SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9876
WEINGARTEN REALTY INVESTORS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1464203
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2600 Citadel Plaza Drive
P.O. Box 924133
Houston, Texas 77292-4133
(Address of principal executive offices) (Zip Code)
(713) 866-6000
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act.
Name of each exchange
Title of Each Class on which registered
- ------------------------------------ ---------------------
Common Shares of New York Stock
Beneficial Interest, $0.03 par value Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the common shares held by non-affiliates
(based upon the closing sale price on the New York Stock Exchange) on February
27, 1997 was approximately $1,137,328,396. As of February 27, 1997, there
were 26,604,173 shares of beneficial interest, $.03 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement in connection with its
Annual Meeting of Shareholders to be held April 29, 1997 are incorporated by
reference in Part III.
Exhibit Index beginning on Page 33
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TABLE OF CONTENTS
ITEM NO PAGE NO.
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PART I
1. Business 1
2. Properties 3
3. Legal Proceedings 11
4. Submission of Matters to a Vote of Security Holders 11
Executive Officers of the Registrant 12
PART II
5. Market for Registrant's Common Shares of Beneficial
Interest and Related Shareholder Matters 13
6. Selected Financial Data 14
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
8. Financial Statements and Supplementary Data 18
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 32
PART III
10. Trust Managers and Executive Officers of the Registrant 32
11. Executive Compensation 33
12. Security Ownership of Certain Beneficial Owners and
Management 33
13. Certain Relationships and Related Transactions 33
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 33
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PART I
ITEM 1. BUSINESS
General. Weingarten Realty Investors (the "Company"), an unincorporated
trust organized under the Texas Real Estate Investment Trust Act, and its
predecessor entity began the ownership and development of shopping centers and
other commercial real estate in 1948. The Company is self-advised and
self-managed and, as of December 31, 1996, owned or had interests in 182
developed income-producing real estate projects, 160 of which were shopping
centers, located in the Houston metropolitan area and in other parts of Texas
and in Louisiana, Arkansas, Oklahoma, New Mexico, Arizona, Maine, Tennessee,
Kansas, Nevada, Missouri and Colorado. The Company's other commercial real
estate projects included 20 industrial projects, one multi-family housing
property and one office building, which serves as the Company's headquarters.
The Company's interests in these projects aggregated approximately 20.2
million square feet of building area and 77.9 million square feet of land
area. The Company also owned interests in 24 parcels of unimproved land held
for future development which aggregated approximately 6.9 million square feet.
The Company currently employs 156 persons. The Company's principal
executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas
77008, and its phone number is (713) 866-6000.
Reorganizations. In December 1984, the Company engaged in a series of
transactions primarily designed to enable it to qualify as a real estate
investment trust ("REIT") for federal income tax purposes for the 1985
calendar year and subsequent years. The Company contributed certain assets
considered unsuitable for ownership by the Company as a REIT and $3.5 million
in cash to WRI Holdings, Inc. ("Holdings"), a Texas corporation and a
newly-formed subsidiary of the Company, in exchange for voting and non-voting
common stock of Holdings (which was subsequently distributed to the Company's
shareholders) and $26.8 million of mortgage bonds. For additional information
concerning Holdings, refer to Note 6 of the Notes to Consolidated Financial
Statements at page 27.
On March 22, 1988, the Company's shareholders approved the conversion of
the Company's form of organization from a Texas corporation to an
unincorporated trust organized under the Texas Real Estate Investment Trust
Act. The conversion was effected by the Company's predecessor entity,
Weingarten Realty, Inc., transferring substantially all of its assets and
liabilities to the newly-formed Company in exchange for common shares of
beneficial interest, $.03 par value ("Common Shares"), of the Company. The
shareholders of the corporation received Common Shares for their shares of
Common Stock of the corporation (on a share-for-share basis), and the Company
continues the business that was previously conducted by the corporation. The
change did not affect the registrant's assets, liabilities, management or
federal income tax status as a REIT.
Location of Properties. Historically, the Company has emphasized
investments in properties located primarily in the Houston area. Since 1987,
the Company has actively acquired properties outside of Houston. Of the
Company's 206 properties which were owned as of December 31, 1996, 89 of its
182 developed properties and 18 of its 24 parcels of unimproved land were
located in the Houston metropolitan area. In addition to these properties,
the Company owned 51 developed properties and 4 parcels of unimproved land
located in other parts of Texas. Because of the Company's investments in the
Houston area, as well as in other parts of Texas, the Houston and Texas
economies affect, to some degree, the business and operations of the Company.
In 1996, the economies in Houston and Texas continued to grow, exceeding
the national average; the economy of the entire southwestern United States,
where the Company has its primary operations, also remained strong relative to
the national average. A deterioration in the Houston or Texas economies could
adversely affect the Company. However, the Company's centers are generally
anchored by grocery and drug stores under long-term leases, and such types of
stores, which deal in basic necessity-type items, tend to be less affected by
economic change.
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Competition. There are other developers and operators engaged in the
development, acquisition and operation of shopping centers and commercial
property who compete with the Company in its trade areas. This results in
competition for both acquisitions of existing income-producing properties and
also for prime development sites. There is also competition for tenants to
occupy the space that the Company and its competitors develop, acquire and
manage.
The Company believes that the principal competitive factors in attracting
tenants in its market areas are location, price, anchor tenants and
maintenance of properties and that the Company's competitive advantages
include the favorable locations of its properties, its ability to provide a
retailer with multiple locations in the Houston area with anchor tenants and
its practice of continuous maintenance and renovation of its properties.
Financial Information. Certain additional financial information
concerning the Company is included in the Company's Consolidated Financial
Statements located on pages 18 through 32 herein.
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ITEM 2. PROPERTIES
At December 31, 1996 the Company's real estate properties consisted of
206 locations in twelve states. A complete listing of these properties,
including the name, location, building area and land area (in square feet),
as applicable, is as follows:
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SHOPPING CENTERS
Building
Name and Location Area Land Area
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<S> <C> <C> <C> <C>
HOUSTON AND HARRIS COUNTY, TOTAL 6,871,000 27,015,000
Alabama-Shepherd, S. Shepherd at W. Alabama 28,000 * 88,000 *
Almeda Road, Almeda at Cleburne 34,000 147,000
Bayshore Plaza, Spencer Hwy. at Burke Rd 36,000 196,000
Bellaire Boulevard, Bellaire at S. Rice 35,000 137,000
Bellfort, Bellfort at Southbank 48,000 167,000
Bellfort Southwest, Bellfort at Gessner 30,000 89,000
Bellwood, Bellaire at Kirkwood 136,000 655,000
Bingle Square, U.S. Hwy. 290 at Bingle 46,000 168,000
Braeswood Square, N. Braeswood at Chimney Rock 103,000 422,000
Centre at Post Oak, Westheimer at Post Oak Blvd. 170,000 468,000
Copperfield Village, Hwy. 6 at F.M. 529 153,000 712,000
Crestview, Bissonnet at Wilcrest 9,000 35,000
Crosby, F.M. 2100 at Kenning Road (61%) 36,000 * 124,000 *
Cullen Place, Cullen at Reed 7,000 30,000
Cullen Plaza, Cullen at Wilmington 81,000 318,000
Cypress Pointe, F.M. 1960 at Cypress Station 191,000 737,000
Del Sol Market Place, Telephone at Monroe 26,000 87,000
Eastpark, Mesa Rd. at Tidwell 140,000 665,000
Edgebrook, Edgebrook at Gulf Fwy. 76,000 360,000
Fiesta Village, Quitman at Fulton 30,000 80,000
Fondren Southwest Village, Fondren at W. Bellfort 225,000 1,014,000
Fondren/West Airport, Fondren at W. Airport 62,000 223,000
45/York Plaza, I-45 at W. Little York 210,000 840,000
Glenbrook Square, Telephone Road 71,000 320,000
Griggs Road, Griggs at Cullen 85,000 422,000
Harrisburg Plaza, Harrisburg at Wayside 95,000 334,000
Heights Plaza, 20th St. at Yale 72,000 228,000
Humblewood Shopping Plaza, Eastex Fwy. at F.M. 1960 180,000 784,000
Inwood Village, W. Little York at N. Houston-Rosslyn 68,000 305,000
Jacinto City, Market at Baca 24,000 * 67,000 *
Kingwood, Kingwood Dr. at Chesnut Ridge 155,000 648,000
Landmark, Gessner at Harwin 56,000 228,000
Lawndale, Lawndale at 75th St. 53,000 177,000
Little York Plaza, Little York at E. Hardy 115,000 486,000
Long Point, Long Point at Wirt (77%) 58,000 * 257,000 *
Lyons Avenue, Lyons at Shotwell 63,000 185,000
Market at Westchase, Westheimer at Wilcrest 84,000 333,000
Miracle Corners, S. Shaver at Southmore 87,000 386,000
Northbrook, Northwest Fwy. at W. 34th 204,000 656,000
North Main Square, Pecore at N. Main 18,000 64,000
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Building
Name and Location Area Land Area
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North Oaks, F.M. 1960 at Veterans Memorial 315,000 1,246,000
North Triangle, I-45 at F.M. 1960 14,000 113,000
Northway, Northwest Fwy. at 34th 212,000 793,000
Northwest Crossing, N.W. Fwy. at Hollister (75%) 133,000 * 671,000 *
Northwest Park Plaza, F.M. 149 at Champions Forest 32,000 268,000
Oak Forest, W. 43rd at Oak Forest 156,000 541,000
Orchard Green, Gulfton at Renwick 64,000 257,000
Randall's/Cypress Station, F.M. 1960 at I-45 141,000 618,000
Randall's/El Dorado, El Dorado at Hwy. 3 119,000 429,000
Randall's/Kings Crossing, Kingwood Dr. at Lake Houston Pkwy. 128,000 624,000
Randall's/Norchester, Grant at Jones 109,000 475,000
Richmond Square, Richmond Ave. at W. Loop 610 22,000 77,000
River Oaks, East, W. Gray at Woodhead 65,000 206,000
River Oaks, West, W. Gray at S. Shepherd 235,000 609,000
Sheldon Forest, North, I-10 at Sheldon 22,000 131,000
Sheldon Forest, South, I-10 at Sheldon 38,000 * 164,000 *
Shops at Three Corners, S. Main at Old Spanish Trail (70%) 183,000 * 803,000 *
Southgate, W. Fuqua at Hiram Clark 115,000 533,000
Spring Plaza, Hammerly at Campbell 56,000 202,000
Steeplechase, Jones Rd. at F.M. 1960 193,000 849,000
Stella Link, North, Stella Link at S. Braeswood (77%) 40,000 * 156,000 *
Stella Link, South, Stella Link at S. Braeswood 15,000 56,000
Studemont, Studewood at E. 14th St 28,000 91,000
Ten Blalock Square, I-10 at Blalock 97,000 321,000
10/Federal, I-10 at Federal 132,000 474,000
University Plaza, Bay Area At Space Center 96,000 424,000
The Village Arcade, University at Kirby 184,000 398,000
West Junction, Hwy. 6 at Kieth Harrow Dr. 67,000 264,000
Westbury Triangle, Chimney Rock at W. Bellfort 67,000 257,000
Westchase, Westheimer at Wilcrest 236,000 766,000
Westhill Village, Westheimer at Hillcroft 131,000 480,000
Wilcrest Southwest, Wilcrest at Southwest Fwy. 26,000 77,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL 4,496,000 19,861,000
Coronado, S.W. 34th St. at Wimberly Dr., Amarillo 49,000 201,000
Puckett Plaza, Bell Road, Amarillo 133,000 621,000
Spanish Crossroads, Bell St. at Atkinson St., Amarillo 72,000 275,000
Wolfin Village, Wolfin Ave. at Georgia St., Amarillo 191,000 513,000
Merrilee, U.S. Highway 80 at Merrilee, Arlington 8,000 74,000
Southridge Plaza, William Cannon Dr. at S. 1st St., Austin 143,000 565,000
Baywood, State Hwy. 60 at Baywood Dr., Bay City 40,000 169,000
Calder, Calder at 24th St., Beaumont 34,000 129,000
North Park Plaza, Eastex Fwy. at Dowlen, Beaumont 70,000 * 318,000 *
Phelan West, Phelan at 23rd St., Beaumont (67%) 16,000 * 59,000 *
Southgate, Calder Ave. at 6th St., Beaumont 34,000 118,000
Westmont, Dowlen at Phelan, Beaumont 95,000 507,000
Bryan Village, Texas at Pease, Bryan 29,000 98,000
Parkway Square, Southwest Pkwy at Texas Ave., College Station 158,000 685,000
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Building
Name and Location Area Land Area
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Montgomery Plaza, Loop 336 West, Conroe 233,000 911,000
River Pointe, I-45 at Loop 336, Conroe 42,000 252,000
Portairs Shopping Center, Ayers St. at Horne Rd., Corpus Christi 121,000 416,000
Dickinson, I-45 at F.M. 517, Dickinson (72%) 55,000 * 225,000 *
Coronado Hills, Mesa at Balboa, El Paso (15%) 19,000 * 86,000 *
Broadway, Broadway at 59th St., Galveston (77%) 58,000 * 167,000 *
Food King Place, 25th St. at Avenue P, Galveston 28,000 78,000
Galveston Place, Central City Blvd. at 61st St., Galveston 123,000 527,000
Cedar Bayou, Bayou Rd., LaMarque 15,000 51,000
Corum South, Gulf Fwy., League City 92,000 574,000
Caprock Center, 50th at Boston Ave., Lubbock 375,000 1,255,000
Town & Country, 4th St. at University, Lubbock 171,000 703,000
Angelina Village, Hwy. 59 at Loop 287, Lufkin 229,000 1,835,000
Independence Plaza, Town East Blvd., Mesquite (15%) 27,000 * 118,000 *
University Park Plaza, University Dr. at E. Austin St., Nacogdoches 78,000 283,000
Mid-County, Twin Cities Hwy. at Nederland Ave., Nederland 107,000 611,000
Gilham Circle, Gilham Circle at Thomas, Port Arthur 33,000 94,000
Village, 9th Ave. at 25th St., Port Arthur (77%) 39,000 * 185,000 *
Porterwood, Eastex Fwy. at F.M. 1314, Porter 99,000 487,000
Plaza, Ave. H at U.S. Hwy. 90A, Rosenberg 41,000 * 135,000
Rose-Rich, U.S. Hwy. 90A at Lane Dr., Rosenberg 104,000 386,000
Bandera Village, Bandera at Hillcrest, San Antonio 57,000 607,000
Oak Park Village, Nacogdoches at New Braunfels, San Antonio 65,000 221,000
Parliament Square, W. Ave. at Blanco, San Antonio 65,000 260,000
San Pedro Court, San Pedro at Hwy. 281N., San Antonio 2,000 18,000
Valley View, West Ave. at Blanco Rd., San Antonio 89,000 341,000
Market at Town Center, Town Center Blvd., Sugar Land 349,000 1,732,000
Williams Trace, Hwy. 6 at Williams Trace, Sugar Land 263,000 1,187,000
New Boston Road, New Boston at Summerhill, Texarkana 90,000 335,000
Island Market Place, 6th St. at 9th Ave., Texas City 27,000 90,000
Mainland, Hwy. 1765 at Hwy. 3, Texas City 69,000 279,000
Palmer Plaza, F.M. 1764 at 34th St., Texas City 97,000 367,000
Broadway, S. Broadway at W. 9th St., Tyler (77%) 46,000 * 197,000 *
Crossroads, I-10 at N. Main, Vidor 116,000 516,000
LOUISIANA, TOTAL 1,337,000 5,504,000
Park Terrace, U.S. Hwy. 171 at Parish, DeRidder 137,000 520,000
Town & Country Plaza, U.S. Hwy. 190 West, Hammond 215,000 915,000
Westwood Village, W. Congress at Bertrand, Lafayette 141,000 942,000
East Town, 3rd Ave. at 1st St., Lake Charles 33,000 * 117,000 *
14/Park Plaza, Hwy. 14 at General Doolittle, Lake Charles 207,000 654,000
Kmart Plaza, Ryan St., Lake Charles 105,000 * 406,000 *
Southgate, Ryan at Eddy, Lake Charles 171,000 628,000
Danville Plaza, Louisville at 19th, Monroe 143,000 539,000
Orleans Station, Paris, Robert E. Lee & Chatham, New Orleans 5,000 31,000
Southgate, 70th at Mansfield, Shreveport 73,000 359,000
Westwood, Jewella at Greenwood, Shreveport 107,000 393,000
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Building
Name and Location Area Land Area
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ARIZONA, TOTAL 725,000 3,342,000
University Plaza, Plaza Way at Milton Rd., Flagstaff 166,000 918,000
Camelback Village Square, Camelback at 7th Avenue, Phoenix 135,000 543,000
Squaw Peak Plaza, 16th Street at Glendale Ave., Phoenix 61,000 220,000
Fountain Plaza, 77th St. at McDowell, Scottsdale 107,000 460,000
Broadway Marketplace, Broadway at Rural, Tempe 86,000 347,000
Fry's Valley Plaza, S. McClintock at E. Southern, Tempe (15%) 21,000 * 85,000 *
Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe 149,000 769,000
OKLAHOMA, TOTAL 687,000 3,173,000
Bryant Square, Bryant Ave. at 2nd St., Edmond 268,000 1,259,000
Market Boulevard, E. Reno Ave. at N. Douglas Ave., Midwest City 36,000 142,000
Town & Country, Reno Ave at North Air Depot, Midwest City 137,000 540,000
Windsor Hills Center, Meridian at Windsor Place, Oklahoma City 246,000 1,232,000
NEW MEXICO, TOTAL 606,000 2,666,000
Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque (15%) 17,000 * 90,000 *
North Towne Plaza, Academy Rd. @ Wyoming Blvd., Albuquerque 103,000 607,000
Valle del Sol, Isleta Blvd. at Rio Bravo, Albuquerque 106,000 475,000
Wyoming Mall, Academy Rd. at Northeastern, Albuquerque 323,000 1,309,000
DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe (23%) 57,000 * 185,000 *
ARKANSAS, TOTAL 534,000 2,054,000
Evelyn Hills, College Ave. at Abshier, Fayetteville 154,000 750,000
Broadway Plaza, Broadway at W. Roosevelt, Little Rock 43,000 148,000
Geyer Springs, Geyer Springs at Baseline, Little Rock 153,000 415,000
Markham Square, W. Markham at John Barrow, Little Rock 134,000 535,000
Westgate, Cantrell at Bryant, Little Rock 50,000 206,000
NEVADA, TOTAL 450,000 1,659,000
Mission Center, Flamingo Rd. at Maryland Pkwy, Las Vegas 71,000 254,000
Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas 149,000 536,000
Rancho Towne & Country, Rancho Dr. at Charleston Blvd., Las Vega s 87,000 350,000
Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas 143,000 519,000
KANSAS, TOTAL 372,000 1,830,000
Westbrooke Village, Quivira Road at 75th St., Shawnee 237,000 1,269,000
Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee 135,000 561,000
MISSOURI, TOTAL 135,000 448,000
PineTree Plaza, U.S. Hwy. 150 at Hwy. 291, Lee's Summit 135,000 448,000
COLORADO, TOTAL 127,000 460,000
Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs 127,000 460,000
MAINE, TOTAL 124,000 482,000
The Promenade, Essex at Summit, Lewiston 124,000 * 482,000 *
TENNESSEE, TOTAL 20,000 84,000
Highland Square, Summer at Highland, Memphis 20,000 84,000
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Building
INDUSTRIAL Area Land Area
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<S> <C> <C> <C> <C>
HOUSTON AND HARRIS COUNTY, TOTAL 3,420,000 8,603,000
Brookhollow Business Center, Dacoma at Directors Row 133,000 405,000
Cannon/So. Loop Business Park, Cannon Street (75%) 221,000 * 362,000 *
Central Park North, W. Hardy Rd. at Kendrick Dr. 155,000 465,000
Central Park Northwest VI, Central Pkwy. at Dacoma 175,000 518,000
Central Park Northwest VII, Central Pkwy. at Dacoma 104,000 283,000
Jester Plaza, West T.C. Jester 101,000 244,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr. 211,000 778,000
Lathrop Warehouse, Lathrop St. at Larimer St. 252,000 436,000
Little York Mini-Storage, West Little York 32,000 * 124,000 *
Navigation Business Park, Navigation At N. York 238,000 555,000
Northway Park II, Loop 610 East at Homestead 303,000 745,000
Park Southwest, Stancliff at Brooklet 52,000 159,000
Railwood Industrial Park, Mesa at U.S. 90 805,000 2,070,000
South Loop Business Park, S. Loop at Long Dr. 46,000 * 103,000 *
Southwest Park II, Rockley Road 68,000 216,000
West-10 Business Center, Wirt Rd. at I-10 141,000 330,000
West Loop Commerce Center, W. Loop N. at I-10 34,000 91,000
610 and 11th St. Warehouse, Loop 610 at 11th St. 349,000 719,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL 143,000 425,000
River Pointe Mini-Storage, Conroe 32,000 * 97,000 *
Nasa One Business Center, Nasa Road One at Hwy. 3, Webster 111,000 328,000
MULTI-FAMILY RESIDENTIAL
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL 37,000 95,000
Summer Place Apartments, Hillcrest at Quill Dr., San Antonio 37,000 * 95,000 *
OFFICE BUILDING
HOUSTON & HARRIS COUNTY, TOTAL 121,000 171,000
Citadel Plaza, N. Loop 610 at Citadel Plaza Dr. 121,000 171,000
UNIMPROVED LAND
HOUSTON & HARRIS COUNTY, TOTAL 5,046,000
Bissonnet at Wilcrest 773,000
Citadel Plaza at 610 N. Loop 137,000
East Orem 122,000
Kirkwood at Dashwood Dr. 322,000
Lockwood at Navigation 163,000
Mesa Rd. at Tidwell 901,000
Mesa Rd. at Spikewood 1 ,374,000
Mowery at Cullen 118,000
Northwest Fwy. at Gessner 484,000
Post Oak at Westheimer 37,000
Redman at W. Denham 17,000
Renwick at Gulfton 17,000
Richmond at Loop 610 60,000
Sheldon at I-10 19,000
University at Morningside 16,000
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Building
Name and Location Area Land Area
- ---------------------------------------------- ---------- ----------
<S> <C> <C> <C>
W. Little York at I-45 322,000
W. Little York at N. Houston-Rosslyn 19,000
W. Loop N. at I-10 145,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL 619,000
Loop 336 at I-45, Conroe 78,000
River Pointe Dr. at I-45, Conroe 186,000
Hillcrest, Sunshine at Quill, San Antonio 171,000
Hwy. 3 at Hwy. 1765, Texas City 184,000
LOUISIANA, TOTAL 1,284,000
U.S. Hwy. 171 at Parish, DeRidder 462,000
Woodland Hwy., Plaquemines Parish (5%) 822,000 *
ALL PROPERTIES-BY LOCATION
GRAND TOTAL 20,205,000 84,821,000
Houston & Harris County 10,412,000 40,835,000
Texas (excluding Houston & Harris County) 4,496,000 21,000,000
Louisiana 1,337,000 6,788,000
Arizona 725,000 3,342,000
Oklahoma 687,000 3,173,000
New Mexico 606,000 2,666,000
Arkansas 534,000 2,054,000
Nevada 450,000 1,659,000
Kansas 372,000 1,830,000
Missouri 135,000 448,000
Colorado 127,000 460,000
Maine 124,000 482,000
Tennessee 20,000 84,000
ALL PROPERTIES-BY CLASSIFICATION
GRAND TOTAL 20,205,000 84,821,000
Shopping Centers 16,484,000 68,578,000
Industrial 3,563,000 9,028,000
Office Building 121,000 171,000
Multi-Family Residential 37,000 95,000
Unimproved Land 6,949,000
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Note: Total square footage includes 6,700,000 square feet of land leased and
170,000 square feet of building leased from others.
* Denotes partial ownership. The Company's interest is 50% except where
noted. The square feet figures represent the Company's proportionate
ownership of the entire property.
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General. In 1996, no single property accounted for more than 3.6% of the
Company's total assets or 3.5% of gross revenues. Three properties, in the
aggregate, represented approximately 8.7% of the Company's gross revenues for
the year ended December 31, 1996; otherwise, none of the remaining properties
accounted for more than 2.0% of the Company's gross revenues during the same
period. The occupancy rate for all of the Company's improved properties as of
December 31, 1996 was 93.0%.
Substantially all of the Company's properties are owned directly by the
Company (subject in certain cases to mortgages), although the Company's
interests in certain of its properties are held indirectly through its
interests in joint ventures or under long-term leases. In the opinion of
management of the Company, its properties are well maintained and in good
repair, suitable for their intended uses, and adequately covered by insurance.
Shopping Centers. As of December 31, 1996, the Company owned, either
directly or through its interests in joint ventures, 160 shopping centers with
approximately 16.5 million square feet of building area. The shopping centers
were located predominantly in Texas with other locations in Louisiana,
Oklahoma, Arkansas, Arizona, New Mexico, Maine, Tennessee, Nevada, Kansas,
Missouri and Colorado.
The Company's shopping centers are primarily community shopping centers
which range in size from 100,000 to 400,000 square feet, as distinguished from
small strip centers which generally contain 5,000 to 25,000 square feet and
from large regional enclosed malls which generally contain over 500,000 square
feet. Most of the centers do not have climatized common areas but are
designed to allow retail customers to park their automobiles in close
proximity to any retailer in the center. The Company's centers are
customarily constructed of masonry, steel and glass and all have lighted,
paved parking areas which are typically landscaped with berms, trees and
shrubs. They are generally located at major intersections in close proximity
to neighborhoods which have existing populations sufficient to support retail
activities of the types conducted in the Company's centers.
The Company has approximately 3,200 separate leases with 2,400 different
tenants in its portfolio, including national and regional supermarket chains,
other nationally or regionally known stores (including drug stores, discount
department stores, junior department stores and catalog stores) and a great
variety of other regional and local retailers. The large number of locations
offered by the Company and the types of traditional anchor tenants help
attract prospective new tenants. Some of the national and regional
supermarket chains which are tenants in the Company's centers include
Albertson's, Fiesta, Jewel, Smith's, Fleming Foods, H.E.B., Kroger Company,
Randall's Food Markets, Fry's Food Stores and Super Value Holdings. In
addition to these supermarket chains, the Company's nationally and regionally
known retail store tenants include Eckerd, Walgreen and Osco drugstores; Kmart
and Venture discount stores; Bealls, Palais Royal and Weiner's junior
department stores; Marshall's, Office Depot, 50-Off, Office Max, Baby
Superstore, Ross and T.J. Maxx off-price specialty stores; Luby's, Piccadilly
and Furr's; Academy sporting goods; Service Merchandise catalog stores; FAO
Schwarz toy store; Cost Plus Imports; Linens 'N Things; Barnes & Noble
bookstore; and the following restaurant chains: Arby's, Burger King, Champ's,
Church's Fried Chicken, Dairy Queen, Domino's, Jack-in-the-Box, CiCi Pizza,
Long John Silver's, McDonald's, Olive Garden, Outback Steakhouse, Pizza Hut,
Shoney's, Steak & Ale, Taco Bell and Whataburger. The Company also leases
space in 3,000 to 10,000 square foot areas to national chains such as the
Limited Store, The Gap, One Price Stores, Tempo, Eddie Bauer and Radio Shack.
The Company's shopping center leases have lease terms generally ranging
from three to five years for tenant space under 5,000 square feet and from 10
to 35 years for tenant space over 10,000 square feet. Leases with primary
lease terms in excess of 10 years, generally for anchor and out-parcels,
frequently contain renewal options which allow the tenant to extend the term
of the lease for one or more additional periods, each such period generally
being of a shorter duration than the primary lease term. The rental rates
paid during a renewal period are generally based upon the rental rate for the
primary term, sometimes adjusted for inflation or for the amount of the
tenant's sales during the primary term.
<PAGE>
Most of the Company's leases provide for the monthly payment in advance
of fixed minimum rentals, the tenants' pro rata share of ad valorem taxes,
insurance (including fire and extended coverage, rent insurance and liability
insurance) and common area maintenance for the center (based on estimates of
the costs for such items) and for the payment of additional rentals based on a
percentage of the tenants' sales ("percentage rentals"). Utilities are
generally paid directly by tenants except where common metering exists with
respect to a center, in which case the Company makes the payments for the
utilities and is reimbursed by the tenants on a monthly basis. Generally, the
Company's leases prohibit the tenant from assigning or subletting its space
and require the tenant to use its space for the purpose designated in its
lease agreement and to operate its business on a continuous basis. Certain of
the lease agreements with major tenants contain modifications of these basic
provisions in view of the financial condition, stability or desirability of
such tenants. Where a tenant is granted the right to assign or sublet its
space, the lease agreement generally provides that the original lessee will
remain liable for the payment of the lease obligations under such lease
agreement.
During 1996, the Company added approximately 1.4 million square feet to
its portfolio of shopping center properties through the acquisition of
properties and another .1 million square feet of space through development.
The Company entered a new market with a 127,000 square foot acquisition in
Colorado. The Company acquired two shopping centers in the suburbs of Kansas
City aggregating 270,000 square feet. In additon the Company also added
470,000 square feet of properties in Arizona, Louisiana and San Antonio,
Texas. The remaining shopping center acquisitions were located in the Houston
metropolitan area.
Industrial Properties. The Company currently owns a total of twenty
industrial projects, all of which are located in the greater Houston area.
These projects include 76 buildings having a total of 3.6 million square feet
of building area situated on 9.0 million square feet of land. These figures
include the Company's interests in four joint ventures. Major tenants of the
Company's industrial properties include Advo (a leading direct mail
advertising company), Pepsico's PFS division, Stone Container Corporation and
Iron Mountain Records Storage.
During 1996, the Company completed the development of a 163,000 square
foot build-to-suit project on a tract of the Company's undeveloped land
located in the Railwood Industrial Park. Railwood Industrial Park is a
master-planned industrial park in northeast Houston, which offers full
utilities, loading docks and rail service in an architecturally controlled
environment.
During 1996, the Company acquired three properties representing 615,000
square feet of industrial space. These acquistions included a combination of
both office/service center space and bulk/dock high facilities. These
properties are all located in Houston.
Office Building. The Company owns a seven-story, 121,000 square foot
masonry office building with a detached, covered, three-level parking garage
situated on 171,000 square feet of land fronting on North Loop 610 West in
Houston. The building serves as the Company's headquarters. Other than the
Company, the major tenant of the building is Nations Bank, which currently
occupies 11% of the office space.
Multi-family Residential Properties. At December 31, 1996, the Company
owned, through a joint venture interest, one apartment project located in San
Antonio, Texas. The Company's percentage ownership represents approximately
79 units of the project's aggregate 159 units. This project is a garden-type
project complemented by landscaping, recreational areas and adequate parking.
This project is managed by our joint venture partner, who is an experienced
apartment operator. During 1996, a 564 unit project in Houston, Texas in
which the Company had a 26% equity interest was sold.
<PAGE>
Unimproved Land. The Company owns, directly or through its interest in a
joint venture, 24 parcels of unimproved land aggregating approximately 6.9
million square feet of land area located in Texas and Louisiana. These
properties include approximately 4.0 million square feet of land adjacent to
certain of the Company's existing developed properties, which may be used for
expansion of these developments, as well as approximately 2.9 million square
feet of land, which may be used for new development. Almost all of these
unimproved properties are served by roads and utilities and are ready for
development. Most of these parcels are suitable for development as shopping
centers, and the Company intends to emphasize the development of these parcels
for such purpose.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to its business, to which the Company is a party
or to which any of its properties are subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
executive officers of the Company as of February 27, 1997. All executive
officers of the Company are elected annually by the Board of Trust Managers
and serve until the successors are elected and qualified.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Stanford Alexander 68 Chairman/Chief Executive Officer
Martin Debrovner 60 Vice Chairman
Andrew M. Alexander 40 President
Joseph W. Robertson, Jr. 49 Executive Vice President/Chief Financial
Officer
Stephen C. Richter 42 Senior Vice President/Financial
Administration and Treasurer
</TABLE>
Mr. S. Alexander is the Company's Chairman and its Chief Executive
Officer. He has been employed by the Company since 1955 and has served in his
present capacity since January 1, 1993. Prior to becoming Chairman, Mr.
Alexander served as President and Chief Executive Officer of the Company since
1962. Mr. Alexander is President, Chief Executive Officer and a Trust Manager
of Weingarten Properties Trust and a member of the Houston Regional Advisory
Board of Texas Commerce Bank National Association, Houston, Texas ("TCB").
Mr. Debrovner became Vice Chairman of the Company on February 25, 1997.
Prior to assuming such position Mr. Debrovner served as President and Chief
Operating Officer since January 1, 1993. Mr. Debrovner served as President of
the Management Company since the Company's reorganization in December 1984.
Prior to such time, Mr. Debrovner was an employee of the Company for 17 years,
holding the positions of Senior Vice President from 1980 until March 1984 and
Executive Vice President until December 1984. As Executive Vice President,
Mr. Debrovner was generally responsible for the Company's operations. Mr.
Debrovner is also a Trust Manager of Weingarten Properties Trust.
Mr. A. Alexander became President of the Company on February 25, 1997.
Prior to his present position, Mr. Alexander was Executive Vice
President/Asset Management of the Company and President of Weingarten Realty
Management Company (the "Management Company"). Prior to such time, Mr.
Alexander was Senior Vice President/Asset Management of the Management
Company. He also served as Vice President of the Management Company and,
prior to the Company's reorganization in December 1984, was Vice President and
an employee of the Company since 1978. Mr. Alexander has been primarily
involved with leasing operations at both the Company and the Management
Company. Mr. Alexander is also a Trust Manager of Weingarten Properties
Trust.
Mr. Robertson became Executive Vice President of the Company and its
Chief Financial Officer on January 1, 1993. Prior to becoming Executive Vice
President, Mr. Robertson served as Senior Vice President and Chief Financial
Officer since 1980. He has been with the Company since 1971. Mr. Robertson
is also a Trust Manager of Weingarten Properties Trust.
Mr. Richter became Senior Vice President/Financial Administration and
Treasurer on January 1, 1997. Prior to his present position, Mr. Richter
served as Vice President/Financial Administration and Treasurer of the Company
since January 1, 1993. For the five years prior to that time, he served as
Vice President/Financial Administration and Treasurer of the Management
Company.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND
RELATED SHAREHOLDER MATTERS
The Company's Common Shares are listed and traded on the New York Stock
Exchange under the symbol "WRI". The number of holders of record of the
Company's Common Shares as of February 27, 1997 was 2,834. The high and low
sale prices per share of the Company's Common Shares, as reported on the New
York Stock Exchange composite tape, and dividends per share paid for the
fiscal quarters indicated were as follows:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
----- ---- ---------
<S> <C> <C> <C>
1996:
Fourth $ 40 3/4 $ 36 $ 0.62
Third 40 1/2 37 3/8 0.62
Second 38 7/8 34 1/4 0.62
First 38 7/8 35 5/8 0.62
1995:
Fourth $ 38 1/2 $ 33 1/2 $ 0.60
Third 37 7/8 35 1/8 0.60
Second 38 1/8 34 1/4 0.60
First 38 34 1/2 0.60
</TABLE>
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with
respect to the Company and should be read in conjunction with "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Consolidated Financial Statements and accompanying Notes in
"Item 8. Financial Statements and Supplementary Data" and the financial
schedules included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
(Amounts in thousands, except per share amounts)
Years Ended December 31,
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues (primarily real estate
rentals) $151,123 $134,197 $120,793 $103,282 $ 89,959
--------- --------- --------- --------- ---------
Expenses:
Depreciation and amortization 33,769 30,060 26,842 23,382 21,291
Interest 21,975 16,707 10,694 10,046 18,689
Other 47,004 42,614 39,235 35,236 30,538
--------- --------- --------- --------- ---------
Total 102,748 89,381 76,771 68,664 70,518
--------- --------- --------- --------- ---------
Income from operations 48,375 44,816 44,022 34,618 19,441
Gain (loss) on sales of property and
securities 5,563 (14) (234) 1,631 1,807
Extraordinary charge(1) (1,167)
--------- --------- --------- --------- ---------
Net Income $ 53,938 $ 44,802 $ 43,788 $ 36,249 $ 20,081
========= ========= ========= ========= =========
Weighted average number of common
shares outstanding 26,555 26,464 26,190 24,211 17,503
Net income per common share $ 2.03 $ 1.69 $ 1.67 $ 1.50 $ 1.15
Cash dividends per common share $ 2.48 $ 2.40 $ 2.28 $ 2.16 $ 2.04
Property (at cost) $970,418 $849,894 $735,134 $634,814 $540,671
Total assets $831,097 $734,824 $682,037 $602,042 $472,303
Debt and convertible notes and
debentures $389,225 $289,339 $229,597 $147,652 $243,627
Other Data:
Funds from Operations (2)
Net income $ 53,938 $ 44,802 $ 43,788 $ 36,249 $ 20,081
Depreciation and amortization(3) 33,414 29,813 26,842 23,382 21,291
(Gain) loss on sales of property and
securities (5,563) 14 234 (1,631) (1,807)
Extraordinary charge (1) 1,167
--------- --------- --------- --------- ---------
Total $ 81,789 $ 74,629 $ 70,864 $ 58,000 $ 40,732
========= ========= ========= ========= =========
<FN>
(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.
(3) In accordance with the newly-adopted NAREIT definition of funds from operations,
debt cost amortization is not included beginning with the year ended December
31, 1995.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the 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 indicative of future
operations.
Weingarten Realty Investors owned and operated 160 anchored shopping centers,
20 industrial properties, one multi-family residential project and one office
building at December 31, 1996. Of the Company's 182 developed properties, 140
are located in Texas (including 89 in Houston and Harris County). The
Company's remaining properties are located in Louisiana (11), Arizona (7),
Arkansas (5), New Mexico (5), Oklahoma (4), Nevada (4), Kansas (2), Colorado
(1), Missouri (1), Tennessee (1) and Maine (1). The Company has nearly 3,200
leases and 2,400 different tenants. Leases for the Company's properties range
from less than a year for smaller spaces to over 25 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 majority of the Company's anchor
tenants are supermarkets, drugstores and other retailers which generally sell
basic necessity-type items.
CAPITAL RESOURCES AND LIQUIDITY
The Company anticipates that cash flows from operating activities will
continue to provide adequate capital for all dividend payments in accordance
with REIT requirements and that cash on hand, borrowings under its existing
credit facility and the use of 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 $76.3 million for 1996 from $72.5 million
for 1995 and $64.3 million for 1994.
Cash dividends increased to $65.9 million in 1996, compared to $63.5 million
in 1995 and $59.7 million in 1994. The Company satisfied its REIT requirement
of distributing at least 95% of ordinary taxable income for each of the three
years ended December 31, 1996, and, accordingly, federal income taxes were not
provided in these years. The Company's dividend payout ratio for 1996, 1995
and 1994 approximated 80.5%, 85.1% and 84.2%, respectively, based on funds
from operations for that year.
The Company continued to expand its portfolio of income-producing properties
in 1996. This growth resulted primarily from acquisitions of existing
properties, both shopping centers and industrial properties. During the year,
the Company purchased nine shopping centers and three industrial projects.
These acquisitions added 2.1 million square feet to the Company's portfolio,
at a combined cost of $99.1 million. The Company expanded its presence in its
existing markets and entered a new market in 1996 with the acquisition of a
shopping center in Colorado. The Company completed the development of a .2
million square foot build-to-suit industrial project on a tract of the
Company's undeveloped land and also completed development of three shopping
centers which added .1 million square feet. Additionally, the Company has an
ongoing program for maintaining and renovating its existing portfolio of
properties. Capitalized expenditures for acquisitions, new development and
additions to the existing portfolio were, in millions, $131.6, $114.7 and
$100.5 during 1996, 1995 and 1994, respectively. All of the acquisitions and
new development during 1996 were initially financed under the Company's
revolving credit facility.
Total debt outstanding increased to $389.2 million at December 31, 1996, from
$289.3 million at December 31, 1995. The Company increased total debt by
$99.9 million primarily to fund acquisitions and new development. The
Company's ratio of debt to total market capitalization was 27% at December 31,
1996, as compared to 22% at year end 1995.
During the year, the Company issued an additional $79 million in unsecured
Medium Term Notes ("MTNs"). These MTNs were issued with an average life of
11 years at an average interest rate of 7.2% and the proceeds were used to pay
down balances outstanding under the Company's revolving credit facility.
Continued growth through acquisitions and new development will eventually
necessitate the issuance of additional equity securities; however, the
Company's current capital structure should allow the issuance of additional
debt before this is required. In the interim, the Company will continue to
closely monitor both the debt and equity markets and carefully consider its
available alternatives, including both public and private placements.
<PAGE>
During 1996, the Company's $200 million unsecured revolving credit facility
was amended to improve the pricing and effectively extend the term of the
commitment. In addition, the Company executed an agreement with a bank for an
unsecured and uncommitted overnight credit facility totaling $20 million to be
used for cash management purposes. The Company will maintain adequate funds
available under the $200 million revolving credit facility at all times to
cover the outstanding balance under the $20 million facility.
At December 31, 1996, the Company had approximately $98 million of funds
available under the revolving credit facilities. In the third quarter of
1996, the Company filed a $250 million shelf registration statement with the
Securities and Exchange Commission (which includes $23.5 million from the
Company's prior shelf registration), which allows for the issuance of debt,
equity securities or warrants. At December 31, 1996, amounts available under
the shelf registration totaled $231 million. The Company expects to continue
to issue debt under its shelf registration and to continually seek and
evaluate other sources of capital.
FUNDS FROM OPERATIONS
The Company considers funds from operations to be an alternate measure of the
performance of an equity REIT since such measure does not recognize
depreciation and amortization of real estate assets as operating expenses.
Management believes that reductions for these charges are not meaningful in
evaluating income-producing real estate, which historically has not
depreciated. The National Association of Real Estate Investment Trusts
defines funds from operations as net income plus depreciation and amortization
of real estate assets, less gains and losses on sales of properties. Funds
from operations does 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 $81.8 million in 1996, as compared to $74.6
million in 1995 and $70.9 million in 1994. These increases relate primarily
to the impact of the Company's acquisitions and new developments and, to a
lesser degree, the activity at its existing properties. For further
information on changes between years, see "Results of Operations" below.
RESULTS OF OPERATIONS
Rental revenues increased 15.9% or $19.9 million from $125.4 million in 1995
to $145.3 million in 1996 and by 11.8% or $13.2 million from $112.2 million in
1994. These increases are primarily the result of the Company's acquisition
and new development programs. Occupancy of the Company's shopping centers and
total portfolio increased from 92% at December 31, 1995 to 93% at the end of
1996. The Company's industrial portfolio remained constant at 94%. The
increase in occupancy from 1995, in addition to increased rental rates
obtained from the re-leasing and renewal of existing space, accounted for the
remaining increase in rental revenues. The Company completed 600 renewals or
leases comprising 1.9 million square feet at an average rental rate increase
of 9.2%. Net of capital costs for tenant improvements, the increase averaged
4.5%.
Interest income totaled $3.1 million in 1996, $5.3 million in 1995 and $5.8
million in 1994. This decrease in income is primarily the result of the
Company selling $31.8 million of its investment in marketable debt securities
during the fourth quarter of 1995. The sale resulted in a gain of $.1
million.
Equity in earnings of real estate joint ventures and partnerships totaled $1.2
million in 1996, $1.5 million in 1995 and $1.3 million in 1994. The decrease
in 1996 is due to the sale in the third quarter of 1996 of the Company's 26%
interest in an apartment complex accounted for under the equity method. This
sale resulted in a gain of $4.2 million. The increase in 1995 is due to
improvements in the operating results from the properties held in the joint
ventures and partnerships.
Direct costs and expenses of operating the Company's properties (i.e.,
operating and ad valorem tax expenses) increased to $41.9 million in 1996 from
$37.7 million in 1995 and $34.8 million in 1994. These increases are
primarily due to property acquired and developed during these periods.
Overall, direct operating costs and expenses as a percentage of rental
revenues have continually declined from 31% in 1994 to 30% in 1995 and to 29%
in 1996. Depreciation and amortization have increased to $33.8 million in
1996 from $30.1 million in 1995 and $26.8 million in 1994, also as a result of
the properties acquired and developed during these periods.
<PAGE>
Gross interest costs, before capitalization of interest to development
projects, increased by $3.7 million from $19.6 million in 1995 to $23.3
million in 1996. This increase in interest cost was due mainly to the
increase in the average debt outstanding from $261.3 million for 1995 to
$314.4 million for 1996. The weighted-average interest rate decreased
slightly from 7.44% in 1995 to 7.36 % in 1996. Interest expense, net of
amounts capitalized, increased $5.3 million from 1995 due to the decrease in
interest capitalization from $2.9 million in 1995 to $1.3 million in 1996 as a
result of the completion in 1996 of two of the Company's significant
development projects. Comparing 1995 to 1994, gross interest costs increased
from $12.4 million in 1994 to $19.6 million in 1995. This was due to an
increase in the average debt outstanding from $181.6 million in 1994 to
$261.3 million in 1995 and to an increase in the weighted-average interest
rate between the two periods from 6.80% in 1994 to 7.44% in 1995. Interest
expense, net of amounts capitalized, increased by only $6.0 million due to the
increase in interest capitalization as a result of increased development
activity during 1995.
The gain on sales of property and securities of $5.6 million in 1996 is due
primarily to the sale of two properties and the receipt of insurance proceeds
from fires which destroyed parts of two shopping centers during 1996. There
were no such occurrences in 1995 or 1994.
As a result of the changes described above, net income increased 20.4% to
$53.9 million in 1996 from $44.8 million in 1995 and by 2.3% from $43.8
million in 1994. Net income per common share increased to $2.03 in 1996 from
$1.69 in 1995 and $1.67 in 1994.
EFFECTS OF INFLATION
The rate of inflation was relatively unchanged in 1996. 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 whereby the Company receives 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 their
proportionate share of operating expenses and ad valorem taxes. As a result
of these lease provisions, increases due to inflation, as well as ad valorem
tax rate increases, generally do not have a significant adverse effect upon
the Company's operating results.
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K includes certain forward looking statements
reflecting the Company's expectations in the near term; however, many factors
which may affect the actual results, especially the everchanging retail
environment, are difficult to predict. Accordingly, there is no assurance
that the Company's expectations will be realized.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying consolidated balance sheets of
Weingarten Realty Investors (the "Company") as of December 31, 1996 and 1995,
and the related statements of consolidated income, shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedules listed in the Index
at Item 14. These financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements and financial statement
schedules 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, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Houston, Texas
February 25, 1997
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31,
------------------------
1996 1995 1994
-------- --------- ---------
<S> <C> <C> <C>
Revenues:
Rentals $145,307 $125,400 $112,233
Interest (including amounts from related parties of
$1,576 in 1996, $2,304 in 1995 and $2,478 in
1994) 3,148 5,338 5,761
Equity in earnings of real estate joint ventures
and partnerships 1,232 1,549 1,330
Other 1,436 1,910 1,469
-------- --------- ---------
Total 151,123 134,197 120,793
-------- --------- ---------
Expenses:
Depreciation and amortization 33,769 30,060 26,842
Operating 23,021 20,890 19,368
Interest 21,975 16,707 10,694
Ad valorem taxes 18,874 16,776 15,433
General and administrative 5,109 4,948 4,434
-------- --------- ---------
Total 102,748 89,381 76,771
-------- --------- ---------
Income from Operations 48,375 44,816 44,022
Gain (loss) on Sales of Property and Securities 5,563 (14) (234)
-------- --------- ---------
Net Income $ 53,938 $ 44,802 $ 43,788
======== ========= =========
Net Income Per Common Share $ 2.03 $ 1.69 $ 1.67
======== ========= =========
Weighted Average Number of Common Shares
Outstanding 26,555 26,464 26,190
======== ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
December 31,
------------
1996 1995
---------- ----------
ASSETS
<S> <C> <C>
Property $ 970,418 $ 849,894
Accumulated Depreciation (233,514) (216,657)
---------- ----------
Property - net 736,904 633,237
Investment in Real Estate Joint Ventures and Partnerships 7,282 8,960
---------- ----------
Total 744,186 642,197
Mortgage Bonds and Notes Receivable from:
Affiliate (net of deferred gain of $4,487 in 1996 and $5,514 in 1995) 14,550 15,863
Real Estate Joint Ventures and Partnerships 15,235 13,897
Marketable Debt Securities 13,806 16,262
Unamortized Debt and Lease Costs 23,411 20,602
Accrued Rent and Accounts Receivable (net of allowance for doubtful
accounts of $1,236 in 1996 and $1,436 in 1995) 13,164 13,357
Cash and Cash Equivalents 169 3,355
Other 6,576 9,291
---------- ----------
Total $ 831,097 $ 734,824
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt $ 389,225 $ 289,339
Accounts Payable and Accrued Expenses 36,949 30,880
Other 3,925 3,006
---------- ----------
Total 430,099 323,225
---------- ----------
Commitments and Contingencies
Shareholders' Equity:
Preferred Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 10,000; shares issued and outstanding:
none
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 150,000; shares issued and outstanding:
26,576 in 1996 and 26,546 in 1995 797 796
Capital Surplus 400,201 410,803
---------- ----------
Shareholders' Equity 400,998 411,599
---------- ----------
Total $ 831,097 $ 734,824
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED CASH FLOWS
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
------------------------
1996 1995 1994
---------- ---------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 53,938 $ 44,802 $ 43,788
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 33,769 30,060 26,842
Equity in earnings of real estate joint ventures and
partnerships (1,232) (1,549) (1,330)
(Gain) loss on sales of property and securities (5,563) 14 234
Amortization of direct financing leases 639 664 585
Changes in accrued rent and accounts receivable (1,836) (526) (2,632)
Changes in other assets (7,507) (7,087) (3,309)
Changes in accounts payable and accrued expenses 4,032 6,187 58
Other, net 59 (67) 69
---------- ---------- ---------
Net cash provided by operating activities 76,299 72,498 64,305
---------- ---------- ---------
Cash Flows from Investing Activities:
Investment in properties (121,379) (105,438) (75,685)
Mortgage bonds and notes receivable:
Advances (3,151) (6,691) (6,557)
Collections 6,188 12,468 2,694
Proceeds from sales and disposition of property 7,231 444 3,063
Proceeds from sales of marketable debt securities 31,836
Real estate joint ventures and partnerships:
Investments (69) (66) (249)
Distributions 1,032 1,337 1,238
Other, net 3,291 2,672 2,519
---------- ---------- ---------
Net cash used in investing activities (106,857) (63,438) (72,977)
---------- ---------- ---------
Cash Flows from Financing Activities:
Proceeds from issuance of:
Debt 95,770 144,500 145,251
Common shares of beneficial interest 231 398 410
Principal payments of debt (2,350) (89,406) (76,527)
Dividends paid (65,851) (63,478) (59,735)
Other, net (428) (1,014) (658)
---------- ---------- ---------
Net cash provided by (used in) financing activities 27,372 (9,000) 8,741
---------- ---------- ---------
Net (decrease) increase in cash and cash equivalents (3,186) 60 69
Cash and cash equivalents at January 1 3,355 3,295 3,226
---------- ---------- ---------
Cash and cash equivalents at December 31 $ 169 $ 3,355 $ 3,295
========== ========== =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31, 1996, 1995 and 1994
Common
Shares of
Beneficial Capital Retained
Interest Surplus Earnings
----------- --------- ----------
<S> <C> <C> <C>
Balance, January 1, 1994 $ 779 $426,308
Net income $ 43,788
Shares exchanged for property 9 11,392
Shares issued under benefit plans 3 849
Cash dividends ($2.28 per share) (15,947) (43,788)
----------- --------- ----------
Balance, December 31, 1994 791 422,602 ---
Net income 44,802
Shares exchanged for property 5 6,342
Shares issued under benefit plans 679
Unrealized loss on marketable securities transferred
to available for sale (144)
Cash dividends ($2.40 per share) (18,676) (44,802)
----------- --------- ----------
Balance, December 31, 1995 796 410,803 ---
Net income 53,938
Shares exchanged for property 1 968
Shares issued under benefit plans 469
Unrealized loss on marketable securities (125)
Cash dividends ($2.48 per share) (11,914) (53,938)
----------- --------- ----------
Balance, December 31, 1996 $ 797 $400,201 $ ---
=========== ========= ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Weingarten Realty Investors (the "Company"), a Texas real estate investment
trust, is engaged in the acquisition, development and management of real
estate, primarily neighborhood and community shopping centers. Over 75% of
the Company's properties are located in Texas, with the remainder located
throughout the southwestern part of the United States. The Company's major
tenants include supermarkets, drugstores and other retailers who generally
sell basic necessity-type commodities. The Company currently operates and
intends to operate in the future as a real estate investment trust ("REIT").
Basis of Presentation
The consolidated financial statements include the accounts of the Company,
its subsidiaries and its interest in 50% or more-owned joint ventures and
partnerships over which the Company exercises control. All significant
intercompany balances and transactions have been eliminated. Investments in
less than 50%-owned joint ventures and partnerships are accounted for using
the equity method.
Revenue Recognition
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.
Property
Real estate assets are 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. Major replacements are capitalized and
the replaced asset and corresponding accumulated depreciation are removed from
the accounts. All other maintenance and repair items are charged to expense
as incurred.
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" effective January 1, 1996. The Company evaluates
long-lived assets for impairment based upon the recoverability of the asset's
carrying value. When it is probable that the undiscounted future cash flows
will not be sufficient to recover the asset's carrying value, an impairment is
recognized. No such impairments were recognized by the Company during the
year ended December 31, 1996.
Capitalization
Carrying charges, principally interest and ad valorem taxes, on land under
development and buildings under construction are capitalized as part of land
under development and buildings and improvements.
Deferred Charges
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.
Marketable Debt Securities
The Company's investment in marketable securities is classified as "available
for sale." The securities are carried at market with any unrealized gains or
losses included as a component of shareholders' equity. Premiums and
discounts are amortized (accreted) to operations over the estimated remaining
lives of the securities using the constant yield method.
Use of Estimates
The preparation of financial statements requires management to make use of
estimates and assumptions that affect amounts reported in the financial
statements as well as certain disclosures. Actual results could differ from
those estimates.
<PAGE>
Per Share Data
Net 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 under benefit plans.
Statements of Cash Flows
The Company considers all highly liquid investments with original maturities
of three months or less as cash equivalents. The Company issued .1 million, .2
million and .3 million common shares of beneficial interest valued at $1.0
million, $6.3 million and $11.4 million in 1996, 1995 and 1994, respectively,
in connection with the purchases of property. The Company also assumed debt
and capital lease obligations totaling $6.6 million, $2.9 million and $13.4
million in connection with the purchases of properties during 1996, 1995 and
1994, respectively.
NOTE 2. DEBT
The Company's debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
Fixed-rate debt payable to 2015 at 6.0% to 10.5% $266,810 $189,413
Notes payable under revolving credit agreements 87,120 73,500
Repurchase agreements, due daily and collateralized by
$13.8 million of marketable debt securities 13,475 11,900
Industrial revenue bonds payable to 2015 at 4.8% to 6.6%
at December 31, 1996 7,558 7,669
Obligations under capital leases 12,467 6,001
Other 1,795 856
-------- --------
Total $389,225 $289,339
======== ========
</TABLE>
The Company has an unsecured $200 million revolving credit agreement with a
bank syndicate. The agreement expires in November 1999, but the Company has
an annual option to request a one year extension of the agreement. All
members of the bank syndicate must agree to the requested extension or the
agreement expires on the scheduled date, at which time all loans outstanding
under the credit agreement become payable over a two-year period. The Company
intends to request an extension of the agreement in 1997 and expects that the
bank syndicate will agree to its request. During 1996, the Company executed
an agreement for an unsecured and uncommitted overnight credit facility
totaling $20 million with a bank to be used for cash management purposes. The
Company will maintain adequate funds available under the $200 million
revolving credit facility at all times to cover the outstanding balance under
this facility. The Company also has letters of credit totaling $14.9 million
outstanding under the $200 million revolving credit facility at December 31,
1996. The revolving credit agreements are subject to normal banking terms and
conditions and do not adversely restrict the Company's operations or
liquidity.
At December 31, 1996, the variable interest rate for notes payable under the
$200 million revolving credit agreement, including the cost of the related
commitment fee, was 7.2% and the variable interest rates under the $20 million
revolving credit agreement and the repurchase agreements were 7.0% and 6.8%,
respectively. During 1996, the maximum balance and weighted-average balance
outstanding under these agreements were $116.2 million and $81.5 million,
respectively, at an average interest rate of 6.1%. The Company made cash
payments for interest on debt, net of amounts capitalized, of $21.3 million
in 1996, $13.9 million in 1995 and $10.1 million in 1994.
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, 1996 and 1995, the carrying value of such property aggregated
$173 million and $177 million, respectively.
The Company has 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 in 1992. The Company intends to hold such
contracts through their expiration date and to use them as a means of fixing
the interest rate on 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: $.9 in
1996, $.8 in 1995 and $1.4 in 1994. The interest rate swaps increased the
average interest rate for the Company's debt by the following amounts: .3% for
1996, .2% for 1995 and .8% for 1994. The Company could be exposed to credit
losses in the event of non-performance by the counterparty; however, the
likelihood of such non-performance is remote.
The Company's debt can be summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
As to interest rate:
Fixed-rate debt (including amounts fixed through interest
rate swaps) $306,853 $229,994
Variable-rate debt 82,372 59,345
-------- --------
Total $389,225 $289,339
======== ========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
As to collateralization:
Secured debt $ 91,334 $ 87,133
Unsecured debt 297,891 202,206
-------- --------
Total $389,225 $289,339
======== ========
</TABLE>
Scheduled principal payments on the Company's debt (excluding $87.1 million
potentially due under the Company's revolving credit agreements in 1997 and
1999 and $13.5 million of repurchase agreements) are due during the following
years (in thousands):
1997 $ 6,466
1998 1,356
1999 1,469
2000 30,540
2001 47,792
2002 through 2006 112,465
2007 through 2011 77,414
Thereafter 10,902
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 (as defined), to limit short-term debt
(as defined) to the greater of 33% of total debt or $200 million (exclusive of
repurchase agreements) and to maintain uncollateralized assets equal to at
least 150% of unsecured debt. Management believes that the Company is in
compliance with all restrictive covenants.
During 1996, the Company issued $79 million of unsecured Medium Term Notes
("MTNs") with an average life of 11 years at an average interest rate of 7.2%.
As of December 31, 1996, the Company had issued a total of $195.5 million of
MTNs. In the third quarter of 1996, the Company filed a $250 million shelf
registration statement with the Securities and Exchange Commission, which
allows for the issuance of debt or equity securities or warrants. At December
31, 1996, the unused portion of the shelf registration totaled $231 million.
<PAGE>
NOTE 3. PROPERTY
The Company's property consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
Land $183,431 $151,985
Land under development 33,140 40,464
Buildings and improvements 743,688 636,601
Construction in-progress 1,897 11,648
Property under direct financing leases 8,262 9,196
-------- --------
Total $970,418 $849,894
======== ========
</TABLE>
The following carrying charges were capitalized (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Interest $1,285 $2,878 $1,670
Ad valorem taxes 269 486 625
------ ------ ------
Total $1,554 $3,364 $2,295
====== ====== ======
</TABLE>
NOTE 4. LEASING OPERATIONS
Leasing Arrangements
The Company's lease terms range from less than one year for smaller tenant
spaces to over twenty-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, 1996, in millions, is: $115.5 in 1997; $102.1 in 1998; $88.5 in 1999;
$73.9 in 2000, $63.0 in 2001 and $468.5 thereafter. The future minimum rental
amounts do not include estimates for contingent rentals. Such contingent
rentals, in millions, aggregated $31.2 in 1996, $26.8 in 1995 and $24.6 in
1994.
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
its books and recorded the future lease payments receivable using the
following components (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
Total minimum lease payments to be received $13,052 $15,303
Estimated residual values of leased property 1,984 2,005
Unearned income (6,774) (8,112)
-------- --------
Property under direct financing leases $ 8,262 $ 9,196
======== ========
</TABLE>
<PAGE>
The Company recognized rental revenue from direct financing leases as follows,
in millions: $1.7 in 1996; $1.9 in 1995 and $1.5 in 1994. At December 31,
1996, minimum lease payments to be received in each of the five succeeding
years, in millions, are: $1.8 in 1997; $1.7 in 1998; $1.5 in 1999; $1.1 in
2000; $1.0 in 2001 and $5.6 thereafter. 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 1996,
$.7 in 1995 and $.8 in 1994.
NOTE 5. LEASE COMMITMENTS
The Company leases land and a shopping center from the owners and then
subleases these properties to other parties. Future minimum rental payments
under these operating leases, in millions, are: $1.5 in 1997 and 1998; $1.4
in 1999; $1.3 in 2000 and 2001 and $19.6 thereafter.
Future minimum rental payments on these leases have not been reduced by future
minimum sublease rentals aggregating $14.6 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: $1.8 in 1996 and 1995 and $1.6 in 1994. Sublease rental
revenue (excluding amounts for improvements constructed by the Company on the
leased land) from these leased properties was as follows, in millions: $2.0
in 1996; $2.2 in 1995 and $2.1 in 1994.
Property under capital leases, consisting of two shopping centers aggregating
$12.3 million at December 31, 1996 and one shopping center aggregating $6.5
million at December 31, 1995, is included in buildings and improvements.
Future minimum lease payments under these capital leases total $19.0 million,
with annual payments due of $.5 million in each of 1997 through 2001, and
$16.4 million thereafter. The amount of these total payments representing
interest is $6.5 million. Accordingly, the present value of the net minimum
lease payments is $12.5 million at December 31, 1996.
NOTE 6. RELATED PARTY TRANSACTIONS
The Company has mortgage bonds and notes receivable of $14.6 million and $15.9
million, net of deferred gain of $4.5 million and $5.5 million, at December
31, 1996 and 1995, respectively, from WRI Holdings, Inc. ("Holdings"). The
Company and Holdings share certain directors and are under common management.
These receivables are collateralized by unimproved land and an investment in a
joint venture which owns and manages a motor hotel ("Hospitality"). The bonds
and notes bear interest at rates of 16% and prime plus 1%, respectively.
However, due to its poor financial condition, Holdings reduced the payment of
interest to the Company in 1988 to the cash flow received from Hospitality
and, accordingly, the Company limited the recognition of interest income for
financial statement purposes to the same amount. The Company does not
anticipate receiving interest payments in excess of this cash flow in the near
term. Interest income recognized for financial reporting purposes was $.3
million, $1.2 million and $1.6 million in 1996, 1995 and 1994, respectively.
During 1995, seven of the eight motor hotels owned by Hospitality were sold.
The Company received $6.6 million in cash and effective ownership of a
three-year, interest-only $3.5 million note receivable which was paid down by
the purchaser in 1996. These proceeds were used to repay the $2.7 million net
investment (cost less related deferred gain) in the mortgage bonds secured by
the seven motels plus accrued interest and $7.4 million of notes receivable.
In 1996, Hospitality obtained secured financing on the remaining motor hotel.
Proceeds from the borrowings were used to repay $.6 million net investment in
the mortgage bonds and $1.3 million of notes receivable. The Company did not
recognize any of the previously deferred gain on these transactions.
The Company had an unrecorded receivable for interest on the mortgage bonds of
$22.4 million and $18.7 million at December 31, 1996 and 1995, respectively.
Interest income not recognized by the Company for financial reporting purposes
aggregated, in millions, $3.7, $3.6 and $3.0 for 1996, 1995 and 1994,
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 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 does not presently
believe that the net investment in the mortgage bonds and notes receivable
from Holdings has been impaired.
The Company owns interests in several joint ventures and partnerships. Notes
receivable from these entities bear interest at 8.3% to 10.3% at December 31,
1996 and are due at various dates through 2020. The Company recognized
interest income on these notes as follows, in millions: $1.3 in 1996; $1.1 in
1995 and $.9 in 1994.
Texas Commerce Bank National Association ("TCB") is a significant participant
in and the agent for the banks that provide the Company's $200 million
revolving credit agreement. The Company and TCB have two common directors.
NOTE 7. COMMITMENTS AND CONTINGENCIES
The Company has guaranteed $1.1 million of notes payable executed by various
joint ventures and partnerships at December 31, 1996.
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 material effect on the Company's consolidated financial
statements.
In connection with the acquisition of certain properties in exchange for the
Company's common shares in 1994 and 1995, the Company entered into agreements
with the sellers under which the Company essentially guaranteed that its
common shares would equal or exceed specified values on certain future dates.
The Company settled these agreements in 1996 through the issuance of $1.0
million in common shares and $.6 million in cash.
In connection with the acquisition of a shopping center in 1996, the Company
is obligated to fund additional payments to the seller upon the execution of
new leases at the property and the satisfaction of other conditions. These
additional payments will range from $2.4 million to $11.5 million and will be
made prior to October of 1997. At December 31, 1996, the Company had already
included $2.4 million of these payments in its consolidated balance sheet.
NOTE 8. SHARE OPTIONS AND AWARDS
The Company has an incentive Share Option Plan which provides for the issuance
of options and share awards up to a maximum of 700,000 common shares and
expires in December 1997. 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 these 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
granted under these plans become exercisable in equal increments over a
three-year period and expire upon termination of employment or ten years from
the date of grant.
In January 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 the
issuance of up to 1,000,000 shares, either in the form of restricted shares or
share 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 Company's shares. The share options vest over a five-year period
beginning three years after the date of grant. Share options were granted at
the market price on the date of grant. The Company recognized $.2 million of
compensation expense relating to the restricted shares in 1996, 1995 and 1994.
Effective January 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." As allowed under this standard, the Company has
continued to use the intrinsic value based method of accounting for such
plans. With respect to the Company's share option and incentive share plans,
adoption of the fair value based approach would result in compensation expense
being recognized in the results of operations when share options are granted,
whereas the intrinsic value based method does not result in the recognition of
compensation expense. Compensation expense for the share awards is the same
under both the fair value and intrinsic value approaches. Had the Company
determined compensation cost for its share option and award plans under the
fair value based approach, the Company's net income would have been reduced by
less than $20,000 and net income per common share would have been unchanged in
both 1995 and 1996. Compensation expense as determined under the fair value
approach was based only on share options granted in 1996 and 1995 and,
accordingly, is not representative of amounts which will be reported in future
years.
The fair value of each option grant was estimated on the date of grant using
the Black-Scholes option-pricing method with the following weighted-average
assumptions; dividend yield of 6.0%, expected volatility of 18.3% and
expected lives of 7.1 years for both 1996 and 1995 and risk-free interest
rates of 6.4% and 6.5% in 1996 and 1995, respectively.
Following is a summary of the option activity for the three years ended
December 31, 1996:
<TABLE>
<CAPTION>
SHARES WEIGHTED
UNDER AVERAGE
OPTION EXERCISE PRICE
-------- ---------------
<S> <C> <C>
Outstanding, January 1, 1994 228,600 $ 29.50
Granted 552,150 37.00
Canceled (15,000) 36.10
Exercised (18,500) 22.25
--------
Outstanding, December 31, 1994 747,250 35.10
Granted 3,510 35.75
Canceled (26,500) 34.25
Exercised (15,610) 29.25
--------
Outstanding, December 31, 1995 708,650 35.25
Granted 24,260 38.10
Canceled (34,300) 37.00
Exercised (10,875) 27.00
--------
Outstanding December 31, 1996 687,735 $ 35.40
========
</TABLE>
The number of share options exercisable at December 31, 1996, 1995 and 1994
were 243,000, 189,000 and 160,000, respectively. Options exercisable at
year-end 1996 had a weighted-average exercise price of $32.30. The
weighted-average fair value of share options granted during 1996 and 1995 were
$5.10 and $4.85, respectively. Share options outstanding at December 31, 1996
had exercise prices ranging from $19.50 to $43.50 and a weighted-average
remaining contractual life of 6.6 years. Approximately 91% of the options
outstanding at year-end 1996 have exercise prices between $31.00 and $37.00.
There were 878,000 common shares available for the future grant of options or
awards at December 31, 1996.
NOTE 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 $53.2 million
at December 31, 1996.
For federal income tax purposes, the cash dividends distributed to
shareholders are characterized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Ordinary income 87.1% 76.4% 94.0%
Return of capital
(generally non-taxable) 4.0 20.1 5.0
Long-term capital gains 8.9 3.5 1.0
------ ------ ------
Total 100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
NOTE 10. MARKETABLE SECURITIES
The Company's investment in marketable debt securities at December 31, 1996
consists of U.S. government agency guaranteed pass-through certificates which
mature through 2008. During 1995, the Company sold U.S. Treasury Notes with
an amortized cost of $31.8 million as determined using the specific
identification method and realized a gain of $.1 million. These securities,
which were classified as "held to maturity," were sold due to changes in
market rates coupled with a shift in the Company's philosophy regarding the
holding of marketable securities. The Company's remaining investment was
reclassified to "available for sale." At December 31, 1996 and 1995, the fair
value of these investments totaled $13.8 million and $16.3 million,
respectively. The amortized cost of the investments at December 31, 1996 and
1995 was $14.1 million and $16.4 million, respectively, and the related
unrealized losses were $.3 million and $.1 million at December 31, 1996 and
1995, respectively.
NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Company's financial instruments was determined using
available market information and appropriate valuation methodologies as of
December 31, 1996. Unless otherwise described below, all other financial
instruments are carried at amounts which approximate their fair values.
Based on rates currently available to the Company for debt with similar terms
and average maturities, fixed-rate debt with a carrying value of $306.9
million has a fair value of approximately $309.6 million at December 31, 1996.
The fair value of the Company's variable-rate debt approximates its carrying
value of $82.4 million.
The fair value of the interest rate swap agreements is based on the estimated
amounts the Company would receive or pay to terminate the contracts at
December 31, 1996. If the Company had terminated these agreements at December
31, 1996, the Company would have paid $3.1 million.
The fair value of the mortgage bonds and notes receivable from Holdings was
not determined because it is not practical to reasonably assess the credit
adjustment that would be applied in the marketplace for such bonds and notes
receivable.
NOTE 12. EMPLOYEE BENEFIT PLANS
The Company has a Savings and Investment Plan to which eligible employees may
elect to contribute from 1% to 12% of their salaries. Employee contributions
are matched by the Company at the rate of $.50 per $1.00 for the first 6% of
the employee's salary. The employees vest in the employer contributions
ratably over a six-year period. Compensation expense related to the plan was
$.2 million per year for 1996, 1995 and 1994.
The Company has a defined benefit pension plan covering substantially all of
its employees. 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,
however, the Company has not been required to make contributions for any of
the past three years. The following table sets forth the plan's funded status
and amounts recognized in the Company's balance sheet (in thousands):
<PAGE>
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation $ 6,263 $5,908
======== =======
Accumulated benefit obligation $ 6,368 $5,976
======== =======
Projected benefit obligation $ 7,943 $7,665
Plan assets at fair value, primarily common stocks and bonds 8,677 7,654
-------- -------
Plan assets in excess of (less than) projected benefit obligation 734 (11)
Unrecognized prior service cost 102 149
Unrecognized net gain (1,882) (851)
Unrecognized net transition asset (53) (125)
-------- -------
Pension liability $(1,099) $ (838)
======== =======
</TABLE>
<TABLE>
<CAPTION>
The components of net periodic pension cost are as follows (in thousands):
1996 1995 1994
-------- -------- ------
<S> <C> <C> <C>
Service cost of benefits earned during the year $ 361 $ 300 $ 248
Interest cost on projected benefit obligation 506 478 422
Actual return on plan assets (1,295) (1,499) 428
Net amortization and deferral 688 1,047 (948)
-------- -------- ------
Total $ 260 $ 326 $ 150
======== ======== ======
</TABLE>
Assumptions used to develop periodic expense and the actuarial present value
of projected benefit obligations for:
<TABLE>
<CAPTION>
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Weighted average discount rate 7.0% 7.0% 7.0%
Expected long-term rate of return on plan assets 8.0% 8.0% 7.0%
Rate of increase in compensation levels 5.0% 5.5% 5.5%
</TABLE>
NOTE 13. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the year ended December 31, 1996, the Company acquired nine retail
centers and three industrial projects. The pro forma financial information
for the years ended December 31, 1996 and 1995 shown below is based on the
historical statements of the Company after giving effect to the acquisitions
as if such acquisitions took place on January 1, 1996 and 1995, respectively
(in thousands, except per share amounts).
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
-------- --------
<S> <C> <C>
Pro forma revenues $163,972 $151,357
======== ========
Pro forma net income $ 57,592 $ 49,273
======== ========
Pro forma net income per common share $ 2.17 $ 1.86
======== ========
</TABLE>
The pro forma financial information is presented for informational purposes
only and may not be indicative of results that would have actually occurred if
the acquisitions had been in effect at the dates indicated, nor does it
purport to be indicative of the results that may be achieved in the future.
<PAGE>
NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 1996 and
1995 is as follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
1996:
Revenues $36,762 $37,178 $37,956 $39,227
Net Income 12,625 12,910 16,325 (1) 12,078
Net Income per Common Share 0.48 0.48 0.61 (1) 0.46
1995:
Revenues $32,092 $32,659 $33,885 $35,561
Net Income 11,364 10,931 11,259 11,248
Net Income per Common Share 0.43 0.41 0.42 0.43
</TABLE>
(1) Increase is primarily the result of a gain on the sale of property during
the quarter.
NOTE 15. 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 fiscal quarters indicated were as follows:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
----- ---- ---------
<S> <C> <C> <C>
1996:
Fourth $ 40 3/4 $ 36 $ 0.62
Third 40 1/2 37 3/8 0.62
Second 38 7/8 34 1/4 0.62
First 38 7/8 35 5/8 0.62
1995:
Fourth $ 38 1/2 $ 33 1/2 $ 0.60
Third 37 7/8 35 1/8 0.60
Second 38 1/8 34 1/4 0.60
First 38 34 1/2 0.60
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. TRUST MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Information with respect to the Company's Trust Managers is
incorporated by reference from pages 3 through 7 of the Company's definitive
Proxy Statement for the Annual Meeting of Shareholders to be held April 29,
1997.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from pages 11 through 13 of the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held
April 29, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from pages 2 through 4 of the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held
April 29, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from pages 14 through 15 of the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held
April 29, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules: PAGE
----
(1) (A) Independent Auditors' Report 18
(B) Financial Statements
(i) Statements of Consolidated Income for the years
ended December 31, 1996, 1995 and 1994 19
(ii) Consolidated Balance Sheets as of December 31, 1996 and 1995 20
(iii) Statements of Consolidated Cash Flows for the years ended
December 31, 1996, 1995 and 1994 21
(iv) Statements of Consolidated Shareholders' Equity for
the years ended December 31, 1996, 1995 and 1994. 22
(v) Notes to Consolidated Financial Statements 23
(2) Financial Statement Schedules:
SCHEDULE PAGE
-------- ----
II Valuation and Qualifying Accounts 39
III Real Estate and Accumulated Depreciation 40
IV Mortgage Loans on Real Estate 42
All other schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule
or because the information required is included in the consolidated financial
statements and notes hereto.
(b) No reports on Form 8-K were filed during the last quarter of the
period covered by this annual report.
(c) Exhibits:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
3.1 - Restated Declaration of Trust, with all amendments thereto (filed as Exhibit 3.1 to the Company's
Registration Statement on Form S-3 (No. 33-49206) and incorporated herein by reference).
3.2 - Bylaws of the Company (filed as Exhibit 3.2 to the Company's Registration Statement on Form
S-3 (No. 33-49206) and incorporated herein by reference).
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).
<PAGE>
10.2** - Weingarten Realty Investors Supplemental Retirement Account Plan, as amended and restated
(filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992 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).
10.3.1* - Third Bonds Renewal and Extension Agreement, effective December 28, 1996, for the 16%
Mortgage Bonds of WRI Holdings, Inc., payable to the Company in the original principal amount
of $3,150,000.
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 - 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* - Third 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 1994 of WRI Holdings, Inc. in the original principal
amount of $3,150,000 .
10.6 - 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).
10.7 - 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).
10.7.1 - 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).
10.8 - Third 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 $40,000,000 from the
Company.
10.9 - 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).
10.10 - 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).
10.10.1 - 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).
10.11 - 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).
10.12 - Amendment to Note Purchase Agreement, dated March 31, 1991, amending loan agreement,
dated August 6, 1987, 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).
10.13** - 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).
10.14** - The Fifth Amendment to Savings and Investment Plan for Employees of the Company (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).
10.15 - 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 December 31,
1991 and incorporated herein by reference).
10.16 - 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).
10.16.1* - Eighth Renewal and Extension of Promissory Note in the amount of $12,000,000, effective as of
December 1, 1996, between the Company, as payee, and Plaza Construction, Inc., as maker.
10.17 - 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).
10.17.1 - 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).
10.17.2 - 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).
10.17.3 - 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).
10.18* - Amended and Restated Credit Agreement dated as of November 21, 1996 between the
Company and Texas Commerce Bank National Association, as Agent, and individually as a
Bank, and the Banks defined therein.
10.19 - 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).
10.20** - 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).
10.21 - 7.10% Senior Medium Term Note (Series A) of the Company, dated 5-22-95, in the amount of
12,500,000 (filed as Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.22 - 7.29% Senior Medium Term Note (Series A) of the Company, dated 5-22-95, in the amount of
12,500,000 (filed as Exhibit 10.28 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.23 - 7.35% Senior Medium Term Note (Series A) of the Company, dated 5-30-95, in the amount of
12,500,000 (filed as Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.24 - 7.125% Senior Medium Term Note (Series A) of the Company, dated 5-30-95, in the amount of
12,500,000 (filed as Exhibit 10.30 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.25 - 7.22% Senior Medium Term Note (Series A) of the Company, dated 6-1-95, in the amount of
12,500,000 (filed as Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.26 - 6.82% Senior Medium Term Note (Series A) of the Company, dated 6-1-95, in the amount of
25,000,000 (filed as Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and incorporated herein by reference).
10.27 - 7.28% Senior Medium Term Note (Series A) of the Company, dated 8-21-95, in the amount of
10,000,000 (filed as Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995 and incorporated herein by reference).
10.28 - 6.84% Senior Medium Term Note (Series A) of the Company, dated 11-7-95, in the amount of
2,000,000 (filed as Exhibit 10.28 to the Company's Annual Report of Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference).
10.29 - 6.84% Senior Medium Term Note (Series A) of the Company, dated 11-20-95, in the amount of
5,000,000 (filed as Exhibit 10.29 to the Company's Annual Report of Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference).
10.30 - 6.62% Senior Medium Term Note (Series A) of the Company, dated 12-11-95, in the amount of
10,000,000 (filed as Exhibit 10.30 of the Company's Annual Report of Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference).
10.31 - 6.65% Senior Medium Term Note (Series A) of the Company, dated 12-14-95, in the amount of
2,000,000 (filed as Exhibit 10.31 to the Company's Annual Report of Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference).
10.32 - 7.12% Senior Medium-Term Note (Series A) of the Company, dated 8-13-96, in the amount of
15,000,000 (filed as Exhibit 10.34 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated herein by reference).
10.33 - 7.44% Senior Medium-Term Note (Series A) of the Company, dated 8-14-96, in the amount of
15,000,000 (filed as Exhibit 10.35 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated herein by reference).
10.34 - 7.39% Senior Medium-Term Note (Series A) of the Company, dated 08-06-96, in the amount of
15,000,000 (filed as Exhibit 10.36 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated herein by reference).
10.35 - 6.95% Senior Medium-Term Note (Series A) of the Company, dated 8-07-96, in the amount of
15,000,000 (filed as Exhibit 10.37 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated herein by reference).
10.36 - 6.90% Senior Medium-Term Note (Series A) of the Company, dated 11-22-96, in the amount of
12,000,000 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated
November 15, 1996 and incorporated herein by reference).
10.37 - 6.60% Senior Medium-Term Note (Series A) of the Company, dated 11-26-96, in the amount of
7,000,000 (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated November
15, 1996 and incorporated herein by reference).
10.38 - Revolving Credit Note, dated September 20, 1995, between the Company and Texas Commerce
Bank National Association in the amount of $73,000,000.
10.39 - Revolving Credit Note, dated September 20, 1995, between the Company and NationsBank of
Texas, N.A. in the amount of $45,000,000.
10.40 - Revolving Credit Note, dated September 20, 1995, between the Company and First Interstate
Bank of Texas, N.A. in the amount of $40,000,000.
10.41 - Revolving Credit Note, dated September 20, 1995, between the Company and Signet
Bank/Virginia in the amount of $22,000,000.
10.42 - Revolving Credit Note, dated September 20, 1995, between the Company and Commerzbank,
A.G. in the amount of $20,000,000.
10.43* - Master Promissory Note in the amount of $20,000,000 between the Company, as payee, and
Texas Commerce Bank National Association, as maker, effective December 30, 1996.
10.44 - Distribution Agreement among the Company and the Agents dated November 15, 1996 relating
to the MTN's (filed as Exhibit 1.1 to the Company's Current Report of Form 8-K dated November
15, 1996 and incorporated herein by reference).
10.45 - Senior Indenture dated as of May 1, 1995 between the Company and Texas Commerce Bank,
National Association, as trustee (filed as Exhibit 4(a) to the Company's Registration Statement
on Form S-3 (No. 33-57659) and incorporated herein by reference).
10.46 - Subordinated Indenture dated as of May 1, 1995 between the Company and Texas Commerce
Bank, National Association (filed as Exhibit 4(b) to the Company's Registration Statement on
Form S-3 (No. 33-57659) and incorporated herein by reference).
11.1* - Computation of Net Income Per Common and Common Equivalent Share.
12.1* - Computation of Fixed Charges Ratios.
21.1* - Subsidiaries of the Registrant.
23.1* - Consent of Deloitte & Touche LLP.
27.1* - Financial Data Schedule.
</TABLE>
* Filed with this report.
** Management contract or compensatory plan or arrangement.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WEINGARTEN REALTY INVESTORS
By: /S/ STANFORD ALEXANDER
-----------------------
Stanford Alexander
Chairman/Chief Executive Officer
Date: March 10, 1997
Pursuant to the requirement of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C> <C>
By: /S/ Stanford Alexander Chairman and Trust Manager March 10,1997
------------------------
Stanford Alexander (Chief Executive Officer)
By: /S/ Andrew M. Alexander President March 10,1997
------------------------
Andrew M. Alexander and Trust Manager
By: /S/ Martin Debrovner Vice Chairman March 10,1997
------------------------
Martin Debrovner and Trust Manager
By: /S/ Melvin Dow Trust Manager March 10,1997
------------------------
Melvin Dow
By: /S/ Stephen A. Lasher Trust Manager March 10,1997
------------------------
Stephen A. Lasher
By: /S/ Joseph W. Robertson, Jr. Executive Vice President and March 10,1997
------------------------
Joseph W. Robertson, Jr. Trust Manager (Chief Financial Officer)
By: /S/ Douglas W. Schnitzer Trust Manager March 10,1997
------------------------
Douglas W. Schnitzer
By: /S/ Marc J. Shapiro Trust Manager March 10,1997
------------------------
Marc J. Shapiro
By: /S/ J.T. Trotter Trust Manager March 10,1997
------------------------
J.T. Trotter
By: /S/ Stephen C. Richter Senior Vice President/ March 10,1997
------------------------
Stephen C. Richter Financial Administration
and Treasurer
(Principal Accounting Officer)
</TABLE>
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 31, 1996, 1995 AND 1994
(AMOUNTS IN THOUSANDS)
CHARGED
BALANCE AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER DEDUCTIONS AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (A) PERIOD
- ------------------------------- ----------- --------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
1996:
Allowance for Doubtful Accounts $ 1,436 $ 1,014 $ 1,214 $ 1,236
1995:
Allowance for Doubtful Accounts 1,007 1,126 697 1,436
1994:
Allowance for Doubtful Accounts 938 1,261 1,192 1,007
</TABLE>
Note A - Write-offs of accounts receivable previously reserved.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
Total Cost
----------
Property
Under
Buildings Direct
and Projects under Financing Total Accumulated Encumbrances
Land Improvements Development Leases Cost Depreciation (A)
-------- ------------- --------------- ---------- -------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
Texas $133,577 $ 469,377 $ 6,256 $609,210 $ 166,121 $ 5,849
Other States 35,171 184,712 2,006 221,889 36,271 8,115
-------- ------------- ---------- -------- ------------- --------------
Total Shopping Centers 168,748 654,089 8,262 831,099 202,392 13,964
INDUSTRIAL PROPERTIES:
Texas 13,750 69,399 83,149 18,896 3,569
OFFICE BUILDING:
Texas 534 12,712 13,246 8,687
MULTI-FAMILY RESIDENTIAL
PROPERTIES:
Texas 399 1,098 1,497 678 1,083
-------- ------------- --------------- ---------- -------- ------------- --------------
Total Improved
Properties 183,431 737,298 8,262 928,991 230,653 18,616
-------- ------------- ---------- -------- ------------- --------------
LAND UNDER DEVELOPMENT:
Texas $ 31,268 31,268
Other States 1,872 1,872
--------------- --------
Total Land Under
Development 33,140 33,140
--------------- --------
LEASED PROPERTY
(SHOPPING CENTER)
UNDER CAPITAL LEASE:
Louisiana 6,390 6,390 2,861 5,857
------------- -------- ------------- --------------
CONSTRUCTION IN
PROGRESS:
Texas 1,164 1,164
Other States 733 733
--------------- --------
Total Construction in
Progress 1,897 1,897
-------- ------------- --------------- ---------- -------- ------------- --------------
TOTAL OF ALL
PROPERTIES $183,431 $ 743,688 $ 35,037 $ 8,262 $970,418 $ 233,514 $ 24,473
======== ============= =============== ========== ======== ============= ==============
</TABLE>
Note A - Encumbrances do not include $62.0 million outstanding under a $35
million 14-year term loan and a $30 million 20-year term loan, both payable to
a group of insurance companies secured by a property collateral pool including
all or part of 8 shopping centers.
<PAGE>
SCHEDULE III
(CONTINUED)
The changes in total cost of the properties for the years ended December
31, 1996, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $849,894 $735,134 $634,814
Additions at cost 131,814 115,687 101,402
Retirements or sales (11,585) (1,433) (1,082)
Other changes (B) 295 506
--------- --------- ---------
Balance at end of year $970,418 $849,894 $735,134
========= ========= =========
</TABLE>
The changes in accumulated depreciation for the years ended December 31,
1996, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $216,657 $191,427 $168,405
Additions charged to expense 27,732 25,541 23,027
Retirements or sales (10,875) (311) (5)
--------- --------- ---------
Balance at end of year $233,514 $216,657 $191,427
========= ========= =========
<FN>
Note B - Transferred from net investment in direct financing leases.
</TABLE>
<PAGE>
SCHEDULE IV
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(B)
--------- -------- ------------------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
FIRST MORTGAGES:
Sheldon Forest
Channelview, TX Prime 12-01-97 Varying ($179 balloon) $ 179 $ 179
Phelan Boulevard
Beaumont, TX Prime 12-31-97 Varying ($129 balloon) 733 79
+2%
Eastex Venture
Beaumont, TX Prime 12-31-97 Varying ($2,465 balloon) 3,500 2,465
+1 1/2%
Main/O.S.T., Ltd.
Houston, TX 9.3% 02-01-20 $ 476 Annual P & I 4,800 4,664
($1,241 balloon)
INDUSTRIAL:
FIRST MORTGAGES:
Railwood
Houston, TX 10% 12-28-04 Varying ($6,223 balloon) 7,000 6,223
River Pointe, Conroe,TX
(Note C) 9% 11-30-03 Varying 2,133 1,839
Little York, Houston, TX
(Note C) 9% 12-31-03 Varying 1,922 1,707
</TABLE>
<PAGE>
SCHEDULE IV
(CONTINUED)
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(B)
--------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
<PAGE>
MULTI-FAMILY RESIDENTIAL
FIRST MORTGAGES:
Stanford Court Apartments
Houston, TX 8.00% 03-30-98 Varying 1,440 1,414
UNIMPROVED LAND:
SECOND MORTGAGE:
River Pointe
Conroe, TX Prime 12-01-97 Varying 12,000 8,587
+1% ($8,587
balloon)
---------- -------------
TOTAL MORTGAGE LOANS ON
REAL ESTATE (Note A) $ 33,707 $ 27,157
========== =============
</TABLE>
Note A - Changes in mortgage loans for the years ended December 31,
1996, 1995 and 1994 are summarized below:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Balance, Beginning of year $31,292 $28,719 $25,635
New Mortgage Loans 3,500 1,354
Additions to Existing Loans 1,075 1,041 2,032
Collections of Principal (5,210) (1,968) (302)
-------- -------- --------
Balance, End of Year 27,157 $31,292 $28,719
======== ======== ========
</TABLE>
Note B - The aggregate cost at December 31, 1996 for federal income tax
purposes is $25,580.
Note C - Principal payments are due monthly to the extent of cash flow
generated by the underlying property.
- 1 -
THIRD BONDS RENEWAL AND EXTENSION AGREEMENT
This THIRD BONDS RENEWAL AND EXTENSION AGREEMENT (this "Third Renewal")
is executed this 21st day of February, 1997 (the "Execution Date"), but
effective as of December 28, 1996, by and between WRI HOLDINGS, INC.
("Maker"), a Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee"), a
Texas real estate investment trust.
W I T N E S S E T H:
WHEREAS, the Payee is the sole legal owner and holder of those certain
16% Mortgage Bonds Due 1994, dated December 28, 1984 (the "Original Bonds"),
in the face principal sum of THREE MILLION ONE HUNDRED FIFTY THOUSAND and
NO/100 DOLLARS ($3,150,000.00) executed by Maker payable to the order of
Weingarten Realty, Inc. ("WRI"), a Texas corporation, payable as therein
provided, which Bonds are secured by
(i) that certain Trust Indenture, dated December 28, 1984 (the
"Original Trust Indenture") executed by Maker and Texas Commerce Bank National
Association (the "Trustee"), a national banking association;
(ii) that certain River Pointe Negative Pledge Agreement, dated
December 28, 1984 (the "Original Negative Pledge") executed by Maker, WRI, and
Plaza Construction, Inc. ("Plaza"); and
(iii) such other documents, instruments, and agreements executed in
connection with, as security for, or as evidence of the obligations evidenced
by the Original Bonds (collectively, the Original Trust Indenture, the
Original Negative Pledge, and such other documents, instruments, and
agreements being herein called the "Original Security Instruments"); and
WHEREAS, WRI assigned and conveyed all of its property, both real and
personal, including, without limitation, the Original Bonds, to Payee, as
evidenced by that certain Master Deed and General Conveyance dated April 5,
1988 from WRI to Payee; and
WHEREAS, effective as of December 28, 1994, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1995 pursuant
to the terms of that certain Bonds Renewal and Extension Agreement, dated as
of December 28, 1994 ("First Renewal"); and
WHEREAS, effective as of December 28, 1995, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1996 pursuant
to the terms of that certain Bonds
<PAGE>
- 4 -
Second Renewal and Extension Agreement, dated as of December 28, 1995 ("Second
Renewal") (the Original Bonds, Original Negative Pledge, and Original Security
Instruments, each as modified, renewed, and extended by the First Renewal and
Second Renewal, being herein called the "Bonds," the "Negative Pledge," and
the "Security Instruments," respectively); and
WHEREAS, Maker and Payee amended and supplemented the terms of the
Original Trust Indenture to reflect the renewal and extension of the Bonds, as
provided in the First Renewal and Second Renewal, such amendments being
evidenced by (i) that certain Supplemental Trust Indenture dated as of
December 28, 1994 between Maker, Trustee, and Payee, and (ii) that certain
Second Supplemental Trust Indenture dated as of December 28, 1995, between
Maker, Trustee and Payee; and
WHEREAS, of even date herewith, Maker, the Trustee, and Payee have
further amended and supplemented the terms of the Trust Indenture pursuant to
that certain Third Supplemental Trust Indenture (the Original Trust Indenture,
as amended and supplemented by the Supplemental Trust Indenture, the Second
Supplemental Trust Indenture and the Third Supplemental Trust Indenture, being
called the "Trust Indenture"); and
WHEREAS, the Bonds mature on December 28, 1996, and Maker and Payee now
propose to renew and extend the maturity date of the Bonds and to continue the
liens and priority of the Security Instruments as security for the payment of
the Bonds, as set forth more particularly herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Maker and Payee hereby
agree as follows:
1. The Maker reaffirms its promise to pay to the order of the Payee,
at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas 77008,
the principal balance due and owing on the Bonds, with interest accrued
thereon, as provided in the Bonds, except that the maturity date of the Bonds
is hereby renewed and extended to December 28, 1997, at which time the unpaid
principal balance of the Bonds, plus all accrued and unpaid interest thereon,
shall be due and payable.
All liens, pledges, and security interests securing the payment of the
Bonds, including, but not limited to, the liens, pledges and security
interests granted in the Trust Indenture and the Negative Pledge, are hereby
renewed, extended and carried forward to secure payment of the Bonds, as
hereby amended, and the Security Instruments are hereby amended to reflect
that the maturity date of the Bonds is December 28, 1997.
2. Maker hereby represents and warrants to Payee that (a) Maker is
the sole legal and beneficial owner of the Trust Estate (as that term is
defined in the Trust Indenture); (b) Maker has the full power and authority to
make the agreements contained in this Third Renewal without joinder and
consent of any other party; and (c) the execution, delivery and performance of
this Third Renewal will not contravene or constitute an event which itself or
which with the passing of time or giving of notice or both would constitute a
default under any trust deed, deed of trust, loan agreement, indenture or
other agreement to which Maker is a party or by which Maker or any of its
property is bound. Maker hereby agrees to indemnify and hold harmless Payee
against any loss, claim, damage, liability or expense (including, without
limitation, attorneys' fees) incurred as a result of any representation or
warranty made by Maker in this Section 2 proving to be untrue in any material
respect.
3. To the extent that the Bonds are inconsistent with the terms of
this Third Renewal, the Bonds are hereby modified and amended to conform with
this Third Renewal. Except as modified, renewed and extended by this Third
Renewal, the Bonds remain unchanged and continue unabated and in full force
and effect as the valid and binding obligation of the Maker.
4. In conjunction with the extension and renewal of the Bonds and the
Security Instruments, Maker hereby extends and renews the liens, pledges, and
security interests as created and granted in the Security Instruments until
the indebtedness secured thereby, as so extended and renewed, has been fully
paid, and agrees that such extension and renewal shall, in no manner, affect
or impair the Bonds or the liens, pledges, and security interests securing
same, and that said liens, pledges, and security interests shall not in any
manner be waived. The purpose of this Third Renewal is simply to extend the
time of payment of the obligation evidenced by the Bonds and any indebtedness
secured by the Security Instruments, as modified by this Third Renewal, and to
carry forward all liens, pledges, and security interests securing the same,
which are acknowledged by Maker to be valid and subsisting.
5. Maker covenants and warrants that the Payee is not in default
under the Bonds or the Security Instruments, or this Third Renewal
(collectively referred to as the "Loan Instruments"), that there are no
defenses, counterclaims or offsets to such Loan Instruments; and that all of
the provisions of the Loan Instruments, as amended hereby, are in full force
and effect.
6. Maker agrees to pay all costs incurred in connection with the
execution and consummation of this Third Renewal, including but not limited
to, all recording costs and the reasonable fees and expenses of Payee's
counsel.
7. If any covenant, condition, or provision herein contained is held
to be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any way
affect any other covenant, condition, or provision herein contained.
8. Payee is the sole owner and holder of the Bonds. Maker and Payee
acknowledge and agree that the outstanding principal balance of the Bonds as
of December 28, 1996 is $3,150,000.00.
9. Payee is an unincorporated trust organized under the Texas Real
Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust
Managers, officers, employees, or other agents shall be personally,
corporately, or individually liable, in any manner whatsoever, for any debt,
act, omission, or obligation of Payee, and all persons having claims of any
kind whatsoever against Payee shall look solely to the property of Payee for
the enforcement of their rights (whether monetary or non-monetary) against
Payee.
EXECUTED this day and year first above written, but effective for all
purposes as of December 28, 1996.
WRI HOLDINGS, INC., a Texas corporation
By:
Martin Debrovner, Vice President
"Maker"
WEINGARTEN REALTY INVESTORS, a Texas real estate
investment trust
By:
Bill Robertson, Jr.
Executive Vice President
"Payee"
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Martin Debrovner, Vice President of WRI HOLDINGS, INC., a
Texas corporation, on behalf of said corporation.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN
REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real
estate investment trust.
Notary Public, State of Texas
THIRD SUPPLEMENTAL TRUST INDENTURE
This THIRD SUPPLEMENTAL TRUST INDENTURE (this "Third Supplemental
Indenture") is executed this 21st day of February, 1997 (the "Execution
Date"), but effective as of December 28, 1996, by and between WRI HOLDINGS,
INC. (the "Company"), a Texas corporation, and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (the "Trustee"), a national banking association.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee executed that certain Trust
Indenture dated December 28, 1984 (the "Original Trust Indenture") to secure
the performance of the Company under the terms of that certain 16% Mortgage
Bonds Due 1994 (the "Original Bonds") executed by the Company payable to the
order of Weingarten Realty, Inc. ("WRI") dated December 28, 1984 in the face
principal amount of THREE MILLION ONE HUNDRED FIFTY THOUSAND and NO/l00
DOLLARS ($3,150,000.00), payable as therein provided; and
WHEREAS, WRI assigned and conveyed all of its property, both real and
personal, including, without limitation, the Original Bonds, to Weingarten
Realty Investors ("Weingarten"), a Texas real estate investment trust, as
evidenced by that certain Master Deed and General Conveyance dated April 5,
1988, from WRI to Weingarten; and
WHEREAS, effective as of December 28, 1994, the Company and Weingarten
renewed and extended the maturity date of the Original Bonds to December
28, 1995 pursuant to the terms of that certain Bonds Renewal and Extension
Agreement dated as of December 28, 1994 ("First Renewal"); and
WHEREAS, effective as of December 28, 1995, the Company and Weingarten
again renewed and extended the maturity date of the Original Bonds to December
28, 1996 pursuant to the terms of that certain Bonds Second Renewal and
Extension Agreement dated as of December 28, 1995 ("Second Renewal") (the
Original Bonds, as renewed and extended by the First Renewal and Second
Renewal, being herein called the "Bonds"); and
WHEREAS, the Company and Weingarten amended and supplemented the terms of
the Original Trust Indenture to reflect the renewal and extension of the Bonds
as provided in the First Renewal and Second Renewal, such amendments being
evidenced by (i) that certain Supplemental Trust Indenture dated as of
December 28, 1994 between the Company, the Trustee and Weingarten and (ii)
that certain Second Supplemental Trust Indenture dated as of December 28,
1995, between the Company, the Trustee, and Weingarten (the Original Trust
Indenture, as amended and supplemented by the Supplemental
Trust Indenture and Second Supplemental Trust Indenture, being herein called
the "Trust Indenture"); and
WHEREAS, the Bonds mature on December 28, 1996, and the Company and
Weingarten have agreed to renew and extend the maturity date of the Bonds and
to continue the liens, pledges, and security interests securing the payment of
the Bonds, as set forth in that certain Third Bonds Renewal and Extension
Agreement ("Third Renewal") dated effective as of December 28, 1996, executed
by the Company and Weingarten, Weingarten being the sole legal owner and
holder of the Bonds; and
WHEREAS, the Company and the Trustee desire to amend and supplement the
Trust Indenture to reflect the renewal and extension of the maturity date of
the Bonds to December 28, 1997.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Trustee
hereby agree as follows:
1. Except as otherwise provided in this Third Supplemental Indenture,
all capitalized terms used in this Third Supplemental Indenture shall
have the meanings ascribed to those terms in the Trust Indenture.
2. The Company and the Trustee acknowledge that the Company has
re-affirmed its promise to pay to the order of the Payee, at 2600 Citadel
Plaza Drive, Suite 300, Houston, Harris County, Texas 77008, the principal
balance due and owing on the Bonds, with interest accrued thereon, as provided
in the Bonds, except that the maturity date of the Bonds has been renewed and
extended to December 28, 1997, at which time the unpaid principal balance of
the Bonds, plus all accrued and unpaid interest thereon, shall be due and
payable.
All liens, pledges, and security interests securing the Bonds granted
under the terms of the Trust Indenture, are hereby renewed, extended and
carried forward to secure payment of the Bonds, as hereby amended, and the
Trust Indenture is hereby amended to reflect that the maturity date of the
Bonds is December 28, 1997.
3. The Company hereby represents and warrants to the Trustee that (a)
the Company is the sole legal and beneficial owner of the Trust Estate; (b)
the Company has the full power and authority to make the agreements contained
in this Third Supplemental Indenture without joinder and consent of any other
party; and (c) the execution, delivery and performance of this Third
Supplemental Indenture will not contravene or constitute an event which itself
or which with the passing of time or giving of notice or both would constitute
a default under any trust deed, deed of trust, loan agreement, indenture or
other agreement to which the Company is a party or by which the Company or any
of its property is bound. The
Company hereby agrees to indemnify and hold harmless the Trustee against any
loss, claim, damage, liability or expense (including, without limitation,
attorneys' fees) incurred as a result of any representation or warranty made
by the Company in this Section 3 proving to be untrue in any material respect.
4. To the extent that the Trust Indenture is inconsistent with the
terms of this Third Supplemental Indenture, the Trust Indenture is hereby
modified and amended to conform with this Third Supplemental Trust Indenture.
Except as modified, renewed and supplemented by this Third Supplemental
Indenture, the Trust Indenture remains unchanged and continues unabated and
in full force and effect as the valid and binding obligation of the Company.
5. The Company covenants and warrants that the Trustee is not in
default under the Trust Indenture, as supplemented by this Third Supplemental
Indenture (collectively referred to as the "Indenture"), that there are no
defenses, counterclaims or offsets to the Bonds or the Indenture, and that all
of the provisions of the Bonds and the Indenture are in full force and effect.
6. The Company agrees to pay all costs incurred in connection
with the execution and consummation of this Third Supplemental Indenture,
including but not limited to, all recording costs and the reasonable fees and
expenses of Trustee's counsel.
7. If any covenant, condition, or provision herein contained is held to
be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any
way affect any other covenant, condition, or provision herein contained.
8. The Company acknowledges and agrees that the outstanding principal
balance of the Bonds as of December 28, 1996 is $3, 150, 000.00.
9. Weingarten joins herein to consent to the amendment and supplement
of the terms of the Trust Indenture, as set forth in this Third Supplemental
Indenture and to acknowledge and represent that Weingarten is the sole owner
and holder of the Bonds. Weingarten is an unincorporated trust organized under
the Texas Real Estate Investment Trust Act. Neither the shareholders of
Weingarten, nor its Trust Managers, officers, employees, or other agents shall
be personally, corporately, or individually liable, in any manner whatsoever,
for any debt, act, omission, or obligation of Weingarten, and all persons
having claims of any kind whatsoever against Weingarten shall look solely to
the property of Weingarten for the enforcement of their rights (whether
monetary or non-monetary) against Weingarten.
EXECUTED this day and year first above written1 but effective for all
purposes as of December 28, 1996.
WRI HOLDINGS, INC.
By:
Martin Debrovner, Vice President
"Company"
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:__________________________________
Terry Stewart
Assistant Vice President and Trust
Officer
"Trustee"
WEINGARTEN REALTY INVESTORS
By:_________________________________
Bill Robertson, Jr. Executive Vice President
"Weingarten"
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Martin Debrovner, Vice President of WRI HOLDINGS, INC., a
Texas corporation, on behalf of said corporation.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Terry Stewart, Assistant Vice President and p Trust Officer
of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association,
on behalf of said national banking association.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this _______ day of
February, 1997, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN
REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real
estate investment trust.
Notary Public, State of Texas
-5-
1
Letter Sized Document, Page Numbers each Page, Auto Sheet Feed
CREATED IN 5.1
EIGHTH RENEWAL AND EXTENSION AGREEMENT
THE STATE OF TEXAS
COUNTY OF MONTGOMERY
This EIGHTH RENEWAL AND EXTENSION AGREEMENT (the "Eighth Renewal") is
executed this 21st day of February, 1997 (the "Execution Date"), but effective
as of December 1, 1996, by and between PLAZA CONSTRUCTION, INC. ("Maker"), a
Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee"), a Texas real
estate investment trust.
W I T N E S S E T H:
WHEREAS, the Payee is the present legal owner and holder of that certain
Promissory Note dated November 29, 1982 (the "Original Note"), in the original
principal sum of Twelve Million and No/100 Dollars ($12,000,000.00) executed
by River Pointe Venture I ("River Pointe"), a Texas joint venture, payable to
the order of Weingarten Realty, Inc. ("WRI"), a Texas corporation, payable as
therein provided, which Note is secured by (i) a Deed of Trust and Security
Agreement dated November 29, 1982 (the "Original Deed of Trust"), executed by
River Pointe to Melvin A. Dow, Trustee, filed under Clerk's File No. 8254156
and under Film Code Reference No. 171-01-0638 in the Real Property Records of
Montgomery County, Texas, covering and affecting certain property situated in
Montgomery County, Texas, more particularly described therein (the
"Property"), and (ii) any and all other liens, security instruments, and
documents executed by River Pointe and/or Maker, securing or governing the
payment of the Original Note including, but not limited to, that certain Loan
Agreement dated November 29, 1982 ("Original Loan Agreement"), executed by WRI
and River Pointe; and
WHEREAS, by that certain River Pointe Venture I Assignment of Interest
and Dissolution, dated October 16, 1987, filed on October 19, 1987, under
Clerk's File No. 8747284, in the Real Property Records of Montgomery County,
Texas, River Pointe was dissolved and Maker assumed all of the debts and
obligations of River Pointe, and obtained ownership of all of the assets of
River Pointe, including, but not limited to, the Property; and
WHEREAS, on April 5, 1988, WRI assigned and conveyed all of its property,
both real and personal, including, without limitation, the Original Note, to
Payee, as evidenced by that certain Master Deed and General Conveyance, from
WRI to Payee, a counterpart of which was filed under Clerk's File No. 8815730
and under Film Code Reference No. 520-01-0704, in the Real Property Records of
Montgomery County, Texas; and
<PAGE>
WHEREAS, by instrument entitled Renewal and Extension Agreement, entered
into as of November 1, 1989 (the "First Renewal"), executed by Maker and
Payee, the Original Note, Original Deed of Trust, Original Loan Agreement, and
all other documents evidencing, governing, or securing the payment of the Note
were renewed and extended; and
WHEREAS, by instrument entitled Second Renewal and Extension Agreement
dated March 12, 1991, but effective as of December 1, 1990 (the "Second
Renewal"), filed on March 21, 1991, under Clerk's File No. 9111519 and under
Film Code Reference No. ###-##-#### in the Official Public Records of Real
Property of Montgomery County, Texas, Maker and Payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing or securing payment of the
Original Note; and
WHEREAS, by instrument entitled Third Renewal and Extension Agreement
dated February 28, 1992, but effective as of December 1, 1991 (the "Third
Renewal"), filed on May 14, 1992, under Clerk's File No. 9222962, and under
Film Code Reference No. ###-##-#### in the Official Public Records of Real
Property of Montgomery County, Texas, Maker and Payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing or securing payment of the
Original Note; and
WHEREAS, by instrument entitled Fourth Renewal and Extension Agreement
dated February 19, 1993, but effective as of December 1, 1992 (the "Fourth
Renewal"), Maker and Payee further modified and extended the Original Note,
Original Deed of Trust, Original Loan Agreement, and all other documents
evidencing, governing or securing payment of the Original Note; and
WHEREAS, by instrument entitled Fifth Renewal and Extension Agreement
dated March 9, 1994, but effective as of December 1, 1993 (the "Fifth
Renewal"), filed on March 18, 1994 under Clerk's File No. 9415326 and under
Film Code Reference No. ###-##-#### in the Official Public Records of Real
Property of Montgomery County, Texas, Maker and Payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing, or securing payment of the
Original Note; and
WHEREAS, by instrument entitled Sixth Renewal and Extension Agreement
dated February 22, 1995, but effective as of December 1, 1994 (the "Sixth
Renewal"), filed on March 1, 1995 under Clerk's File No. 09511049 and under
Film Code Reference No. 046-00-0785 in the Official Public Records of Real
Property of Montgomery County, Texas, Maker and Payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing, or securing payment of the
Original Note.
<PAGE>
WHEREAS, by instrument entitled Seventh Renewal and Extension Agreement
dated February 7, 1996, but effective December 1, 1995 (the "Seventh
Renewal"), filed on February 23, 1996 under Clerk's File No. 9611331 and under
Film Code Reference No. 135-00-0887 in the Official Public Records of Real
Property of Montgomery County, Texas, Maker and Payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing, or securing payment of the
Original Note.
WHEREAS, the Original Note, the Original Deed of Trust, and Original Loan
Agreement, together with any and all other liens, security interests and
documents evidencing, securing or governing payment of the Original Note, as
modified by the First Renewal, Second Renewal, Third Renewal, Fourth Renewal,
Fifth Renewal, Sixth Renewal, and Seventh Renewal are herein referred to as
the "Note" and "Security Instruments," respectively; and
WHEREAS, Maker and Payee now propose to modify the Note in certain
respects and to continue the lien and priority of the Security Instruments as
security for the payment of the Note, as set forth more particularly herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Maker and Payee hereby
agree as follows:
1. The Maker re-affirms its promise to pay to the order of the Payee,
at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas
77008, the principal balance due and owing on the Note, with accrued interest
thereon, as provided in the Note, except that the maturity date of the Note is
hereby amended and extended until December 1, 1997, at which time the unpaid
principal balance of the Note, together with all accrued but unpaid interest,
shall be due and payable.
All liens securing the Note, including, but not limited to, the lien
created by the Original Deed of Trust, are hereby renewed, extended and
carried forward to secure payment of the Note, as hereby amended, and the
Original Deed of Trust is hereby amended to reflect that the maturity date of
the Note is December 1, 1997. All other Security Instruments including, but
not limited to, the Original Loan Agreement, are likewise hereby modified and
amended to reflect the renewal and extension of the maturity date of the Note
to December 1, 1997.
2. Maker hereby represents and warrants to Payee that (a) Maker is
the sole legal and beneficial owner of the Property (b) Maker has the full
power and authority to make the agreements contained in this Eighth Renewal,
without joinder and consent of any other party; and (c) the execution,
delivery and performance of this Eighth Renewal will not contravene or
constitute an event which itself or which, with the passing of time, or giving
of notice, or both, would constitute a default under any trust deed, deed
of trust, loan agreement, indenture or other agreement to which Maker is a
party or by which Maker or any of its property is bound. Maker hereby agrees
to indemnify and hold harmless Payee against any loss, claim, damage,
liability or expense (including, without limitation, attorneys' fees) incurred
as a result of any representation or warranty made by Maker in this Section 2
proving to be untrue in any material respect.
<PAGE>
3. To the extent that the Note is inconsistent with the terms of this
Eighth Renewal, the Note is hereby modified and amended to conform with
the Eighth Renewal. Except as modified, renewed and extended by this Eighth
Renewal, the Note and the Security Instruments remain unchanged and continue
unabated and in full force and effect as the valid and binding obligation of
the Maker.
4. In conjunction with the extension, renewal and modification of the
Note and the Security Instruments, Maker hereby extends and renews the
liens, security interests, and assignments created and granted in the Security
Instruments until the indebtedness secured thereby, as so extended, renewed
and modified, has been fully paid, and agrees that such extension, renewal and
modification shall in no manner affect or impair the Note, the liens or
security interests securing same, and that said liens, security interests, and
assignments shall not in any manner be waived. The purpose of this Eighth
Renewal is simply to extend the time of payment of the loan evidenced by the
Note and any indebtedness secured by the Security Instruments, as modified by
this Eighth Renewal, and to carry forward all liens and security interests
securing the same, which are acknowledged by Maker to be valid and subsisting.
5. Maker covenants and warrants that the Payee is not in default
under the Note or Security Instruments, each as modified by this Eighth
Renewal (collectively referred to as the "Loan Instruments"), that there are
no defenses, counterclaims or offsets to such Loan Instruments; and that all
of the provisions of the Loan Instruments, as amended hereby, are in full
force and effect.
6. Maker agrees to pay all costs incurred in connection with the
execution and consummation of this Eighth Renewal, including but not limited
to, all recording costs, the premium for an endorsement to the Mortgagee
Policy of Title Insurance insuring the validity and priority of the Original
Deed of Trust, in form satisfactory to Payee, and the reasonable fees and
expenses of Payee's counsel.
<PAGE>
7. If any covenant, condition, or provision herein contained is held
to be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any way
affect any other covenant, condition, or provision herein contained.
8. Payee is an unincorporated trust organized under the Texas Real
Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust
Managers, officers, employees, or other agents shall be personally,
corporately,or individually liable, in any manner whatsoever, for any debt,
act, omission, or obligation of Payee, and all persons having claims of any
kind whatsoever against Payee shall look solely to the property of Payee for
the enforcement of their rights (whether monetary or non-monetary) against
Payee.
EXECUTED this day and year first above written, but effective for all
purposes as of December 1, 1996.
PLAZA CONSTRUCTION, INC., a Texas corporation
By:
Martin Debrovner, Vice President
"Maker"
WEINGARTEN REALTY INVESTORS, a Texas real estate
investment trust
By:
Bill Robertson, Jr.
Executive Vice President
"Payee"
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Martin Debrovner, Vice President of PLAZA CONSTRUCTION,
INC., a Texas corporation, on behalf of said corporation.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
February, 1997, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN
REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real
estate investment trust.
Notary Public, State of Texas
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 21, 1996
between
Weingarten Realty Investors
and
Texas Commerce Bank National Association,
as Agent, and individually as a Bank,
and
The Banks Defined Herein
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Other Defined Terms. 16
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES; LETTERS OF CREDIT
2.01. The Revolving Credit Loan; Letters of Credit; Term Loan 16
2.02. Making the Advances on the Revolving Credit Loan 19
2.03. Issuing the Letters of Credit 20
2.04. Fees 29
2.05. Reduction of the Commitments 31
2.06. Interest 31
2.07. Additional Interest on LIBOR Rate Advances 32
2.08. Interest Rate Determination and Protection 33
2.09. Voluntary Interest Conversion of Advances 34
2.10. Funding Losses Relating to LIBOR Rate Advances 34
2.11. Extension of Commitments 35
ARTICLE III PAYMENTS, PREPAYMENTS, INCREASED COSTS AND TAXES
3.01. Payments and Computations 36
3.02. Voluntary Prepayments 37
3.03. Mandatory Prepayments 37
3.04. Increased Costs; Capital Adequacy 38
3.05. Taxes 38
3.06. Certificate of Bank 39
ARTICLE IV CONDITIONS OF LENDING
4.01. Conditions Precedent to Initial Advances and Issuance of Letters of
Credit 39
4.02. Conditions Precedent to Each Borrowing 41
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.01. Existence 41
5.02. Financial Condition 42
5.03. Use of Proceeds; Margin Stock 42
5.04. Binding Obligations 42
5.05. No Conflict or Resultant Lien 43
5.06. Compliance with Other Agreements 43
5.07. No Consent 43
5.08. Litigation 43
5.09. Taxes; Governmental Charges 43
5.10. Full Disclosure 43
5.11. Investment Company Act 44
5.12. Compliance with Law 44
5.13. ERISA 44
5.14. No Default or Event of Default 44
5.15. Permits and Licenses 44
5.16. Insurance 44
<PAGE>
ARTICLE VI AFFIRMATIVE COVENANTS OF THE BORROWER
6.01. Reporting and Notice Requirements 45
6.02. Maintenance 47
6.03. Insurance 48
6.04. Taxes and Other Claims 48
6.05. Right of Inspection 48
6.06. Guarantees of Subsidiaries 48
6.07. Compliance with Law 49
6.08. Delivery of Certain Certificates 49
ARTICLE VII NEGATIVE COVENANTS
7.01. Liens, Etc 49
7.02. Limitations on Incurrence of Debt 49
7.03. Unimproved Real Property 50
7.04. Sale or Other Disposition of Real Property 50
7.05. Mergers; Consolidations 51
7.06. Investments, Loans, and Advances 51
7.07. Coverage Ratio 52
7.08. Transactions with Affiliates 53
7.09. Change of Business 53
7.10. Intentionally Omitted 53
7.11. Amendment of Organizational Documents 53
7.12. Guarantees 53
7.13. Assets Retained 54
ARTICLE VIII EVENTS OF DEFAULT
8.01. Events of Default 55
ARTICLE IX THE AGENT
9.01. Authorization and Action 57
9.02. Agent's Reliance, Etc 57
9.03. TCB and Affiliates 58
9.04. Bank Credit Decision 58
9.05. Indemnification 58
9.06. Successor Agent 59
9.07. Agent's Reliance 60
9.08. Defaults 60
<PAGE>
ARTICLE X MISCELLANEOUS
10.01. Amendments, Etc 60
10.02. Notices, Etc 61
10.03. No Waiver; Remedies 61
10.04. Costs, Expenses and Taxes 61
10.05. Right of Set-off 62
10.06. Sharing of Payments, Etc. 62
10.07. Binding Effect 62
10.08. Assignments and Participations 62
10.09. Limitation on Agreements 64
10.10. Severability 65
10.11. Governing Law 66
10.12. SUBMISSION TO JURISDICTION; WAIVERS 66
10.13. Execution in Counterparts 66
10.14. Liability of Borrower 66
10.15. FINAL AGREEMENT 67
EXHIBITS
Exhibit 1.01-A - Form of Guaranty
Exhibit 1.01-B - Existing Letters of Credit
Exhibit 1.01-C - Definitions Governing Letters of Credit Supporting Bonds
Exhibit 2.02(a) - Notice of Borrowing
Exhibit 2.02(c) - Form of Notes
Exhibit 2.03 - Form of Letter of Credit Request
Exhibit 2.09 - Form of Notice of Interest Conversion
Exhibit 5.01 - Subsidiaries
Exhibit 5.08 - Material Litigation
Exhibit 6.01(c) - Form of Compliance Certificate
Exhibit 10.08 - Form of Assignment and Acceptance
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 21, 1996
Weingarten Realty Investors, a Texas real estate investment trust
(the "Borrower"), Texas Commerce Bank National Association, a national banking
--------
association (in its individual capacity, "TCB"), NationsBank of Texas, N.A., a
---
national banking association, ("NationsBank"), Signet Bank ("Signet"),
Commerzbank, A.G., a domestic branch of a bank organized under the laws of
Germany ("Commerzbank"), The Sumitomo Bank, Limited, a Japanese banking
corporation ("Sumitomo") and any bank that may hereafter become a party
hereto in accordance with the provisions hereof (each individually, a "Bank"
----
and collectively, the "Banks"), TCB as Agent hereunder (in such capacity, the
-----
"Agent") for the Banks hereunder, NationsBank, in its capacity as Documentary
-----
Agent hereunder, and Commerzbank, in its capacity as Co-Agent hereunder,
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Credit
---------------------
Agreement (the "Agreement"), the following terms shall have the following
---------
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Act" shall have the meaning specified in Section 5.01.
---
"Adjusted Net Proceeds" has the meaning specified in Section 7.04.
-----------------------
"Advance" means the Revolving Credit Advances provided for in Section
-------
2.01(a) hereof, and on and after the Conversion Date, means the Term Loan
Advances provided for in Section 2.01(c).
"Affiliate" means any Person which, directly or indirectly, controls or
---------
is controlled by or is under common control with another Person. For purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities or by contract or otherwise.
"Annual Date" means, during the first 365 days of the term of this
------------
Agreement, the date which is 364 days from and after the Closing Date, and
thereafter, means the anniversary of such date in each succeeding year.
"Annual Service Charge" means, for any Calculation Period, the sum of (i)
---------------------
the amount accrued during such period in respect of interest (including the
interest component of Capitalized Lease obligations) and original issue
discount of Debt of the Borrower and its Subsidiaries, plus (ii) amounts
----
accrued by the Borrower and its Subsidiaries in respect of Disqualified Stock
(including, without limitation, dividends payable thereon).
"Applicable Margin" shall mean with respect to any Advance, the rate per
------------------
annum for the respective Type of Advance indicated below for the credit rating
assigned to (or in respect of) long-term, senior unsecured Debt of the
Borrower by S&P, as reflected on the most recent Compliance Certificate of the
Borrower delivered in accordance with Section 6.01(c), or the most recent
Rating Certificate delivered in accordance with Section 6.01(h), as the case
may be, and shall become effective with respect to each such Advance requested
by the Borrower on the applicable Calculation Date, and shall remain in effect
to (but not including) the next Calculation Date:
<PAGE>
<TABLE>
<CAPTION>
If the credit rating determined
on any Calculation Date is: The Applicable Margin for the Type of
- -------------------------------
Advance indicated is:
-------------------------------------
For For a
Revolving Term
Loan: Loan:
---------- ------
<S> <C> <C> <C>
A+, A or A-, or better (a) LIBOR Rate Advance .40% .65%
(b) Effective Federal Funds
Rate Advance .58% .83%
BBB+ (a) LIBOR Rate Advance .65% .90%
(b) Effective Federal Funds
Rate Advance . 83% 1.08%
BBB,BBB- (a) LIBOR Rate Advance .85% 1.10%
(b) Effective Federal Funds
Rate Advance 1.03% 1.28%
BB+ and below (a) LIBOR Rate Advance 1.25% 1.50%
(b) Effective Federal Funds 1.43%
Rate Advance 1.68%
</TABLE>
<PAGE>
; provided that, if at any time no such credit rating shall be assigned
to (or in respect of) long-term, senior unsecured Debt of the Borrower by S&P,
the "Applicable Margin" shall mean the rate per annum for the respective Type
of Advance indicated below for the Coverage Ratio in effect, as reflected on
the most recent Compliance Certificate of the Borrower delivered to the Agent
in accordance with Section 6.01(c), or the most recent Rating Certificate
delivered in accordance with Section 6.01(h), as the case may be, and shall
become effective with respect to each such Advance requested by the Borrower
on the applicable Calculation Date, and shall remain in effect to (but not
including) the next Calculation Date:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
If the Coverage Ratio The Applicable Margin for the
determined on any Calculation Type of Advance indicated is:
- -------------------------------- --------------------------------
Date is: For Revolving
- -------------------------------- --------------
Loan: For a Term
-------------- -----------
Loan
-----------
(a) LIBOR Rate Advance .40%
Greater than 3.0 to 1.0 (b) Effective Federal Funds Rate .65%
Advance .58%
.83%
(a) LIBOR Rate Advance
Equal to or less than 3.0 to 1.0 (b) Effective Federal Funds Rate .65%
Advance .90%
.83% 1.08%
</TABLE>
The Applicable Margin shall be computed by the Agent on each Calculation Date,
and the Agent shall notify the Borrower and the Banks of the Applicable
Margin.
"Assignee" has the meaning specified in Section 10.08(a) hereof.
--------
"Assignment and Acceptance" has the meaning specified in Section 10.08(a)
-------------------------
hereof.
"Borrowing" means a revolving credit loan borrowing under Section
---------
2.01(a) hereof consisting of one Revolving Credit Advance from each Bank, of
the same Type made on the same day.
<PAGE>
"Business Day" means a day of the year on which banks are not required or
------------
authorized to close in Houston, Texas and, if the applicable Business Day
relates to any LIBOR Rate Advances, on which dealings are carried on in the
London interbank market.
"Calculation Date" means (i) the Closing Date, and (ii) a date which is
-----------------
the earlier of (A) the date of delivery of a Compliance Certificate in
accordance with Section 6.01(c), or (B) the date that such Compliance
Certificate is required to be delivered pursuant to Section 6.01(c), and (C)
with respect to a Rating Certificate, the date of such Rating Certificate.
"Capital Shares" means, with respect to any Person, any capital stock or
----------------
capital shares (including without limitation, preferred stock or shares),
interests, participations or other ownership interests (however designated) of
such Person, and any rights, warrants or options to purchase any thereof.
"Capitalized Lease" means any lease of any property (whether real,
------------------
personal or mixed) which, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of the lessee.
"Cash Equivalents" means (a) marketable direct obligations issued or
-----------------
unconditionally guaranteed by the United States Government or issued by an
agency thereof or by the Federal National Mortgage Association; (b) commercial
paper maturing no more than ninety (90) days after the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 or
P-1 from either S&P or Moody's (or, if at any time neither S&P nor Moody's
shall be rating such obligations, then the highest rating from such other
nationally recognized rating services acceptable to the Agent); (c)
investments in repurchase agreements backed by securities described in clause
(a) hereof; and (d) domestic and eurodollar certificates of deposit or
bankers' acceptances maturing within ninety (90) days after the date of
acquisition thereof issued by any Bank or any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia having capital of not less than $100,000,000.
"Closing Date" means the date the Agreement becomes effective in
-------------
accordance with Article IV.
--
"Code" means the Internal Revenue Code of 1986, as amended from time to
----
time, and any successor statute.
"Commitment" means, as to any Bank, such Bank's Pro Rata Percentage of
----------
$200,000,000, as such amount is set forth on the signature pages hereof with
respect to each Bank on and as of the Closing Date, and as it may be reduced
from time to time in accordance with Section 2.05, and, prior to the
Conversion Date, includes its commitment in respect of the Revolving Credit
Loan as described in Section 2.01(a), its Letter of Credit Commitment, and on
and subsequent to the Conversion Date, includes its commitment in respect of
the Term Loan, as described in Section 2.01(c) and its Letter of Credit
Commitment (but limited to those Letters of Credit issued prior to the
Conversion Date); and "Commitments" means, collectively, the Commitments for
-----------
all the Banks.
"Compliance Certificate" has the meaning specified in Section 6.01(c).
-----------------------
"Consent Period" has the meaning specified in Section 2.11.
---------------
"Conversion Date" has the meaning specified in Section 2.01(c)(i).
----------------
"Coverage Ratio" has the meaning specified in Section 7.07.
---------------
"Debt" of the Borrower or any Subsidiary means any indebtedness of the
----
Borrower, or any Subsidiary, whether or not contingent, in respect of (without
duplication):
(i) borrowed money, or obligations evidenced by bonds, notes,
debentures or similar instruments,
(ii) the portion of indebtedness secured by any Lien existing on
property owned by the Borrower or any Subsidiary,
(iii) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit or similar instruments issued or
confirmed by banks or other financial institutions for the account of the
Borrower or any Subsidiary,
(iv) amounts representing the balance deferred and unpaid of the
purchase price of any property or services (except any such balance that
constitutes trade payables) or conditional sale obligations or obligations
under any title retention agreement,
(v) the principal amount of all obligations of the Borrower or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock or,
(vi) Guaranties, or
(vii) obligations of the Borrower or any Subsidiary as lessee under a
Capitalized Lease; provided that the items of indebtedness under (i), (ii),
(iii) and (iv) above shall be deemed to be Debt only to the extent that any
such items (other than obligations in respect of letters of credit) would
appear as a quantified liability on the Borrower's consolidated balance sheet
in accordance with GAAP (as distinguished from being referred to in the notes
to such Financial Statement).
The term "Debt" shall not include (x) contingent liabilities relating to
deposit and/or endorsement of checks in the ordinary course of business of the
Borrower or any Subsidiary; or (y) guaranties or contingent liabilities under
leases customarily undertaken or incurred by Borrower or any Subsidiary in the
ordinary course of business as either landlord or tenant. The term "Debt"
includes the Borrower's and Subsidiaries' share of debt of partnerships and
joint ventures (other than debt that is non-recourse to the Borrower or its
Subsidiaries) which are accounted for on the Borrower's Financial Statements
under the equity method of accounting.
"Debtor Laws" means all applicable liquidation, conservatorship,
------------
bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization
--
or similar laws or general equitable principles from time to time in effect
affecting the rights of creditors generally.
"Default" means any event which, with the lapse of time or giving of
-------
notice, or both, would constitute an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital
-------------------
Shares of such Person, which by the terms thereof (or by the terms of any
security or instrument into which such Capital Shares are convertible or for
which such Capital Shares are exchangeable or exercisable) upon the happening
of any event or otherwise, (i) mature or are mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, (ii) are convertible into or
exchangeable or exercisable for Debt or Disqualified Stock, or (iii) are
redeemable at the option of the holder thereof, in whole or in part, in each
case on a date prior to the stated maturity of the Notes.
"Effective Federal Funds Rate" means the Federal Funds Rate, plus the
-------------------------------
Applicable Margin.
"Effective Federal Funds Rate Advance" means an Advance which bears
----------------------------------------
interest at the Effective Federal Funds Rate as provided in Section 2.06(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Subsidiary or trade or business (whether or
----------------
not incorporated) which is a member of a group of which the Borrower is a
member and which is under common control within the meaning of Section 414 of
the Code and the rules and regulations thereunder.
<PAGE>
"ERISA Event" means any of the following events: (a) a "Reportable
------------
Event" described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the provisions for
the 30-day notice to the PBGC under such regulations), (b) the withdrawal of
the Borrower from a PBGC Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or the
incurrence of liability by the Borrower under Section 4064 of ERISA, (c) the
distribution of a notice of intent to terminate a PBGC Plan pursuant to
Section 4041(c) of ERISA or the treatment of a PBGC Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a PBGC Plan by the PBGC, or (e) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any PBGC Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
-------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Events of Default" has the meaning specified in Section 8.01.
-------------------
"Existing Debt" means all indebtedness of the Borrower to the Prior Banks
-------------
under or in connection with the Prior Credit Agreement, the Prior Notes and
the Existing Letters of Credit.
"Federal Funds Rate" means, as of any particular date, a fluctuating
--------------------
interest rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Existing Letters of Credit" means the Letters of Credit issued pursuant
---------------------------
to the Prior Credit Agreement and outstanding as of the Closing Date, as
described on Exhibit 1.01-B hereto.
"Fees" means the Unused Borrowing Commitment Fee, the Letter of Credit
----
Fee and the Issuance Fee.
"Financial Statements" shall mean statements of the financial condition
---------------------
of the Borrower and its Subsidiaries on a consolidated basis as set forth in
the Borrower's Annual Report on Form 10K for each calendar year, or in the
Borrower's Quarterly Report on Form 10-Q for each quarterly accounting period,
and filed with the Securities and Exchange Commission, or if such filing is
not permitted or required at any time, financial statements in such form of
the Borrower and its Subsidiaries on a consolidated basis, delivered to the
Agent and, in such event, for quarterly financial statements, certified by a
Responsible Officer as presenting fairly the consolidated financial position
of the Borrower and its Subsidiaries as of the date indicated and the results
of their operations for the period indicated in conformity with GAAP,
consistently applied, subject to changes resulting from year-end adjustments,
and for year-end financial statements together with the unqualified opinion of
Deloitte & Touche, or other independent public accountants of recognized
national standing selected by the Borrower, stating that such financial
statements fairly present the consolidated financial position of the Borrower
and its Subsidiaries as of the date indicated and the consolidated results of
their operations and changes in financial position for the period indicated in
conformity with GAAP, consistently applied.
"Funds from Operations" means for any Calculation Period, net income of
-----------------------
the Borrower and its Subsidiaries plus (i) each of the following, to the
----
extent actually deducted in arriving at such net income during such period:
(A) depreciation and amortization expenses, (B) the amount accrued during such
period in respect of interest (including the interest component of Capitalized
Lease obligations) and original issue discount of Debt of the Borrower and its
Subsidiaries, and (C) extraordinary charges plus (ii) the excess, if any, of
----
the share of distributable funds allowable under any joint venture or
partnership which is not a Guarantor over net income from such joint venture
or partnership, minus (iii) each of the following to the extent actually
-----
included in arriving at such net income during such period: (x) gains on the
sale or disposition of properties and investment securities of the Borrower
and its Subsidiaries, and (y) the excess, if any, of net income from any joint
venture or partnership which is not a Guarantor, over the share of
distributable funds allowable under the applicable joint venture or
partnership agreement.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board.
"Governmental Authority" means any (domestic or foreign) federal, state,
-----------------------
county, municipal, parish, provincial, or other government, or any department,
commission, board, court, agency (including, without limitation, the
Environmental Protection Agency), or any other instrumentality of any of them
or any other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions of,
or pertaining to, government, including, without limitation, any arbitration
panel, any court, or any commission.
"Governmental Requirement" means any order, permit, law, statute
-------------------------
(including, without limitation, any statute enacted in connection with or
--
relating to the protection or regulation of the environment), code, ordinance,
rule, regulation, certificate, or other direction or requirement of any
Governmental Authority.
"Guarantor" means each Subsidiary which is a corporation, 100% of the
---------
capital stock of which is owned by the Borrower, or a Subsidiary, and that has
executed or will execute a Guaranty Agreement, including without limitation,
each Guaranty Agreement executed in accordance with Section 6.06 herein.
"Guaranty" or "Guarantees" has the meaning specified in Section 7.12, and
-------- ----------
does not include a "Guaranty Agreement", executed in favor of the Banks in
connection with this Agreement.
"Guaranty Agreement" means an Amended and Restated Guaranty Agreement
-------------------
executed by each Guarantor substantially in the form of Exhibit 1.01-A,
attached hereto.
"Highest Lawful Rate" means, with respect to each Bank, the maximum
---------------------
nonusurious interest rate, if any, that at any time or from time to time may
be contracted for, taken, reserved, charged, or received with respect to any
Note or on other amounts, if any, due to such Bank pursuant to this Agreement
or any other Loan Document under laws applicable to such Bank which are
presently in effect or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect.
"Interest Period" means, for each LIBOR Rate Advance comprising part of
----------------
the same Borrowing, or in the case of a Term Loan, for each Term Advance, the
period commencing on the date of such Advance or the date of the conversion of
any Advance into such an Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be seven (7) days or one, two or three months, as the Borrower
may, upon notice received by the Agent have selected in accordance with
Section 2.02; provided however, that:
--------
(i) the duration of any Interest Period which commences before any
principal repayment date required hereunder and would otherwise end (but for
this provision) after such date shall end on such date; and
(ii) whenever the last day of any Interest Period would otherwise
(but for this provision) occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, that, if such extension would cause the last day of
--------
such Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business Day.
<PAGE>
"Interest Rate Agreements" shall have the meaning specified in Section
--------------------------
8.01(i).
"Investment" of any Person means any investment so classified under GAAP,
----------
and, whether or not so classified, includes (a) any direct or indirect loan or
advance made by it to any other Person, whether by means of stock purchase,
loan, advance or otherwise, (b) any capital contribution to any other Person,
and (c) any ownership or similar interest in any other Person.
"Issuing Bank" means TCB.
-------------
"Issuance Fee" has the meaning specified in Section 2.04(b).
-------------
"Letter of Credit" means the letters of credit provided for in Section
-------------------
2.01 hereof, and shall include, without limitation, the Special Letters of
Credit and the Bond Support Letters of Credit.
"Letter of Credit Commitment" means, as to any Bank, such Bank's Pro Rata
----------------------------
Percentage of $50,000,000, as such amount may be reduced from time to time
pursuant to the terms and provisions hereof, and "Letter of Credit
Commitments" means, collectively, the Letter of Credit Commitments for all the
Banks.
"Letter of Credit Fee" has the meaning specified in Section 2.04(b).
-----------------------
"Letter of Credit Request" has the meaning specified in Section 2.03(a)
--------------------------
hereof.
"LIBOR Rate" means, for any Interest Period for each LIBOR Rate Advance,
-----------
an interest rate per annum determined by the Agent to be the average (rounded,
if necessary, to the nearest whole multiple of one thirty-second of one
percent (1/32%) if such average is not a multiple thereof) of the rate per
annum at which deposits in U.S. dollars are offered to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days prior to
the commencement of such Interest Period, in an amount substantially equal to
such LIBOR Rate Advance and for a period equal to such Interest Period.
"LIBOR Rate Advance" means an Advance which bears interest at the LIBOR
--------------------
Rate as provided in Section 2.06(a).
"LIBOR Rate Reserve Percentage" of any Bank for any Interest Period for
-------------------------------
any LIBOR Rate Advance means the reserve percentage, if any, applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement, expressed as a percentage per annum) for
such Bank with respect to liabilities or assets consisting of or including
eurocurrency liabilities having a term equal to such Interest Period.
"Lien" means any claim, mortgage, deed of trust, pledge, security
----
interest, encumbrance, lien, or charge of any kind (including, without
-
limitation, any agreement to give any of the foregoing), any conditional sale
-
or other title retention agreement, or the interest of the lessor under any
Capitalized Lease (but otherwise excluding leases).
"Loan Documents" means this Agreement, the Notes, the Letters of Credit,
---------------
the Guaranty Agreements, and any document or instrument executed in connection
with the foregoing.
"Majority Banks" means at any time Banks holding at least 66 % of the
---------------
then aggregate unpaid principal amount of the Notes held by Banks, or, if no
such principal amount is then outstanding, Banks having at least 66 % of the
Commitments.
"Margin Stock" shall have the meaning assigned to such term in any of
-------------
Regulation G, T, U or X.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
--------------------
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or
accruing or has made or accrued an obligation to make contributions.
"Net Proceeds" means with respect to the disposition of Real Property of
-------------
the Borrower permitted by Section 7.04 hereof, all proceeds realized from such
disposition after deducting: (i) any withholding taxes arising from the
disposition of assets located outside of the United States; (ii) the ordinary
and customary out-of-pocket costs of such disposition; and (iii) amounts
applied to the repayment of Debt secured by Liens on such Real Property, to
the extent such Liens were not prohibited hereunder. "Net Proceeds" shall
also include proceeds of insurance with respect to an actual or constructive
loss of such property, an agreed or compromised loss of such property or the
taking of any such property under the power of eminent domain and condemnation
awards and awards in lieu of condemnation for the taking of property under the
power of eminent domain.
<PAGE>
"Non-Recourse Debt" of any Person means Debt of such Person in respect of
-----------------
which (other than with respect to agreements in respect of such Debt regarding
the occurrence of certain wrongful acts or misapplication of funds) (i) the
recourse of the holder of such Debt, whether direct or indirect and whether
contingent or otherwise, is effectively limited to the assets directly
securing such Debt; and (ii) such holder may not collect by levy of execution
against assets of such Person generally (other than the assets directly
securing such Debt) if such Person fails to pay such Debt when due and the
holder obtains a judgment with respect thereto.
"Note" or "Notes" has the meaning specified in Section 2.02(c).
---- -----
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
---------------------
"Notice of Conversion" has the meaning specified in Section 2.01
----------------------
(c)(i).
"Notice of Interest Conversion" has the meaning specified in Section
--------------------------------
2.09.
"Obligations" means all of the obligations of the Borrower and its
-----------
Subsidiaries now or hereafter existing under the Loan Documents to which it is
a party, whether for principal, interest, fees, expenses, indemnification or
otherwise.
"Organizational Document" has the meaning set forth in Section 4.01(d).
------------------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Debt" means Debt which does not exceed the limits specified in
--------------
Section 7.02.
"Permitted Liens" means:
----------------
(a) non-consensual Liens imposed by operation of law including,
without limitation, Liens for taxes not yet delinquent, landlord Liens for
rent not yet due and payable, and Liens for materialmen, mechanics,
warehousemen, carriers, employees, workmen, repairmen, current wages, or
accounts payable not yet delinquent and arising in the ordinary course of
business; provided, however, that any right to seizure, levy, attachment,
--------
sequestration, foreclosure, or garnishment with respect to Property of the
Borrower or any Subsidiary by reason of such Lien has not matured, or has
been, and continues to be, effectively enjoined or stayed;
(b) easements, rights-of-way, restrictions, and other similar
Liens or imperfections to title which do not materially interfere with the
occupation, use, and enjoyment by the Borrower or any Subsidiary of the
Property encumbered thereby or materially impair the value of such Property
subject thereto for its intended purpose;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, performance or payment bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property; and
(d) UCC protective filings with respect to personal property
leased to the Borrower or any Subsidiary.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a Governmental Authority.
"Plan" means any employee benefit plan within the meaning of Section 3(3)
----
of ERISA, other than a Multiemployer Plan, maintained by the Borrower or any
ERISA Affiliate.
Prior Banks" means banks and other financial institutions holding a Prior
-----------
Note issued by the Borrower to such Prior Bank under the Prior Credit
Agreement, including such Prior Banks which are parties to this Agreement.
"Prior Credit Agreement" shall have the meaning specified for such term
------------------------
in Section 4.01(i) hereof.
"Property" means any interest or right in any kind of property or asset,
--------
whether real, personal, or mixed, owned or leased, tangible or intangible, and
whether now held or hereafter acquired.
"Pro Rata Percentage" or "ratably" means as to any Bank a fraction
---------------------
(expressed as a percentage) the numerator of which shall be the aggregate
original principal amount of such Bank's Note and the denominator of which
shall be $200,000,000.
"Rating Certificate" has the meaning specified in Section 6.01(h).
-------------------
"Real Property" means all of the land, buildings, improvements and
--------------
projects under construction owned by the Borrower or any Subsidiary, including
without limitation all improvements thereon, fixtures, and any leasehold or
other interest in such property owned or held by the Borrower or any
Subsidiary, but excluding Property under direct financing leases (as reflected
on the balance sheet of the Borrower).
"Register" has the meaning specified in subsection 10.08(c) hereof.
--------
"Regulation G," "Regulation T," "Regulation U" and "Regulation X" means
------------------------------------------------------------------
Regulation G, T, U or X, as the case may be, of the Board of Governors of the
Federal Reserve System, or any successor or other regulation hereafter
promulgated by said Board to replace the prior Regulation G, T, U or X and
having substantially the same function.
"Responsible Officer" means the chief financial officer or the chief
--------------------
accounting officer of the Borrower.
"Revolving Credit Advance" means an advance of funds made by each Bank in
------------------------
respect of the Revolving Credit Loan.
"Revolving Credit Loan" or "Revolving Loan" means the revolving credit
----------------------- --------------
loan to be made under Section 2.01 (a) hereof.
"Revolving Credit Termination Date" means the earlier of (i) November
------------------------------------
21, 1999, or such later date to which the Revolving Credit Termination Date
may be extended pursuant to Section 2.11, or (ii) any date occurring prior to
the Conversion Date on which (y) the Commitments have been terminated in
accordance with this Agreement (including, without limitation, under Section
8.01 hereof), and (z) all amounts due and owing under the Notes have been paid
in full, and (iii) the Conversion Date.
"S&P" means Standard & Poor's Corporation.
----
"Subsidiary" shall mean (i) a corporation of which a sufficient number of
----------
shares of stock having ordinary voting power (other than stock having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors of such corporation are owned directly or indirectly
by the Borrower, or (ii) any partnership or other business entity, with
respect to which the Borrower or a Guarantor owns an equity interest
sufficient to exercise majority voting power over management decisions. For
purposes of clause (ii) aforesaid, neither the Borrower nor a Guarantor shall
be deemed to own an equity interest sufficient to exercise "majority voting
power over management decisions" if certain major decisions of such
partnership or other business entity (e.g., a decision to sell property)
require consent of Persons other than the Borrower or Guarantor. For purposes
of this definition, Weingarten Properties Trust, a Texas real estate
investment trust, shall not be deemed to be a Subsidiary.
"Term Anniversary Date" has the meaning specified for such term in
-----------------------
Section 2.01(c)(ii).
"Term Loan" means the Term Loan made pursuant to Section 2.01(c) hereof.
----------
"Term Loan Advance" or "Term Advance" means an Advance made by each Bank
------------------ ------------
in respect of the Term Loan; provided that, subject to being increased by
deemed Advances under Section 2.03(d), the principal amount outstanding for
all Term Loan Advances from time to time shall never be increased from and
after the Conversion Date.
"Term Maturity Date" has the meaning specified for such term in Section
--------------------
2.01(c)(ii).
"Termination Date" means November 21, 1999, or such later date to which
-----------------
the Termination Date may be extended pursuant to Section 2.11 or Section
2.01(c) (the Term Maturity Date), or any earlier date on which (i) the
Commitments have been terminated in accordance with this Agreement (including,
without limitation, under Section 8.01 hereof), and (ii) all unpaid amounts
due and owing under the Notes have been paid in full.
"Total Assets" as of any date means the sum of (i) the Undepreciated Real
------------
Estate Assets, and (ii) the aggregate book value of all other assets of the
Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP (after deducting therefrom assets classified as
"intangible assets" in accordance with GAAP.)
"Total Commitment" shall mean the sum of the Commitments in effect under
-----------------
this Agreement from time to time.
"Type" refers to the determination whether an Advance is an Effective
----
Federal Funds Rate Advance or a LIBOR Rate Advance (or a Borrowing comprised
of such Advances).
"UCP" has the meaning specified in Section 2.03(b).
---
"Undepreciated Real Estate Assets" as of any date means the aggregate
-----------------------------------
book value, before deduction for depreciation and amortization, of Real
Property assets of the Borrower and the Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Unimproved Real Property" shall mean Projects Under Development, as
--------------------------
reflected on the Financial Statements, less (i) Construction in progress, and
----
(ii) Capitalized interest in respect of Construction in progress, and (iii)
Capitalized interest on unimproved land.
"Unused Borrowing Commitment Fee" has the meaning specified in Section
----------------------------------
2.04(a).
SECTION 1.02. Other Defined Terms
---------------------
(a) Terms Governing Letters of Credit Supporting Bonds. All
----------------------------------------------------
terms utilized solely in connection with Letters of Credit issued hereunder in
support of bonds shall have the meanings specified for such terms in Exhibit
1.01-C hereof.
(b) Accounting Terms. All accounting terms not specifically
-----------------
defined herein shall be construed in accordance with GAAP consistent with
those applied in the preparation of the financial statements referred to in
Section 5.02.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES; LETTERS OF CREDIT
SECTION 2.01. The Revolving Credit Loan; Letters of Credit; Term
--------------------------------------------------
Loan. (a) Each Bank acknowledges that the Prior Credit Agreement, and the
- ----
promissory notes dated as of September 20, 1995, issued pursuant to the Prior
Credit Agreement (the "Prior Notes"), together with the Existing Letters of
Credit, evidences the Existing Debt. The Existing Debt is held by some, but
not all of the Banks under this Agreement, and the Borrower acknowledges and
agrees that the Notes issued by the Borrower pursuant to this Agreement in
accordance with Section 2.02(c) hereof, together with other indebtedness of
the Borrower hereunder, incorporates Existing Debt, to the extent of Existing
Debt held by each Prior Bank. In addition, each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Advances on a revolving
credit basis to the Borrower from time to time on any Business Day during the
period on and after the date hereof until the Revolving Credit Termination
Date, in an aggregate amount not to exceed at any time outstanding an amount
equal to such Bank's Commitment; provided that, in no event shall the ratable
principal amount outstanding on all Advances made by any Bank, plus the
principal amount of such Bank's Pro Rata Percentage of Letters of Credit
issued and outstanding at any time (whether drawn and not reimbursed or
undrawn) exceed such Bank's Commitment. Each Borrowing shall be in an
aggregate amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Advances of the same Type
made on the same day by the Banks ratably according to their respective
Commitments. Within the limits set forth herein, until, and including, the
Revolving Credit Termination Date, the Borrower may borrow, prepay pursuant
to Sections 3.02 and 3.03 and reborrow under this Section 2.01. The principal
amount outstanding of all Advances shall mature and, together with accrued and
unpaid interest thereon, shall be due and payable on the Termination Date.
(b) Each Bank hereby agrees that upon the Closing Date, the
Issuing Bank (on behalf of the Prior Banks) shall be deemed, without further
action by any party hereto, to have sold to each Bank under this Agreement,
and each such Bank shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank (on behalf of the Prior
Banks), a participation to the extent of the Pro Rata Percentage of each Bank
under this Agreement in each of the Existing Letters of Credit, in the
obligations of the Borrower thereunder and in the reimbursement obligations of
the Borrower due in respect of drawings made under such Letters of Credit. If
requested by the Issuing Bank, the other Banks will execute any other
documents reasonably requested by the Issuing Bank to evidence the purchase of
such participation. Additionally, the Issuing Bank agrees to issue Letters of
Credit upon the request of the Borrower for the account of the Borrower at any
time and from time to time on and after the Closing Date and up to, but
excluding, the earlier of the Revolving Credit Termination Date and the
termination of the Letter of Credit Commitments or the Commitments, in
accordance with the terms hereof. Each Bank (other than the Issuing Bank)
severally agrees, on the terms and conditions hereinafter set forth, to
purchase participations in the Letters of Credit issued by the Issuing Bank
pursuant to Section 2.03 in an aggregate amount not to exceed such Bank's
Letter of Credit Commitment; provided that, in no event shall the principal
amount of such Bank's Pro Rata Percentage of aggregate Letters of Credit
issued and outstanding at any time (whether drawn and not reimbursed, or
undrawn, including without limitation, under the Existing Letters of Credit),
plus the ratable principal amount on all outstanding Advances made by such
Bank, exceed such Bank's Commitment. On each day during the period commencing
with the issuance by the Issuing Bank of any Letter of Credit and until such
Letter of Credit shall have expired or been terminated, and, irrespective of
whether such Letter of Credit has expired or terminated, if same has been
drawn upon and the amount so drawn has not been reimbursed to the Issuing
Bank, the Commitment of each Bank shall be deemed to be utilized for all
purposes hereof in an amount equal to such Bank's Pro Rata Percentage of the
undrawn face amount of such Letter of Credit, plus such Bank's Pro Rata
----
Percentage of the aggregate amount of all unreimbursed drawings under such
Letter of Credit. Each Letter of Credit issued hereunder shall be in face
amount not less than $100,000.00.
----
(c)(i) In the event that the Borrower shall have requested an
extension of the Revolving Credit Termination Date in accordance with the
provisions of Section 2.11 hereof and all Banks shall not have consented to
such extension on or before the last day of the Consent Period, upon notice
in writing ("Notice of Conversion") delivered by the Borrower to the Agent on
a day which is not less than 15 days prior to the then current Termination
Date, provided that no Default or Event of Default shall have occurred and be
continuing, the Borrower may elect to convert the aggregate principal amount
of all Advances outstanding under the Revolving Loan as of the Revolving
Credit Termination Date, to a Term Loan in an aggregate principal amount equal
to the aggregate outstanding principal amount of all such Advances. The Notice
of Conversion shall specify the date of conversion ("Conversion Date"), which
date shall not be beyond the Revolving Credit Termination Date, and shall be
irrevocable and binding on the Borrower. The Agent shall promptly deliver a
copy of the Notice of Conversion to each Bank. On the Conversion Date
specified in such notice, subject to the second to last sentence of this
Section 2.01(c)(i), the aggregate principal amount outstanding in respect of
all Advances shall automatically convert to a Term Loan of the same Type and
duration, subject to the terms and conditions of this Agreement. With respect
to any Notice of Borrowing given by Borrower during the period after
Borrower's giving of Notice of Conversion and prior to the third day before
the then scheduled Conversion Date, Borrower shall have the special right to
designate that the proposed Borrowing be made on the Conversion Date itself
(rather than on the third Business Day after Borrower has given Notice of
Borrowing in the case of a LIBOR Rate Advance, or on the same Business Day of
the Notice of Borrowing in the case of an Effective Funds Rate Advance), and
the Advance so made with reference to such Notice of Borrowing shall be
deemed, for all purposes to be a Revolving Credit Advance (with interest
commencing as of the Conversion Date if the proposed date of Borrowing has
been designated as the Conversion Date) eligible for conversion into the Term
Loan, as a Term Advance of the same Type and duration. On the Conversion Date
each Bank shall be deemed to have made a Term Advance to the Borrower, and
each Bank hereby severally agrees, on the terms and conditions set forth in
this Agreement, to make a Term Advance to the Borrower pursuant to this
Section 2.01(c) in an aggregate amount equal to, but not exceeding, its Pro
Rata Percentage of the aggregate principal amount of all Advances outstanding
on such Conversion Date, but in any event, not to exceed an amount equal to
such Bank's Commitment, less the principal amount of such Bank's Pro Rata
Percentage of Letters of Credit issued and outstanding at such time (whether
drawn and not reimbursed, or undrawn). With respect to Letters of Credit
issued and outstanding on the Conversion Date, the Borrower agrees that (A)
unreimbursed drawings shall be paid to the Banks on or prior to the
Conversion Date as a condition to the conversion of all Advances into a Term
Loan, (B) all issued and outstanding Letters of Credit shall continue in
effect in accordance with their terms, and (C) amounts drawn on a Letter of
Credit on and after the Conversion Date, shall be deemed to be Term Advances
made by the Banks under the Notes, and, to the extent not reimbursed by the
Borrower, shall increase the principal amount of the Term Loan in an amount
equal to such Advance; provided that such Term Advance, after giving effect
thereto, shall not cause the principal amount of each Bank's Pro Rata
Percentage of aggregate Letters of Credit issued and outstanding at such time
(whether drawn and not reimbursed or undrawn), plus the ratable principal
amount on all outstanding Advances made by such Bank, to exceed such Bank's
Commitment as at such time. On and after the Conversion Date, the Borrower
may not reborrow principal amounts repaid in respect of the Term Loan, except
to the extent Letters of Credit outstanding as of the Conversion Date
otherwise contemplate a reinstatement as provided in paragraph 2.03(j) below.
Term Advances under the Term Loan shall continue to bear interest in
accordance with Section 2.06 through 2.10 of this Agreement, and shall be
subject to all of the terms and provisions of this Agreement.
(ii) On and after the Conversion Date, the Term Advance of each Bank
shall be evidenced by its Note. Each Bank's Pro Rata Percentage of the
principal amount of the Term Loan shall be increased from time to time by the
principal amount of Term Advances deemed made in respect of a draw under a
Letter of Credit on and after the Conversion Date, as provided under Section
2.01(c) (i) above. The principal of such Term Advances shall be due and
payable, together with accrued and unpaid interest thereon, (i) on the first
anniversary date of the Conversion Date (the "Term Anniversary Date"), in an
amount equal to fifty percent (50%) of the principal amount of such Term Loan
outstanding on such date, and (ii) thereafter, in four equal quarterly
principal installments, payable on the last Business Day of the third,
sixth, ninth and twelfth months immediately succeeding the month in which the
Term Anniversary Date shall have occurred, with all principal outstanding on
the Term Loan to be due and payable, together with all accrued and unpaid
interest thereon, in a final installment on the last Business Day of the
twelfth month immediately succeeding the month in which the Term Anniversary
Date occurred (such date, hereinafter referred to as the "Term Maturity
Date").
(iii) Notwithstanding the schedule of payment required under Section
2.01(c)(ii) above, Borrower shall make mandatory prepayments in accordance
with Section 3.03(c). In the event that (A) the amount due and owing in
respect of the Term Loan shall be zero as a result of any regularly scheduled
principal payments, any mandatory prepayments or otherwise, or (B) the
Commitment of each Bank has been terminated and the Notes have become due and
payable in accordance with Section 8.01 hereof, the Borrower shall deliver to
the Agent, for deposit into an interest bearing collateral account, readily
available funds in an amount equal to the aggregate undrawn face amount of all
Letters of Credit issued and outstanding at such time, as security for the
obligations of the Borrower under such Letters of Credit, with rights of
return of said collateral periodically, all in accordance with Section 8.01.
SECTION 2.02. Making the Advances on the Revolving Credit Loan.
------------------------------------------------
(a) Each Borrowing shall be made on the Borrower's written notice in the form
set forth as Exhibit 2.02(a), attached hereto ("Notice of Borrowing") or oral
-------------------
notice (containing the information required in a Notice of Borrowing) given by
the Borrower to the Agent not later than 10:00 A.M. (Houston, Texas time) (i)
on the third Business Day prior to the date of the proposed Borrowing in the
case of a LIBOR Rate Advance, and (ii) on the same Business Day of the
proposed Borrowing in the case of a Effective Federal Funds Rate Advance (to
the extent permitted under Section 2.06(b)). With respect to any oral Notice
of Borrowing, the Borrower shall promptly thereafter confirm such notice in
writing. Each Notice of Borrowing shall specify therein the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
comprised of LIBOR Rate Advances, the initial Interest Period for each such
Advance; provided that, there shall not be more than two (2) Interest Periods
for a period of seven (7) days in effect at any one time with respect to any
Note, and no more than seven (7) Interest Periods in effect in the aggregate
at any one time with respect to any Note. The Agent shall promptly deliver a
copy of each Notice of Borrowing to each Bank. Each Bank shall, before 11:00
A.M. (Houston time) on the date of such Borrowing, make available to the Agent
at its address referred to in Section 10.02, in immediately available funds,
such Bank's ratable portion of such Borrowing. After the Agent's receipt from
the Banks (other than TCB) of such funds (and not prior thereto), and upon
fulfillment of the applicable conditions set forth in Article IV, the Agent
will promptly make such funds available to the Borrower at the Agent's
aforesaid address. Each Notice of Borrowing shall be irrevocable and binding
on the Borrower.
(b) The failure of any Bank to make an Advance to be made by it
as part of any Borrowing shall not relieve any other Bank of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Advance to be made by such other Bank on the date of any Borrowing.
(c) The Borrower shall execute and deliver for each Bank to
evidence the Advances made or to be made by such Bank pursuant to Section
2.01(a) or (b) hereof, and on and after the Conversion Date, to evidence
Advances made by each Bank outstanding or deemed made under the Term Loan
(and no new Notes shall be required to be issued on the Conversion Date), a
promissory note (each such note a "Note" and more than one Note, the
----
"Notes"), dated as of the Closing Date, in the amount of such Bank's
Commitment. Each Note shall be substantially in the form of Exhibit 2.02(c)
---------------
with the blanks appropriately filled, and shall mature on the Termination
Date.
SECTION 2.03. Issuing the Letters of Credit. (a) In order to
-----------------------------
effect the issuance of a Letter of Credit, the Borrower shall submit a Letter
of Credit Request and a Letter of Credit Application in writing to the Agent
(who shall promptly notify the Issuing Bank) not later than 11:00 a.m.
(Houston, Texas time) two (2) Business Days before the date of issuance of
such Letter of Credit. Each such Letter of Credit Request and Letter of
Credit Application shall be signed by the Borrower, specify the Business Day
on which such Letter of Credit is to be issued, and, the availability for
Letters of Credit under the Letter of Credit Commitment and the Commitment as
of the date of issuance of such Letter of Credit; provided that, without the
consent of all Banks, the expiration date thereof shall not be later than the
earlier of (I) thirty (30) months from the date of issuance of such Letter of
Credit and (ii) five (5) Business Days prior to a date which is two (2) years
beyond the Revolving Credit Termination Date.
(b) Upon satisfaction of the applicable terms and conditions set
forth in Article IV, the Issuing Bank shall issue such Letter of Credit to the
specified beneficiary not later than the close of business (Houston, Texas
time) on the date so specified. The Agent shall provide the Borrower and each
Bank with a copy of each Letter of Credit so issued. Each such Letter of
Credit shall (i) provide for the payment of drafts presented for honor
thereunder by the beneficiary in accordance with the terms thereof, at sight
when accompanied by the documents, if any, described therein and (ii) be
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision, effective January 1, 1994), International Chamber of Commerce
Publication No. 500 (and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the
Issuing Bank) (the "UCP"), and shall, as to matters not governed by the UCP,
be governed by, and construed and interpreted in accordance with, the laws of
the State of Texas.
(c) Upon the issuance date of each Letter of Credit (other than
the Existing Letters of Credit which are governed by Section 2.01(b)), the
Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each other Bank, and each other Bank shall be deemed, without
further action by any party hereto, to have purchased from the Issuing Bank, a
participation, to the extent of such Bank's Pro Rata Percentage, in such
Letter of Credit, the obligations thereunder and in the reimbursement
obligations of Borrower due in respect of drawings made under such Letter of
Credit. If requested by the Issuing Bank, the other Banks will execute any
other documents reasonably requested by the Issuing Bank to evidence the
purchase of such participation.
(d) Subject to paragraph (i) hereof with respect to the Bonds
and the Shawnee Village Bonds and subject to paragraph (l) below with respect
to draws on and after the Conversion Date, upon the presentment of any draft
for honor under any Letter of Credit by the beneficiary thereof which the
Issuing Bank determines is in compliance with the conditions for payment
thereunder, the Issuing Bank shall promptly notify the Borrower, the Agent and
each Bank of the intended date of honor of such draft, and the Borrower hereby
promises and agrees to pay to the Agent for the account of the Issuing Bank
upon receipt of such notice, by 9:00 A.M. (Houston, Texas time) on the date
payment is due as specified in such notice but in any event, no earlier than
the Business Day after receipt of such notice, the full amount of such draft
in immediately available funds (unless honor of such draft has been enjoined
by a court of competent jurisdiction pursuant to Section 5.114 of the Texas
Business and Commerce Code prior to its payment by the Issuing Bank). If the
Borrower fails timely to make such payment (or is not required to make such
payment), each Bank shall, notwithstanding any other provision of this
Agreement (including the occurrence and continuance of a Default or an Event
of Default), make available to the Agent for the benefit of the Issuing Bank
an amount equal to its Pro Rata Percentage of the amount of the presented
draft on the day the Issuing Bank is required to honor such draft. If such
amount is not in fact made available to the Agent by any such Bank on such
date, then such Bank shall pay to the Agent for the account of the Issuing
Bank, on demand made by the Issuing Bank, in addition to such amount, an
amount equal to the product of (i) the average daily Effective Federal Funds
Rate per annum during the period referred to in clause (iii) of this sentence
times (ii) the amount of such Bank's Pro Rata Percentage of the amount of the
- -----
presented draft times (iii) the number of days that elapse from the day the
-----
Issuing Bank honors such draft to the date on which the amount equal to such
Bank's Pro Rata Percentage of the amount of the presented draft becomes
immediately available to the Issuing Bank divided (iv) by 360. Upon receipt
-------
by the Agent from the Banks of the full amount of such draft, notwithstanding
any provision of this Agreement (including the occurrence and continuance of a
Default or an Event of Default) the full amount of such draft shall
automatically and without any action by the Borrower, be deemed to have been
an Advance as of the date of payment of such draft, bearing interest at a rate
per annum (except for paragraph (l) below) equal at all times to the lesser of
(I) two percent (2%) per annum above the Effective Federal Funds Rate, and
(ii) the Highest Lawful Rate. Nothing in this paragraph (d) or elsewhere in
this Agreement (other than in paragraph (l) below) shall diminish the
Borrower's obligation under this Agreement to provide the funds for the
payment of, or on demand to reimburse the Issuing Bank for payment of, any
draft presented to, and duly honored by, the Issuing Bank under any Letter of
Credit, and the automatic funding of an Advance as in this paragraph provided
shall not constitute a cure or waiver of the Event of Default for failure,
timely to provide such funds as in this paragraph agreed.
(e) IN ORDER TO INDUCE THE ISSUANCE OF LETTERS OF CREDIT BY THE
ISSUING BANK AND THE PURCHASE OF PARTICIPATIONS THEREIN BY THE OTHER BANKS, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE BORROWER AGREES WITH THE AGENT,
THE ISSUING BANK AND THE OTHER BANKS THAT NEITHER THE AGENT NOR ANY BANK
(INCLUDING THE ISSUING BANK) SHALL BE RESPONSIBLE OR LIABLE FOR, AND
BORROWER'S UNCONDITIONAL OBLIGATION TO REIMBURSE THE ISSUING BANK THROUGH THE
AGENT FOR AMOUNTS PAID BY THE ISSUING BANK, AS PROVIDED IN SECTION 2.03(d), ON
---------------
ACCOUNT OF DRAFTS SO HONORED UNDER THE LETTERS OF CREDIT, SHALL NOT BE
AFFECTED BY, ANY CIRCUMSTANCE, ACT OR OMISSION WHATSOEVER (WHETHER OR NOT
KNOWN TO THE AGENT OR ANY BANK (INCLUDING THE ISSUING BANK) OTHER THAN A
CIRCUMSTANCE, ACT OR OMISSION RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT OR ANY BANK IN DETERMINING WHETHER SUCH DRAW CONFORMS
TO THE TERMS OF THE LETTER OF CREDIT BUT EXPRESSLY INCLUDING A CIRCUMSTANCE,
ACT OR OMISSION CONSTITUTING ORDINARY SOLE OR CONTRIBUTING NEGLIGENCE),
INCLUDING WITHOUT LIMITATION THE FOLLOWING CIRCUMSTANCES:
(i) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any Subsidiary may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any
person for whom any such transferee may be acting), any Agent, the Issuing
Bank, any Bank, or any other person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower or any other party and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or any Guarantor.
The Borrower hereby waives presentment for payment (except the
presentment required by the terms of any Letter of Credit) and notice of
dishonor, protest and notice of protest with respect to drafts honored under
the Letters of Credit. The Issuing Bank agrees promptly to notify the
Borrower whenever a draft is presented under any Letter of Credit, but failure
to so notify the Borrower shall not in any way affect the Borrower's rights or
obligations hereunder.
(f) IN DETERMINING WHETHER TO PAY UNDER ANY LETTER OF CREDIT,
THE ISSUING BANK SHALL HAVE NO OBLIGATION RELATIVE TO THE AGENT OR THE BANKS
OTHER THAN TO CONFIRM THAT ANY DOCUMENTS REQUIRED TO BE DELIVERED UNDER SUCH
LETTER OF CREDIT APPEAR TO HAVE BEEN DELIVERED AND THAT THEY APPEAR TO COMPLY
ON THEIR FACE WITH THE REQUIREMENTS OF SUCH LETTER OF CREDIT. ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY THE ISSUING BANK UNDER OR IN CONNECTION WITH
ANY LETTER OF CREDIT IF TAKEN OR OMITTED IN THE ABSENCE OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT IN DETERMINING WHETHER SUCH DRAW CONFORMS TO THE TERMS OF
THE LETTER OF CREDIT IN COMPLIANCE WITH REQUIREMENT OF SECTION 5.109 OF THE
TEXAS BUSINESS AND COMMERCE CODE, SHALL NOT CREATE FOR THE ISSUING BANK ANY
RESULTING LIABILITY TO ANY AGENT OR ANY BANK. IT IS THE INTENT OF THE PARTIES
HERETO THAT THE ISSUING BANK SHALL HAVE NO LIABILITY TO THE AGENT OR BANK FOR
ITS ORDINARY SOLE OR CONTRIBUTING NEGLIGENCE.
(g) In the event that any provision of a Letter of Credit
Application is inconsistent with, or in conflict of, any provision of this
Agreement, including provisions of either document for the rate of interest
applicable to drawings thereunder, delivery of collateral or rights of setoff
or any representations, warranties, covenants or any events of default set
forth therein, the provisions of this Agreement shall govern.
(h) (i) In connection with the issuance of each of the Series
1995 Lafayette Bonds and the Series 1995 Calcasieu Bonds, on the terms and
conditions set forth in subsections (a) through (c), and (e) through (k) of
this Section 2.03, the Issuing Bank has issued and shall, from time to time,
issue the Special Letters of Credit in favor of the Credit Facility Trustee
for the benefit of holders of the Series 1995 Lafayette Bonds and the Series
1995 Calcasieu Bonds. The Special Letters of Credit shall authorize the
Credit Facility Trustee to draw under the terms and conditions of each Special
Letter of Credit thereunder an amount not to exceed the applicable Letter of
Credit Amount (as defined in each Special Letter of Credit) then in effect (as
the same may be adjusted in accordance with the terms of such Special Letter
of Credit from time to time), which was initially, for the Series 1995
Lafayette Bonds, the sum of $3,735,000 in respect of the initial aggregate
principal amount outstanding of such Series 1995 Lafayette Bonds plus 105 days
----
of interest on the Bonds computed at the rate of twelve percent (12%) per
annum calculated on the basis of a year of 365 days, initially being an amount
equal to $128,934.25, for an aggregate amount of principal and interest
initially equal to $3,863,934.25, and for the Series 1995 Calcasieu Bonds, the
sum of $1,990,000 in respect of the initial aggregate principal amount
outstanding of such Series 1995 Calcasieu Bonds plus 105 days of interest on
----
the Bonds computed at the rate of twelve percent (12%) per annum calculated on
the basis of a year of 365 days initially being an amount equal to $68,695.89,
for an aggregate amount of principal and interest initially equal to
$2,058,695.89, in each case, less all amounts drawn under such Special Letters
of Credit prior to such time, plus all increases and minus all decreases in
accordance with paragraph 2 of such Special Letters of Credit prior to such
time. A Full Drawing or Partial Drawing under a Special Letter of Credit in
respect of an optional redemption of the Bonds pursuant to the Indenture shall
require the consent of all Banks, as evidenced to the Trustee under the
Indenture and the Credit Facility Trustee by written consent of the Agent.
The maximum amount that may be drawn under each Special Letter of Credit is
the applicable Letter of Credit Amount as calculated hereunder.
(ii) With reference to each of the Shawnee Village Bonds, on the
terms and conditions set forth in subsections (a) through (c), and (e) through
(k) of this Section 2.03, the Issuing Bank has issued and shall issue, from
time to time, the Bond Support Letters of Credit in favor of the S.V.
Trustee for the benefit of holders of such Shawnee Village Bonds. The Bond
Support Letters of Credit shall authorize the S.V. Trustee to draw under the
terms and conditions of each Bond Support Letter of Credit thereunder an
amount not to exceed the applicable Letter of Credit Amount (as defined in
each Bond Support Letter of Credit) then in effect (as the same may be
adjusted in accordance with the terms of such Bond Support Letter of Credit
from time to time), which was initially, for the Shawnee Village Bonds, the
sum of $6,610,000 in respect of the initial aggregate principal amount
outstanding of such Shawnee Village Bonds plus 65 days of interest on the
----
Bonds computed at the rate of eighteen percent (18%) per annum calculated on
the basis of a year of 365 or 366 days, as the case may be, initially being
an amount equal to $211,882.19, for an aggregate amount of principal and
interest initially equal to $6,821,882.19, less all amounts drawn under such
Bond Support Letters of Credit prior to such time, plus all increases and
minus all decreases in accordance with paragraph 2 of such Bond Support
Letters of Credit prior to such time. A Full Drawing- Shawnee Village Bonds
or Partial Drawing-Shawnee Village Bonds under a Bond Support Letter of Credit
in respect of an optional redemption or certain mandatory repurchases of the
Shawnee Village Bonds pursuant to the Shawnee Village Indenture and the terms
of the Bond Support Letter of Credit shall require the consent of all Banks,
as evidenced to the S.V. Trustee by written consent of the Agent. The maximum
amount that may be drawn under each Bond Support Letter of Credit is the
applicable Letter of Credit Amount as set forth in each Bond Support Letter of
Credit, or as to the Shawnee Village Bonds, as calculated hereunder.
(i) (i) Upon the presentment of any draft for honor in
connection with a Purchase Drawing under any Special Letter of Credit by the
beneficiary thereof which the Issuing Bank determines is in compliance with
the conditions for payment thereunder, the Issuing Bank shall promptly notify
the Borrower, the Agent, and each Bank of the intended date of honor of such
draft. In the event of a Purchase Drawing under a Special Letter of Credit in
accordance with the terms of such Letter of Credit, the Borrower, except as
provided in paragraph (l) below, hereby promises and agrees to pay to the
Agent for the account of the Issuing Bank, notwithstanding paragraph (d) of
this Section 2.03, by 9:00 A.M. (Houston, Texas time) on the 30th day after
the date of honor of such Purchase Drawing (the "Payment Date"), the full
amount of all principal of and accrued and unpaid interest on each Liquidity
Bank Bond, plus the Interest Differential, if any, at such time (the "Purchase
Price"), in immediately available funds, unless the Issuing Bank shall have
been previously reimbursed for the amount thereof as a result of remarketing
of such Liquidity Bank Bonds in accordance with the provisions of the
applicable Remarketing Agreement before such date. Upon receipt of payment of
an amount equal to the Purchase Price by the Agent for the account of the
Issuing Bank, the Agent shall notify the Tender Agent to deliver the Liquidity
Bank Bonds to the Borrower if such payment was made by or on behalf of the
Borrower, and otherwise to the Remarketing Agent, in accordance with the
provisions of the applicable Remarketing Agreement. Each Bank shall,
notwithstanding any other provision of this Agreement (including the
occurrence and continuance of a Default or an Event of Default), make
available to the Agent for the benefit of the Issuing Bank an amount equal to
its Pro Rata Percentage of the amount of the presented draft under the
respective Special Letter of Credit on the date on which such draft shall have
been honored by the Issuing Bank. If such amount is not in fact made
available to the Agent by any such Bank on such date, then such Bank shall pay
to the Agent for the account of the Issuing Bank, on demand made by the
Issuing Bank, in addition to such amount, an amount equal to the product of
(i) the average daily Effective Federal Funds Rate per annum during the period
referred to in clause (iii) of this sentence times (ii) the amount of such
-----
Bank's Pro Rata Percentage of the amount of the presented draft times (iii)
-----
the number of days that elapse from the day the Issuing Bank has honored such
draft to the date on which the amount equal to such Bank's Pro Rata Percentage
of the amount of the presented draft becomes immediately available to the
Issuing Bank divided (iv) by 360. The Liquidity Bank Bonds shall, in
-------
accordance with the applicable Indenture, as of the date of payment of such
draft, bear interest at a rate per annum equal at all times to the lesser of
(i) the Prime Rate per annum or (ii) the Maximum Rate. In the event that the
Purchase Price for Liquidity Bank Bonds shall not have been paid by the
Payment Date as required hereunder, and the Issuing Bank shall not have been
otherwise reimbursed, the portion of the Purchase Price not paid or
reimbursed, notwithstanding any other provision of this Agreement (including
the occurrence and the continuance of a Default or an Event of Default), shall
be deemed automatically and without any action by the Borrower to be an
Advance in an amount equal to such portion of the Purchase Price not paid or
reimbursed (including, without limitation, the Interest Differential, if any)
which is immediately due and payable, bearing interest at a rate per annum,
except as provided in paragraph (l) below, equal to the lesser of the Prime
Rate, plus 1.00% per annum, or the Highest Lawful Rate, and the Borrower shall
be deemed to have purchased such Liquidity Bank Bonds. Such Advance shall be
deemed a payment by Borrower of an amount equal to the Purchase Price to the
Agent for the account of the Issuing Bank. The Agent shall promptly notify
the Tender Agent to deliver the Liquidity Bank Bonds to the Agent for the
benefit of Borrower to be held by the Agent as collateral securing such
Advance. The Borrower hereby grants to the Agent, for the benefit of each
Bank, a Lien on and a security interest in such Liquidity Bank Bonds, until
such time as such Advance shall have been paid in full. Each drawing on a
Special Letter of Credit other than a Purchase Drawing and the reimbursement
obligation of the Borrower in respect thereof, shall, notwithstanding the
delivery of Bonds in respect thereof to the Tender Agent as custodian for the
Banks, be governed by paragraph (d) of this Section 2.03. Nothing in this
paragraph (i)-(i) or elsewhere in this Agreement (other than as provided in
paragraph (l) below) shall diminish the Borrower's obligation under this
Agreement to provide the funds for the payment of, or on demand to reimburse
the Issuing Bank for payment of, any draft presented to, and duly honored by,
the Issuing Bank under any Letter of Credit at the time and in the manner
provided under this Section 2.03 for each Letter of Credit, including without
limitation, the Special Letters of Credit, and the automatic funding of an
Advance as in this paragraph provided shall not constitute a cure or waiver of
the Event of Default for failure to timely provide such funds as in this
paragraph agreed.
(ii) Upon the presentment of any draft for honor in connection
with a Purchase Drawing - Shawnee Village Bonds , under any Bond Support
Letter of Credit by the beneficiary thereof which the Issuing Bank determines
is in compliance with the conditions for payment thereunder, the Issuing Bank
shall promptly notify the Borrower, the Agent, and each Bank of the intended
date of honor of such draft. In the event of a Purchase Drawing - Shawnee
Village Bonds, under a Bond Support Letter of Credit in accordance with the
terms of such Letter of Credit, the Borrower, except as provided in paragraph
(l) below, hereby promises and agrees to pay to the Agent for the account of
the Issuing Bank, notwithstanding paragraph (d) of this Section 2.03, by 9:00
A.M. (Houston, Texas time) on the 30th day after the date of honor of such
Purchase Drawing (the "Shawnee Village Payment Date"), the full amount of such
Purchase Drawing, plus an amount equal to (A) accrued and unpaid interest on
each Shawnee Village Bond purchased by the Company in connection with the
Purchase Drawing - Shawnee Village Bonds (without duplication of any amount of
interest already included in the full amount of such Purchase Drawing), plus
(B) an amount equal to the Shawnee Village Interest Differential, if any, at
such time (collectively, the "Shawnee Village Purchase Price"), in
immediately available funds, unless the Issuing Bank shall have been
previously reimbursed for the amount thereof before such date. Upon receipt
of payment of an amount equal to the Shawnee Village Purchase Price by the
Agent, the Agent shall release the Lien on such Bonds securing the
reimbursement obligation hereunder with respect to such Shawnee Village Bonds.
Each Bank shall, notwithstanding any other provision of this Agreement
(including the occurrence and continuance of a Default or an Event of
Default), make available to the Agent for the benefit of the Issuing Bank an
amount equal to its Pro Rata Percentage of the amount of the presented draft
under the respective Bond Support Letter of Credit on the date on which such
draft shall have been honored by the Issuing Bank. If such amount is not in
fact made available to the Agent by any such Bank on such date, then such Bank
shall pay to the Agent for the account of the Issuing Bank, on demand made by
the Issuing Bank, in addition to such amount, an amount equal to the product
of (i) the average daily Effective Federal Funds Rate per annum during the
period referred to in clause (iii) of this sentence times (ii) the amount of
-----
such Bank's Pro Rata Percentage of the amount of the presented draft times
-----
(iii) the number of days that elapse from the day the Issuing Bank has honored
such draft to the date on which the amount equal to such Bank's Pro Rata
Percentage of the amount of the presented draft becomes immediately available
to the Issuing Bank divided (iv) by 360. The Shawnee Village Bonds shall, as
-------
of the date of payment of such draft by the Issuing Bank, bear interest at a
rate per annum equal at all times to the Shawnee Village Bank Rate. In the
event that the Shawnee Village Purchase Price for Shawnee Village Bonds shall
not have been paid by the Shawnee Village Payment Date as required hereunder,
and the Issuing Bank shall not have been otherwise reimbursed, the portion of
the Shawnee Village Purchase Price not paid or reimbursed, notwithstanding any
other provision of this Agreement (including the occurrence and the
continuance of a Default or an Event of Default), shall be deemed
automatically and without any action by the Borrower to be an Advance in an
amount equal to such portion of the Shawnee Village Purchase Price not paid or
reimbursed (including, without limitation, the Shawnee Village Interest
Differential, if any) which is immediately due and payable, bearing interest
at a rate per annum (except as provided in paragraph (l) below) equal to the
lesser of (y) two percent (2%) per annum above the Effective Funds Rate, or
(z) the Highest Lawful Rate, in accordance with Section 2.03(d) hereof. In
addition to the Lien created under the Pledge and Security Agreement securing
the reimbursement obligations of the Borrower hereunder for a Purchase Drawing
- - Shawnee Village Bonds, the Borrower hereby grants to the Agent, for the
benefit of each Bank, a Lien on and a security interest in such Shawnee
Village Bonds, until such time as such Advance shall have been paid in full.
Each drawing on a Bond Support Letter of Credit other than a Purchase Drawing
- - Shawnee Village Bonds, and the reimbursement obligation of the Borrower in
respect thereof, shall, notwithstanding the delivery of Shawnee Village Bonds
in respect thereof to the Shawnee Village Tender Agent as custodian for the
Banks, be governed by paragraph (d) of this Section 2.03. Nothing in this
paragraph (i)-(ii) or elsewhere in this Agreement (other than as provided in
paragraph (l) below) shall diminish the Borrower's obligation under this
Agreement to provide the funds for the payment of, or on demand to reimburse
the Issuing Bank for payment of, any draft presented to, and duly honored by,
the Issuing Bank under any Letter of Credit at the time and in the manner
provided under this Section 2.03 for each Letter of Credit, including without
limitation, the Bond Support Letters of Credit, and the automatic funding of
an Advance as in this paragraph provided shall not constitute a cure or waiver
of the Event of Default for failure to timely provide such funds as in this
paragraph agreed.
(j) (i) Other than for purposes of calculation of the principal
amount of Letters of Credit issued and outstanding under Section 2.01 of this
Agreement, each drawing honored in accordance with Section 2.03(i)-(i) shall
automatically reduce the Letter of Credit Amount of the applicable Special
Letter of Credit; provided that (i) with respect to any Partial Drawing, the
Letter of Credit Amount shall be automatically increased immediately following
such payment by the amount paid for accrued interest on the Bonds (other than
such interest component attributable to the Bonds, the principal of which was
paid with the proceeds of such drawing) in connection therewith (provided that
such automatic reinstatement shall be revoked upon notice from the Agent to
the Credit Facility Trustee, at the request of the Majority Banks, of such
revocation within seven (7) calendar days from and after the date on which
such drawing was honored), and (ii) with respect to any Purchase Drawing, the
Letter of Credit Amount shall be automatically increased by an amount equal to
(x) the amount drawn by such Purchase Drawing upon reimbursement of such
amount to the Issuing Bank, less (y) the portion of the amount in clause (x)
----
hereof representing principal and interest attributable to any Liquidity Bank
Bonds, or Bonds held at such time in the name of the Borrower, the Issuer or
the User. The Agent shall provide notice to the Credit Facility Trustee and
the Trustee of receipt of funds in respect of reimbursement for each drawing
under a Special Letter of Credit which has been honored by the Issuing Bank,
specifying the date and amount of such reimbursement, and of the related
drawing; provided that, failure to provide such notice shall not diminish the
obligations of the Borrower hereunder.
(ii) Other than for purposes of calculation of the principal
amount of Letters of Credit issued and outstanding under Section 2.01 of this
Agreement, each drawing honored in accordance with Section 2.03(i)-(ii) shall
automatically reduce the Letter of Credit Amount of the applicable Bond
Support Letter of Credit; provided that (i) with respect to any Partial
Drawing - Shawnee Village Bonds, the Letter of Credit Amount shall be
automatically increased immediately following such payment by the amount of
such drawing attributable to the payment of accrued interest on the Shawnee
Village Bond (other than interest attributable to the Shawnee Village Bonds,
the principal of which was paid with the proceeds of a Partial Drawing -
Shawnee Village Bonds) in connection therewith; provided that, an automatic
reinstatement shall be revoked upon notice from the Agent to the S.V. Trustee,
at the request of the Majority Banks, of such revocation within ten (10)
calendar days from and after the date on which such drawing was honored), and
(ii) with respect to any Purchase Drawing - Shawnee Village Bonds, the Letter
of Credit Amount shall be automatically increased upon notice in writing
delivered by the Agent to the S.V. Trustee (stating that the Agent has been
reimbursed for such Purchase Drawing), by an amount equal to (x) the amount
drawn by such Purchase Drawing-Shawnee Village Bonds, less (y) the portion of
----
the amount in clause (x) hereof representing principal and interest
attributable to any Shawnee Village Bonds, or Bonds held at such time in the
name of the Agent, the Borrower, the Issuer or any Special Affiliate of either
of them. The Agent shall provide notice to the S.V. Trustee of receipt of
funds in respect of reimbursement for each drawing under a Bond Support Letter
of Credit which has been honored by the Issuing Bank, specifying the date and
amount of such reimbursement, and of the related drawing; provided that,
failure to provide such notice shall not diminish the obligations of the
Borrower hereunder.
(k) The obligations of the Borrower in respect of the Special
Letters of Credit and the Bond Support Letters of Credit shall be governed in
all respects by the terms and provisions of this Agreement.
(l) Notwithstanding anything contained herein to the contrary,
any draw on and after the Conversion Date on any Letter of Credit shall
automatically, and without any action by the Borrower, be deemed to have been
a Term Advance as of the date of payment of such draft and shall increase the
principal amount of the Term Loan in an amount equal to such Term Advance,
with Borrower obligated for interest in accordance with Sections 2.06 through
2.10 hereof (rather than as otherwise provided herein), with principal subject
to repayment after the Conversion Date in accordance with Section 2.01(c)(ii),
rather than subject to:
(x) immediate payment on the intended date of honor (or the next
Business Day) in accordance with Section 2.03(d);
(y) immediate payment on the thirtieth (30th) day after the date of
honor of the draft in accordance with subparagraph (i) (i), or (i) (ii); or
(z) reimbursement, on demand, in accordance with Section 2.03(d) or
otherwise.
SECTION 2.04. Fees. (a) The Borrower agrees to pay to the Agent
----
for the account of each Bank a commitment fee (the "Unused Borrowing
----------------
Commitment Fee") on the average daily unused portion of such respective Bank's
-----
Commitment from the date hereof until the Revolving Credit Termination Date,
at the rate per annum indicated below for the credit rating assigned to
long-term, senior unsecured Debt of the Borrower by S&P, as reflected on the
most recent Compliance Certificate of the Borrower delivered in accordance
with Section 6.01(c), or the most recent Rating Certificate delivered in
accordance with Section 6.01(h), as the case may be, and shall become
effective on the applicable Calculation Date, and shall remain in effect to
(but not including) the next Calculation Date, payable quarterly in arrears on
the first day of each calendar quarter for the prior calendar quarter during
the term of such Bank's Commitment, commencing on the date of this Agreement,
and continuing until the Revolving Credit Termination Date:
<PAGE>
If the credit rating determined The Unused Borrowing
on any Calculation Date is: Commitment Fee is:
- ------------------------------- ---------------------------
For Revolving Credit Loans
---------------------------
A+, A or A-, or better .125%
BBB+ .25%
BBB, BBB- .30%
BB+ and below .50%
; provided that, if at any time no such credit rating shall be assigned to
(or in respect of) long-term, senior unsecured Debt of the Borrower by S&P,
the Unused Borrowing Commitment Fee shall mean the rate per annum indicated
below for the Coverage Ratio in effect, as reflected on the most recent
Compliance Certificate of the Borrower delivered to the Agent in accordance
with Section 6.01(c), or the most recent Rating Certificate delivered in
accordance with Section 6.01(h), as the case may be, and shall become
effective on the applicable Calculation Date, and shall remain in effect to
(but not including) the next Calculation Date, payable as set forth above.
If the Coverage Ratio The Unused Borrowing
determined on any Calculation Commitment Fee is:
- -------------------------------- ---------------------
Date is
- --------------------------------
For Revolving Loans:
---------------------
Greater than 3.0 to 1.0 .125 %
Equal to or less than 3.0 to 1.0 .25 %
The Unused Borrowing Commitment Fee shall be calculated by the Agent on each
Calculation Date until the Revolving Credit Termination Date, and the Agent
shall notify the Borrower and the Banks of the applicable Fee.
(b) The Borrower agrees to pay to the Issuing Bank for the
issuance of each Letter of Credit, an issuance fee ("Issuance Fee") in an
------------
amount equal to one-eighth of one percent (1/8 of 1%) of the face amount of
each Letter of Credit. The Borrower further agrees to pay to each Bank
(including the Issuing Bank) for the issuance, or purchase of participations
in, and maintenance of each Letter of Credit, a letter of credit fee (the
"Letter of Credit Fee"), in an amount equal to such Bank's Pro Rata Percentage
--------------------
of four-tenths of one percent (4/10 of 1%) per annum of the undrawn face
amount of each Letter of Credit, from the date of issuance thereof (or, as to
Existing Letters of Credit, from the date of Closing) to the date on which
such Letter of Credit expires or terminates, or the date on which funds have
been deposited with the Agent, as required under Sections 2.01(c)(iii) or
8.01 hereof, whichever is earlier. The Issuance Fee shall be payable in full
in advance of the issuance of such Letter of Credit. The Letter of Credit Fee
shall be payable quarterly in arrears on the first day of each calendar
quarter for the prior calendar quarter commencing on the date of issuance of
each Letter of Credit (or, as to Existing Letters of Credit, from the date of
Closing).
(c) The Fees payable under Sections 2.04(a) and (b) shall be
calculated by the Agent on the basis of a 365 or 366 day year, as the case may
be, for the actual days (including the first day but excluding the last day)
occurring in the period for which such fee is payable. Each determination by
the Agent under this Section 2.04 shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.05. Reduction of the Commitments. The Borrower shall
----------------------------
have the right, upon at least three (3) Business Days' notice to the Agent, to
terminate in whole or reduce ratably in part the unused portions of the
Commitments or the Letter of Credit Commitments of the Banks, provided that
--------
each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple thereafter of $1,000,000; and further provided that, the
Letter of Credit Commitments may never be reduced below an amount equal to the
aggregate undrawn face amount of Letters of Credit issued and outstanding at
any time. Any termination or reduction pursuant to this Section 2.05 shall be
a permanent termination or reduction of the Commitments.
SECTION 2.06. Interest. Each Advance shall bear interest at the
--------
rates set forth below, and the Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the times and at
the rates per annum set forth below:
(a) LIBOR Rate Advances. During such periods as such Advance is
-------------------
a LIBOR Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the lesser of (I) the sum of the LIBOR Rate for
such Interest Period for such Advance plus the Applicable Margin, together
with additional interest due under Section 2.07 hereof, if any, and (ii) the
Highest Lawful Rate, payable quarterly in arrears on the first day of each
calendar quarter, commencing with the calendar quarter following the calendar
quarter in which the date of this Agreement occurs, and on the Termination
Date; provided that, any amount of principal which is not paid when due
--------
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times to the
lesser of (I) two percent (2%) per annum above the Effective Federal Funds
Rate in effect from time to time and (ii) the Highest Lawful Rate.
(b) Effective Federal Funds Rate Advances. During such periods
-------------------------------------
as such Advance is an Effective Federal Funds Rate Advance, a rate per annum
equal at all times to the lesser of (i) the Effective Federal Funds Rate and
(ii) the Highest Lawful Rate, payable quarterly in arrears on the first day of
each calendar quarter, commencing with the calendar quarter following the
calendar quarter in which the date of this Agreement occurs, and on the
Termination Date; provided that the Borrower may only elect an Effective
Federal Funds Rate Advance (A) during a period for which the Borrower has been
notified in accordance with Sections 2.08(b) or (d) that a LIBOR Rate Advance
shall not be available to the Borrower or (B) with respect to such Bank's Pro
Rata Percentage of an Advance after the Borrower has received a demand for
compensation pursuant to Sections 3.04(a) or (b), or pursuant to Section 2.07,
and then, only for such period as such compensation shall be required; further
-------
provided that, any amount of principal which is not paid when due (whether at
- --------
stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the lesser of (I) two
percent (2%) per annum above the Effective Federal Funds Rate in effect from
time to time and (ii) the Highest Lawful Rate.
(c) All computations of interest hereunder at the Effective
Federal Funds Rate pursuant to this Article II shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest hereunder at the LIBOR Rate (plus the Applicable
Margin) pursuant to this Article II shall be made by the Agent on the basis of
a year of 360 days (but if a 360 day calculation would result in a rate in
excess of the Highest Lawful Rate, then based on a year of 365 or 366 days, as
the case may be), in each case (whether for a LIBOR Rate Advance or an
Effective Federal Funds Rate Advance) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such interest is payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.07. Additional Interest on LIBOR Rate Advances.
-------------------------------------------
Subject to Section 10.09 hereof, the Borrower shall pay to each Bank, at such
time as and so long as such Bank shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each
Advance of such Bank during such periods as such Advance is a LIBOR Rate
Advance, from the date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the LIBOR Rate for such Interest Period for such
LIBOR Rate Advance from (ii) the rate obtained by dividing such LIBOR Rate by
a percentage equal to 100% minus the LIBOR Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is
payable on such LIBOR Rate Advance pursuant to Section 2.06(a) hereof. Such
additional interest shall be determined by such Bank (subject to Section
10.09) and notified to the Borrower through the Agent, and each such
notification shall be conclusive absent manifest error.
SECTION 2.08. Interest Rate Determination and Protection. (a)
------------------------------------------
The rate of interest for each LIBOR Rate Advance specified in a Notice of
Borrowing or a Notice of Interest Conversion, shall be determined by the Agent
two (2) Business Days before the first day of the Interest Period applicable
for such Advance. The Agent shall give prompt notice to the Borrower and the
Banks of the applicable interest rate determined by the Agent for purposes of
Section 2.06(a) hereof, and each such determination by the Agent shall be
conclusive, absent manifest error.
(b) If, with respect to any LIBOR Rate Advances, the Majority
Banks notify the Agent that the LIBOR Rate (plus the Applicable Margin) for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Banks of making, funding or maintaining their respective LIBOR
Rate Advances for such Interest Period, the Agent shall forthwith promptly so
notify the Borrower and the Banks, whereupon;
(i) each LIBOR Rate Advance, which has been effected, will
automatically, on the last day of the then existing Interest Period therefor,
convert into an Effective Federal Funds Rate Advance, and
(ii) the obligation of the Banks to make, or to convert Advances
into, LIBOR Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such suspension no
longer exist.
(c) If the Borrower shall fail to deliver to the Agent a Notice
of Interest Conversion in accordance with Section 2.09 hereof or to select the
duration of any subsequent Interest Period for the principal amount
outstanding under any LIBOR Rate Advance prior to the last day of the Interest
Period applicable to such Advance, the Agent will forthwith so notify the
Borrower and the Banks, and such Advances will automatically, on the last day
of the then existing Interest Period therefor, convert into LIBOR Rate
Advances at the LIBOR Rate in effect two Business Days prior to such date for
an Interest Period of one month, plus the Applicable Margin.
(d) Notwithstanding any other provision of this Agreement, if
any Bank shall notify the Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
any Bank to perform its obligations hereunder to make LIBOR Rate Advances or
to fund or maintain LIBOR Rate Advances hereunder, (i) the obligation of such
Bank to make, or to convert Advances into, LIBOR Rate Advances shall be
suspended until such Bank shall notify the Borrower and the Agent that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all LIBOR Rate Advances of such affected Bank
then outstanding, unless the Borrower, within two (2) Business Days of notice
from the Agent, converts all LIBOR Rate Advances of such Bank then outstanding
into Effective Federal Funds Rate Advances in accordance with Section 2.09.
SECTION 2.09. Voluntary Interest Conversion of Advances. The
-----------------------------------------
Borrower may on any Business Day prior to the Termination Date, upon the
Borrower's written notice in the form set forth as Exhibit 2.09 attached
hereto ("Notice of Interest Conversion"), or oral notice (containing the
--------------------------------
information requested in a Notice of Interest Conversion) given to the Agent
not later than 10:00 A.M. (Houston, Texas time) on the third (3rd) Business
Day prior to the date of the proposed interest conversion in the case of a
LIBOR Rate Advance, (i) convert all such LIBOR Rate Advances into an Effective
Federal Funds Rate Advances or (ii) convert all LIBOR Rate Advances for a
specified Interest Period into LIBOR Rate Advances for a different Interest
Period; provided however, with respect to any oral Notice of Interest
--------
Conversion, the Borrower shall promptly confirm such notice in writing;
provided further that, any conversion of any LIBOR Rate Advances into an
--
Effective Federal Funds Rate Advance or a different Interest Period shall be
made on, and only on, the last day of an Interest Period for such LIBOR Rate
Advances (unless the provisions of Sections 2.07, 2.08(d) or 3.04 apply), and;
provided further that the Borrower may convert an Advance into an Effective
Federal Funds Rate Advance only if (i) the Borrower has been notified in
accordance with Section 2.08(b) or (d) that a LIBOR Rate Advance is not
available at such time to the Borrower or if (ii) additional interest becomes
due under Section 2.07, or additional amounts become due under Section 3.04.
Each such Notice of Interest Conversion shall specify therein (i) the
requested date of such interest conversion, (ii) the Advances to be converted
and (iii) if such interest conversion is into Advances constituting LIBOR Rate
Advances, the duration of the Interest Period for each such Advance. The
Agent shall promptly deliver a copy of each Notice of Interest Conversion to
each Bank. Each Notice of Interest Conversion shall be irrevocable and
binding on the Borrower.
SECTION 2.10. Funding Losses Relating to LIBOR Rate Advances.
----------------------------------------------
(a) If any payment of principal of, or interest conversion of, any LIBOR Rate
Advance is made other than on the last day of an Interest Period relating to
such Advance, as a result of a conversion pursuant to Section 2.09, or a
payment pursuant to Sections 3.02, 3.03, or acceleration of the maturity of
any Note in accordance with the terms hereof, or for any other reason, the
Borrower shall, upon demand by the Agent or any Bank (with a copy of such
demand to the Agent), pay to the Agent for the account of such Bank any
amounts required to compensate such Bank for any additional losses, costs, or
expenses which it may reasonably incur as a result of such payment or interest
conversion, including, without limitation, any loss, cost, or expense incurred
by reason of the liquidation or reemployment of the amounts so prepaid or of
deposits or other funds acquired by such Bank to fund or maintain such
Advance. Each Bank requesting compensation under this Section 2.10 shall
deliver to the Borrower (with a copy to the Agent) a certificate of such Bank
setting forth the calculation of such amounts with reasonable specificity and
such certificate shall be conclusive, absent manifest error.
(b) IN THE CASE OF ANY BORROWING, THE BORROWER SHALL INDEMNIFY
EACH BANK AGAINST ANY LOSS, COST, OR EXPENSE INCURRED BY SUCH BANK AS A RESULT
OF ANY FAILURE OF THE BORROWER TO FULFILL ON OR BEFORE THE DATE SPECIFIED IN A
NOTICE OF BORROWING THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE IV,
INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST, OR EXPENSE INCURRED BY REASON
OF THE LIQUIDATION OR REEMPLOYMENT OF THE AMOUNTS SO PREPAID OR OF DEPOSITS OR
OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND THE ADVANCE TO BE MADE BY SUCH BANK
AS PART OF SUCH BORROWING WHEN SUCH ADVANCE, AS A RESULT OF SUCH FAILURE, IS
NOT MADE ON SUCH DATE.
(c) Any Bank demanding payment under this Section 2.10 shall
deliver to the Borrower and the Agent a statement reasonably setting forth the
amount and manner of determining such loss, cost, or expense, which statement
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.11. Extension of Commitments. The Commitments
--------------------------
(including the Letter of Credit Commitments) shall terminate on November 21,
1999, unless on a Business Day which is at least ninety (90) days (but no more
than one hundred fifty (150) days) prior to the applicable Annual Date, the
Agent shall have received notice in writing from the Borrower of its desire to
extend the Revolving Credit Termination Date to a date which is the
anniversary of such then current Revolving Credit Termination Date in the year
immediately succeeding the year in which the Revolving Credit Termination Date
is then scheduled to occur, and upon consent in writing given to the Agent and
the Borrower by each Bank on or prior to a date which is thirty (30) days
before the applicable Annual Date (such period ending on such date, the
"Consent Period"), the Revolving Credit Termination Date shall be extended to
---------------
such requested date, whereupon the Commitments (including the Letter of Credit
Commitments) shall continue in force and effect until such new Revolving
Credit Termination Date, on the terms and conditions set forth in this
Agreement, as hereafter amended from time to time. If any Bank does not
consent to the extension of the Revolving Credit Termination Date pursuant to
this Section 2.11 (which determination shall be made by each Bank in its sole
discretion), all of the Commitments (including the Letter of Credit
Commitments) shall terminate on the Revolving Credit Termination Date in
effect prior to the request for extension; provided that, notwithstanding the
foregoing, the Borrower may, at its option, upon notice to the Agent in
accordance with the provisions of Section 2.01(c), elect to have the principal
amount of Advances outstanding as of the Revolving Credit Termination Date
converted into a Term Loan, in accordance with the provisions of Section
2.01(c) hereof.
ARTICLE III
PAYMENTS, PREPAYMENTS,
INCREASED COSTS AND TAXES
SECTION 3.01. Payments and Computations. (a) The Borrower shall
-------------------------
make each payment under this Agreement and under the Notes or in connection
with the Letters of Credit not later than 10:00 A.M. (Houston time) on the day
when due in U.S. dollars to the Agent at its address referred to in Section
10.02 in immediately available funds. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or commitment fees (to the extent received by the Agent) ratably to
the Banks, and like funds relating to the payment of any other amount payable
to any Bank (to the extent received by the Agent) to such Bank in each case to
be applied in accordance with the terms of this Agreement.
(b) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as the
case may be; provided however, if such extension would cause payment of
interest on or principal of LIBOR Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day; further provided that, the foregoing shall not obligate the
Borrower to pay amounts under Section 2.10.
(c) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent the Borrower shall not have so made such payment in full
to the Agent, each Bank shall repay to the Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Agent, at the lesser of (i) the Federal Funds Rate
or (ii) the Highest Lawful Rate.
(d) Notwithstanding anything in this Agreement to the contrary,
proceeds of amounts paid to the Issuing Bank for reimbursement of a drawing
under a Special Letter of Credit or a Bond Support Letter of Credit honored by
the Issuing Bank shall be promptly thereafter distributed by the Agent to each
Bank in accordance with such Bank's Pro Rata Percentage interest in such
Special Letter of Credit or Bond Support Letter of Credit, as the case may be,
for reduction of principal or interest outstanding, as the case may be, with
respect to such Bank's participation in such drawing.
<PAGE>
SECTION 3.02. Voluntary Prepayments. Subject to Section 2.10,
---------------------
the Borrower may, upon notice delivered to the Agent prior to 11:00 A.M.
(Houston, Texas time) on any Business Day prior to the Termination Date
stating the aggregate principal amount of the prepayment and the Advances to
be prepaid, prepay the outstanding principal amounts of such Advances
comprising part of the same Borrowing in whole or ratably in part, provided
--------
however, that all such prepayments shall be made without premium or penalty
thereon; and provided further that, losses incurred by any Bank under Section
--------
2.10 shall be payable with respect to each such prepayment. Such notice shall
be irrevocable and the payment amount specified in such notice shall be due
and payable on the prepayment date described in such notice. Partial
prepayments with respect to any Advance shall be in an aggregate principal
amount equal to the lesser of (a) $1,000,000 or in greater integral multiples
of $1,000,000, or (b) the aggregate principal amount of Advances of such Banks
outstanding. In the event that the Borrower fails to notify the Agent as to
which Advance is to be prepaid, the partial prepayments shall be applied in
the order of the next succeeding expiration of outstanding Interest Periods.
SECTION 3.03. Mandatory Prepayments. (a) Within the time period
---------------------
specified in Section 7.04, the Borrower shall deliver to the Agent, as a
prepayment on the Notes, an amount equal to the Adjusted Net Proceeds of a
disposition of Real Property of the Borrower or any Subsidiary permitted under
Section 7.04. Upon receipt of such amount, the Agent shall promptly deliver
to each Bank, to the extent required under Section 7.04, its Pro Rata
Percentage of such prepayment. Upon the date on which a prepayment is
required under Section 7.04, the Commitment of each Bank shall be permanently
reduced in an amount equal to such Bank's Pro Rata Percentage of such Adjusted
Net Proceeds.
(b) If at any time the sum of (i) the principal balance
outstanding on the Notes, and (ii) the aggregate undrawn face amount of
Letters of Credit issued and outstanding at such time, exceeds the Total
Commitment then in effect, the Borrower shall immediately pay to the Agent as
a prepayment on the Notes for the ratable account of each Bank the amount of
such excess.
(c) Together with principal payments on the Term Loan required
to be made in accordance with Section 2.01(c)(ii) hereof, Borrower shall
deliver to the Agent, as a prepayment on the Notes, on the Term Anniversary
Date, an amount equal to 50% of the aggregate undrawn face amount of all
Letters of Credit issued and outstanding on such date (calculated as of the
Term Anniversary Date), and on each quarterly payment date thereafter, as
described under Section 2.01(c)(ii) hereof, an amount equal to twelve and
one-half percent (12 1/2%) of the aggregate undrawn face amount of all
Letters of Credit issued and outstanding on such date (calculated as of the
Term Anniversary Date) reduced by the respective quarter's L/C Credit. As
used herein, the term "L/C Credit' means the sum of (i) the face amount of all
Letters of Credit under which there has been no drawing (A) which, during the
quarter in which the quarterly payment is due, have expired by their terms or
(B) for which, during such quarter, the original has been returned undrawn to
the Issuing Bank, and (ii) the undrawn portion of any Letter of Credit under
which there has been a partial drawing but (A) which, during the quarter in
which the quarterly payment is due, has expired by its terms or (B) for which,
during such quarter, the original has been returned to the Issuing Bank.
SECTION 3.04. Increased Costs; Capital Adequacy. (a) If, due
---------------------------------
to either (i) the introduction of or any change (other than any change by way
of imposition or increase of reserve requirements, in the case of LIBOR Rate
Advances, included in the LIBOR Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Bank of agreeing to make or making, funding or maintaining LIBOR
Rate Advances (without duplication of payments made under Section 3.05 or any
other provision of this Agreement), then the Borrower shall from time to time,
upon demand by such Bank (with a copy of such demand to the Agent), pay to the
Agent for the account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost; provided that the Borrower shall only be
liable for such additional costs incurred by such Bank for the period
commencing thirty (30) days after the date of notice from such Bank to the
Borrower of such additional amounts; and provided further, that subject to
Section 2.10, the Borrower may elect to convert outstanding LIBOR Rate
Advances into Effective Federal Funds Rate Advances in accordance with Section
2.09.
(b) If any Bank determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority, enacted after the date of this Agreement, or any new
interpretation of an existing law, regulation, guideline or request (whether
or not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank and that the amount of such capital is increased by or
based upon the existence of such Bank's Commitment to lend hereunder and other
commitments of this type, or its Letter of Credit Commitment, then, upon
demand by such Bank (with a copy of such demand to the Agent), the Borrower
shall pay to the Agent for the account of such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate such Bank
or such corporation in the light of such circumstances for such increased
capital requirement; provided that the Borrower shall only be liable for such
additional costs incurred by such Bank for the period commencing thirty (30)
days after the date of notice from such Bank to the Borrower of such
additional amounts; and provided further, that subject to Section 2.10, the
Borrower may elect to convert outstanding LIBOR Rate Advances into Effective
Federal Funds Rate Advances in accordance with Section 2.09.
SECTION 3.05. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under the Notes (including in respect of any Letter of Credit)
shall be made, in accordance with Section 3.01, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank or any political subdivision thereof. If the Borrower shall be required
by law to deduct any such amounts from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (I) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.05) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. The Borrower further agrees to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under the Notes or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the Notes.
(b) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.05 shall survive the payment in full of principal
and interest hereunder and under the Notes.
SECTION 3.06. Certificate of Bank. Any Bank demanding
---------------------
compensation under Section 3.04 or 3.05 shall deliver to the Borrower and the
Agent a statement reasonably setting forth the amount and manner of
determining such loss, cost or expense, which statement shall be conclusive
and binding for all purposes, absent manifest error.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Advances and
--------------------------------------------
Issuance of Letters of Credit. The obligation of each Bank to make its
- ---------------------------------
initial Advance or of the Issuing Bank to issue any Letter of Credit on or
after the date of this Agreement is subject to the condition precedent that
the Agent shall have received (or the actions described below shall have
occurred, as the case may be), the following, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient copies for
each Bank:
(a) The Notes, duly executed by the Borrower and payable to the
order of the Banks, respectively.
(b) This Agreement, duly executed by the Borrower.
(c) A Guaranty Agreement duly executed by each Guarantor.
(d) A certificate of the Secretary of the Borrower certifying
(i) the names and true signatures of the officers of the Borrower authorized
to sign each Loan Document to which the Borrower is a party and the notices
and other documents to be delivered by the Borrower pursuant to any such Loan
Document; (ii) the Restated Declaration of Trust dated March 23, 1988,
together with any amendments thereto, (the "Organizational Documents") of the
------------------------
Borrower as in effect on the date of such certification; and (iii) the
resolutions of the Board of Trust Managers of the Borrower approving and
authorizing the execution, delivery, and performance by the Borrower of each
Loan Document to which the Borrower is a party, the notices and other
documents to be delivered by the Borrower pursuant to any such Loan Document,
and the transactions contemplated thereunder.
(e) A certificate of the Secretary of each Guarantor certifying
(i) the names and true signatures of the officers of such Guarantor authorized
to sign each Loan Document to which such Guarantor is a party and the notices
and other documents to be delivered by such Guarantor pursuant to any such
Loan Document; (ii) the By-laws and Articles of Incorporation of such
Guarantor as in effect on the date of such certification; and (iii) the
resolutions of the Board of Directors of such Guarantor approving and
authorizing the execution, delivery, and performance by such Guarantor of each
Loan Document to which each such Guarantor is a party, the notices and other
documents to be delivered by such Guarantor pursuant to any such Loan
Document, and the transactions contemplated thereunder.
(f) Subject to Section 6.08, certificates of appropriate
officials as to the existence and good standing of each of the Borrower and
each Guarantor in its jurisdiction of organization or incorporation, and any
and all other jurisdictions where the Property owned or the business
transacted by each of the Borrower and each Guarantor requires each of the
Borrower and each Guarantor to be qualified therein and where the failure to
be so qualified would have a material adverse effect on the business
operations or financial condition of the Borrower and the Guarantors, taken as
a whole.
(g) A favorable opinion of Dow, Cogburn & Friedman, P.C.,
counsel for the Borrower and the Guarantors, in form and substance
satisfactory to the Banks.
(h) Payment to the Agent of all fees and expenses payable at
Closing, including, without limitation, fees of counsel to the Agent and the
Banks payable under Section 10.04.
(i) Payment in full of all amounts outstanding and due and owing
on the Closing Date by the Borrower or any Subsidiary, if any, under the
Credit Agreement, dated November 22, 1994, as such agreement has been amended
from time to time (the "Prior Credit Agreement"), by and between the
Borrower, the Agent and the Prior Banks, other than principal of the Prior
Notes not otherwise paid to the Agent for the benefit of the Banks on the date
of Closing and which is represented and evidenced by the new Notes issued
hereunder pursuant to Section 2.02(c).
(j) Such other documents and instruments with respect to the
transactions contemplated hereby as the Agent may reasonably request.
SECTION 4.02. Conditions Precedent to Each Borrowing. The
--------------------------------------
obligation of each Bank to make an Advance under the Revolving Credit Loan or
of the Issuing Bank to issue any Letter of Credit on the occasion of each
Borrowing (including the initial Borrowing) shall be subject to the further
conditions precedent that on the date of such Borrowing (a) the Agent shall
have received a Notice of Borrowing, or Letter of Credit Request, as the case
may be, in accordance with the terms of this Agreement, and (b) the following
statements shall be true and correct (and each of the giving of the applicable
Notice of Borrowing or Letter of Credit Request, as the case may be, and the
acceptance by the Borrower of the proceeds of such Borrowing, shall constitute
a representation and warranty by the Borrower that on the date of such
Borrowing such statements are true and correct):
(i) The representations and warranties contained in Article V of this
Agreement are true and correct in all material respects on and as of the date
of such Borrowing, before and after giving effect to such Borrowing, and to
the application of the proceeds therefrom, as though made on and as of such
date, and
(ii) No event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes (or would constitute) a Default or an Event of Default.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement, the
Borrower represents and warrants to the Banks (which representations and
warranties will survive the delivery of any Note, the issuance of any Letter
of Credit, the making of any Advance and the conversion of the Revolving
Credit Loan into a Term Loan) that:
SECTION 5.01. Existence. The Borrower (a) is a real estate
---------
investment trust duly organized under the Texas Real Estate Investment Trust
Act, Tex. Rev. Civ. Stat. Ann. art. 6138A (Vernon 1986) (the "Act"), and in
good standing under the Act and the laws of the State of Texas, (b) has the
power to own its Property and to carry on its business as now conducted, and
(c) is duly qualified to do business and is in good standing in every
jurisdiction where such qualification is necessary. Each Subsidiary of the
Borrower (x) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, (b) has the power to
own its property and carry on its business as now conducted, and (I) is duly
qualified to do business and is in good standing in every jurisdiction in
which such qualification is necessary, and where the failure to be so
qualified or in good standing would have a material adverse effect on the
business operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole. The Subsidiaries of the Borrower, and the
jurisdiction of organization of each such Subsidiary, are set forth on Exhibit
-------
5.01 hereto.
- ----
SECTION 5.02. Financial Condition. The Borrower has furnished
-------------------
the Bank with consolidated financial statements as at and for the twelve-month
period ended December 31, 1995, accompanied by the opinion of Deloitte &
Touche, and quarterly unaudited consolidated financial statements as at and
for the three-month periods ending March 31, 1996, June 30, 1996, and
September 30, 1996. These statements are true and correct and have been
prepared in conformity with GAAP consistently followed throughout the periods
involved. They fully and accurately reflect the financial condition of the
Borrower and its Subsidiaries and the results of their operations as at the
date and for the period indicated.
SECTION 5.03. Use of Proceeds; Margin Stock. Neither the
------------------------------
Borrower nor any Subsidiary owns any Margin Stock. The proceeds of the Loans
shall be used for general trust purposes. None of the proceeds of Borrowings
hereunder will be used for the purpose of purchasing or carrying any Margin
Stock or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a Margin Stock or for any other
purpose which might constitute this transaction a "purpose" credit within the
meaning of said Regulation U, as now in effect or as it may hereafter be
amended. Neither the Borrower nor any Subsidiary nor any agent acting on its
or their behalf has taken or will take any action which might cause this
Agreement or any Advance to violate Regulation G, T, U or X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as in effect now or
as the same may hereafter be in effect on the date of any Borrowing hereunder.
SECTION 5.04. Binding Obligations. The Borrower has the power
-------------------
and authority under the Act to make and carry out this Agreement, to make the
borrowings provided for herein, to execute and deliver the Notes, and to
perform its obligations hereunder and under the Notes; and all such action has
been duly authorized by all necessary proceedings on its part. Each
Subsidiary which is a party to a Guaranty Agreement has the power and
authority to perform its obligations in accordance with the terms and
conditions of the Guaranty Agreement to which it is a party, and all such
action has been duly authorized by all necessary proceedings on its part.
Each of this Agreement and the Notes have been duly and validly executed and
delivered by the Borrower and constitute a valid and legally binding
obligation of the Borrower enforceable in accordance with its terms, and the
Guaranty Agreements have been duly executed and delivered by the Guarantors
and constitute valid and legally binding obligations of each such Guarantor
enforceable in accordance with the respective terms thereof and of this
Agreement, except as limited by Debtor Laws.
SECTION 5.05. No Conflict or Resultant Lien. The execution,
-----------------------------
delivery, and performance by the Borrower and each Subsidiary of each Loan
Document to which it is a party, the Borrowings hereunder by the Borrower as
contemplated herein, and the effectuation of the transactions contemplated by
any Loan Document, do not and will not violate any provision of, or result in
a default under, the Borrower's Organizational Documents, or the Articles of
Incorporation or other charter documents or by-laws of any Subsidiary, or any
material agreement to which the Borrower or such Subsidiary is a party, or
Governmental Requirement to which the Borrower or such Subsidiary is subject,
or result in the creation or imposition of any Lien upon any Property of the
Borrower or such Subsidiary.
SECTION 5.06. Compliance with Other Agreements. Neither the
--------------------------------
Borrower nor any Subsidiary is in default in any material respect under any
Governmental Requirement. Neither the Borrower nor any Subsidiary is in
default under any other agreement, which default could have a material adverse
effect on the business, operations or financial condition of the Borrower and
its Subsidiaries, taken as a whole, or the ability of the Borrower or any
Guarantor to perform its obligations under this Agreement or any other Loan
Document to which it is a party.
SECTION 5.07. No Consent. No authorization or approval or other
----------
action by, and no notice to or filing with, any Person or any Governmental
Authority is required for the due execution, delivery, and performance by each
of the Borrower or any Subsidiary of any Loan Document to which it is a party
or the Borrowings hereunder, in each case as contemplated herein, or the
effectuation of the transactions contemplated under any Loan Document.
SECTION 5.08. Litigation. Except as described on Exhibit 5.08,
----------
attached hereto or as disclosed in any Compliance Certificate, there are no
material actions, suits, or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary, or
the Properties of the Borrower or any Subsidiary.
SECTION 5.09. Taxes; Governmental Charges. The Borrower and
---------------------------
each Subsidiary has filed or caused to be filed all federal, state, and
foreign income tax returns which are required to be filed, and has paid or
caused to be paid all taxes as shown on such returns or on any assessment
received by it to the extent that such taxes have become due and payable,
except for such taxes and assessments as are being contested in good faith in
appropriate proceedings and reserved for in accordance with GAAP in the manner
required by Section 6.04.
SECTION 5.10. Full Disclosure. All information furnished by or
---------------
on behalf of the Borrower or any Subsidiary to the Agent or any Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no material fact relevant to this
Agreement or the transactions contemplated by this Agreement known to the
Borrower which has not been disclosed herein or in such other written
documents, information or certificates furnished to the Agent and the Banks
for use in connection with the transactions contemplated hereby.
SECTION 5.11. Investment Company Act. Neither the Borrower nor
----------------------
any Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
SECTION 5.12. Compliance with Law. Except as disclosed in any
-------------------
Compliance Certificate and approved by the Banks, the business and operations
of the Borrower and each Subsidiary as conducted at all times have been and
are in compliance in all material respects with all applicable Governmental
Requirements.
SECTION 5.13. ERISA. Each of the Borrower and each Subsidiary
-----
is in compliance in all material respects with all applicable provisions of
ERISA and the Code with respect to each Plan, including the fiduciary
provisions thereof, and each Plan is, and has been, maintained in material
compliance with ERISA and, where applicable, the Code. Full payment when due
has been made of all material amounts which the Borrower or any Subsidiary is
required under the terms of each Plan or applicable law to have paid as
contributions to such Plan as of the date hereof. For purposes of this
Section 5.13, the term "material" shall mean a liability in excess of
$10,000,000.
SECTION 5.14. No Default or Event of Default. No Default or
------------------------------
Event of Default hereunder has occurred and is continuing.
SECTION 5.15. Permits and Licenses. All material permits,
--------------------
licenses and other governmental authorizations necessary for the Borrower or
any Subsidiary to carry on its business have been obtained and are in full
force and effect and neither the Borrower nor any Subsidiary is in breach of
the foregoing. Each of the Borrower and each Subsidiary owns or possesses
adequate licenses or other valid rights to use United States trademarks, trade
names, service marks, copyrights, patents and applications therefor which are
necessary for the conduct of the business, operations or financial condition
of the Borrower or such Subsidiary.
SECTION 5.16. Insurance. Each of the Borrower and each
---------
Subsidiary maintains insurance of such types as is usually carried by
companies of established reputation engaged in the same or similar business
and which are similarly situated with financially sound and reputable
insurance companies and associations acceptable to the Agent, with a rating of
at least A-, financial size category, Class VI as set forth in Best's Key
Rating Guide, published by A.M. Best Company, Inc., and in such amounts as
such insurance is usually carried by similar businesses, and in any event, in
compliance with the requirements of Section 6.03. If the rating of any
insurance company or association is or becomes below the aforesaid minimum
requirements, then Borrower and its Subsidiaries shall have 45 days to secure
(i) an appropriate reinsurance or other endorsement which will satisfy the
aforesaid minimum standards, or (ii) secure replacement insurance coverage
satisfying the aforesaid minimum standards.
All representations and warranties in each Loan Document shall
survive the delivery of the Notes, the making of any Advance and the
conversion of the Revolving Credit Loan into a Term Loan, and shall continue
for 366 days after the repayment of the Notes, the expiration or termination
of, any Letter of Credit, and the termination of the Letter of Credit
Commitment and the Commitments; any investigation at any time made by or on
behalf of the Agent or any Bank shall not diminish any Bank's right to rely
thereon.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any Note shall remain unpaid or any Letter of Credit
remains outstanding, or any Bank shall have any Commitment hereunder, the
Borrower covenants and agrees that:
SECTION 6.01. Reporting and Notice Requirements. The Borrower
---------------------------------
will furnish to each Bank, with respect to items described in Subsections (a),
(b), (c) and (f), and to the Agent for delivery to the Banks, with respect to
all other items:
(a) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within forty-five (45) days after the end of each fiscal quarter of the
Borrower (excluding the fourth quarter), Financial Statements of the Borrower
and its Subsidiaries as of the end of such quarter.
(b) Annual Financial Statements. As soon as available and in any
---------------------------
event within ninety (90) days after the end of each fiscal year of the
Borrower, Financial Statements of the Borrower and its Subsidiaries for such
fiscal year.
(c) Compliance Certificate. Together with and at the time of the
----------------------
delivery of any information required by Subsection (a) and Subsection (b) of
this Section 6.01, a certificate (a "Compliance Certificate") substantially in
the form of Exhibit 6.01(c), attached hereto, signed by a Responsible Officer,
(i) stating that there exists no Event of Default or Default, or if any Event
of Default or Default exists, specifying the nature thereof, the period of
existence thereof, and what action the Borrower proposes to take with respect
thereto; (ii) setting forth the credit rating assigned to the Borrower's
senior-unsecured, long-term debt by S&P as of the date of the Compliance
Certificate, and as of the date of delivery of such Financial Statements; and
(iii) setting forth with reasonable specificity such schedules, computations
and other information as may be required to demonstrate that the Borrower is
in compliance with its covenants in Sections 7.02, 7.03, 7.04, 7.07 and 7.13
hereof.
(d) Notice of Default. Promptly after any Responsible Officer of the
-----------------
Borrower knows or has reason to know that any Default or Event of Default has
occurred, a written statement of a Responsible Officer of the Borrower setting
forth the details of such Default or Event of Default and the action which the
Borrower has taken or proposes to take with respect thereto.
(e) Notice of Litigation. Together with and at the time of the
---------------------
delivery of information required by Subsection (a) or (b), notice of any
litigation, legal, administrative, or arbitral proceeding, investigation, or
other action of any nature which involves a claim (or a series of related
claims in the aggregate) for an amount equal to or exceeding $5,000,000, or,
promptly after any Responsible Officer of the Borrower or any Subsidiary
obtaining knowledge of the commencement thereof, notice of any litigation,
legal, administrative or arbitral proceeding, investigation or other action of
any nature which involves the reasonable possibility, if adversely determined,
in the judgment of the Borrower, of a judgment in excess of $1,000,000 which
has not been stayed, or other liability, in each case which could have a
material adverse effect on the business, operations or financial condition of
the Borrower and its Subsidiaries, taken as a whole, or on the ability of the
Borrower or any Subsidiary to perform its obligations under this Agreement or
any other Loan Document to which it is a party, and upon request by the Agent
or any Bank, details regarding such litigation which are satisfactory to the
Agent or such Bank.
(f) Securities Filings. Promptly after the sending or filing thereof
------------------
and in any event within fifteen (15) days thereof, copies of all reports which
the Borrower sends to any of its security holders, and copies of all reports
(including each regular and periodic report, but without duplication of
Financial Statements provided in accordance with Sections 6.01(a) and (b)) and
each registration statement or prospectus which the Borrower or any Subsidiary
files with the Securities and Exchange Commission or any national securities
exchange.
(g) ERISA Notices. The Borrower will and will cause its ERISA
--------------
Affiliates to obtain and deliver to the Agent, as soon as possible and in any
event within 10 days from receipt, or if applicable, filing, copies of any
reports, notices or filings which the Borrower or an ERISA Affiliate files
with the Internal Revenue Service, PBGC or the United States Department of
Labor with respect to an ERISA Event or which the Borrower or an ERISA
Affiliate receives from such Governmental Authority relating to an ERISA
Event, and copies of any notice, complaint or other documentation of any
pending or threatened lawsuit or claim relating to any Plan or Multiemployer
Plan which may have a material adverse effect on the Borrower or an ERISA
Affiliate, taken as a whole.
(h) Rating Certificate. Promptly upon the Borrower's knowledge of or
------------------
notification (i) by S&P or Moody's that the credit rating assigned to
senior-unsecured, long-term debt of the Borrower by S&P or Moody's, as the
case may be, has changed from the rating set forth in the most recent
Compliance Certificate delivered in accordance with Section 6.01(c), or (ii)
by any other nationally recognized rating agency that the Borrower's senior
unsecured, long-term debt has been assigned a credit rating, or that
subsequent to such assignment, such credit rating has been changed, the
Borrower will notify the Agent in writing of the occurrence of such event, and
if a notice has been received by the Borrower from S&P, Moody's or such other
rating agency, shall provide to the Agent a copy of such notice (each such
notice provided hereunder, a "Rating Certificate").
-------------------
(i) Other Information. Such other information respecting the
------------------
condition or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Bank through the Agent may from time to time reasonably
request.
SECTION 6.02. Maintenance. The Borrower will, and will cause
-----------
each of its Subsidiaries to, (a) at all times do or cause to be done all
things necessary to maintain, preserve and renew its existence as a real
estate investment trust under the Act or its corporate existence, as the case
may be, and its rights and franchises, and comply with all governmental laws,
rules, regulations or rulings with respect thereto; provided, however, that
nothing contained in this Section 6.02 or any other provision of this
Agreement shall (I) require the Borrower or any of its Subsidiaries to comply
with any such governmental laws, rules, regulations or rulings, so long as the
validity or applicability thereof shall be contested in good faith by
appropriate proceedings and any such failure to comply could not reasonably be
anticipated to have a material adverse effect on the business, operations or
financial condition of the Borrower and its Subsidiaries taken as a whole on a
consolidated basis, or the ability of the Borrower or such Subsidiary to
perform its obligations under this Agreement or any other Loan Document; or
(ii) require the Borrower or any of its Subsidiaries to maintain, preserve or
renew any right or franchise not necessary or desirable in the conduct of its
business as determined in good faith by Borrower's Trust Managers or Board of
Directors, as the case may be, and (b) except for planned demolition of Real
Property or Property subject to a direct financing lease (as reflected on the
Financial Statements), for the purpose of increasing its ultimate value, at
all times maintain, preserve, protect and keep or cause to be maintained,
preserved, protected and kept its Property in good repair, working order and
condition (ordinary wear and tear excepted) and, from time to time, will make
or cause to be made all repairs, renewals, replacements, extensions,
additions, betterments and improvements to its Property as are appropriate, so
that (I) each of the Borrower and its Subsidiaries maintains its current line
of business and (ii) the business carried on in connection therewith may be
conducted properly and efficiently at all times.
SECTION 6.03. Insurance. The Borrower will, and will cause each
---------
of its Subsidiaries to, keep its Property insured against loss or damage by
fire and other hazards with extended coverage and as is otherwise usually
carried by companies of established reputation engaged in the same or similar
business which are similarly situated, and in such amounts as such insurance
is usually carried by such similar businesses. Such policy or policies shall
be satisfactory in form and substance to the Banks, with the premiums thereon
fully paid in advance, issued by and binding upon financially sound and
reputable insurance companies and associations acceptable to the Agent, with a
rating of at least A-, financial size category, Class VI as set forth in
Best's Key Rating Guide, published by A.M. Best Company, Inc., and providing
for at least fifteen (15) days written notice to the Agent of cancellation,
failure to renew or other material change in such policy or policies. If the
rating of any insurance company or association is or becomes below the
aforesaid minimum requirements, then Borrower and its Subsidiaries shall have
45 days to secure (i) an appropriate reinsurance or other endorsement which
will satisfy the aforesaid minimum standards, or (ii) secure replacement
insurance coverage satisfying the aforesaid minimum standards.
SECTION 6.04. Taxes and Other Claims. The Borrower will, and
----------------------
will cause each of its Subsidiaries to, duly pay and discharge, as the same
become due and payable, all of its taxes (including without limitation all
federal and state income taxes, ad valorem taxes, sales taxes, use taxes,
occupational taxes, franchise taxes, withholding taxes, severance taxes,
excise taxes and manufacturing taxes) and assessments, and all claims and
charges of any Governmental Authority or any other Person levied or imposed,
or which if unpaid might become a Lien or charge, upon the franchises, assets,
earnings or businesses of the Borrower or any of its Subsidiaries, as the case
may be; provided, however, that nothing contained in this Section 6.04 shall
require the Borrower or any of its Subsidiaries to pay any such tax,
assessment, charge or claim so long as the validity thereof shall be contested
in good faith by appropriate proceedings and the Borrower or any such
Subsidiary shall set aside on its books adequate reserves with respect thereto
if required by GAAP.
SECTION 6.05. Right of Inspection. From time to time upon
-------------------
reasonable notice to the Borrower, the Borrower will, and will cause each
Subsidiary to, permit any officer, or employee of, or agent designated by, the
Agent or any Bank to visit and inspect any of the Properties of the Borrower
or any Subsidiary, examine the Borrower's or such Subsidiary's corporate books
or financial records, take copies and extracts therefrom, and discuss the
affairs, finances, and accounts of the Borrower or any Subsidiary with the
Borrower's or such Subsidiary's officers or certified public accountants, all
as often as the Agent or any Bank may reasonably desire.
SECTION 6.06. Guarantees of Subsidiaries. In the event that the
--------------------------
Borrower shall at any time acquire or create a new Subsidiary all of the stock
of which is 100% owned by the Borrower, the Borrower shall immediately cause
such Subsidiary to provide to the Agent for the benefit of the Banks a
guaranty of the obligations of the Borrower under this Agreement which shall
be in the form attached hereto as Exhibit 1.01-A; provided that, it shall not
--------------
constitute a Default hereunder if such new Subsidiary does not provide such
Guaranty Agreement until the date required for delivery of the Compliance
Certificate in accordance with Section 6.01(c). It is agreed and understood
that the obligation of the Borrower under this Section6.06 to cause any such
Subsidiary to provide to the Agent for the benefit of the Banks a guaranty is
a condition precedent to the making of the Advances pursuant to this Agreement
and that the entry into this Agreement by the Banks constitutes good and
adequate consideration for the provision of such guaranty.
SECTION 6.07. Compliance with Law. The Borrower will, and will
-------------------
cause each of its Subsidiaries to, comply in all material respects with all
laws, rules, regulations and rulings of all Governmental Authority having
jurisdiction in respect of the conduct of its business and the ownership of
its Property.
SECTION 6.08. Delivery of Certain Certificates. The Borrower
--------------------------------
agrees that to the extent it was unable to provide certificates required under
Section 4.01(f) on or before the Closing Date for any Subsidiary, after using
its best efforts to obtain the same, all such certificates shall be provided
to the Agent, on behalf of the Banks, on or before the forty-fifth (45th) day
after the Closing Date.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Note shall remain unpaid or any Bank shall have any
Commitment hereunder, the Borrower covenants and agrees that:
SECTION 7.01. Liens, Etc. The Borrower will not grant, permit,
----------
create or suffer to exist, and will not permit any Subsidiary to grant,
permit, create or suffer to exist, any Lien, upon or with respect to any of
its Properties, whether now owned or hereafter acquired, or assign, or permit
any of its Subsidiaries to assign, any right to receive income, in each case
to secure or provide for the payment of any Debt of any Person, other than:
(a) Permitted Liens; or
(b) Liens which do not violate the covenants contained in Section
7.02(b) hereof.
SECTION 7.02. Limitations on Incurrence of Debt. (a) The
----------------------------------
Borrower will not, and will not permit any Subsidiary to, incur any Debt if
prior to incurrence of such Debt, but after giving effect to the incurrence of
such Debt and the application of the proceeds thereof, the aggregate principal
amount of all outstanding Debt of the Borrower and its Subsidiaries is greater
than 60% of the Total Assets, determined as at the last day of the most recent
preceding calendar year or calendar quarter, as the case may be, as reflected
in the Financial Statements of the Borrower most recently provided under
Sections 6.01(a) or (b).
(b) The Borrower will not, and will not permit any Subsidiary
to, incur any Debt secured by any Lien upon any Property of the Borrower or
any Subsidiary if, prior to incurrence of such Debt, but after giving effect
to the incurrence of such Debt and the application of the proceeds thereof,
the aggregate principal amount of all outstanding Debt of the Borrower and its
Subsidiaries which is secured by a Lien on Property of the Borrower or any
Subsidiary is greater than 40% of Total Assets, determined as at the last day
of the most recent preceding calendar year or calendar quarter, as the case
may be, as reflected in Financial Statements of the Borrower most recently
provided under Sections 6.01(a) or (b).
(c) For purposes of this Section 7.02, the term (i) "Total
Assets" does not include securities issued or unconditionally guaranteed by
the United States government or an agency thereof or by the Federal National
Mortgage Association which secure a repurchase agreement with a financial
institution, entered into in the ordinary course of business by the Borrower
or any Subsidiary, and (ii) "Debt" does not include obligations under any such
repurchase agreement or indebtedness of the Borrower or any Subsidiary owed to
a financial institution, which is secured by governmental securities described
in clause (i) hereof, owned by the Borrower or such Subsidiary, entered into
in the ordinary course of business (a "reverse repurchase agreement"),
provided that in the case of transactions described in clauses (i) and (ii)
hereof, the market value of such governmental securities is at all times equal
at least to the principal amount of such repurchase agreement or reverse
repurchase agreement.
SECTION 7.03. Unimproved Real Property. The Borrower will not
------------------------
permit Unimproved Real Property to exceed 12.5% of Undepreciated Real Estate
Assets.
SECTION 7.04. Sale or Other Disposition of Real Property. The
------------------------------------------
Borrower will not, and will not permit its Subsidiaries to, sell, dispose of
or otherwise transfer (including, without limitation, a sale-leaseback) (i)
Real Property of the Borrower or any Subsidiary with an aggregate book value
in any twelve-month period, ending on the last day of the month in which such
disposition occurs (or if shorter, for the period from the Closing Date to
such day), for all such dispositions (after giving effect to such
disposition), greater than 10% of the Undepreciated Real Estate Assets as of
the last day of the preceding calendar quarter, or (ii) Real Property of the
Borrower or any Subsidiary with a cumulative aggregate book value in any
thirty-six month period, ending on the last day of the month in which such
disposition occurs (or if shorter, for the period from the Closing Date to
such day), for all such dispositions (after giving effect to such disposition)
greater than 15% of the Undepreciated Real Estate Assets as of the last day of
the preceding calendar quarter, unless, on the date on which the next
Compliance Certificate is required to be delivered in accordance with Section
6.01(c), the Borrower shall have delivered to the Agent the excess of Net
Proceeds of such disposition over such applicable percentage amounts of the
Undepreciated Real Estate Assets, respectively (herein referred to as the
"Adjusted Net Proceeds") as a prepayment on the Notes, in accordance with
Section 3.03. For purposes of this Section 7.04, neither a lease of property
(nor the existence of a financing lease) nor creation of a Lien on such
property in the ordinary course of business, shall be deemed to be a
disposition of such property.
SECTION 7.05. Mergers; Consolidations. Except as permitted
-----------------------
under Section 7.06(f), the Borrower will not, and will not permit any
Subsidiary to, merge or consolidate with or into any other Person, or convey,
transfer or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired); provided that (a) subject to the limitations of Section
--------
7.06(f), the Borrower may merge or consolidate with or into, or acquire all or
substantially all of the assets or capital stock of any other Person, so long
as the Borrower is the survivor thereof, and (b) any Subsidiary may merge or
consolidate with or into, or acquire all or substantially all of the assets or
capital stock of, (i) any other Subsidiary, so long as, if either such
Subsidiary is a Guarantor, a Guarantor is the survivor thereof, and (ii)
subject to the limitations of Section 7.06(f), any other Person (other than
the Borrower), so long as a Subsidiary is the survivor thereof, and (c) any
Subsidiary may merge into or transfer all or substantially all of its assets
to the Borrower, so long as the Borrower is the survivor thereof, if prior to
and after giving effect thereto, in the case of clauses (a), (b) and (c) no
Default or Event of Default has occurred or would exist (expressly including,
without limitation, under Section 7.06(f)).
SECTION 7.06. Investments, Loans, and Advances. Without the
--------------------------------
consent of the Banks, the Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any Investment, endorse,
or otherwise be or become contingently liable, directly or indirectly, in
connection with the stock or other securities of, or purchase, or acquire any
stock or securities of, or any other interest in, any Person, except that:
(a) the Borrower or any Subsidiary may permit to remain outstanding
Investments existing on the date hereof;
(b) the Borrower or any Subsidiary may acquire and own capital stock,
obligations, or securities received in settlement of debts (created in the
ordinary course of business) owing to the Borrower or any Subsidiary;
(c) the Borrower or any Subsidiary may own, purchase, or acquire Cash
Equivalents;
(d) the Borrower and any Subsidiary may make intercompany loans and
advances which are permitted under Section 7.08 hereof, and (subject to
Section 6.06) may form Subsidiaries, the capital stock of which is 100% owned
by the Borrower or a Guarantor;
(e) the transactions permitted under Subsection (a), (b) and (c) of
Section 7.05 are permissible;
(f) the Borrower or any Subsidiary may (I) acquire the capital stock
of a Person without the consent of the Banks, so long as (A) the aggregate
purchase price, or cost, of such stock received in exchange for Capital Shares
or any asset of the Borrower or a Subsidiary (measured by the value of such
Capital Shares or asset of the Borrower or such Subsidiary given in exchange
therefor) does not exceed, in the aggregate for any successive twelve (12)
month period for all such transactions (or series of related transactions) an
amount equal to one-third (33 1/3%) of Total Assets, determined as of the last
day of the preceding calendar quarter, or (B) if all or a part of such
purchase price is paid in cash, the cash portion of the purchase price does
not exceed, in the aggregate for any successive twelve (12) month period for
all such transactions (or series of related transactions) an amount equal to
ten percent (10%) of the Total Assets, determined as of the last day of the
preceding calendar quarter, and (ii) acquire other Investments, (in addition
to Investments permitted under subsections (a) through (e), or (f)(i), or (g),
of this Section 7.06) so long as the aggregate purchase price, or cost, of
such acquisition (measured by the value of such Capital Shares or any assets
or promissory note of the Borrower or such Subsidiary, if any, given in
exchange therefor, plus the cash portion thereof) does not exceed in the
aggregate for any successive twelve (12) month period for all such
transactions (or series of related transactions) an amount equal to ten
percent (10%) of Total Assets, determined as of the last day of the preceding
calendar quarter, and in the case of each of clause (i) or (ii), (w) such
action does not result in the income of the Borrower being primarily
attributable to loans secured by mortgages on Real Property, (x) if the
acquisition results in ownership by the Borrower or any Subsidiary (whether
beneficial or of record) of a majority of the voting stock of such Person or
results in a merger or consolidation with the Borrower or such Subsidiary,
then the board of directors of such Person shall have approved such
transaction and such transaction shall not constitute a "hostile" acquisition
with respect to such Person, (y) (except for Investments described under
clause (ii) hereof) the business of such Person is substantially similar to
the business conducted by the Borrower or such Subsidiary, or is primarily to
hold Real Property, and such purchase or acquisition is made in the ordinary
course of business, and (z) in any event, prior to and after giving effect to
such purchase or acquisition, no Default or Event of Default has occurred or
would exist; and
(g) the Borrower and any Subsidiary may purchase or acquire directly
or indirectly, through partnerships, joint ventures or otherwise, title to
Real Property (expressly including, for purposes of this Section 7.06, without
limitation, "direct financing leases," reflected as such on the Financial
Statements).
SECTION 7.07. Coverage Ratio. The Borrower will not permit the
--------------
ratio of (i) Funds From Operations, to (ii) the Annual Service Charge,
determined as of the last day of each fiscal quarter for the four (4)
successive quarterly accounting periods ending on such date (the "Coverage
Ratio") to be less than 2.5 to 1.0.
SECTION 7.08. Transactions with Affiliates. The Borrower will
----------------------------
not, and will not permit any Subsidiary to, directly or indirectly, enter into
any transaction, or modify any existing transaction, with any Affiliate
(including, without limitation, any transaction involving the payment of
management fees or directors' fees to any Affiliate), except for transactions
(including any loans or advances by or to any Affiliate otherwise in
compliance under this Agreement) in good faith, the terms of which are fair
and reasonable to the Borrower or such Subsidiary, and are at least as
favorable as the terms which could be obtained by the Borrower or such
Subsidiary in a comparable transaction made on an arm's-length basis between
unaffiliated parties.
SECTION 7.09. Change of Business. The Borrower will not, and
------------------
will not permit any Subsidiary to, make any material change in the nature of
the business conducted by the Borrower and its Subsidiaries taken as a whole
and will at all times qualify for taxation as a Real Estate Investment Trust
under the Code.
SECTION 7.10. Intentionally Omitted
SECTION 7.11. Amendment of Organizational Documents. The
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Borrower will not, and will not permit any of its Subsidiaries to, without the
prior written consent of the Banks, amend, alter or modify its Organizational
Documents or articles of incorporation or other charter or bylaws, as the case
may be, in such a manner as to (a) change its purpose or (b) restrict its
powers in any manner.
SECTION 7.12. Guarantees. "Guaranty" shall mean all obligations
----------
not otherwise reflected on the balance sheet of the Borrower or any Subsidiary
whereby the Borrower or such Subsidiary guarantees the performance of any
joint venture or partnership or the payment or performance of any
indebtedness, dividend or other obligation of any other Person (for purposes
of this Section 7.12, the "Primary Obligor") in any manner, whether directly
or indirectly, including obligations incurred through an agreement or
covenant, contingent or otherwise:
(i) to purchase such indebtedness or obligation or any Property or
assets constituting security therefor;
(ii) to advance or supply funds
(A) for the purchase or payment of such indebtedness or obligation,
or
(B) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of
such indebtedness or obligation;
(iii) to lease Property or to purchase securities or other Property
or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(iv) to assure the owner of the indebtedness or obligation of the
Primary Obligor against loss in respect thereof.
Notwithstanding the above, and in any event, except for (i) Guaranties by the
Borrower of indebtedness or obligations of any Subsidiary, or (ii) Guaranties
of any Subsidiary of indebtedness or obligations of the Borrower, or (iii) the
Guaranty by the Borrower of the obligations of the Dugas Partnership In
Commendam in respect of the Series 1995 Lafayette Bonds and the Special Letter
of Credit issued in connection therewith, neither the Borrower nor any
Subsidiary shall enter into any Guaranty (other than checks deposited and/or
endorsed in the ordinary course of business of the Borrower or any Subsidiary)
unless (A) liability incurred by the Borrower or such Subsidiary under such
Guaranty is secured and is for a Primary Obligor's indebtedness or other
obligation, and (B) upon payment by the Borrower or such Subsidiary on account
of (or in connection with) its obligations under the Guaranty or, after
compliance with applicable foreclosure proceedings specified by law or
otherwise agreed upon, the Borrower or such Subsidiary will become subrogated
to the right, title and interests of the beneficiary of the Guaranty or of the
Primary Obligor, to all Property securing such liability. By way of
illustration, but not limitation: (x) in the case of a Guaranty of the
obligations of a venturer or partner, the Guaranty shall be deemed secured if
the Borrower or such Subsidiary is entitled (after compliance with applicable
foreclosure proceedings specified by law or otherwise agreed upon) to such
defaulting party's venture or partnership interest in case of a default of
such venturer or partner; (y) in the case of the Guaranty of a lease, the
Guaranty shall be deemed secured if the Borrower or such Subsidiary is
entitled (after compliance with applicable foreclosure proceedings specified
by law or otherwise agreed upon) to the leasehold estate in case of default by
the tenant under such lease; and (z) in the case of the Guaranty of a secured
promissory note, a Guaranty shall be deemed secured if the Borrower or such
Subsidiary is entitled to purchase the note and the lien securing same, and to
become subrogated to the rights of the previous payee on the Note in the case
of default of the maker on such default.
SECTION 7.13. Assets Retained. The Borrower will not permit the
---------------
portion of Undepreciated Real Estate Assets which is subject to no Lien (other
than a Permitted Lien) to be less than 150% of the aggregate principal amount
outstanding at any time of Debt which is not secured by a Lien on Property of
the Borrower or any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur:
-------------------
(a) The Borrower shall fail to pay principal of or interest on any
Note or fees or other amounts due under any Note or this Agreement or, in
connection with its reimbursement obligations under any Letter of Credit or
any other Loan Document, when the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower (or any of
its Responsible Officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made or deemed made;
or
(c) The Borrower shall fail to perform or observe any term, covenant
or agreement contained in Sections 6.01(d), 6.06 or in Article VII; or
(d) The Borrower shall fail to perform or observe any term, covenant
or agreement contained in any Loan Document (other than those set forth in
(a), (b) and (c) above) on its part to be performed or observed if such
failure shall remain unremedied for thirty (30) days after the occurrence of
such event; or
(e) The Borrower shall fail to pay any principal of or premium or
interest on any Debt (other than Non-Recourse Debt) which is outstanding in a
principal amount greater than $10,000,000 in the aggregate when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any other event constituting a default
(however defined) shall occur or condition shall exist under any agreement or
instrument relating to any such Debt outstanding in a principal amount greater
than $10,000,000 (other than Non-Recourse Debt) and shall continue after the
applicable grace period, if any, specified in such agreement or instrument; or
(f) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any Debtor Laws,
or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial
part of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its Property) shall
occur; or the Borrower or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection (f);
or
(g) Any final judgment or order for the payment of money which,
individually or in the aggregate, shall be in excess of $1,000,000 at any
time, shall be rendered against the Borrower or any of its Subsidiaries and
remains unpaid for a period of 15 days, and a stay of execution thereof
(whether by supersedeas bond or otherwise) shall not be in effect after entry
thereof; or
(h) With respect to any Plan, Multiemployer Plan or any other
employee benefit plan within the meaning of Section 3(3) of ERISA, the
Borrower or any ERISA Affiliate has incurred and fails to pay (or fund, as
applicable) within the maximum time period permitted by law, a liability in
excess of $10,000,000; or
(i) An Event of Default (however defined) in that certain Master Swap
Agreement between the Borrower and TCB dated as of January 29, 1992, as
amended, or in any interest rate swap agreement issued thereunder, or any
other interest rate protection agreement to which the Borrower or any
Subsidiary is a party (the "Interest Rate Agreements"), shall have occurred at
any time during which the Agent or any Bank is a counterparty thereunder; or
(j) The Borrower shall be or become, in the reasonable judgment of
the Agent or any Bank, a liquidating trust under the Internal Revenue Code of
1986, as amended;
then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the Majority Banks, by notice to the Borrower, declare the
Commitment (including the Revolving Credit Commitment, the Letter of Credit
Commitment and the Term Commitment) of each Bank to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Banks by notice to the Borrower, declare the
Notes, all interest thereon and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Notes, all such interest and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided however, that upon such
--------
event the Borrower shall deliver to the Agent, for deposit into an interest
bearing collateral account, readily available funds in an amount equal to the
aggregate undrawn face amount of all Letters of Credit issued and outstanding
at such time, as security for the obligations of the Borrower under such
Letters of Credit; provided further that funds on deposit in such collateral
account shall be returned to the Borrower periodically in an amount equal to
amounts drawn under a Letter of Credit and reimbursed to the Banks by the
Borrower from time to time, or upon expiration or termination otherwise of a
Letter of Credit, without a draw outstanding, in the face amount of such
Letter of Credit; provided further, that in the event of an entry of an order
for relief with respect to the Borrower or any of its Subsidiaries under the
United States Bankruptcy Code, (A) the obligation of each Bank to make
Advances shall automatically be terminated and (B) the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower.
ARTICLE IX
THE AGENT
SECTION 9.01. Authorization and Action. Each Bank hereby
-------------------------
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Majority Banks, and such instructions shall be binding upon all Banks and all
holders of Notes; provided however, that the Agent shall not be required to
--------
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law. The Agent agrees to give to
each Bank prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 9.02. Agent's Reliance, Etc. Neither the Agent nor any
----------------------
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may,
subject to the provisions of Section 10.08 hereof, treat the payee of any Note
as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and including the
agreement of the assignee or transferee to be bound hereby as it would have
been if it had been an original Bank party hereto, in form satisfactory to the
Agent; (ii)may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on
the part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of this
Agreement by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier, telegram, cable or telex) believed by
it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03. TCB and Affiliates. With respect to its
--------------------
Commitment, the Advances made by it and the Note issued to it, TCB shall have
the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include TCB in its
individual capacity. TCB and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its Subsidiaries and any Person who may
do business with or own securities of the Borrower or any such Subsidiary, all
as if TCB were not the Agent and without any duty to account therefor to the
Banks.
SECTION 9.04. Bank Credit Decision. Each Bank acknowledges that
--------------------
it has, independently and without reliance upon the Agent or any other Bank
and based on the financial statements referred to in Sections 5.02 and 6.01
and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under each Loan Document. The Agent shall not
be required to keep itself informed as to the performance or observance by the
Borrower of any Loan Document or to inspect the Properties or books of the
Borrower or any Subsidiary. Except for notices, reports, and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition, or business of the Borrower or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
SECTION 9.05. Indemnification. Notwithstanding anything to the
---------------
contrary herein contained, the Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Banks against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, and
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of its taking or continuing to take any action. EACH BANK AGREES TO
INDEMNIFY THE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), ACCORDING
TO SUCH BANK'S PRO RATA PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO
OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY THE
AGENT UNDER ANY LOAN DOCUMENT IN ITS CAPACITY AS AGENT, PROVIDED THAT NO BANK
SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PERSON BEING INDEMNIFIED; AND PROVIDED FURTHER, THAT IT IS THE INTENTION OF
EACH BANK TO INDEMNIFY THE AGENT AGAINST THE CONSEQUENCES OF THE AGENT'S OWN
NEGLIGENCE WHEN ACTING IN ITS CAPACITY AS AGENT, WHETHER SUCH NEGLIGENCE BE
SOLE, JOINT, OR CONCURRENT, ACTIVE OR PASSIVE. WITHOUT LIMITATION OF THE
FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR
ITS PRO RATA PERCENTAGE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) INCURRED BY THE AGENT IN ITS CAPACITY AS AGENT IN CONNECTION
WITH THE PREPARATION, ADMINISTRATION, OR ENFORCEMENT OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, ANY LOAN DOCUMENT, TO THE EXTENT
THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
SECTION 9.06. Successor Agent. The Agent may resign at any time
---------------
by giving written notice thereof to the Banks and the Borrower and may be
removed at any time with cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks, and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having capital of at least $100,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
SECTION 9.07. Agent's Reliance. The Borrower shall notify the
----------------
Agent in writing of the names of its officers and employees authorized to
request an Advance on behalf of the Borrower and shall provide the Agent with
a specimen signature of each such officer or employee. The Agent shall be
entitled to rely conclusively on such officer's or employee's authority to
request an Advance on behalf of the Borrower until the Agent receives written
notice from the Borrower to the contrary. The Agent shall have no duty to
verify the authenticity of the signature appearing on any Notice of Borrowing,
and, with respect to any oral request for an Advance, the Agent shall have no
duty to verify the identity of any Person representing himself as one of the
officers or employees authorized to make such request on behalf of the
Borrower. Neither the Agent nor any Bank shall incur any liability to the
Borrower in acting upon any telephonic notice referred to above which the
Agent or such Bank believes in good faith to have been given by a duly
authorized officer or other Person authorized to borrow on behalf of the
Borrower or for otherwise acting in good faith.
SECTION 9.08. Defaults. The Agent shall not be deemed to have
--------
knowledge of the occurrence of a Default (other than the nonpayment of
principal of or interest hereunder or of any fees payable hereunder) unless
the Agent has received notice from a Bank or the Borrower specifying such
Default. In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks and to
the Borrower (and shall give each Bank prompt notice of each such nonpayment);
provided that, failure of the Agent to give notice to the Borrower hereunder
shall in no event diminish the obligations of the Borrower hereunder. The
Agent shall (subject to Section 8.01 and 9.01) take such action as may be
expressly required hereunder with respect to such Default; provided that,
unless and until the Agent shall have received the directions referred to in
Section 8.01, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable and in the best interest of the Banks.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement or the Notes or any Letter of Credit, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Borrower and the
Majority Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided
--------
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) waive any of the
conditions specified in Section 4.02, (b) increase the Commitments of the
Banks or subject the Banks to any additional obligations, (c) reduce the
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder or the terms of any Letter of Credit, (d) postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (e) change the definition of "Pro Rata
Percentage," the percentage of the Commitments or the aggregate unpaid
principal amount of the Notes, or the number or percentage of Banks, which
shall be required for the Banks or any of them to take any action hereunder,
(f) amend this Section 10.01, (g) alter any Guaranty Agreement or Section
6.06 hereof, or (h) amend Article VII hereof, and provided, further, that no
--------
amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Banks required above to take such action, affect the rights
or duties of the Agent under this Agreement or any Note.
SECTION 10.02. Notices, Etc. All notices and other
-------------
communications provided for hereunder shall be in writing (including by telex
or telefacsimile transmission) and shall be effective when actually delivered,
or in the case of telex notice, when sent, and answerback is received, or in
the case of telefacsimile transmission, when received and telephonically
confirmed, addressed as follows: if to the Borrower, at its address at 2600
Citadel Plaza Drive, Houston, Texas 77018, Attention: Chief Executive Officer,
with a copy to Dow, Cogburn & Friedman, P.C., 9 Greenway Plaza, Suite 2300,
Houston, Texas 77046, Attention: Mr. Melvin Dow; if to any Bank, at its
address specified opposite its name on the signature page hereof; and if to
the Agent, at its address at 712 Main Street, Houston, Texas 77002, Attention:
Ms. Catherine Arnold; with a copy to 1111 Fannin, Houston, Texas 77002,
Attention: Manager, Loan Syndication Services; or, as to the Borrower, any
Bank or the Agent, at such other address as shall be designated by such party
in a written notice to the other parties.
SECTION 10.03. No Waiver; Remedies. No failure on the part of
-------------------
any Bank or the Agent to exercise, and no delay in exercising, any right under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. Costs, Expenses and Taxes. The Borrower agrees
-------------------------
to pay on demand all costs and expenses in connection with the preparation,
execution, delivery, modification, waiver, and amendment of the Loan Documents
and the other documents to be delivered under the Loan Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent and each Bank with respect thereto and with respect to advising
the Agent and each Bank as to its rights and responsibilities under the Loan
Documents; provided that, fees of counsel for the Agent and the Banks for work
performed in connection with the preparation, execution and delivery of this
Agreement and the other Loan Documents on the Closing Date and all other work
described in this sentence performed on or prior to the Closing Date (together
with routine post-closing matters, such as preparation and delivery of closing
packages), shall not exceed $_______________, plus expenses of such counsel
incurred in connection therewith. In the event of the occurrence of a
Default, the Borrower further agrees to pay on demand all costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses),
in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of the Loan Documents and the other documents to be
delivered under the Loan Documents, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of rights under
this Section 10.04.
SECTION 10.05. Right of Set-off. Upon (i) the occurrence and
----------------
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 8.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 8.01, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for the
credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under any Loan Document, whether or
not such Bank shall have made any demand under this Agreement or such Note and
although such obligations may be unmatured. Each Bank agrees promptly to
notify the Borrower after any such set-off and application made by such Bank,
provided that the failure to give such notice shall not affect the validity of
- --------
such set-off and application. The rights of each Bank under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Bank may have.
SECTION 10.06. Sharing of Payments, Etc. If any Bank shall
------------------------
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) on account of any Advance made by it
(other than pursuant to Sections 2.07, 2.10, 3.04 or 3.05) in excess of its
Pro Rata Percentage of payments on account of the Advances, such Bank shall
forthwith purchase from the other Banks such participations in the Advances
made by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of them, provided however, that if all or any
--------
portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and such Bank shall
repay to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (i) the amount of such Bank's required repayment to (ii) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount
so recovered.
SECTION 10.07. Binding Effect. This Agreement shall become
--------------
effective when it shall have been executed by the Borrower, the Agent and the
Banks (and a counterpart original has been delivered to the Agent, for itself
and each Bank, and to the Borrower) when the Agent shall have been notified by
each Bank that such Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Agent and each Bank and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks.
SECTION 10.08. Assignments and Participations. (a) Each Bank
------------------------------
may assign all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments and the
Note held by it and any interest held by it in a Letter of Credit) to any
financial institution (the "Assignee"); provided however, (i) prior to the
-------- --------
occurrence of an Event of Default, TCB shall not assign its rights and
obligations hereunder without the consent of the Borrower, which will not be
unreasonably withheld, if, after giving effect to such assignment, the
Commitment of TCB would be reduced to less than $45,000,000, (ii) each
assignment made hereunder shall equal or exceed the lesser of (A) $10,000,000
or (B) the remaining Commitment held by the Assigning Bank, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (with a copy to the Borrower), an
Assignment and Acceptance Agreement in the form of Exhibit 10.08, attached
hereto (the "Assignment and Acceptance"), together with any Note subject to
--------------------------
such assignment. Upon such execution, delivery, acceptance, and recordation
by the Agent of such Assignment and Acceptance, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall
be the date on which such Assignment and Acceptance is accepted by the Agent,
(A) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank under the
Loan Documents, and (B) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be a party
thereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the Assignee confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties, or representations made in or in connection with any Loan Document
or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any other Subsidiary or the performance or
observance by the Borrower or any other Subsidiary of any of its respective
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such Assignee confirms that it has received
a copy of the Loan Documents, together with copies of the Financial Statements
referred to in Section 5.02 and Section 6.01 and such other documents and
------------- ------------
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such Assignee,
independently and without reliance upon the Agent, such assigning Bank, or any
Bank and based on such documents and information as it shall deem appropriate
at the time, will continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such Assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under any Loan Document as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(vi) such Assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of any Loan Document are required to
be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 10.02 a copy of each Assignment and Acceptance delivered to and
---------
accepted by it and a register for the recordation of the names and addresses
-
of the Banks and the Commitment of, and principal amount of the Borrowings
owing to, each Bank from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent, and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of the
Loan Documents. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank, together with any Note subject to such assignment, the
Agent, if such Assignment and Acceptance has been completed and otherwise
complies with Section 10.08(a), shall (I) accept such Assignment and
Acceptance; (ii) record the information contained therein in the Register; and
(iii) give prompt notice thereof to the Borrower. Simultaneously upon its
receipt of such notice, the Borrower at its own expense, shall execute and
deliver to the Agent in exchange for each surrendered Note a new Note to the
order of such Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained Commitments hereunder, new Notes to the order of the assigning Bank
in an amount equal to the Commitments retained by it hereunder. The new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit 2.02(c). Upon receipt by the Agent of each such new Note conforming
- ----------------
to the requirements set forth in the preceding sentences, the Agent shall
return to the Borrower each such surrendered Note marked to show that each
such surrendered Note has been replaced, renewed, and extended by such new
Note.
(e) Each Bank may sell participations to one or more financial
institutions in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments and the Notes held by it), and no such sale of a participation
shall reduce such Bank's obligations to the Borrower hereunder.
SECTION 10.09. Limitation on Agreements. (a) All agreements
------------------------
between the Borrower, the Agent, or any Bank, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of demand being
made in respect of an amount due under any Loan Document or otherwise, shall
the amount paid, or agreed to be paid, to the Agent or any Bank for the use,
forbearance, or detention of the money to be loaned under this Agreement, the
Notes or any other Loan Document or otherwise or for the payment or
performance of any covenant or obligation contained herein or in any other
Loan Document exceed the Highest Lawful Rate. If, as a result of any
circumstance whatsoever, fulfillment of or compliance with any provision
hereof or of any of such documents at the time performance of such provision
shall be due or at any other time shall involve exceeding the amount permitted
to be contracted for, taken, reserved, charged or received by the Agent or any
Bank under applicable usury law, then, ipso facto, the obligation to be
---- -----
fulfilled or complied with shall be reduced to the limit prescribed by such
applicable usury law, and if, from any such circumstance, the Agent or any
Bank shall ever receive interest or anything which might be deemed interest
under applicable law which would exceed the Highest Lawful Rate, such amount
which would be excessive interest shall be applied to the reduction of the
principal amount owing on account of such Bank's Note or the amounts owing on
other obligations of the Borrower to the Agent or any Bank under any Loan
Document and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of any Note and the amounts owing on
other obligations of the Borrower to the Agent or any Bank under any Loan
Document, as the case may be, such excess shall be refunded to the Borrower.
All sums paid or agreed to be paid to the Agent or any Bank for the use,
forbearance, or detention of the indebtedness of the Borrower to the Agent or
any Bank shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full term of such indebtedness
until payment in full of the principal (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary
contained in any Loan Document, it is understood and agreed that if at any
time the rate of interest which accrues on the outstanding principal balance
of any Note shall exceed the Highest Lawful Rate, the rate of interest which
accrues on the outstanding principal balance of any Note shall be limited to
the Highest Lawful Rate, but any subsequent reductions in the rate of interest
which accrues on the outstanding principal balance of any Note shall not
reduce the rate of interest which accrues on the outstanding principal balance
of any Note below the Highest Lawful Rate until the total amount of interest
accrued on the outstanding principal balance of any Note equals the amount of
interest which would have accrued if such interest rate had at all times been
in effect. The terms and provisions of this Section 10.09 shall control and
-------------
supersede every other provision of all Loan Documents.
(b) The Banks and the Borrower agree that (i) if Article 1.04,
Subtitle 1, Title 79 of the Revised Civil Statutes of Texas, 1925, as amended,
is applicable to the determination of the Highest Lawful Rate, the indicated
rate ceiling computed from time to time pursuant to Section (a) of such
Article shall apply, provided that, to the extent permitted by such Article,
--------
the Agent may from time to time by notice to the Borrower revise the election
of such interest rate ceiling as such ceiling affects the then current or
future balances of the Advances; and (ii) the provisions of Chapter 15 of
Subtitle 3, Title 79, of the Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to this Agreement or any Note.
SECTION 10.10. Severability. In case any one or more of the
------------
provisions contained in any Loan Document to which the Borrower is a party or
in any instrument contemplated thereby, or any application thereof, shall be
invalid, illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained therein, and any other
application thereof, shall not in any way be affected or impaired thereby.
Each covenant contained in any Loan Document to which the Borrower is a party
shall be construed (absent an express contrary provision herein) as being
independent of each other covenant contained therein, and compliance with any
one covenant shall not (absent such an express contrary provision) be deemed
to excuse compliance with one or more other covenants.
SECTION 10.11. Governing Law. This Agreement and the Notes
-------------
shall be governed by, and construed in accordance with, the laws of the State
of Texas.
SECTION 10.12. SUBMISSION TO JURISDICTION; WAIVERS. THE
-------------------------------------
BORROWER IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT IN HARRIS COUNTY,
TEXAS, OR THAT SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY REGISTERED OR
CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, POSTAGE PREPAID) TO
ITS ADDRESS SET FORTH IN SECTION 10.02 HEREOF OR TO SUCH OTHER ADDRESS OF
WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING BY THE
BORROWER PURSUANT TO SECTION 10.02.
SECTION 10.13. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 10.14. Liability of Borrower. With respect to the
---------------------
incurrence of certain liabilities hereunder and the making of certain
agreements by the Borrower as herein stated, such incurrence of liabilities
and such agreements shall be binding upon the Borrower only as a trust formed
under the Texas Real Estate Investment Trust Act pursuant to that certain
Restated Declaration of Trust dated March 23, 1988 (as it is amended from time
to time), and only upon the assets of such Borrower. No Trust Manager or
officer or holder of any beneficial interest in the Borrower shall have any
personal liability for the payment of any indebtedness or other liabilities
incurred by the Borrower hereunder or for the performance of any agreements
made by the Borrower hereunder, nor for any other act, omission or obligation
incurred by the Borrower or the Trust Managers except, in the case of a Trust
Manager, any liability arising from his own willful misfeasance or malfeasance
or gross negligence.
SECTION 10.15. FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE
---------------
GUARANTY, THE NOTES AND THE LETTERS OF CREDIT REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
WEINGARTEN REALTY INVESTORS,
Borrower
By: /S/ BILL ROBERTSON
Bill Robertson
Title: Executive VP/CFO
______________________________
Commitment: $60,000,000 TEXAS COMMERCE BANK
- ----------
NATIONAL ASSOCIATION,
in its individual capacity and as Agent
By: /S/ CATERHINE A. ARNOLD
Catherine A. Arnold
Title: Managing Director and Senior
______________________________
Vice President
______________________________
Address: NATIONSBANK OF TEXAS, N.A., as
- -------
700 Louisiana, 5th Floor Documentary Agent, and as a Bank
Houston, Texas 77002
Attention: Real Estate Loan Administration
By: /S/ CYNTHIA SANFORD
Cynthia Sanford
Commitment: $60,000,000 Title: Senior Vice President
- --------- ______________________________
<PAGE>
Address: COMMERZBANK, A.G., as Co-Agent, and
- -------
as a Bank
1230 Peachtree Street, N.E.
Suite 3500
Atlanta, Georgia 30309 By: /S/ A. BREMER /S/ D. SUTTLES
A. Bremer D. Suttles
Title: Sen. Vice President Vice President
Commitment: $40,000,000
- ----------
Address: SIGNET BANK
- -------
7799 Leesburg Pike
4th Floor
Falls Church, Virginia 22043
By: /S/ ERIK LAWRENCE
Erik Lawrence
Commitment: $ 25,000,000 Title: Senior Vice President
- -----------
Address: THE SUMITOMO BANK, LIMITED
- -------
233 South Wacker
Suite 4800
Chicago, Illinois 60606
Attention: Tom Batterham By:
Title: Joint General Manager
Commitment: $15,000,000
- ----------
<PAGE>
MASTER
PROMISSORY NOTE
(this "Note")
$20,000,000.00 December 30, 1996
FOR VALUE RECEIVED, the undersigned, WEINGARTEN REALTY INVESTORS
("Company") promises to pay to the order of TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Bank"), on or before December 15, 1997 ("Final Maturity Date")
at its offices located at 712 Main Street Houston, Texas 77002 in lawful money
of the United States of America and in immediately available funds, the
principal amount of each loan (a "Loan") shown in Bank's records to have been
made by Bank and on the relevant maturity date as set forth in Bank's records.
Each Loan shall also have its own date of maturity agreed by Company and Bank
which will occur prior to the Final Maturity Date. The rate of interest on
each Loan evidenced hereby from time to time shall be the interest rate which
shall be determined for each Loan by agreement between Company and Bank but,
in no event, shall exceed the maximum interest rate permitted under applicable
law ("Highest Lawful Rate"). If Texas law determines the Highest Lawful Rate,
Bank has elected the "indicated" (weekly) ceiling as defined in the Texas
Credit Code or any successor statute. All past due amounts shall bear
interest at a per annum interest rate equal to the Prime Rate plus one percent
(1%). The term "Prime Rate" shall mean the prime rate as determined from time
to time by Bank and thereafter entered in the minutes of Bank's Loan and
Discount Committee, fluctuating upward-or downward automatically, without
notice to Company on the business day of each such determination. THE PRIME
RATE IS A REFERENCE RATE AND BANK MAY MAKE LOANS AT RATES OF INTEREST AT,
ABOVE OR BELOW THE PRIME RATE. Interest on each Loan shall be: (I) computed
on the unpaid principal amount of the Loan outstanding from the date of
advance until paid; (ii) payable at maturity end thereafter on demand; and
(iii) shall be calculated on the basis of a year of 360 days for the actual
days elapsed.
The total amount of interest (as defined under applicable law) contracted
for, charged or collected under this Note will never exceed the Highest Lawful
Rate. If Bank contracts for, charges or receives any excess interest, it will
be deemed a mistake. Bank will automatically reform the contract or charge to
conform to applicable law, and if excess interest has been received, Bank will
either refund the excess or credit the excess on the unpaid principal amount
of this Note. All amounts constituting interest will be spread throughout the
full term of this Note in determining whether interest exceeds lawful amounts.
Each of the following is an event of default ("Events of Default"):
(a) Company shall fail to pay any amount of principal of or
interest on this Note when due;
(b) Company shall fail to pay when due any amount of principal
or interest with respect to any obligation to
Bank (other than this Note);
or
(c) Company shall fall to pay any amount relating to any other
recourse indebtedness in excess of $10,000,000 for
borrowedmoney or other pecuniary obligation (including any
contingent such obligation) or an event or condition shall
occur or exist which gives the holder of any such
indebtedness or obligation the right or option to
accelerate the maturity thereof.
(d) Company shall commence any bankruptcy, reorganization or
similar case or proceeding r elating to it or its property
under the law of any jurisdiction, or a trustee or
receiver shall be appointed for itself or any substantial
part of is property;
(e) any involuntary bankruptcy, reorganization or similar case
or proceeding under the law of any jurisdiction shall have
been commenced against Company or any substantial part of
its property and such case or proceeding shell not have
been dismissed within 60 days, or against Company shall
have consented to such case or proceeding; or
(f) Company shall admit in writing its inability to pay its
debts as they become due.
Upon the happening of any Event of Default specified in paragraphs
(d),(e) or (f) above, automatically the Loans evidenced by this Note
(with accrued interest thereon) shall immediately become due and payable, and
upon the happening of an Event of Default specified in paragraphs (a), (b) or
(c) above, Bank may, by notice to Company, declare the Loans evidenced by this
Note (with accrued interest thereon) to be due and payable, whereupon the same
shall immediately become due and payable. Except as expressly provided above,
presentment, demand, protest, notice of intent to accelerate, acceleration and
all other notices of any kind are hereby expressly waived.
The Company hereby agrees to pay on demand, in addition to unpaid
principal and interest, all Bank's costs and expenses incurred in attempting
or effecting collection hereunder, including the reasonable fees and expense
of counsel (which may include, to the extent permitted by applicable law,
allocated costs of in-house counsel), whether or not suit is instituted.
This Note is executed and delivered by Company to evidence Loans which
may be made by Bank to Company not to exceed $20,000,000.00. COMPANY
UNDERSTANDS THAT BANK HAS NO OBLIGATION TO MAKE ANY LOAN TO COMPANY UNDER THIS
NOTE.
All Loans evidenced by this Note are and will be for business and
commercial purposes and no Loan will be used for the purpose of purchasing or
carrying any margin stock as that term is defined in Regulation U of the Board
of Governors of the Federal Reverse System (the "Board").
Chapter 15 of the Texas Credit Code does not apply to this Note or to any
Loan evidenced by this Note. This Note shall be governed by the laws of the
Slate of Texas and the laws of the United States as applicable.
Bank shall, and is hereby authorized by Company, to record in its records
the date, amount, interest rate and due date of each Loan as wall as the date
and amount of each payment by the undersigned in respect thereof. Payments
may be applied to accrued interest or principal in whatever order Bank
chooses.
Loans evidenced by this Note may not be prepaid. In the event any such
prepayment occurs, Company shall indemnify Bank against any loss, liability,
damage, cost or expense which Bank may sustain or incur as a consequence
thereof, including with out limitation any loss, liability, damage, cost or
expense sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof. Bank
shall provide to Company a written statement explaining the amount of any such
loss or expense, which statement shall be conclusive absent manifest error.
No waiver of any default shall be deemed to be a waiver of any other
default. No failure to exercise or delay in exercising any right or power
under this Note shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude any further or other
exercise thereof or the exercise of any other right or power. No amendment,
modification or waiver of this Note shall be effective unless the same is in
writing and signed by the person against whom such amendment, modification or
waiver is sought to be enforced. No notice to or demand on any person shall
entitle any person to any other or further notice or demand in similar or
other circumstances.
This Note shall be binding upon the successors and assigns of Company and
inure to the benefit of Bank, its successors, endorsees and assigns
(furthermore, Bank may assign or pledge this Note or any interest therein to
any Federal Reserve Bank). If any term or provision of this Note shall be
held invalid, illegal or unenforceable the validity of all other terms and
provisions will not be effected.
This Note renewals and extends that certain Master Promissory Note dated
June 25,1996, in the original principal sum of $15,000,000.00, executed by the
Company, payable to the order of the Bank. THIS NOTE REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
WEINGARTEN REALTY INVESTORS
By:_______________________________________
Name:_______________________________________
Title:_______________________________________
Weingarten Realty Investors ("the 'trust")
is an unincorporated trust organized under
the Texas Real Estate Investment Trust
Act. Neither the shareholders of the
trust, nor its trust managers, officers,
employees or other agents are personally,
corporately or individually Liable for any
debt act, omission or obligation of the
trust, and all persons having claims of
any kind against the trust must look
solely to the property of the trust for
the enforcement of the enforcement of
their rights.
(The Bank's signature is provided as
its acknowledgment of the above as
the final written agreement between the parties.)
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
EXHIBIT 11.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
COMPUTATION OF NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
SIMPLE EARNINGS PER SHARE:
Weighted Average Common Shares Outstanding 26,555 26,464 26,190
======= ======= =======
Simple Earnings Per Share $ 2.03 $ 1.69 $ 1.67
======= ======= =======
PRIMARY EARNINGS PER SHARE (NOTE A):
Weighted Average Common Shares Outstanding 26,555 26,464 26,190
Shares Issuable from Assumed Conversion of
Common Share Options Granted and Outstanding 43 29 55
------- ------- -------
Weighted Average Common Shares Outstanding, as Adjusted 26,598 26,493 26,245
======= ======= =======
Primary Earnings Per Share $ 2.03 $ 1.69 $ 1.67
======= ======= =======
FULLY DILUTED EARNINGS PER SHARE (NOTE A):
Weighted Average Common Shares Outstanding 26,555 26,464 26,190
Shares Issuable from Assumed Conversion of
Common Share Options Granted and Outstanding 91 52 55
------- ------- -------
Weighted Average Common Shares Outstanding, as Adjusted 26,646 26,516 26,245
======= ======= =======
Fully Diluted Earnings Per Share $ 2.02 $ 1.69 $ 1.67
======= ======= =======
EARNINGS FOR SIMPLE, PRIMARY AND FULLY
DILUTED COMPUTATION:
Earnings $53,938 $44,802 $43,788
======= ======= =======
</TABLE>
Note A: This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB Opinion
No. 15 because it results in dilution of less than 3%.
EXHIBIT 12.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
COMPUTATION OF FIXED CHARGES RATIOS
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges and of funds from operations before interest expense to fixed
charges for the periods shown:
YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges 3.17x 3.05x 4.16x 3.94x 1.89x
Ratio of Funds from Operations Before Interest
Expense to Fixed Charges 4.28x 4.48x 6.10x 5.83x 2.82x
</TABLE>
The ratios of earnings to fixed charges were computed by dividing
earnings by fixed charges. The ratios of funds from operations before
interest expense to fixed charges were computed by dividing funds from
operations before interest expense by fixed charges. For these purposes,
earnings is defined as income before extraordinary charge plus fixed charges
(excluding interest costs capitalized). Funds from operations before interest
expense is defined as net income plus depreciation and amortization of real
estate assets and extraordinary charge, less gain (loss) on sales of property
and securities plus interest on indebtedness. Fixed charges consist of
interest on indebtedness (including interest costs capitalized), amortization
of debt costs and the portion of rent expense representing an interest factor.
Note: In accordance with the newly-adopted NAREIT definition of funds from
operations, debt cost amortization is not included beginning with the year
ended December 31, 1995.
<PAGE>
EXHIBIT
21.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
LIST OF SUBSIDIARIES OF THE REGISTRANT
STATE OF INCORPORATION
----------------------
SUBSIDIARY
- ------------------------------------
<S> <C>
Weingarten Realty Management Company Texas
Weingarten/Nostat, Inc. Texas
Weingarten/Lufkin, Inc. Texas
WRI/Post Oak, Inc. Texas
Weingarten Properties Trust N/A
Main/O.S.T., Ltd. N/A
Phelan Boulevard Venture N/A
Northwest Hollister Venture N/A
WRI/Interpak Venture N/A
East Town Lake Charles Co. N/A
Alabama-Shepherd Shopping Center N/A
Sheldon Center, Ltd. N/A
Jacinto City, Ltd. N/A
Weingarten/Finger Venture N/A
Rosenberg, Ltd. N/A
Eastex Venture N/A
GJR/Weingarten River Pointe Venture N/A
GJR/Weingarten Little York Venture N/A
WRI/Palans Joint Venture N/A
South Loop Long Wayside Company N/A
Lisbon St. Shopping Trust N/A
WRI/Crosby N/A
WRI/Dickinson N/A
Market at Town Center-Sugarland N/A
</TABLE>
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements
No. 33-20964, No. 33-24364, No. 33-41604, No. 33-52473, No. 33-54402 and No.
33-54404 on Form S-8, in Post-Effective Amendment No. 1 to Registration
Statement No. 33-25581 on Form S-8 and in Registration Statements No.
33-57659, No. 33-54529 and No. 333-12179 on Form S-3 of our report dated
February 25, 1997 appearing in this Annual Report on Form 10-K of Weingarten
Realty Investors for the year ended December 31, 1996. We also consent to the
reference to us under the heading "Experts" in the Prospectus which is part of
such Registration Statements on Form S-3.
DELOITTE & TOUCHE LLP
Houston, Texas
March 10, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WEINGARTEN
REALTY INVESTORS' ANNUAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 1996.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 169
<SECURITIES> 13,806
<RECEIVABLES> 14,400
<ALLOWANCES> 1,236
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 970,418
<DEPRECIATION> (233,514)
<TOTAL-ASSETS> 831,097
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 797
0
0
<OTHER-SE> 400,201
<TOTAL-LIABILITY-AND-EQUITY> 831,097
<SALES> 0
<TOTAL-REVENUES> 151,123
<CGS> 0
<TOTAL-COSTS> 41,895
<OTHER-EXPENSES> 33,769
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,975
<INCOME-PRETAX> 53,938
<INCOME-TAX> 0
<INCOME-CONTINUING> 53,938
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,938
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 0
</TABLE>
Exhibit 1.01-A
AMENDED AND RESTATED GUARANTY
-----------------------------
THIS AMENDED AND RESTATED GUARANTY is dated as of the 21st day
of November, 1996, by Weingarten/Lufkin, Inc., Weingarten Nostat Inc.
(formerly known as Weingarten/Arkansas, Inc.), Weingarten Realty Management
Company, and WRI/Post Oak, Inc., each a Texas corporation (each of the
foregoing, a "Guarantor", and collectively, the "Guarantors"), to TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, a national banking association as Agent
(the "Agent"), under the Credit Agreement (as defined below) for itself and
for the Banks which are parties to the Credit Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Weingarten Realty Investors, a Texas real estate investment
trust (the "Trust"), Agent and the certain of the Banks entered into that
certain Credit Agreement, dated as of November 22, 1994 (the " Original Credit
Agreement"), which Credit Agreement was guaranteed by each Guarantor under a
Guaranty dated as of even date therewith (the "Original Guaranty");
WHEREAS, the Original Credit Agreement has been amended and
restated as of even date herewith, and each Guarantor has agreed to restate
its guaranty of the obligations of the Trust under the Amended and Restated
Credit Agreement (as amended from time to time, the "Credit Agreement") dated
as of even date herewitih, by and among the Trust, the Agent, and the Banks
which are parties thereto, including certain new Banks which were not parties
to the Original Credit Agreement;
WHEREAS, each Guarantor is a wholly-owned subsidiary of the Trust
and will receive substantial benefits from the Credit Agreement, and in
consideration therefor, the Guarantor has agreed to guarantee the obligations
of the Trust under, and performance by the Trust of its cov-enants,
agreements, representations and warranties pursuant to the terms of, the
Credit Agreement and the promissory notes issued to the Banks pursuant thereto
(the "Notes") and to make and perform the covenants and agree-ments set forth
herein;
NOW, THEREFORE, as an inducement for the Banks to execute and
deliver the Credit Agreement and for other valu-able consideration, including,
but not limited to, the direct and indirect benefits flowing to each Guarantor
as a result of the execution and delivery of the Credit Agreement, each
Guar-antor agrees as follows:
Each Guarantor hereby absolutely, uncondition-ally and
irrevocably guarantees to the Banks, jointly and severally with all other
Guarantors, the full perfor-mance and observance of all of the Trust's
covenants, agreements, representations and warranties (collectively the
"Performance Obligations") set forth in the Credit Agreement, the Notes, any
Interest Rate Agreement and all other Loan Documents.
Each Guarantor hereby absolutely unconditionally and
irrevocably guarantees payment to the Banks of all indebtedness and
obligations due to the Banks, by acceleration or otherwise, of the Trust
arising under the Credit Agreement, the Notes, the Interest Rate Agreements
and all other Loan Documents, whether such indebtedness is liquidated or
unliquidated, fixed or contingent, now owing or hereafter arising
(collectively the "Payment Obligations" and together with the Performance
Obligations, herein referred to as the "Obligations").
This is a guaranty of payment and not of collection. The
Agent, on behalf of and at the instruction of the Banks may enforce such
guaranty, or any part thereof, against any Guarantor without first exercising
rights against the Trust or any other Guarantor. Each Guarantor hereby waives
any rights to require the Agent or the Banks to pursue the Trust before
enforcing the obligations of each Guarantor hereunder.
Each Guarantor guarantees that the Obligations will be paid
strictly in accordance with the terms of the Credit Agreement, the Notes, any
Interest Rate Agreements and all other Loan Documents and any other agreement
or instrument executed in connection therewith, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Banks with respect thereto. The
liability of each Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of or defect or
deficiency in the Credit Agreement, the Notes, any Interest Rate Agreement,
any of the other Loan Documents or any other agreement or instrument executed
in connection with or pursuant to any such Loan Document;
(b) any change in the time, manner, terms or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the Credit Agreement, the Notes,
any Interest Rate Agreement, any of the other Loan Documents, or any other
agreement or instrument executed in connection with or pursuant to any Loan
Document;
(c) any sale, exchange, release or non-perfection of any property
standing as security for the liabilities hereby guaranteed or any liabilities
incurred directly or indirectly hereunder or any setoff against any of said
liabilities, or any release or amendment or waiver of or consent to departure
from any other guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Trust or any other Person that is
a party to any Loan Document (including any other guarantors) in respect of
the Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any Bank upon the insolvency, bankruptcy or
reorganization of the Trust, or any Guarantor or otherwise, all as though such
payment had not been made. The enforceability of the obligations of each
Guarantor under this Guaranty shall not be affected by the amount of credit
extended to the Trust, any repayment by the Trust to the Banks (other than the
full and final payment of all of the Obligations), allocation by the Banks of
any repayment, any compromise or discharge of the Obligations, any
application, release or substitution of collateral or other security therefor,
release of any Guarantor, surety or other Person obligated in connection with
the Loan Documents, or any further advances to the Trust, or for any other
reason.
This is a continuing Guaranty, and all extensions of credit and
financial accommodations heretofore, concurrently herewith or hereafter made
by the Banks to the Trust and all indebtedness of the Trust now owned or
hereafter acquired by the Banks in connection with the transactions
contemplated under the Credit Agreement shall be conclusively presumed to have
been made or acquired in acceptance hereof.
Each Guarantor hereby waives (i) notice of acceptance of this
Guaranty and of presentment, demand and protest; (ii) notice of any default
hereunder or under the Credit Agreement, the Notes, the Interest Rate
Agreements or any other Loan Document, and of all indulgences; (iii) demand
for observance or perfor-mance of, or enforcement of, any terms or provisions
of this Guaranty or the Credit Agreement, the Notes, the Interest Rate
Agreements or any other Loan Document; (iv) notice of intent to accelerate and
notice of accel-eration; and (v) any right of subrogation under this Guaranty,
until payment in full of the Obligations. Should the Agent or the Banks seek
to enforce the obligations of any Guarantor hereunder by action in any court,
each Guarantor waives any necessity, substantive or procedural, that a
judgment previously be rendered against the Trust, any other Guarantor or any
other Person, or that any action be brought against the Trust, any other
Guarantor or any other Person, or that the Trust, any other Guarantor or any
other Person should be joined in such cause. Such waiver shall be without
prejudice to the Banks at their option to proceed against the Trust, any other
Guarantor or any other Person, whether by separate action or by joinder.
The obligations of each Guarantor hereunder are several from
the Trust or any other Person, and are primary obligations concerning which
each Guarantor is a principal obligor. Each Guarantor agrees that this
Guaranty shall not be discharged except by complete performance of the
obligations of the Trust under the Notes, the Credit Agreement, the Interest
Rate Agreements and any other Loan Document to which the Trust is a party and
the obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder shall not be affected in any way by any receivership, insolvency,
bankruptcy or other proceedings affecting the Trust or any of the Trust's
assets, or the release or discharge of the Trust from the performance of any
obligation contained in any promissory note or other instrument issued in
connection with, evidencing or securing any indebtedness guaranteed by this
instrument, whether occurring by reason of law or any other cause, whether
similar or dissimilar to the foregoing.
Each Guarantor hereby represents and warrants as follows:
(a) Each Guarantor has received, or will receive, direct or
indirect benefit from the making of this Guaranty.
(b) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by each Guarantor of this Guaranty and the
other documents and instruments executed in connection therewith, all of which
have been duly obtained or made and are in full force and effect.
(c) This Guaranty is, and all other documents and instruments
executed in connection therewith, when delivered will be, legal, valid and
binding obligations of each Guarantor, enforceable against such Guarantor in
accordance with their respective terms, except as such enforceability may be
(i) limited by the effect of any applicable Debtor Laws and (ii) subject to
the effect of general principles of equity.
(d) Each Guarantor's execution, delivery and performance of this
Guaranty does not require the consent or approval of any other Person.
No amendment or waiver of any provision of this Guaranty nor
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Banks, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
All notices and other communications provided for hereunder
shall be in writing (including telex or facsimile communication) and shall be
effective when actually delivered, or in the case of telex notice, when sent,
answerback received, or in the case of telefacsimile transmission, when
received and telephonically confirmed, addressed as follows: if to any
Guarantor, at its address set forth on the signature page hereof, with a copy
to Dow, Cogburn & Friedman, P.C., 9 Greenway Plaza, Suite 2300, Houston, Texas
77046, Attention: Mr. Melvin Dow; if to the Agent or any Bank, at the address
for the Agent or such Bank, as the case may be, set forth in the Credit
Agreement, or, as to each party, at such other address as shall be designated
by such party in a written notice to the other party.
No failure on the part of the Agent or any Bank to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Each Guarantor agrees to pay on demand all costs and expenses
in connection with the preparation, execution, delivery, modification, waiver
and amendment of this Guaranty and any of the documents or instruments
evidencing the Obligations and any other agreements or documents delivered in
connection with any of the Obligations, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent and each
Bank with respect thereto and with respect to advising the Agent and each Bank
as to its rights and responsibilities under this Guaranty and the other Loan
Documents; provided that, fees of counsel for the Agent and the Banks for work
performed in connection with the preparation, execution and delivery of this
Guaranty and the other Loan Documents on the Closing Date and all other work
described in this sentence performed on or prior to the Closing Date (together
with routine post-closing matters, such as preparation and delivery of Closing
packages), shall not exceed $_______. In the event of the occurrence of a
Default, each Guarantor further agrees to pay on demand, all costs and
expenses, if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Guaranty (whether through
negotiations, legal proceedings or otherwise) and the other Loan Documents.
The agreements of each Guarantor contained in this Section 12 shall survive
the payment of all other amounts owing hereunder or under any of the other
obligations.
Should any clause, sentence, paragraph, subsection or Section
of this Guaranty be judicially declared to be invalid, unenforceable or void,
such decision will not have the effect of invalidating or voiding the
remainder of this Guaranty, and the parties hereto agree that the part or
parts of this Guaranty so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom and the remainder will have the same
force and effectiveness as if such part or parts had never been included
herein.
This Guaranty is a continuing guaranty and shall (a) remain in
full force and effect until payment in full of the Obligations and all other
amounts payable under this Guaranty; (b) be binding upon each Guarantor, its
successors and assigns; and (c) inure to the benefit of and be enforceable by
the Agent and the Banks and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), the
Agent and the Banks may assign or otherwise transfer the Notes to any other
Person in accordance with the terms and provisions set forth in Section 10.08
of the Credit Agreement, and such other Person shall thereupon become vested
with all the rights and benefits in respect thereof granted to the Agent and
the Banks herein or otherwise.
Notwithstanding anything contained in any of the Loan Documents
executed by each Guarantor to the contrary, the maximum aggregate liability of
each Guarantor under this Guaranty shall be limited to the Maximum Guaranteed
Amount (as hereinafter defined) determined with respect to such Guarantor as
and when provided in the definition of Maximum Guaranteed Amount.
"Adjusted Net Worth" means, with respect to any Guarantor, on the Closing
------------------
Date and on any date which payment by the Guarantor in respect of the
Obligations is required to be made under the terms of this Guaranty (each such
date a "Calculation Date"), the excess of (i) the amount of the "present fair
saleable value" of the "assets" of such Guarantor as of such Calculation Date,
over (ii) the amount of all "liabilities" (other than the Obligations) of such
Guarantor, whether matured or unmatured, liquidated or unliquidated, absolute,
fixed or contingent, as determined on such Calculation Date, as such quoted
terms are determined in accordance with applicable laws governing fraudu-lent
conveyances and transfers and determinations of the insolvency of debtors.
"Maximum Guaranteed Amount" means, on any Calculation Date, the greater
---------------------------
of (i) ninety-five percent (95%) of the Adjusted Net Worth of each Guarantor,
on the Closing Date immediately after the consumma-tion of the transactions
contemplated hereby or (ii) ninety-five percent (95%) of the Adjusted Net
Worth of the Guarantor on such other Calculation Date.
GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SUBMISSION TO JURISDICTION; WAIVERS. EACH GUARANTOR
--------------------------------------
IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT IN HARRIS COUNTY,
TEXAS OR THAT SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY REGISTERED OR
CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL POSTAGE PREPAID) TO
THE ADDRESS SET FORTH IN SECTION 10. HEREOF OR AT SUCH OTHER ADDRESS OF WHICH
THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING PURSUANT TO
SECTION 10.
FINAL AGREEMENT. THIS WRITTEN GUARANTY, THE NOTES AND THE
----------------
CREDIT AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
All terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed by its respective officer thereunto duly authorized, as of the
date first above written.
GUARANTOR:
WEINGARTEN/LUFKIN, INC.
By: /S/ JOSEPH WILLIAM ROBERTSON, JR.
Name: Joseph William Robertson, Jr.
Title: Executive Vice President
WEINGARTEN/NOSTAT INC.
By: /S/ JOSEPH WILLIAM ROBERTSON, JR.
Name: Joseph William Robertson, Jr.
Title: Executive Vice President
WEINGARTEN REALTY MANAGEMENT
COMPANY
By: /S/ JOSEPH WILLIAM ROBERTSON, JR.
Name: Joseph William Robertson, Jr.
Title: Executive Vice President
WRI/POST OAK, INC.
By: JOSEPH WILLIAM ROBERTSON, JR.
Name: Joseph William Robertson, Jr.
Title: Executive Vice President
<PAGE>
EXHIBIT 1.01-B
EXISTING LETTERS OF CREDIT
<TABLE>
<CAPTION>
Number Effictive Date Expiration Date Amount
- ------- -------------- --------------- --------------
<S> <C> <C> <C>
I451606 03/23/95 07/15/97 $ 2,184,911.00
I454505 07/12/95 10/1797/ $ 3,863,934.25
I454507 07/12/95 10/17/97 $ 2,058,695.89
I461289 04/19/96 10/17/98 $ 6,821,882.19
$14,929,423.33
==============
</TABLE>
<PAGE>
EXHIBIT 1.01-C
DEFINITIONS GOVERNING LETTERS OF CREDIT SUPPORTING BONDS
--------------------------------------------------------
"Bonds" means, together, the Series 1995 Lafayette Bonds and the Series
-----
1995 Calcasieu Bonds.
"Bond Support Letter of Credit" shall mean the Letter of Credit issued
-------------------------------
pursuant to Sections 2.03(h)-(ii) and (i)-(ii) hereof in respect of the
Shawnee Village Bonds substantially in the form of Exhibit C attached to the
Seventh Amendment to the Prior Credit Agreement.
"Calcasieu Indenture" means a Trust Indenture dated June 1, 1995 between
---------------------
the Industrial Development Board of the Parish of Calcasieu, Louisiana, Inc.,
Texas Commerce Bank National Association, as Trustee, and First Union National
Bank of Florida, as Credit Facility Trustee thereunder.
"Credit Facility Trustee" shall have the meaning assigned to that term in
-----------------------
each Special Letter of Credit.
"Fixed Rate" shall have the meaning specified for such term in the
-----------
Shawnee Village Indenture.
"Fixed Rate Period" shall mean the period of time during which the
-------------------
Shawnee Village Bonds bear interest at the Fixed Rate pursuant to the Shawnee
Village Indenture.
"Floating Rate" shall have the meaning assigned to such term in the
--------------
Shawnee Village Indenture.
"Full Drawing" shall have the meaning assigned to such term in the
-------------
applicable Special Letter of Credit.
"Full Drawing - Shawnee Village Bonds" shall have the meaning assigned to
------------------------------------
such term in the applicable Bond Support Letter of Credit.
"Indenture" or Indentures" means either or both of the Lafayette
--------- ----------
Indenture and the Calcasieu Indenture.
--
"Interest Differential" means, with respect to the principal amount of
----------------------
any Liquidity Bank Bond and for the period commencing on the date that such
Bond bears interest at the Liquidity Bank Rate and ending on a date thirty
(30) days thereafter, the excess, if any, of
<PAGE>
(i) interest calculated on such Bond at the lesser of (x) the Prime Rate,
or (y) the Highest Lawful Rate, over
(ii)interest calculated on such Bond at the Liquidity Bank Rate.
"Lafayette Indenture" means a Trust Indenture dated June 1, 1995 between
---------------------
the Industrial Development Board of the Parish of Lafayette, Louisiana, Inc.,
Texas Commerce Bank National Association, as trustee, and First Union National
Bank of Florida, as Credit Facility Trustee thereunder.
"Liquidity Bank Bonds" means the particular Bond (or Bonds) of the Series
--------------------
1995 Lafayette Bonds or Series 1995 Calcasieu Bonds, as the case may be, which
are actually required to be purchased due to the inability of the applicable
Remarketing Agent (as that term is defined in the respective Indentures) to
remarket such bonds, and as a result of the requirement that such bonds be
delivered to the Tender Agent for the benefit of the Banks, pursuant to the
provisions of the Indentures.
"Long Rate Period" shall have the meaning assigned to such term in the
------------------
applicable Indenture in respect of the Series 1995 Lafayette Bonds or the
Series 1995 Calcasieu Bonds.
"Maximum Rate" means 12% per annum, with respect to the Series 1995
-------------
Lafayette Bonds and the Series 1995 Calcasieu Bonds, and 18% per annum, with
respect to the Shawnee Village Bonds.
"Partial Drawing" shall have the meaning assigned to such term in the
----------------
applicable Special Letter of Credit.
"Partial Drawing - Shawnee Village Bonds" shall have the meaning assigned
---------------------------------------
to such term, as applicable, in the Bond Support Letter of Credit.
"Pledge and Security Agreement" shall mean, with respect to the Shawnee
-------------------------------
Village Bonds, that certain Pledge and Security Agreement, dated as of
December 1, 1984, by and among Shawnee Village Associates, L.P. (the "Pledgor"
thereunder), Citibank, N.A. (the "Agent" thereunder), and First National Bank
of Minneapolis (the "Bank" thereunder), as amended by the First Amendment to
Pledge and Security Agreement dated as of April 19, 1996, by and among the
Borrower, replacing the Pledgor thereunder, State Street Bank & Trust Company,
N.A. (as "Tender Agent") and Texas Commerce Bank National Association, as
Agent for the Banks thereunder (the "First Amendment"), the original agreement
being in the form set forth in Exhibit A to the First Amendment and
incorporated by reference therein, as amended by the First Amendment, whether
or not such original agreement is otherwise deemed to be in effect as to the
original parties thereto .
<PAGE>
"Prime Rate" means, as of a particular date, the prime rate most recently
----------
announced by the Agent and thereafter entered in the minutes of the Agent's
Loan and Discount Committee. Without notice to the Borrower or any other
Person, the Prime Rate shall change automatically from time to time as and in
the amount by which such prime rate shall fluctuate, with each such change to
be effective as of the date of each change in such prime rate. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Agent may, in its individual capacity,
make commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"Purchase Drawing" shall have the meaning assigned to such term in the
-----------------
applicable Special Letter of Credit.
"Purchase Drawing - Shawnee Village Bonds" shall have the meaning
---------------------------------------------
assigned to such term in the applicable Bond Support Letter of Credit.
-
"Purchase Price" shall have the meaning assigned to such term in Section
---------------
2.03(i)-(i) hereof.
"Remarketing Agreements" means that certain Remarketing Agreement dated
-----------------------
as of June 1, 1995, among the Borrower, the Industrial Development Board of
the Parish of Lafayette, Louisiana, Inc. and Rauscher Pierce Refsnes, Inc. in
connection with the Series 1995 Lafayette Bonds, and that certain Remarketing
Agreement dated as of June 1, 1995, among the Borrower, the Industrial
Development Board of the Parish of Calcasieu, Louisiana, Inc. and Rauscher
Pierce Refsnes, Inc. in connection with the Series 1995 Calcasieu Bonds.
"Series 1995 Calcasieu Bonds" means the $1,990,000 Industrial Development
---------------------------
Board of the Parish of Calcasieu, Louisiana Inc.Adjustable Rate Demand
Industrial Development Revenue Refunding Bonds (Weingarten Realty Investors
Project) Series 1995, issued by the Industrial Development Board of the Parish
of Calcasieu, Louisiana, Inc.
"Series 1995 Lafayette Bonds" means the $3,735,000 Industrial Development
---------------------------
Board of the Parish of Lafayette, Louisiana, Inc. Adjustable Rate Demand
Industrial Development Revenue Refunding Bonds (Westwood Village Project)
Series 1995, issued by the Industrial Development Board of the Parish of
Lafayette, Louisiana, Inc.
"Shawnee Village Bonds" means the Variable Rate Demand Industrial Revenue
---------------------
Bonds, Series December 1, 1984 (Shawnee Village Associates Project) issued by
the City of Shawnee, Kansas.
"Shawnee Village Bank Bonds" means the particular Shawnee Village Bond
-----------------------------
(or Shawnee Village Bonds) which are actually required (due to the inability
of the Remarketing Agent (as that term is defined in the Shawnee Village
Indenture) to remarket such bonds) to be delivered to the Shawnee Village
Tender Agent, to hold such bonds as agent for the Banks (in their capacity as
holders of a security interest in such Shawnee Village Bonds), pursuant to the
provisions of the Shawnee Village Indenture and the Pledge and Security
Agreement.
"Shawnee Village Bank Rate" means at the option of the Borrower (A) the
---------------------------
lesser of (x) the Prime Rate, or (y) the Maximum Rate, or (z) the Highest
Lawful Rate, or (B) the rate otherwise available for an Advance under Section
2.06 of this Agreement, and subject to the requirements of Sections 2.02(a),
2.08 and 2.10, as if the principal amount of such Shawnee Village Bank Bonds
bearing interest at such rate were deemed, solely for the purpose of
determining interest thereon, to be an Advance under this Agreement.
"Shawnee Village Indenture" means a Trust Indenture dated as of December
--------------------------
1, 1984, the parties to which are currently Boatmen's First National Bank of
Kansas City, as Successor Trustee, and the City of Shawnee, Kansas, as
supplemented by the Supplemental Trust Indenture, dated as of December 1,
1984, and as thereafter supplemented from time to time.
"Shawnee Village Interest Differential" means, with respect to the
----------------------------------------
principal amount of any Shawnee Village Bond and for the period commencing on
the date that such bond bears interest at the Shawnee Village Bank Rate and
ending on a date thirty (30) days thereafter, the excess, if any, of
(a) interest calculated on such Shawnee Village Bank Bonds at the
applicable Shawnee Village Bank Rate, over
(b) interest calculated on such Shawnee Village Bank Bond at the rate of
interest which would otherwise be applicable in respect of such Bonds if such
Bonds were not Shawnee Village Bank Bonds.
"Shawnee Village Purchase Price" shall have the meaning assigned to such
-------------------------------
term in Section 2.03(i)-(ii) hereof.
"Shawnee Village Tender Agent" means a Person acting as a Tender Agent
------------------------------
under the Shawnee Village Indenture in connection with the Shawnee Village
Bonds.
"Short Rate" shall have the meaning assigned to such term in the
-----------
applicable Indenture governing the Series 1995 Calcasieu Bonds or the Series
--
1995 Lafayette Bonds, as the case may be.
"Short Rate Period" shall have the meaning assigned to such term in the
-------------------
applicable Indenture governing the Series 1995 Calcasieu Bonds or the Series
1995 Lafayette Bonds, as the case may be.
"Special Affiliate" shall mean, for purposes of the Shawnee Village
------------------
Bonds, with respect to any Person, any Person that directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, such first Person or is treated as a single employer with
such first Person under Section 414(b) or (c) of the Internal Revenue Code,
and the regulations thereunder. As used in this definition, the term
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or
instrumentality thereof.
"Special Letters of Credit" shall mean the Letters of Credit issued
----------------------------
pursuant to Sections 2.03(h)-(i) and (i)-(i) hereof, each substantially in the
form of Exhibits A and B, attached to the Third Amendment to the Prior Credit
Agreement, in respect of the Series 1995 Calcasieu Bonds and the Series 1995
Lafayette Bonds.
"S.V. Trustee" shall mean Boatmen's First National Bank of Kansas City,
--------------
or such other Trustee as shall be named as Trustee under the Shawnee Village
Indenture.
"Tender Agent" means initially, Texas Commerce Bank National Association,
------------
and thereafter shall have the meaning assigned to such term in the Indentures
governing the Series 1995 Calcasieu Bonds and the Series 1995 Lafayette Bonds.
"Weekly Rate" shall have the meaning assigned to such term in the
------------
applicable Indenture governing the Series 1995 Calcasieu Bonds or the Series
-
1995 Lafayette Bonds, as the case may be.
"Weekly Rate Period" shall have the meaning assigned to such term in the
-------------------
applicable Indenture governing the Series 1995 Calcasieu Bonds or the Series
1995 Lafayette Bonds, as the case may be.
<PAGE>
Exhibit 2.02(a)
NOTICE OF BORROWING
-------------------
The undersigned hereby certifies that he is the Chief Executive
Officer or Chief Financial Officer of Weingarten Realty Investors, a Texas
real estate investment trust (the "Borrower"), and that as such he is
authorized to execute this Notice of Borrowing on behalf of the Borrower.
With reference to that certain Amended and Restated Credit Agreement dated
November __, 1996 (as the same may be amended, modified, increased,
supplemented and/or restated from time to time, the "Credit Agreement")
entered into by and among the Borrower, TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association and each of the other banks to
become a party thereto in accordance with the terms and provisions thereof
(collectively the "Banks") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as
Agent (the "Agent"), NATIONSBANK OF TEXAS, N.A., as Documentary Agent and
COMMERZBANK, A.G., as Co-Agent, the undersigned further certifies, represents
and warrants on behalf of the Borrower that to his best knowledge and belief
after reasonable and due investigation and review, all of the following
statements are true and correct (each capitalized term used herein having the
same meaning given to it in the Credit Agreement unless otherwise specified):
Borrower requests that each Bank advance to the Borrower its Pro
Rata Percentage of the aggregate sum of $________ by no later than ________,
19__. Immediately following such Advances, the aggregate outstanding balance
of Advances shall equal $________. Borrower requests that the ratable
principal amount for each Bank of the Advances consist of Effective Federal
Funds Rate Advances and/or LIBOR Rate Advances as follows:
Note: Borrower need only complete the line item labeled "Total".
(i) The principal amount of Advances consisting of LIBOR Rate
Advances for which the initial Interest Period shall be seven (7) days, if
any, requested to be made by each Bank is as follows:
_________________ $______________
_________________ $______________
Total $______________
(ii) The principal amount of Advances consisting of LIBOR Rate
Advances for which the initial Interest Period shall be one month, if any,
---------
requested to be made by each Bank is as follows:
_________________ $______________
_________________ $______________
_________________ $______________
_________________ $______________
Total $______________
(iii) The principal amount of Advances consisting of LIBOR Rate
Advances for which the initial Interest Period shall be two months, if any,
----------
requested to be made by each Bank is as follows:
_________________ $______________
_________________ $______________
_________________ $______________
_________________ $______________
Total $______________
(iv) The principal amount of Advances consisting of Effective Federal
Funds Rate Advances, if any, requested to be made by each Bank is as follows:
_________________ $______________
_________________ $______________
_________________ $______________
_________________ $______________
Total $______________
(v) The principal amount of Advances consisting of LIBOR Rate
Advances for which the initial Interest Period shall be three months, if any,
------------
requested to be made by each Bank is as follows:
_________________ $______________
_________________ $______________
_________________ $______________
_________________ $______________
Total $______________
(a) The representations and warranties contained in Article V of
the Credit Agreement are true and correct in all material respects on and as
of the date hereof, before and after giving effect to such Borrowing, and to
the application of the proceeds therefrom, as though made on and as of this
date.
(b) No event has occurred or is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes (or would constitute) a Default or an Event of Default.
EXECUTED AND DELIVERED this ___ day of ________, 19__.
WEINGARTEN REALTY INVESTORS
By:
Name:
Title:
<PAGE>
Exhibit 2.02(c)
WEINGARTEN REALTY INVESTORS
Promissory Note
---------------
$_____________________ November __, 1996
FOR VALUE RECEIVED, the undersigned, Weingarten Realty Investors, a
Texas real estate investment trust, hereby promises to pay to the order of
______________________________________________ (the "Bank") the principal sum
of _______________________________________________ DOLLARS ($______________)
or the aggregate principal amount of Advances made pursuant to the Credit
Agreement hereinafter mentioned and outstanding as of the maturity hereof,
whether by acceleration or otherwise, whichever may be the lesser, on or
before the Termination Date, together with interest on any and all amounts
remaining unpaid hereon from time to time from the date hereof until maturity,
payable as described in the Credit Agreement, and at maturity, in the manner
and at the rates per annum as set forth in the Amended and Restated Credit
Agreement dated as of even date herewith, between the undersigned, the Bank in
its own capacity and as Agent, and the other banks which are party thereto, as
amended from time to time (the "Credit Agreement"). Capitalized terms used but
not otherwise defined herein shall have the same respective meanings ascribed
to them as in the Credit Agreement.
If any payment of principal or interest on this Note shall become
due on a day which is not a Business Day, such payment shall be made on the
next succeeding business day, and such extension of time shall in such case be
considered in computing interest in connection with such payment.
Payments of both principal and interest are to be made in
immediately available funds at the office of the Agent, 712 Main Street,
Houston, Texas, or such other place as the holder shall designate in writing
to the maker.
If default is made in the payment of this Note and it is placed in
the hands of an attorney for collection, or collected through bankruptcy
proceedings, or if suit is brought on this Note, the maker agrees to pay
reasonable attorneys' fees in addition to all other amounts owing hereunder.
This Note is the Note provided for in, and is entitled to the
benefits of, the Credit Agreement, which, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events, for prepayments of principal hereof prior to the
maturity hereof upon terms and conditions therein specified, for conversion of
the Revolving Credit Loan to a Term Loan on the Conversion Date and,
thereafter, for scheduled payments of principal of and interest on this Note
in the manner and at the times and under the terms and conditions of the
Credit Agreement, and to the effect that no provision of the Credit Agreement
or this Note shall require the payment or permit the collection of interest in
excess of the Highest Lawful Rate. It is contemplated that by reason of
prepayments hereon there may be times when no indebtedness is owing hereunder;
but notwithstanding such occurrences this Note shall remain valid and shall be
in full force and effect as to Advances made pursuant to the Credit Agreement
subsequent to each such occurrence.
Except as expressly provided in the Credit Agreement, the maker and
any and all endorsers, guarantors and sureties severally waive grace, notice
of intent to accelerate, notice of acceleration, demand, presentment for
payment, notice of dishonor or default, protest and notice of protest and
diligence in collecting and bringing of suit against any party hereto, and
agree to all renewals, extensions or partial payments hereon and to any
release or substitution of security herefor, in whole or in part, with or
without notice, before or after maturity.
With respect to the incurrence of certain liabilities hereunder and
the making of certain agreements by the Borrower as herein stated, such
incurrence of liabilities and such agreements shall be binding upon the
Borrower only as a trust formed under the Texas Real Estate Investment Trust
Act pursuant to that certain Restated Declaration of Trust dated March 23,
1988, and only upon the assets of such Borrower. No Trust Manager or officer
or other holder of any beneficial interest in the Borrower shall have any
personal liability for the payment of any indebtedness or other liabilities
incurred by the Borrower hereunder or for the performance of any agreements
made by the Borrower hereunder, nor for any other act, omission or obligation
incurred by the Borrower or by the Trust Managers except, in the case of a
Trust Manager, any liability arising from his own wilful misfeasance or
malfeasance or negligence.
WEINGARTEN REALTY INVESTORS
By: /S/ JOSEPH WILLIAM ROBERTSON, JR.
Name: Joseph William Robertson, Jr.
Title: Executive Vice President
<PAGE>
Exhibit 2.03
LETTER OF CREDIT REQUEST
------------------------
The undersigned hereby certifies that he is the Chief Executive
Officer or Chief Financial Officer of Weingarten Realty Investors, a Texas
real estate investment trust (the "Borrower"), and that as such he is
authorized to execute this Letter of Credit Request on behalf of the Borrower.
With reference to that certain Amended and Restated Credit Agreement dated
November __, 1996 (as the same may be amended, modified, increased,
supplemented and/or restated from time to time, the "Credit Agreement")
entered into by and among the Borrower, TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association and each of the other banks to
become a party thereto in accordance with the terms and provisions thereof
(collectively the "Banks") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as
Agent (the "Agent"), NATIONSBANK OF TEXAS, N.A., as Documentary Agent and
COMMERZBANK, A.G., as Co-Agent, the undersigned further certifies, represents
and warrants on behalf of the Borrower that to his best knowledge and belief
after reasonable and due investigation and review, all of the following
statements are true and correct (each capitalized term used herein having the
same meaning given to it in the Credit Agreement unless otherwise specified):
Borrower requests the issuance of a Letter of Credit under the
Credit Agreement, in the face amount of $___________________. Immediately
following the issuance of such Letter of Credit the aggregate outstanding face
amount of Letters of Credit issued and outstanding shall equal $________.
Date of issue requested; ____________, 19__;
---------------------------------------------------
for the benefit of _______________;
---------------------------------------
in the amount of $________________;
---------------------------------------
having an expiry date of _____________, 19__; and which is
---------------------------------------------------------------
subject to the conditions set forth in the Letter of Credit
--------------------------------------------------------------------
Application attached hereto.
--------------------------
The Borrower hereby further certifies that:
(a) on the date hereof all applicable conditions to the
--- ---------------------------------------------------
issuance of the proposed Letter of Credit set forth in Sections 2.03, 4.01 and
---------------------------------------------------------------------------
4.02 of the Credit Agreement have been satisfied and that the proposed Letter
- ------------------------------------------------------------------------------
of Credit complies with the terms of the Credit Agreement;
- -------------------------------------------------------------------
<PAGE>
(b) after giving effect to the Letter of Credit herein
--- --------------------------------------------------
requested, the aggregate unused portion of the Letter of Credit Commitment is
--------------------------------------------------------------------------
$_______________, and the aggregate unused portion of the Commitment is
- ------------------------------------------------------------------------------
$________________.
- ------------------
(c) the representations and warranties contained in Article
--- -------------------------------------------------------
V of the Credit Agreement are true and correct in all material respects on and
- ------------------------------------------------------------------------------
as of the date hereof, before and after giving effect to the issuance of the
- ------------------------------------------------------------------------------
Letter of Credit, as though made on and as of this date.
- -------------------------------------------------------------------
(d) No event has occurred or is continuing, or would result
--- -------------------------------------------------------
from such issuance of Letter of Credit, which constitutes (or would
- -----------------------------------------------------------------------------
constitute) a Default or an Event of Default.
- ----------------------------------------------------
Upon the issuance or extension of the proposed Letter of
Credit, the Borrower will be deemed to have recertified the foregoing on such
issuance date or extension date, as the case may be.
EXECUTED AND DELIVERED this ________ day of ________________,
199__.
WEINGARTEN REALTY INVESTORS
By:
Name:
Title:
<PAGE>
Exhibit 2.09
NOTICE OF INTEREST CONVERSION
-----------------------------
TO: TEXAS COMMERCE BANK NATIONAL ASSOCIATION, in its capacity as Agent
(the "Agent") under that certain Amended and Restated Credit Agreement dated
as of November __, 1996 (as the same may be amended, modified, increased,
supplemented and/or restated from time to time, the "Credit Agreement"),
entered into by and among WEINGARTEN REALTY INVESTORS ("Borrower"), the Banks
on the signature pages thereto, the Agent, and NATIONSBANK OF TEXAS, N.A., as
Documentary Agent and COMMERZBANK, A.G., as Co-Agent thereunder.
Pursuant to Section 2.09 of the Credit Agreement, this Notice of
Interest Conversion (the "Notice") represents the Borrower's election of
[insert one or more of the following]:
1. Use if converting LIBOR Rate Advances to Effective Federal Funds
Rate Advances.
Convert $________ in aggregate principal amount of LIBOR Rate Advances
with a current Interest Period ending on ________, 19__, to Effective Federal
Funds Rate Advances on ________, 19__; and
2. Use if continuing the balance as LIBOR Rate Advances.
Continue $________ in aggregate principal amount of LIBOR Rate Advances with a
current Interest Period ending on ____________, 19__, to a new Interest Period
commencing on _________________, 19__, and ending on ________, 19__.
Unless otherwise defined herein, terms defined in the Credit
Agreement shall have the same meanings in this Notice.
Dated: ________, 19__.
WEINGARTEN REALTY INVESTORS
By:
Name:
Title:
<PAGE>
Exhibit 5.01
SUBSIDIARIES
------------
Weingarten/Lufkin, Inc. (formerly WRI/Central Park North, Inc.)
Weingarten Nostat, Inc. (formerly Weingarten/Arkansas, Inc.)
Weingarten Realty Management Company
WRI/Post Oak, Inc.
<PAGE>
EXHIBIT 5.08
LITIGATION
PENDING CLAIMS OVER 1. MILLION
<TABLE>
<CAPTION>
AMT REQ'D
LOC DATE CLAIMANT DESC IN SUIT
---- -------- -------------------- ---------- ------------------
<C> <C> <C> <S> <C> <C>
(1) 0061 02/05/91 Phuong Anh Thi Trong Assault >$1,000,000.00
(Insurance claim
prior to SIR)
(2) 0095 12/08/92 Noris Faniel Fall from $ 2,500,000.00
Ceiling
(3) 0140 02/09/94 Stacey Thompson Rape $ 30,000,000.00
(4) 0505 05/02/94 David Wu Shooting $ 9,750,000.00
(Death)
</TABLE>
(5) All other matters set out in audit letter dated February 16,
1996, from Dow, Cogburn & Friedman, P.C. to Deloitte & Touche (a copy of which
has been provided to Agent).
Footnote: We have $76,000,000 coverage every year from 1992 to date.
<PAGE>
______________________
Date
EXHIBIT 6.01(C)
COMPLIANCE CERTIFICATE
I. Borrower certifies that the credit rating assigned to the Borrower's
senior-unsecured, long-term debt by S&P as of the date of this Compliance
Certificate, and as of the date of delivery of its Financial Statements is
_____________.
II. Financial Covenants
<TABLE>
<CAPTION>
In
Limit Actual Compliance
----------------------------- ------ ----------
<S> <C> <C> <C> <C>
Total Debt
----------------------------
Not greater
Section 7.02(a) than 60% ______ __________
Secured Debt
----------------------------
Not greater
Section 7.02(b) than 40% ______ __________
Limitation of Unimproved Real Property
---------------------------- -----------------------------
Not greater
Section 7.03 than 12.5% ______ __________
Limitation on Sale or Other Disposition of Real Property
---------------------------- -----------------------------
Section 7.04 See Schedule A __________
(attached hereto)
Coverage Ratio
----------------------------
Section 7.07 2.5 or more ______ __________
f. Assets Retained
Section 7.13 Not less than 150% ______ __________
</TABLE>
<PAGE>
III. Certification
The undersigned hereby further certifies and warrants to the Banks that,
as of the date set forth above, (i) no default under the Amended and Restated
Credit Agreement (the "Credit Agreement") has occurred, and no event has
occurred, which, but for the passage of time, would constitute a default
(except for any default which may have been expressly waived in writing by the
Banks), (ii) each representation and warranty of the Borrower contained in the
Credit Agreement is still true and correct on and as of the date set forth
above, as though made on and as of such date, and (iii) the undersigned is the
duly elected, qualified and acting Chief Financial Officer (or Chief
Accounting Officer) of the Borrower, and as such, is authorized to execute
this Report on its behalf.
The undersigned hereby further certifies and warrants to the Banks that,
as of the date set forth above, (i) no default under the Credit Agreement has
occurred, and no event has occurred, which, but for the passage of time, would
constitute a default (except for any default which may have been expressly
waived in writing by the Banks) except as noted on the attachment, (ii) each
representation and warranty of the Borrower contained in the Credit Agreement
is still true and correct on and as of the date set forth above, as though
made on and as of such date, except as noted on the attachment, and (iii) the
undersigned is the duly elected, qualified and acting Chief Financial Officer
or Chief Accounting Officer of the Borrower, and as such, is authorized to
execute this Report on its behalf.
IV. .n accordance with Section 6.01(e) of the Credit Agreement, attached
hereto is a description of each litigation, legal, administrative, or arbitral
proceeding, investigation or other action of any nature not previously
reported which involves a claim equal to or exceeding $5,000,000 against the
Borrower or any Subsidiary, or which involves the reasonable possibility, if
adversely determined, in the judgment of the Borrower, of a judgment in excess
of $1,000,000 which has not been stayed (whether by supersedas bond or
otherwise), or other liability, in each case, which could have a material
adverse effect on the business, operations or financial conditions of the
Borrower and its Subsidiaries, taken as a whole or otherwise required to be
reported pursuant to said Section 6.01(e).
V. Each Subsidiary newly formed or acquired since the Closing Date (all of
the stock of which is owned by the Borrower) has executed and delivered to the
Agent a Guaranty Agreement in accordance with Section 6.06 of the Credit
Agreement.
A Guaranty Agreement from the Subsidiary(ies) listed on the attachment is
enclosed herewith.
<PAGE>
VI. Attached is Schedule A, computations and other information relevant in
connection with this Compliance Certificate.
By:
Name:
Title:
Schedule A
----------
Debt
- ----
Section 7.02(a)
- ----------------
Calculation of "Limitations on Incurrence of Debt" as defined for purposes of
Section 7.02(a). Calculations as of _________________:
Components of Debt:
Debt
Total Assets
Debt/Total Assets (Line 2 divided by Line 3)
"Debt" and "Total Assets" are defined terms in the Credit Agreement.
Secured Debt
- -------------
Section 7.02(b)
- ----------------
Calculation of "Limitations on Incurrence of Debt" as defined for purposes of
Section 7.02(b). Calculation as of _________________:
<PAGE>
1. Components of Secured Debt:
2. Secured Debt
3. Total Assets
4. Secured Debt/Total Assets (Line 2 divided by Line 3)
"Debt" and "Total Assets" are defined terms in the Credit Agreement. "Secured
Debt" means Debt described in Section 7.02(b) and (c) of the Credit Agreement.
Limitation of Unimproved Real Property
- ------------------------------------------
Section 7.03
- -------------
Calculation of "Unimproved Real Property" as defined for purposes of Section
7.03. Calculation as of ___________________:
1. Unimproved Real Property
2. Undepreciated Real Estate Assets
3. Unimproved Real Property/
Undepreciated Real Estate Assets (Line 1 divided by Line 2)
"Unimproved Real Property" and "Undepreciated Real Estate Assets" are defined
terms in the Loan Agreement.
Limitation on Sale or Other Disposition of Real Property
- ----------------------------------------------------------------
Section 7.04
- -------------
(i) Calculation of "Sale or Other Disposition of Real Property" as
defined for purposes of Section 7.04(i). Calculation as of
___________________:
1. Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12 (month of current disposition)
<PAGE>
2. Total Dispositions for last 12
calendar months (or if shorter, for the
period from November __, 1996 to such date).
3. Total Dispositions/Undepreciated Real Estate Assets
4. Undepreciated Real Estate Assets
(as of last day of preceding quarter)
5. Ten Percent (10%) of line (4)
6. Excess of line 2 over line 5 -
Amount of Adjusted Net Proceeds
"Adjusted Net Proceeds" is a defined term in the Credit Agreement.
Limitation on Sale or Other Disposition of Real Property
- ----------------------------------------------------------------
Section 7.04
- -------------
(ii) Calculation of "Sale or Other Disposition of Real Property" as
defined for purposes of Section 7.04(ii). Calculation as of
____________________:
1. Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18
Month 19
Month 20
Month 21
Month 22
Month 23
Month 24
Month 25
Month 26
Month 27
Month 28
Month 29
Month 30
Month 31
Month 32
Month 33
Month 34
Month 35
Month 36 (month of current disposition)
2. Total Dispositions for last 36
months (or if shorter, for the period
from November __, 1996 to such date).
3. Total Dispositions/Undepreciated Real Estate Assets
4. Undepreciated Real Estate Assets (as of last day of
preceding quarter)
5. Fifteen Percent (15%) of line (4)
6. Excess of line 2 over line 5 -
Amount of Adjusted Net Proceeds
"Adjusted Net Proceeds" is a defined term in the Credit Agreement.
Coverage Ratio
- ---------------
Section 7.07
- -------------
Calculation of "Coverage Ratio" as defined for purposes of Section 7.07.
Calculation as of ____________________:
1. Funds from Operations
2. Net Income
3. Plus:
4. Depreciation and Amortization
5. Interest/Original Issue Discount
6. Extraordinary Charges
7. Excess Distributable Funds
8. Minus:
9. Gains on Sale of Properties and
investment securities
10. Excess Net Income
11. Total (Sum of Lines 2-7 minus Lines 9 and 10)
12. Annual Service Charge
13. Interest/Original Issue Discount
14. Amount accrued in respect of Disqualified Stock
15. Total (Line 13 plus Line 14)
16. Funds from Operations/
Annual Service Charge (Line 11 divided by Line 15)
"Funds from Operations" and "Annual Service Charge" are defined terms in the
Credit Agreement.
Assets Retained
- ----------------
Section 7.13
- -------------
Calculation of Undepreciated Real Estate Assets subject to no lien to
Unsecured Debt for purposes of Section 7.13.
1. Undepreciated Real Estate Assets subject to
no lien (other than Permitted Liens)
2. Principal outstanding of unsecured debt
3. 150% of line 2
4. Excess of line 1 over line 3
<PAGE>
Exhibit 10.08
-------------
ASSIGNMENT AND ACCEPTANCE
Dated _______________, 19___
Reference is made to that certain Amended and Restated Credit
Agreement dated as of November __, 1996 (the "Credit Agreement") among
Weingarten Realty Investors, a Texas real estate investment trust, (the
"Company"), the Banks (as defined in the Credit Agree-ment), Texas Commerce
Bank National Association, a national banking association ("TCB"), as Agent
for the Banks (the "Agent"), NationsBank of Texas, N.A., as Documentary Agent
and Commerzbank, A.G., as Co-Agent. Terms defined in the Credit Agreement and
not defined herein are used herein with the same meaning.
________________________ (the "Assignor") and _____________________
(the "Assignee") agree as follows:
NOW, THEREFORE, for and in consideration of ten dollars ($10) in
hand paid and for other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an aggregate
interest equal to $______________ in principal amount, and a proportionate
interest as of the Effective Date (as defined below) in and to all of the
Assig-nor's rights and obligations under the Credit Agreement (including,
without limitation, a proportionate interest in the Assignor's Commitment
[including the Letter of Credit Commitment ] as in effect on the Effective
Date, the Note, including without limitation, Advances owing to the Assignor
on the Effective Date, and the interest of the Assignor in any Letter of
Credit).
2. The Assignor (i) represents and warrants that as of the date
hereof (prior to giving effect to this Assignment and Acceptance) its
Commitment is $__________; (ii) its Letter of Credit Commitment is $________;
and the aggregate outstanding principal amount of Advances owing to it is
$__________; (iii) represents and warrants that it is the legal and
bene-ficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iv) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of any Loan Document or any other instrument or document furnished
pursuant thereto; (v) makes no representation or warranty and assumes no
res-ponsibility with respect to the financial condition of the Borrower or any
Guarantor or the performance or observance by the Borrower or any Guarantor of
any of its obligations under any Loan Document to which it is a party, or any
other in-strument or document furnished pursuant thereto; and (vi) attaches
the Note referred to in paragraph 1 above and requests that the Agent exchange
such Note for new Note(s) as follows: a Note dated _______________, 19___ in
the principal amount of $__________ payable to the order of the Assignee; and
a Note dated _______________, 19___ in the principal amount of $__________
payable to the order of the Assignor.
3. The Assignee (i) confirms that it has received a copy of the
Loan Documents, together with copies of the most recent Financial Statements
referred to in Section 6.01 of the Credit Agreement and such other docu-ments
and informa-tion as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assign-ment and Acceptance; (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, con-tinue to make its own credit decisions in taking
or not taking action under the Credit Agreement; (iii) appoints and authorizes
the Agent to take such action as the Agent on its behalf, and to exercise such
powers under the Loan Documents, as are delegated to the Agent by the terms of
the Loan Documents, together with such powers as are reasonably inci-dental
thereto; (iv) agrees that it will perform in accord-ance with their terms all
of the obligations which by the terms of the Credit Agreement and the other
Loan Documents are required to be performed by it as a Bank; (v) (if such
Assignee is a bank or financial institution organized outside the United
States) agrees that it will deliver to the Borrower (with a copy to the Agent)
such certificates, documents or other evidence as may be required from time to
time, including any certificate or statement of exemption required under
Treasury Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or any
subsequent version thereof, to establish that it is not subject to withholding
under Section 1441 or 1442 of the Code, or comparable provisions, because
payments to it are effectively connected with the conduct of a trade or
business conducted in the United States or because it is fully exempt from
United States tax under a provision of an applicable tax treaty; and (vi)
specifies as its address for notices the offices set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall
be _________________________________________________________ (the "Effective
Date"). Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance
and recording by the Agent, and a copy will be delivered to the Borrower.
5. Upon such acceptance and recording, as of the Effective Date
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assign-ment and Acceptance, have the rights and obligations
of a Bank there-under and under the other Loan Documents and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement and
the other Loan Documents and in the event that the Assignor has assigned
(pursuant to a right granted under the Credit Agreement) to the Assignee
hereunder all of its rights and obligations under the Credit Agreement and the
other Loan Documents, the Assignor shall cease to be a party to the Credit
Agreement and such other Loan Documents.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement
and the Note in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Note
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be gov-erned by, and
construed in accordance with, the laws of the State of Texas.
[NAME OF ASSIGNOR]
By
Title:
[NAME OF ASSIGNEE]
By
Title:
Accepted this _____ day
of _______________, 19___
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as Agent
By
Title:
