupted source of basic goods and services for
these residential neighborhoods.
KROGER
GERLANDS
FIESTA
RANDALLS
APPLETREE
[END OF GRAPHIC]
[PHOTO APPEARS HERE]
7
<PAGE>
CAMELBACK SHOPPING CENTER, PHOENIX, ARIZONA
[PHOTO APPEARS HERE]
One of six shopping centers acquired by WRI in the Phoenix metropolitan area,
Camelback is a 135,000-square foot shopping center anchored by Smith's
supermarket, Office Max and a 100,000-square foot Target (corporately owned).
8
<PAGE>
$100 million revolving credit facilities with an unsecured $150 million
syndicated revolving credit agreement with an initial three-year term at a more
favorable rate. At year end, WRI had over $63 million of funds available to
support our acquisition and new development efforts going forward.
POSITIONED FOR MORE GROWTH This company's history of success is based on
our belief in the fundamental long-term value of real estate as an investment
and our disciplined approach to adding to the value of such assets. We expect
1995 to be a year of continued challenges, as well as one of many
opportunities.
We will continue to acquire and develop predominantly neighborhood and
community shopping centers as well as selected industrial projects. In 1995 our
two new developments will add 300,000 square feet with a total investment of
approximately $40 million. We are also aggressively pursuing new acquisitions
(with $25 million presently under contract) as well as additional development
opportunities. We are operating from a very flexible financial position, with
substantial credit availability at attractive costs.
As always, we are grateful for the trust and efforts extended by our
shareholders, employees, business associates, tenants, trust managers and the
communities of which we are a part. You can be sure we will continue to
conduct our business in a manner designed to reward us all.
Very truly yours,
[signature of Standford Alexander
appears here]
Stanford Alexander
[Signature of Martin Debrovner
appears here]
Martin Debrovner
March 2, 1995
[PHOTO APPEARS HERE]
Stanford Alexander
Chairman/Chief Executive Officer
[PHOTO APPEARS HERE]
Martin Debrovner
President/Chief Operating Officer
9
<PAGE>
Northwest Crossing Shopping Center, Houston
[Photo appears here]
WRI added 95,000 square feet of retail space to Northwest Crossing during 1994,
bringing its total to 244,000 square feet (including a 116,000-square foot
Target, corporately owned). With its occupancy level currently at 97%, Northwest
Crossing now includes Marshall's, Boot Town, Michael's and many other retailers
and restaurants.
10
<PAGE>
[photo appears here]
A key component in many of WRI's neighborhood and community shopping centers is
the concept of "pad" locations or stand-alone facilities such as restaurants and
banks. Pad locations are usually along the perimeter of a center, where they
have maximum visibility, as well as drive-in, drive-out convenience.
Tenants are typically high-profile, well-recognized regional, national and
local chains. Among our many pad location tenants are such relative newcomers as
Outback Steakhouse, China Coast, World Savings, and others such as Black-Eyed
Pea, McDonald's, and Steak & Ale, who have been with us for many years.
[photo appears here]
11
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND NOTES THERETO AND THE COMPARATIVE SUMMARY OF SELECTED
FINANCIAL DATA APPEARING ELSEWHERE IN THIS REPORT. HISTORICAL RESULTS AND TRENDS
WHICH MIGHT APPEAR, SHOULD NOT BE TAKEN AS INDICATION OF FUTURE OPERATIONS.
BUSINESS ENVIRONMENT Weingarten Realty Investors owned and operated 141 anchored
shopping centers, 16 industrial properties, 3 multi-family residential projects,
and one office building at December 31, 1994. Of the Company's 161 developed
properties, 129 are located in Texas (including 81 in Houston and Harris
County). The Company's remaining properties are located in Louisiana (11),
Arizona (6), Arkansas (6), Oklahoma (4), New Mexico (3), Maine (1) and Tennessee
(1). The Company has over 2,600 leases and 1,900 different tenants. Leases for
the Company's properties range from less than a year for smaller spaces to over
thirty five years for larger tenants; leases generally include minimum lease
payments and contingent rentals for payment of taxes, insurance and maintenance
and for an amount based on a percentage of the tenants' sales. The Company's
revenues and occupancy rates are directly affected by the square footage leased
and the business environment and conditions of the markets in which the Company
owns and operates its properties. The Company's results of operations are also
significantly affected by the property operating expenses, cost of capital and
acquisition and development of additional properties. Following is a summary of
selected key indicators (in thousands, except for percentages):
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Rental revenues $112,233 $ 95,791 $ 85,178
Occupancy rate 92% 92% 93%
Square footage leased 14,956 13,802 12,479
Renewal rental rate increase 5.7% 1.8% 2.4%
Property--at cost $735,134 $634,814 $540,671
Property acquisitions and
new development--
at cost $100,458 $ 91,008 $ 61,872
Building square footage:
Acquisitions and new
development 1,302 1,483 1,119
Total 16,271 14,994 13,467
Debt (weighted average):
Outstanding $181,595 $138,323 $267,727
Interest rate 6.8% 8.1% 7.8%
</TABLE>
The Company considers the renewal rental rate as one of the best
indicators for changes in overall rental rates for the Company's properties. The
rate presented herein is the percentage change in the weighted average rental
rate for shopping center space renewed by existing non-anchor tenants. Renewals
of anchor tenants are excluded from the computation, because their leases are of
a much longer term (and therefore, generally result in significant increase upon
renewal) and the extensive space leased by anchors could significantly skew the
overall average rate.
12
<PAGE>
The 1994 economic performance of the southwestern United States in which
the Company has its primary operations improved over 1993, however, this
improvement still generally lagged the national economy. The overall economic
conditions of these areas can be illustrated through total retail sales (as
distinguished from same store sales), and leading economic indicators as
published:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Total Retail sales for:
United States 7.7% 6.3%
Houston 5.6% 1.0%
Texas 7.3% 4.3%
(Source: U. S. Department of Commerce)
Leading economic indicators for:
United States 3.6% 3.8%
Houston 4.9% 3.2%
Texas 6.2% 5.0%
(Source: Texas Perspective, Inc.)
</TABLE>
ACQUISITION AND NEW DEVELOPMENT ACTIVITIES Since occupancy rates have
remained constant and rental rates have only shown modest increases in the past
three years, increases in revenues are mainly due to the acquisition and new
development of additional properties. Such activities had the following effects
(in thousands) on the Company's rental revenues from:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Base property $ 84,816 $ 81,415 $ 81,077
Acquired and developed
property 27,417 14,376 4,101
-------- -------- --------
Total $112,233 $ 95,791 $ 85,178
======== ======== ========
</TABLE>
In the above schedule, "base property" includes property acquired before
1992 and "acquired and developed property" includes property acquired or
developed during 1992 through 1994.
RESULTS OF OPERATIONS Rental revenues increased by 17.2% or $16.4 million
from $95.8 million in 1993 to $112.2 million in 1994 and by 12.4% or $10.6
million from $85.2 million in 1992 to $95.8 million in 1993. Of
[GRAPHIC]
The capital structure of WRI has never been stronger. Our sound financial
position is demonstrated through our cash flow to total interest coverage of
over six times and a debt to total capitalization of 18.6%. Recently, in
support of these and other positive indicators, WRI received upgraded ratings
from both Standard & Poor's and Moody's. We are one of only two publicly traded
REITs with such superior ratings.
RATED
A+
STANDARD
& POOR'S
A2
MOODY'S
[END OF GRAPHIC]
13
<PAGE>
Post Oak Centre, Houston, Texas
[PHOTO APPEARS HERE]
This 11.6-acre landmark site, across from The Galleria in Houston's most
dynamic retail area, is being developed as one of WRI's flagship properties.
When complete in late 1995, its 190,000 square feet of prime space will further
broaden the area's retail and dining mix. Among its anchors are Marshall's,
CompUSA and Barnes & Noble.
14
<PAGE>
these increases, property acquisitions and new development contributed $13.0
million in 1994 and $10.3 in 1993. Since occupancy rates have remained
consistent during the periods, the remaining portion of these increases is due
primarily to increased rental rates obtained from releasing and renewals of
existing space.
Interest income was $3.4 million in 1992, $5.3 million in 1993 and $5.8
million in 1994. This increased income is mainly the result of investing
approximately $50 million of excess funds from a stock offering in March 1993
in marketable debt securities.
Equity in earnings of real estate joint ventures and partnerships has
increased from $.7 million in 1992 to $1.1 million in 1993 to $1.3 million in
1994. These increases are the result of additional investment in entities
accounted for under the equity method. Other income increased from $.6 million
in 1992 to $1.1 million in 1993 to $1.5 million in 1994. These increases were
primarily due to lease cancellation income.
Direct costs and expenses of operating the Company's properties (i.e.,
depreciation and amortization, operating and ad valorem tax expenses) increased
from $47.3 million in 1992 to $53.6 million in 1993 to $61.6 million in 1994.
These increases are primarily due to property acquired and developed during
these periods. Overall, direct operating costs and expenses as a percent of
rental revenues has remained relatively constant at 56% in 1992 and 1993 and
55% in 1994.
Interest incurred on debt outstanding during the periods increased from
$11.2 million in 1993 to $12.4 million in 1994. This increase was due to an
increase in the weighted average debt outstanding from $138.3 million in 1993
to $181.6 million in 1994 offset partially by a decrease in the weighted
average interest rate of 8.1% in 1993 to 6.8% in 1994. Interest expense
charged to current operations, however, increased in 1994 by only $.6 million
due to the decrease in the average interest rate mentioned above and an
increase in the amount of interest capitalized on projects under development
during 1994. Interest incurred on debt outstanding decreased from $20.7 million
in 1992 to
[GRAPHIC]
In the middle of the thirteenth-largest business district in the
United States, the area in southwest Houston known as the Galleria, there have
always been oak trees -- during all of those decades when the venerable
Sakowitz department store dominated these surroundings and even before that,
when this acreage was pasture land for horses and cattle. When Post Oak Centre
opens its doors to the shopping public, it will look out onto many of those
same oaks. In preparing the site, WRI either relocated or built around these
natural landmarks, preserving one of the site's most identifiable
characteristics.
[END OF GRAPHIC]
[PHOTO APPEARS HERE]
15
<PAGE>
$11.2 for 1993. This decrease was due almost entirely to a decrease of
$129.4 million in the weighted average amount of debt outstanding as a result
of the use of proceeds from a public offering of common shares that were used
to reduce debt and the conversion of all the Company's convertible debt during
1993. The Company capitalized $.9 million less interest in 1993 than in 1992
due to reduced levels of development in 1993. As a result, interest expense
decreased from $18.7 million in 1992 to $10.0 million in 1993.
The majority of the change in gains (loss) on sales of properties and
securities from 1993 and 1994 related to the gains realized in 1993 as a result
of fires at two of the Company's properties; there were no similar occurrences
in 1994. The fires had no material impact on the Company's earnings for 1993 or
1994. The $1.8 million gain in 1992 was the result of selling the Company's
investment in government backed debt securities and two small tracts of
undeveloped land. Additionally, the Company had a $1.2 million extraordinary
charge for the early retirement of debt in 1992; no such charges occurred in
1993 or 1994.
As a result of these changes, net income increased from $20.1 million in
1992 to $36.2 million (an 80.1% increase) in 1993 to $43.8 million (a 21.0%
increase) in 1994. Net income per common share increased from $1.15 in 1992 to
$1.50 (a 30.4% increase) in 1993 to $1.67 (an 11.3% increase) in 1994.
FUNDS FROM OPERATIONS The Company considers funds from operations (defined
by NAREIT as net income plus depreciation and amortization, less gains (loss)
on sales of property and securities) to be an alternative measure of the
performance of any equity REIT since such measure does not recognize
depreciation and amortization expenses as operating expenses. Management
believes that reductions for these charges are not meaningful in evaluating
income-producing real estate, which historically has not depreciated. Funds
from operations do not represent cash flows from operations as defined by
generally accepted accounting principles and should not be considered as an
alternative to net income as an indicator of the Company's operating
performance or to cash flows as a measure of liquidity.
Funds from operations increased to $70.9 million in 1994 compared to
$58.0 million in 1993 and $40.7 million in 1992. The majority of the increase
relates to the impact of the Company's acquisitions and new development
programs. For further information of the changes between years, see "Results of
Operations" above.
CAPITAL RESOURCES AND LIQUIDITY The Company anticipates that cash flow from
operating activities will continue to provide adequate capital for all
principal payments as well as dividend payments in accordance with REIT
requirements, and that cash on hand, borrowings under its existing credit
facilities, the use of corporate and project financing, as well as other debt
and equity alternatives will provide the necessary capital to achieve growth.
Cash flow from operating activities as reported in the Statements of
Consolidated Cash Flows increased to $65.5 million for 1994 from $57.6 million
for 1993 and $38.3 million for 1992.
Cash dividends increased to $59.7 million in 1994, compared to $52.3
million in 1993 and $36.2 million in 1992. The Company satisfied its REIT
requirement of distributing at least 95% of ordinary taxable income for each of
the three years ending December 31, 1994 and, accordingly, federal income taxes
were not provided in these years. The Company's dividend payout ratio for 1994
and 1993 approximated 84.2% and 90.2% of the 1994 and 1993 funds from
operations (defined as net income plus depreciation and amortization, less
gains (loss) on sales of property and securities), respectively. Recently, the
Company's Board of Trust Managers approved an increase in the quarterly
dividend per common share from $.57 to $.60.
In 1994, the Company continued to expand its portfolio of income
producing properties. This growth resulted from both acquisitions of existing
properties, both shopping centers and industrial property, and development of
new shopping centers. The Company added, in millions,
16
<PAGE>
Interpak Industrial Complex, Houston
[PHOTO APPEARS HERE]
WRI added approximately 389,000 square feet to our industrial portfolio in 1994.
Included was a 295,000-square foot warehouse and distribution center in joint
venture with Interpak Terminals. The two-building, rail-served complex is 100%
occupied by Interpak, a leading custom-packager of thermoplastic resins.
17
<PAGE>
$100.5, $91.0 and $61.9 of new property during 1994, 1993 and 1992,
respectively.
Total debt outstanding at December 31, 1994 was $229.6 million compared
to $147.7 million at December 31, 1993, and $243.6 million at December 31, 1992.
In 1994, the Company increased total debt $81.9 million primarily to fund the
acquisition and new development programs. Three of the Company's acquisitions
were financed, in part, through the assumption of $13.4 million of debt with
interest rates ranging from 7.5 to 9.75%. The remainder of the purchase price of
the acquisitions was financed through the use of revolving credit debt and the
issuance of 300,000 common shares.
Following is the percentage of the Company's debt to equity and debt to
total capitalization as of December 31:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Debt to equity 54% 35% 59%*
Debt to total market
(equity) capitalization 19% 13% 26%
</TABLE>
* Excludes convertible debentures and notes which were converted to equity
in 1993.
During 1994, the Company replaced its two existing secured bank
revolving credit agreements totaling $100 million with a new syndicated bank
agreement. This new revolver, in addition to being usecured, is also at a more
favorable rate. The agreement has an initial three year term which is renewable
annually. The Company is currently negotiating with the syndicate to increase
the amount available under the credit agreement.
At December 31, 1994, the Company had approximately $63 million of funds
available to support the growth of the Company. These funds were available
through a combination of $4 million available under the revolving line of
credit, $29 million of uncollateralized government debt securities and a $30.0
million closed but unfunded loan from an insurance company.
In 1993, the Company had reduced total debt by calling all $123.0
million of outstanding convertible note and debenture issues. The issues were
converted into 3.9 million common shares, all of which had a beneficial anti-
dilutive effect on earnings per share. During March 1993, the Company raised
$113 million of new capital through an equity offering of 2.8 million common
shares. Although a large portion of these proceeds were initially used to reduce
short-term revolving credit debt, the proceeds were ultimately the primary
source of the Company's capital needs for the year. Approximately $91.0 million
was invested in new assets, consisting of acquisitions totaling 1.3 million
square feet, the development of new shopping centers and capital improvements to
existing properties.
EFFECTS OF INFLATION The rate of inflation was on the rise in 1994, but was
inconsequential to the Company's operations. The Company has structured its
leases, however, in such a way as to remain largely unaffected should
significant inflation occur. Most of the leases contain percentage rent
provisions with the Company to receive rentals based on the tenants' gross
sales. Many leases provide for increasing minimum rentals during the terms of
the leases through escalation provisions. In addition, many of the Company's
leases are for terms of less than ten years, which allows the Company to adjust
rentals to changing market conditions when the leases expire. Most of the
Company's leases require the tenant to pay a large portion of operating
expenses. As a result of these lease provisions, increases due to inflation, as
well as tax rate increases which are usually anticipated to occur, generally do
not have a significant adverse effect upon the Company's operating results.
18
<PAGE>
PORTFOLIO OVERVIEW
<TABLE>
<CAPTION>
# OF Building Area Land Area
PROPERTIES (in sq ft) (in sq ft)
---------- ------------- ----------
<S> <C> <C> <C>
PORTFOLIO BY LOCATION
Grand Total 161 16,271,181 71,186,718
Houston 81 8,897,808 37,605,447
Texas (excluding Houston) 48 4,085,055 18,230,189
Louisiana 11 1,141,473 6,005,740
Oklahoma 4 678,036 3,172,742
Arkansas 6 598,617 2,251,604
Arizona 6 558,725 2,423,704
New Mexico 3 177,162 931,444
Maine 1 114,589 481,550
Tennessee 1 19,716 84,298
PORTFOLIO BY CLASSIFICATION
Grand Total 161 16,271,181 71,186,718
Shopping Centers 141 13,293,346 55,857,667
Industrial 16 2,652,735 6,420,000
Multi-Family Residential 3 204,100 430,470
Office Building 1 121,000 170,931
Unimproved land 8,307,650
NEW DEVELOPMENTS IN 1994
*Northwest Crossing, Houston,
TX (75%) 95,287 416,524
*River Pointe Mini-Storage,
Conroe, TX 32,288 96,679
*Little York Mini-Storage,
Houston, TX 31,536 123,756
Cypress Pointe, Houston, TX 15,698 169,369
ACQUISITIONS IN 1994
Windsor Hills Center,
Oklahoma City, OK 234,604 1,231,646
*Interpak, Houston, TX (75%) 221,074 361,592
Pueblo Anozira Shopping Center,
Tempe, AZ 149,104 769,115
Camelback Village Square,
Phoenix, AZ 134,500 542,758
Fountain Plaza (Phase II),
Scottsdale, AZ 107,255 459,994
Central Park VII(Phase II),
Houston, TX 103,485 282,843
Squaw Peak Plaza, Phoenix, AZ 61,033 219,542
Amber's/Gold's Gym (Parkway
Plaza), College Station, TX 60,000 240,000
Oak Park Village,
San Antonio, TX 56,284 221,112
Post Oak Center, Houston, TX 504,826
Griggs Road, Houston, TX 9,675
</TABLE>
[GRAPHIC]
WRI currently has 161 income-producing projects primarily in the Southwest.
Eighty-one of the properties are located in Houston, Texas, the Company's
corporate headquarters. As WRI has grown, it has concentrated on markets that
are a natural extension of its home base.
[END OF GRAPHIC]
[PHOTO APPEARS HERE]
*Denotes partial ownership. The
Company's interest is 50% except
where noted.
19
<PAGE>
Trust Managers
[PHOTO APPEARS HERE]
Seated, from left to right are, Martin Debrovner, Marc J. Shapiro, Stanford
Alexander and Andrew M. Alexander. Standing, from left to right are, Douglas W.
Schnitzer, Melvin A. Dow, Joseph W. Robertson, Jr., and Stephen A. Lasher. (Not
shown: J.T. Trotter.)
20
<PAGE>
[PHOTO APPEARS HERE]
21
<PAGE>
_____________________________________________________________________________
| |
F I N A N C I A L
R E V I E W
22
<PAGE>
CONSOLIDATED BALANCE SHEETS WEINGARTEN REALTY INVESTORS
Amounts in thousands, except per share amounts
<TABLE>
<CAPTION>
As of December 31, 1994 1993
-------- --------
<S> <C> <C>
ASSETS
Property $ 735,134 $ 634,814
Accumulated Depreciation (191,427) (168,405)
--------- ---------
Property - net 543,707 466,409
Investment in Real Estate Joint Ventures and Partnerships 9,442 9,542
--------- ---------
Total 553,149 475,951
Mortgage Bonds and Notes Receivable from:
Affiliate (net of deferred gain of $16,235) 25,112 24,914
Real Estate Joint Ventures and Partnerships 13,590 10,090
Marketable Debt Securities (Held-to-Maturity) 49,906 51,405
Unamortized Debt and Lease Costs 16,997 15,038
Accrued Rent and Accounts Receivable (net of allowance
for doubtful accounts of $1,007 in 1994 and $938 in 1993) 14,367 13,880
Cash and Cash Equivalents 3,295 3,226
Other 5,621 7,538
--------- ---------
Total $ 682,037 $ 602,042
========= =========
Liabilities and Shareholders' Equity
Debt $ 229,597 $ 147,652
Accounts Payable and Accrued Expenses 26,512 22,975
Other 2,535 4,328
--------- ---------
Total 258,644 174,955
--------- ---------
Commitments and Contingencies
Shareholders' Equity:
Preferred Shares of beneficial interest - par
value, $0.03 per share; shares authorized:
10,000; shares issued or outstanding: none
Common Shares of beneficial interest - par value,
$0.03 per share; shares authorized:
150,000; shares issued and outstanding:
26,368 in 1994 and 25,972 in 1993 791 779
Capital surplus 422,602 426,308
--------- ---------
Shareholders' equity 423,393 427,087
--------- ---------
Total $ 682,037 $ 602,042
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
23
<PAGE>
STATEMENTS OF CONSOLIDATED INCOME WEINGARTEN REALTY INVESTORS
Amounts in thousands, except per share amounts
<TABLE>
<CAPTION>
Years Ended December 31, 1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Rentals $112,233 $ 95,791 $ 85,178
Interest (including amounts from related parties of $2,478
in 1994, $3,020 in 1993 and $2,340 in 1992) 5,761 5,341 3,428
Equity in earnings of real estate joint ventures
and partnerships 1,330 1,093 736
Other 1,469 1,057 617
-------- -------- --------
Total 120,793 103,282 89,959
-------- -------- --------
Expenses:
Depreciation and amortization 26,842 23,382 21,291
Operating 19,368 17,348 14,600
Ad valorem taxes 15,433 12,887 11,372
Interest 10,694 10,046 18,689
General and administrative 4,434 5,001 4,566
-------- -------- --------
Total 76,771 68,664 70,518
-------- -------- --------
Income from Operations 44,022 34,618 19,441
Gains (Loss) on Sales of Property and Securities (234) 1,631 1,807
-------- -------- --------
Income Before Extraordinary Charge 43,788 36,249 21,248
Extraordinary Charge (penalty for early retirement of debt) 1,167
-------- -------- --------
Net Income $ 43,788 $ 36,249 $ 20,081
======== ======== ========
Per Common Share:
Income Before Extraordinary Charge $ 1.67 $ 1.50 $ 1.21
======== ======== ========
Net Income $ 1.67 $ 1.50 $ 1.15
======== ======== ========
Weighted Average Number of Common Shares Outstanding 26,190 24,211 17,503
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
24
<PAGE>
STATEMENTS OF CONSOLIDATED CASH FLOWS WEINGARTEN REALTY INVESTORS
<TABLE>
<CAPTION>
Amounts in thousands
Years Ended December 31, 1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 43,788 $ 36,249 $ 20,081
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 26,842 23,382 21,291
Real estate joint ventures and partnerships:
Equity in earnings (1,330) (1,093) (736)
Cash distributions 1,238 904 606
(Gains) loss on sales of property and securities 234 (1,631) (1,807)
Prepayment penalties associated with early
extinguishment of debt 1,167
Amortization of direct financing leases 585 920 502
Net effect of changes in operating accounts (5,883) (1,222) (2,830)
Other, net 69 132
-------- -------- -------
Net cash provided by operating activities 65,543 57,641 38,274
-------- -------- -------
Cash Flows from Investing Activities:
Property acquisitions and development (75,685) (91,008) (47,322)
Notes receivable:
Advances (6,557) (3,775) (8,570)
Collections 2,694 3,423 2,582
Proceeds from sales and disposition of property 3,063 1,741 1,822
Proceeds from sales of marketable debt securities 32,612 18,632
Purchase of marketable debt securities (84,718)
Investment in real estate joint ventures and partnerships (249) (2,803) (2,216)
Other 2,519 1,213 1,523
-------- -------- -------
Net cash used in investing activities (74,215) (143,315) (33,549)
-------- -------- -------
Cash Flows from Financing Activities:
Proceeds from issuance of:
Debt 145,251 71,834 42,042
Common shares of beneficial interest 410 113,190 64,210
Principal payments of debt (76,527) (44,837) (74,562)
Dividends paid (59,735) (52,345) (36,180)
Other, net (658) (94) (1,176)
-------- -------- -------
Net cash provided by (used in) financing
activities 8,741 87,748 (5,666)
-------- -------- -------
Net increase (decrease) in cash and cash equivalents 69 2,074 (941)
Cash and cash equivalents at January 1 3,226 1,152 2,093
-------- -------- -------
Cash and cash equivalents at December 31 $ 3,295 $ 3,226 $ 1,152
======== ======== =======
</TABLE>
See Notes to Consolidated Financial Statements.
25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
WEINGARTEN REALTY INVESTORS
1. Summary of Significant Accounting Policies
OPERATIONS of Weingarten Realty Investors, a Texas business trust, consist of
one business segment--acquiring, developing and leasing of real estate,
primarily community shopping centers, in Texas and throughout the southwestern
part of the United States. The Company currently operates and intends to operate
in the future as a real estate investment trust ("REIT").
CONSOLIDATED FINANCIAL STATEMENTS include the accounts of the Company, its
subsidiaries and its interest in 50% or more-owned joint ventures and
partnerships. All significant intercompany balances and transactions have been
eliminated. Joint ventures, effectively owned more than 20%, but less than 50%,
are accounted for using the equity method.
CARRYING CHARGES, principally interest and ad valorem taxes, of land under
development and buildings under construction are capitalized as part of projects
under development and buildings and improvements to the extent that such charges
do not cause the carrying value of the asset to exceed its net realizable value.
PROPERTY is carried at cost plus capitalized carrying charges. Depreciation is
computed using the straight-line method, generally over estimated useful lives
of 18-50 years for buildings and 10-20 years for parking lot surfacing and
equipment. Maintenance and repairs are expensed. Major replacements are
capitalized and the replaced asset and corresponding accumulated depreciation is
removed from the accounts.
MARKETABLE DEBT SECURITIES (HELD-TO-MATURITY), consisting of U. S. government
agency guaranteed pass-through certificates and U.S. Treasury Notes, are carried
at amortized cost. Premiums and discounts are amortized (accreted) to operations
over the estimated remaining lives of the mortgage-backed securities using the
constant yield method.
UNAMORTIZED DEBT AND LEASE COSTS are amortized primarily on a straight-line
basis over the terms of the debt and over the lives of leases, respectively.
RENTAL REVENUE is generally recognized on a straight-line basis over the life of
the lease for operating leases and over the lease terms using the interest
method for direct financing leases. Contingent rentals (payments for taxes,
maintenance and insurance by the lessees and for an amount based on a percentage
of the tenants' sales) are estimated and accrued over the lease year.
INCOME PER COMMON SHARE is computed using the weighted average number of common
shares outstanding during the period and excludes the negligible dilutive effect
of shares issuable in connection with share options and awards.
CASH FLOWS are computed using the indirect method. For cash flow purposes, the
Company considers all highly liquid debt instruments with a maturity of less
than three months as cash equivalents.
DOLLAR AMOUNTS presented in the tabulations in the notes to consolidated
financial statements are stated in thousands of dollars, except per share
amounts.
26
<PAGE>
RECLASSIFICATIONS have been made to prior years' amounts to conform with the
current year presentation.
2. DEBT
The Company's debt consists of the following:
<TABLE>
<CAPTION>
December 31, 1994 1993
-------- --------
<S> <C> <C>
Permanent trust-deed and
mortgage notes payable to 2014
at 6.0% to 10.5%, primarily
with insurance companies $ 53,036 $ 41,066
Notes payable under revolving
credit agreement 145,000 40,350
Reverse repurchase agreements,
due daily and collateralized by $31.9
million of marketable debt securities 16,200 51,826
Industrial revenue bonds to 2014
at 5.7% to 6.8% at
December 31, 1994 7,772 7,899
Obligations under capital leases 6,048 6,119
Other 1,541 392
-------- --------
Total $229,597 $147,652
======== ========
</TABLE>
At December 31, 1994, the variable interest rate for notes payable under
the revolving credit agreement and the reverse repurchase agreement was 6.8% and
6.7%, respectively. The weighted average interest rate for the Company's short
term debt for 1994 was 4.4%.
The Company's debt can be summarized as follows:
<TABLE>
<CAPTION>
December 31, 1994 1993
-------- --------
<S> <C> <C>
As to interest rate:
Fixed rate debt (including amounts
fixed through interest rate swaps) $102,278 $ 87,577
Variable rate debt 127,319 60,075
-------- --------
Total $229,597 $147,652
======== ========
As to collateralization:
Secured debt $ 84,284 $147,439
Unsecured debt 145,313 213
-------- --------
Total $229,597 $147,652
======== ========
</TABLE>
Scheduled principal payments on the Company's debt (excluding $145.0
million potentially due under the Company's revolving credit agreement in 1997
and $16.2 million of reverse repurchase agreements) are due during the following
years:
<TABLE>
<S> <C>
1995 $ 9,410
1996 1,253
1997 770
1998 840
1999 720
2000 through 2004 41,087
2005 through 2009 4,627
Thereafter 3,642
</TABLE>
Certain debt is collateralized by various direct financing leases or other
property and current and future rentals from these leases and properties. At
December 31, 1994 and 1993, the carrying value of such property aggregated $257
million and $328 million, respectively.
The Company has an unsecured $150 million revolving credit agreement with a
bank syndication (the "Banks"). Although the agreement expires in November 1997,
the Company has an annual option to request a one year extension of the
agreement. Unless all of the banks in the syndication agree to the requested
extension by the Company, the agreement expires on the scheduled date and all
loans outstanding under the credit agreement are payable on the agreement's
expiration. The Company intends to request an extension of the agreement in 1995
and expects that the Banks will agree to their request. During 1994, the maximum
balance and weighted average balance outstanding under this agreement was $145
million and $98 million, (at 6.3%) respectively. The revolving credit agreement
is subject to normal banking terms and conditions and does not adversely
restrict the Company's operations or liquidity.
The Company made cash payments for interest on debt, net of amounts
capitalized, of $10.1 million in 1994, $9.4 million in 1993 and $18.3 million in
1992.
27
<PAGE>
Various debt agreements contain restrictive covenants, the most restrictive
of which requires the Company to produce annual consolidated distributable cash
flow, as defined by the agreements, of not less than 250% of interest payments,
to limit the payment of dividends to no more than 100% of the Company's annual
consolidated cash flow, to limit short term debt (as defined) to the greater of
33% of total debt or $200 million and uncollateralized assets must be at least
150% of unsecured debt. Management believes that the Company is in compliance
with all restrictive covenants.
In October 1992, the Company purchased three interest rate swap contracts
with an aggregate notional amount of $40 million. Such contracts, which expire
through 2004, have been outstanding since their purchase. The Company intends to
hold such contracts through their expiration dates and to use them as a means of
fixing a portion of the Company's variable rate debt. The interest rate swaps
have an effective interest rate of 8.1%. The difference between the interest
received and paid on the interest rate swaps is recognized as interest expense
as incurred. The interest rate swaps increased interest expense and decreased
net income as follows, in millions: $1.4 in 1994, $1.9 in 1993 and $.3 in 1992.
The interest rate swaps increased the average interest rate for the Company's
debt by the following amounts: .8% for 1994, 1.3% for 1993 and .1% for 1992. The
Company currently has no financial exposure, in the unlikely event of default by
the counterparty, because the Company has paid a higher rate of interest than it
has received under these agreements.
3. PROPERTY
The Company's property consists of the following:
<TABLE>
<CAPTION>
December 31, 1994 1993
-------- --------
<S> <C> <C>
Land $121,773 $110,704
Land under development 50,537 38,966
Buildings and improvements 539,862 466,938
Construction in-progress 13,111 7,771
Property under direct financing leases 9,851 10,435
-------- --------
Total $735,134 $634,814
======== ========
</TABLE>
The following carrying charges were capitalized:
<TABLE>
<CAPTION>
December 31, 1994 1993 1992
------- -------- --------
<S> <C> <C> <C>
Interest $ 1,670 $ 1,114 $ 2,025
Ad valorem taxes 625 193 196
------- -------- --------
Total $ 2,295 $ 1,307 $ 2,221
======= ======== ========
</TABLE>
4. LEASING OPERATIONS
LEASING ARRANGEMENTS The Company's lease terms range from less than one year for
smaller tenant spaces to thirty-five years for larger tenant spaces. In addition
to minimum lease payments, most of the leases provide for contingent rentals.
RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable
operating leases at December 31, 1994, in millions, is: $83.3 in 1995; $73.5 in
1996; $63.0 in 1997; $54.5 in 1998; $46.4 in 1999 and $349.4 thereafter. The
future minimum rental amounts do not include estimates for contingent rentals.
Such contingent rentals, in millions, aggregated $24.6 in 1994, $21.4 in 1993
and $19.5 in 1992.
PROPERTY UNDER DIRECT FINANCING LEASES Leases that are, in substance, the
financing of an asset purchase by the party leasing the property are recorded as
property under direct financing leases. The Company, in its capacity as lessor,
has removed the leased property from the books and recorded the future lease
payments
28
<PAGE>
receivable using the following components:
<TABLE>
<CAPTION>
December 31, 1994 1993
------- --------
<S> <C> <C>
Total minimum lease payments
to be received $17,405 $ 19,280
Estimated residual values of
leased property 1,991 2,224
Unearned income (9,545) (11,069)
------- --------
Property under direct
financing leases $ 9,851 $ 10,435
======= ========
</TABLE>
The Company recognized rental revenue from direct financing leases as
follows, in millions: $1.5 in 1994; $1.6 in 1993 and $2.0 in 1992. At December
31, 1994, minimum lease payments to be received in each of the five succeeding
years, in millions, are: $1.9 in 1995; $1.8 in 1996 and 1997; $1.7 in 1998 and
$1.5 in 1999. The future minimum lease payments do not include amounts for
contingent rentals; contingent rental income on properties leased under direct
financing leases, in millions, was $.8 in 1994, $.6 in 1993 and $.8 in 1992.
5. LEASE COMMITMENTS
OPERATING LEASES The Company leases land and a shopping center from the owners,
and then subleases these properties to other parties. Future minimum rentals
under these operating leases, in millions, are: $1.4 in 1995; $1.3 in 1996;
$1.2 in 1997 and 1998; $1.1 in 1999 and $14.9 thereafter.
Future minimum rental payments on these leases have not been reduced by
future minimum sublease rentals aggregating $15.7 million through 2017 that are
due under various non-cancelable subleases. Rental expense (including
insignificant amounts for contingent rentals) for operating leases aggregated,
in millions: $1.6 in 1994; $1.6 in 1993 and $1.5 in 1992. Sublease rental
revenue (excluding amounts for improvements constructed by the Company on the
leased land) from these leased properties were as follows, in millions: $2.1 in
1994; $2.0 in 1993 and $1.6 in 1992.
CAPITAL LEASES Leases which transfer substantially all of the risks and
benefits of ownership associated with the underlying property to the Company are
considered capital leases, and the present value of the required lease payments
are recorded as property and the related debt is recorded as obligations under
capital leases. The debt is amortized as each lease payment is made. Property
under capital leases, consisting of a shopping center aggregating $6.5 million,
is included in buildings and improvements at December 31, 1994 and 1993.
Future minimum lease payments under these capital leases total $12.2
million, with annual payments due of $.6 million in 1995 through 1999, and $9.3
million thereafter. The amount of these total payments representing interest is
$6.1 million. Accordingly, the present value of the net minimum lease payments
is $6.0 million at December 31, 1994.
The Company subleases this property to other parties. The minimum lease
payments discussed above have not been reduced by minimum sublease rentals
aggregating $3.2 million due under non-cancelable subleases. Minimum sublease
rentals do not include estimates for contingent rentals that aggregated
approximately $.2 million in 1994, 1993, and 1992.
6. RELATED PARTY TRANSACTIONS
The Company and Weingarten Realty Management Company (the "Management
Company") were related parties during 1992 because the Management Company was
owned by directors and shareholders of the Company. As the Company had only a
few employees, its operations were primarily performed by employees of the
Management Company through a contract to lease, manage and develop the Company's
properties. The Company and WRI Holdings, Inc. ("Holdings") are related parties
because they share certain directors and are under common management. See Note 8
for related party information about Holdings.
Effective January 1, 1993, the assets of the Management Company, which were
not material in relation to the Company's consolidated balance sheet, were
acquired by
29
<PAGE>
the Company through the assumption of less than $.1 million of net liabilities
from the shareholders of the Management Company. This event did not have a
significant effect on 1993 earnings because the additional salaries paid as the
result of this merger were offset by the various fees no longer being paid to
the Management Company.
The Management Company charged the Company fees aggregating $8.0 million
for 1992, in connection with services rendered under the management contract.
Fees paid under the management contract were generally based upon a specified
percent of revenues, minimum lease rentals of space leased and costs incurred
for acquisition, construction and development of the Company's properties.
The Company owns an interest in several joint ventures and partnerships.
Notes receivable from these entities bear interest at 4.0% to 10.5% at December
31, 1994 and are due at various dates through 2020. The Company recognized
interest income on these notes aggregating, in millions: $.9 in 1994; $1.0 in
1993 and $.7 in 1992.
Texas Commerce Bank National Association ("TCB") is a significant
participant in and the agent for the Banks that provide the Company's $150
million syndicated revolving credit agreement. The Company and TCB have two
common directors.
7. COMMITMENTS AND CONTINGENCIES
The Company was contingently liable at December 31, 1994 for $1.2 million
of notes payable executed by various joint ventures and partnerships.
The Company is committed to lend Holdings an additional $5.2 million. The
Company remains contingently liable for $.9 million of notes payable by
Hospitality Venture which were transferred to Holdings in 1988.
The Company is involved in various matters of litigation arising in the
normal course of business. While the Company is unable to predict with certainty
the amounts involved, the Company's management and counsel are of the opinion
that, when such litigation is resolved, the Company's resulting liability, if
any, will not have a significant effect on the Company's consolidated financial
position.
In connection with the acquisition of certain property in exchange for the
Company's common shares in 1994, the Company entered into an agreement with the
seller under which the Company essentially guarantees that its shares would
exceed a specified value on a certain future date. If the shares' market value
does not exceed the threshold specified in the agreement, the Company has the
option to pay the seller the difference in cash, issue additional shares (based
upon the then market value of the shares) for the difference or settle the
difference by a combination of paying cash and issuing shares. The Company has
the option to settle the agreement in June 1996, December 1996 or June 1997. If
the Company had settled this agreement at December 31, 1994, the cash settlement
amount would have been $1.5 million or a maximum of 40,561 shares would have
been issued. The settlement amount would be considered additional consideration
paid for the property, and be included in the basis of the property, provided
such additional basis would not make the carrying value of the property exceed
its fair market value.
8. INVESTMENT IN MORTGAGE BONDS AND NOTES RECEIVABLE From an Affiliate
Concurrent with the Company being organized as a REIT in 1984, certain
property and investments in joint ventures, which were considered to be
incompatible with a REIT's operation and $3.5 million were transferred to
Holdings in exchange for $26.8 million of mortgage bonds. The transfer price for
the assets was based upon independent appraisals. The appraised values exceeded
the Company's carrying value of the assets; however, because Holdings is a
related party, the gain of $17.3 million was deferred by the Company. Holdings
currently owns three investments: a 50% interest in Hospitality Venture, which
owns and operates eight motor hotels in Florida and Alabama ("Hospitality");
unimproved land in a multi-use land development north of Houston ("River
Pointe") and unimproved land in a major industrial park in Houston ("Railwood").
30
<PAGE>
The mortgage bonds and notes receivable from Holdings, and related deferred
gain, were as follows:
<TABLE>
<CAPTION>
December 31, 1994 1993
-------- --------
<S> <C> <C>
Hospitality mortgage bonds, bearing
interest at the greater of 16% or
11% of gross receipts (as defined),
due 2004 and collateralized by an
interest in Hospitality Venture $ 15,982 $ 15,982
Railwood mortgage bonds, bearing
interest at 16% (payable at 10%),
due 2004 and collateralized by
unimproved land 6,223 6,223
River Pointe mortgage bonds, bearing
interest at 16% (payable at 10%),
due 1995 and collateralized by
unimproved land 3,150 3,150
------- -------
Total 25,355 25,355
River Pointe development notes receivable,
bearing interest at prime rate plus 1%
(9.5% at December 31, 1994), due
December 1995 and collateralized by
unimproved land 10,612 9,907
Hospitality Venture note receivable under
a credit agreement, bearing interest
at prime rate plus 1% (9.5% at
December 31, 1994), due August 1995
and collateralized by property 350 2,200
Note receivable, bearing interest at
prime rate plus 1% (9.5% at December
31, 1994), due June 1996 and
collateralized by an interest in
Hospitality Venture 5,030 3,687
-------- --------
Total 41,347 41,149
Unrecognized portion of the deferred gain (16,235) (16,235)
-------- --------
Net investment $ 25,112 $ 24,914
======== ========
</TABLE>
Before 1988, Holdings was current on the payments of all interest;
accordingly, the Company had recognized interest income on all the Holdings debt
at the stated interest pay rates. During the fourth quarter of 1988, Holdings'
cash flow and capital resources became insufficient to meet the full interest
requirements on the mortgage bonds. The accrual of interest income on the River
Pointe and Railwood mortgage bonds has been suspended and interest income on the
Hospitality mortgage bonds has been limited to Holdings' pro rata share of cash
flow from Hospitality Venture. Interest income from the mortgage bonds and notes
receivable recognized by the Company for financial reporting purposes, in
millions, aggregated $1.6 for 1994, $2.1 for 1993 and $1.6 for 1992. At December
31, 1994 and 1993, accrued interest receivable from Holdings was $.2 million and
$.4 million, respectively.
The Company had an unrecorded receivable for interest of $28.6 million and
$22.3 million at December 31, 1994 and 1993, respectively. Of these amounts,
$6.0 million and $5.4 million represent the difference between the accrual rate
and the pay rate on the Railwood and River Pointe mortgage bonds at 1994 and
1993, respectively. Interest income not recognized by the Company for financial
reporting purposes aggregated, in millions, $6.3, $5.2 and $4.9 for 1994, 1993
and 1992, respectively.
Management of the Company believes that the fair market value of the
security collateralizing debt from Holdings is greater than the net investment
in such debt (cost less related deferred gain) and that there would not be a
charge to operations if the Company were to foreclose on the debt. If
foreclosure were required, the net investment in such debt would become the
Company's basis of the repossessed assets. However, the Company does not
currently anticipate foreclosure on Holdings' properties due to certain
restrictions imposed on such assets in connection with the Company's REIT
status. The Company's management presently does not believe that the net
investment in the mortgage bonds and notes receivable from Holdings has been
impaired nor that a reserve for any such impairment is currently required.
31
<PAGE>
9. FEDERAL INCOME TAX CONSIDERATIONS
Federal income taxes are not provided because the Company believes it
qualifies as a REIT under the provisions of the Internal Revenue Code.
Shareholders of the Company include their proportionate taxable income in their
individual tax returns. As a REIT, the Company must distribute at least 95% of
its ordinary taxable income to its shareholders and meet certain income source
and investment restriction requirements.
Taxable income differs from net income for financial reporting purposes
principally because of differences in the timing of recognition of interest, ad
valorem taxes, depreciation, rental revenue, pension expense and installment
gains on sales of property. As a result of these differences, the book value of
the Company's net assets exceeds its tax basis by $30.8 million at December 31,
1994. Such differences of books over (under) tax are primarily due to the
following, in millions: $50.6 for property basis and depreciation and ($19.1)
for additional interest income recognized for tax purposes on Holdings' debt.
For federal income tax purposes, the cash dividends distributed to
shareholders are characterized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Ordinary income 94.0% 86.9% 83.3%
Return of capital
(generally non-taxable) 5.0% 10.2% 11.5%
Long-term capital gains 1.0% 2.9% 5.2%
------ ------ ------
Total 100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
10. SHARE OPTIONS AND AWARDS
The Company has an incentive Share Option Plan (the "Plan") which expires
in December 1997. During 1991, the Company amended the Plan to add awards of
shares of beneficial interest, at nominal cost to the recipient, in addition to
options. The Plan provides options and awards for a maximum of 500,000 common
shares. The Company has an additional share option plan which grants 100 share
options to every employee of the Company, excluding executive officers, upon
completion of each five year interval of service. This plan, which expires in
2002, provides options for a maximum of 100,000 common shares. For both of the
share option plans, options are granted to employees of the Company at an
exercise price equal to the quoted fair market value of the common shares on the
date the options are granted. All options and awards that are granted expire
upon termination of employment or ten years from the date of the grant.
Following is a summary of the option activity of the plans for the three
years ended December 31, 1994:
<TABLE>
<CAPTION>
Shares Under Option Price
Option Per Share
------------ ---------------
<S> <C> <C>
Outstanding, January 1, 1992 108,275 $19.50 - $25.00
Granted 159,500 31.00 - 34.00
Cancelled (1,500) 25.00
Exercised (37,950) 19.50 - 25.00
-------
Outstanding, December 31, 1992 228,325 19.50 - 34.00
Granted 11,700 36.88 - 44.00
Exercised (11,425) 19.50 - 36.88
-------
Outstanding, December 31, 1993 228,600 19.50 - 44.00
Granted 551,950 33.00 - 40.50
Cancelled (14,800) 31.00 - 41.50
Exercised (18,500) 19.50 - 31.00
-------
Outstanding, December 31, 1994 747,250 19.50 - 44.00
=======
</TABLE>
At December 31, 1994, 24,034 common shares were available for the future
grant of options or awards and options for 159,933 shares were exercisable.
On January 3, 1994, the Company issued 62,900 restricted shares and granted
434,400 share options under a compensatory Incentive Share Plan for key officers
of the Company. This plan, which expires in 2003, provides for a total of
500,000 shares, either in the form of restricted shares or options. The
restricted shares generally vest over a ten year period, with potential
acceleration of vesting due to appreciation in the market value of the
32
<PAGE>
Company's shares. The share options vest over a five year period beginning two
years after the date of grant. Share options were granted at the market price on
the date of grant. The Company recognized $.2 million in compensation expense
during 1994 relating to the restricted shares.
During 1991, 56,000 shares of beneficial interest were granted as awards to
certain key officers of the Company and the Management Company. All of these
common shares had vested and were issued at December 31, 1994. Compensation
expense relating to the share awards aggregated, in millions, $.5 in 1994, $.6
in 1993 and $.4 in 1992.
11. Changes in Operating Accounts
The effect of changes in the operating accounts on cash flows from
operating activities is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Increase in:
Accrued rent and accounts
receivable $(2,632) $(1,635) $ (413)
All other assets - primarily
unamortized lease costs (3,309) (5,459) (3,591)
Increase in:
Accounts payable and accrued
expenses (excluding
amounts applicable to
construction in-progress) 58 5,872 1,174
------- ------- -------
Net effect of changes in
operating accounts $(5,883) $(1,222) $(2,830)
======= ======= =======
</TABLE>
During 1994, the Company issued .3 million common shares valued at $11.4
million and assumed $13.4 million of debt in connection with the purchase of
property. During 1993, $123.0 million in convertible debentures and notes were
converted into 3.9 million common shares of beneficial interest. During 1992,
the Company converted $4.1 million of convertible debentures into .1 million
common shares and .4 million common shares valued at $14.6 million to a partner
for the purchase of the partner's interest in a joint venture.
12. SHAREHOLDERS' EQUITY
Following is a summary of changes in the Company's shareholders' equity for
the three years ended December 31, 1994:
<TABLE>
<CAPTION>
Common Capital Retained
Shares Surplus Earnings
-------- -------- ---------
<S> <C> <C> <C>
Balance, January 1, 1992 $499 $137,903 $ 22
Net income 20,081
Public offering 60 63,393
Property acquisition 12 14,538
Conversion of debentures 4 3,911
Benefit plans 2 1,122
Cash dividends ($2.04
per share) (16,077) (20,103)
------- -------- -------
Balance, December 31, 1992 577 204,790 -
Net income 36,249
Public offering 85 112,890
Conversion of notes and
debentures 116 123,877
Benefit plans 1 847
Cash dividends ($2.16
per share) (16,096) (36,249)
------- -------- -------
Balance, December 31, 1993 779 426,308 -
Net income 43,788
Property acquisition 9 11,392
Benefit plans 3 849
Cash dividends ($2.28
per share) (15,947) (43,788)
------- -------- -------
Balance December 31, 1994 $ 791 $422,602 $ -
======= ======== =======
</TABLE>
13. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
The following disclosure of estimated fair value was determined by the
Company, using available market information and appropriate valuation
methodologies as of December 31, 1994. However, considerable judgment is
33
<PAGE>
necessary to interpret market data and develop the related estimates of fair
value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize upon disposition of the
asset. The use of different market assumptions and/or estimation methodologies
may have a material effect on the estimated fair value amounts. Unless otherwise
described below, all other financial instruments of the Company are carried at
amounts which approximate their fair values.
MARKETABLE DEBT SECURITIES HELD-TO-MATURITY have an estimated market value of
$45.8 million. Such securities include $16.5 million of U.S. government agency
guaranteed pass-through certificates which mature through 2008 and $29.3 million
of U.S. Treasury Notes which mature in 2000. The Company estimates that these
securities will mature, in millions, as follows: $1.5 in 1995; $38.1 in 1996
through 2000 and $10.3 thereafter.
MORTGAGE BONDS AND NOTES RECEIVABLE FROM AN AFFILIATE were not fair valued
because it is not practicable to reasonably assess the credit adjustment that
would be applied in the marketplace for such bonds and notes receivable.
However, management of the Company believes that the fair value of the security
collateralizing such bonds and notes receivable is greater than the net
investment in such instruments (cost less related deferred gain).
FIXED RATE DEBT with carrying values of $102.3 million have fair values of
$103.3 million, which were estimated based on interest rates currently available
to the Company for issuance of debt with similar terms and remaining maturities.
The Company believes that the carrying value of its $127.3 million of variable
rate debt is equivalent to its fair value.
INTEREST RATE SWAP AGREEMENTS are valued at amounts at which they could be
settled. Settlement amounts are based upon estimates obtained from dealers. If
the Company had settled these agreements with the counterparty at December 31,
1994, the Company would have received $.4 million from the counterparty.
The fair value estimates represented herein are based on pertinent
information available to management as of December 31, 1994. Although management
is not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date, and current estimates of fair
value may differ significantly from the amounts presented herein.
14. PENSION PLAN
Effective January 1, 1993, the Company acquired the assets of the
Management Company, including a defined benefit pension plan covering
substantially all of its employees. This plan was merged with the plan of the
Company, effective January 1, 1993. The benefit formula for both pre-existing
plans is identical to the formula for the surviving merged plan.
The benefits are based on years of service and the employee's compensation
during the last five years of service. The Company's funding policy is to make
annual contributions as required by applicable regulations.
34
<PAGE>
The following table sets forth the plan's funded status and amounts
recognized in the Company's balance sheet at:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Actual present value of:
Vested benefit obligation $5,218 $4,785
====== ======
Accumulated benefit obligation $5,278 $5,017
====== ======
Projected benefit obligation $6,748 $7,412
Plan assets at fair value, primarily
common stocks and bonds 6,270 6,703
------ ------
Projected benefit obligation in
excess of plan assets (478) (709)
Unrecognized prior service cost 196 404
Unrecognized net (gain) loss (33) 212
Unrecognized net transition asset (198) (271)
------ ------
Pension liability recognized in
the balance sheet $ (513) $ (364)
====== ======
</TABLE>
The components of net periodic pension cost for the years ended December
31, 1994 and 1993 are as follows:
<TABLE>
<S> <C> <C>
Service cost of benefits earned
during the year $ 248 $ 115
Interest cost on projected benefit
obligation 422 482
Actual return on plan assets 428 (646)
Net amortization and deferral (948) 135
------ ------
Total $ 150 $ 86
====== ======
</TABLE>
Assumptions used to develop periodic pension expense and the actuarial
present value of projected benefit obligations for:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Weighted average discount rate 7.0% 7.0%
Expected long-term rate of return
on plan assets 7.0% 7.0%
Rate of increase in compensation levels 5.5% 5.5%
</TABLE>
Disclosure for the Company's pension plan for 1992 is not included since
such plan was not significant prior to the merger of the Management Company.
15. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 1994
and 1993 is as follows:
<TABLE>
<CAPTION>
First Second Third Fourth
------- ------- ------- -------
<S> <C> <C> <C> <C>
1994:
Revenues $28,889 $29,416 $31,126 $31,362
Net income 10,591 10,216 11,873 11,108
Net income per
common share .41 .39 .45 .42
1993:
Revenues $24,206 $25,009 $26,836 $27,231
Net income 7,746 8,447 9,470 10,586
Net income per
common share .38 .34 .37 .41
</TABLE>
16. PRICE RANGE OF COMMON SHARES
(UNAUDITED)
The high and low sale prices per share of the Company's shares, as reported
on the New York Stock Exchange composite tape, and dividends per share paid for
the periods indicated were as follows:
<TABLE>
<CAPTION>
High Low Dividends
------- ------- ---------
<S> <C> <C> <C>
1994:
First $40 1/2 $36 3/8 $.57
Second 39 7/8 36 3/4 .57
Third 39 1/2 34 3/4 .57
Fourth 38 1/8 32 3/4 .57
1993:
First $44 $36 1/2 $.54
Second 43 5/8 37 7/8 .54
Third 45 1/4 40 7/8 .54
Fourth 43 3/4 36 1/2 .54
</TABLE>
35
<PAGE>
I N D E P E N D E N T A U D I T O R S' R E P O R T
WEINGARTEN REALTY INVESTORS
We have audited the accompanying consolidated balance sheets of
Weingarten Realty Investors as of December 31, 1994 and 1993, and the related
statements of consolidated income and cash flows for each of the three years in
the period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Weingarten Realty Investors
at December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
February 22, 1995
Houston, Texas
36
<PAGE>
SELECTED FINANCIAL DATA WEINGARTEN REALTY INVESTORS
The following table sets forth selected consolidated financial data with
respect to the Company and should be read in conjunction with the Consolidated
Financial Statements.
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts
Years Ended December 31, 1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues (primarily real estate rentals) $120,793 $103,282 $ 89,959 $ 82,645 $ 76,863
Expenses:
Depreciation and amortization 26,842 23,382 21,291 19,019 17,699
Interest 10,694 10,046 18,689 20,157 19,938
Other 39,235 35,236 30,538 26,119 23,071
-------- -------- -------- -------- --------
Total 76,771 68,664 70,518 65,295 60,708
-------- -------- -------- -------- --------
Income from operations 44,022 34,618 19,441 17,350 16,155
Gains (loss) on sales of property and securities (234) 1,631 1,807 608 327
Extraordinary charge (1) (1,167)
-------- -------- -------- -------- --------
Net Income $ 43,788 $ 36,249 $ 20,081 $ 17,958 $ 16,482
======== ======== ======== ======== ========
Funds from Operations (2):
Net income $ 43,788 $ 36,249 $ 20,081 $ 17,958 $ 16,482
Depreciation and amortization 26,842 23,382 21,291 19,019 17,699
(Gains) loss on sales of property and securities 234 (1,631) (1,807) (608) (327)
Extraordinary charge (1) 1,167
-------- -------- -------- -------- --------
Total $ 70,864 $ 58,000 $ 40,732 $ 36,369 $ 33,854
======== ======== ======== ======== ========
Weighted average number of
common shares outstanding 26,190 24,211 17,503 16,580 16,279
Net income per common share $ 1.67 $ 1.50 $ 1.15 $ 1.08 $ 1.01
Cash dividends per common share $ 2.28 $ 2.16 $ 2.04 $ 1.92 $ 1.88
Property (at cost) $735,134 $634,814 $540,671 $482,732 $435,457
Total assets $682,037 $602,042 $472,303 $440,088 $415,858
Debt and convertible notes and debentures $229,597 $147,652 $243,627 $280,217 $249,686
</TABLE>
(1) Relates to prepayment penalties paid in connection with the early retirement
of debt.
(2) Funds from operations do not represent cash flows from operations and should
not be considered as an alternative to net income.
37
<PAGE>
Trust Managers Weingarten Realty Investors
<TABLE>
<C> <S>
Stanford Alexander Chairman/Chief Executive Officer, Weingarten Realty Investors
Andrew M. Alexander Executive Vice President/Asset Management, Weingarten Realty Investors;
President, Weingarten Realty Management Company
Martin Debrovner President/Chief Operating Officer, Weingarten Realty Investors
Melvin A. Dow Chairman/Chief Executive Officer, Dow, Cogburn & Friedman, P.C.
Stephen A. Lasher President, The GulfStar Group, Inc.
Joseph W. Robertson, Jr. Executive Vice President/Chief Financial Officer, Weingarten Realty Investors
Douglas W. Schnitzer President, Senterra Development
Marc J. Shapiro Chairman/Chief Executive Officer, Texas Commerce Bank, N.A.
J. T. Trotter Private Investor
Officers
Stanford Alexander Chairman/Chief Executive Officer
Martin Debrovner President/Chief Operating Officer
Andrew M. Alexander Executive Vice President/Asset Management
Joseph W. Robertson, Jr. Executive Vice President/Chief Financial Officer
Gary Cunningham Vice President/New Development and Acquisitions
M. Candace DuFour Vice President/Acquisitions and Secretary
Johnny L. Hendrix Vice President/Leasing
Joseph W. Karp Vice President/Operating Properties
John J. Marcisz Vice President/Construction
Stephen C. Richter Vice President/Financial Administration and Treasurer
Jeffrey A. Tucker Vice President/General Counsel
Steven R. Weingarten Vice President/Leasing
Peggy Sivers Assistant Secretary and Assistant Treasurer
Departments
Patricia A. Bender Associate Director/Leasing
Janet Brown Director/Sales and Acquisitions
Brenda Corn Director/Human Resources
David Daleiden Director/Market Research
Rick Hollingsworth Director/Commercial Properties
Rick D. Jacobsen Director/Financial Analysis
Freddye Kelly Director/Corporate Communications
Arnie Ostrin Director/Computer Services
Timothy F. Seckinger Associate Director/Leasing
Robert Smith Associate Director/Leasing
</TABLE>
38
<PAGE>
SHAREHOLDER INFORMATION WEINGARTEN REALTY INVESTORS
TRANSFER AGENT, REGISTRAR, DIVIDEND
DISBURSING AND REINVESTMENT AGENT
Society National Bank
c/o KeyCorp Shareholder Services, Inc., Houston, Texas
1-800-539-6549 or 713-546-5500
AUDITORS
Deloitte & Touche llp Houston, Texas
COUNSEL
Dow, Cogburn & Friedman, P.C. Houston, Texas
Andrews & Kurth L.L.P. Houston, Texas
STOCK LISTING
New York Stock Exchange (WRI)
MEMBERSHIPS
National Association of Real Estate Investment Trusts, Inc.
International Council of Shopping Centers
Urban Land Institute
FORM 10-K
A copy of the annual report on form 10-K filed with the Securities and
Exchange Commission is available to security holders, without charge, upon
written request to the Director of Corporate Communications.
39
<PAGE>
ANNAUL MEETING
Shareholders are invited to attend the Annual Shareholders' Meeting, to
be held at 4:00 p.m. on Thursday, April 27, 1995, at the Houstonian Hotel, 111 N
orth Post Oak Lane, Houston, Texas.
SHAREHOLDER CONTACT
Shareholders are encouraged to contact the Company with questions or
requests for information. Inquiries should be directed to:
Freddye Kelly
Director, Corporate Communications
Weingarten Realty Investors
P. O. Box 924133
Houston, Texas 77292-4133
713-866-6000 or by calling 1-800-298-9974.
DIVIDEND REINVESTMENT PLAN
WRI offers a dividend reinvestment plan which enables its shareholders
to automatically reinvest dividends as well as make voluntary cash payments
towards the purchase of additional shares. To receive more information, contact
either KeyCorp Shareholder Services, Inc., Houston, Texas, at 1-800-539-6549, or
Weingarten Realty Investors' Corporate Communications Department at 1-800-298-
9974.
40
<PAGE>
Weingarten Realty Investors
2600 Citadel Plaza Drive
P.O. Box 924133
Houston, Texas 77292-4133
713-866-6000
