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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9876
WEINGARTEN REALTY INVESTORS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TEXAS 74-1464203
(State or other jurisdiction of incorporation or organization) (IRS Employer
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.
Title of Each Class Name of each exchange on which registered
- ----------------------------------------------------------------- -----------------------------------------
Common Shares of Beneficial Interest, $0.03 par value New York Stock Exchange
Series A Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange
Series C Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange
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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
22, 2000 was approximately $952,676,135. As of February 22, 2000 there were
26,694,953 common 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 24, 2000 are incorporated by reference
in Part III.
Exhibit Index beginning on Page 40
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TABLE OF CONTENTS
ITEM NO. PAGE NO.
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PART I
1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 13
4. Submission of Matters to a Vote of Shareholders . . . . . . . . . 13
Executive Officers of the Registrant. . . . . . . . . . . . . . . 14
PART II
5. Market for Registrant's Common Shares of Beneficial
Interest and Related Shareholder Matters. . . . . . . . . . . . . 15
6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . 16
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . 17
7A. Quantitative and Qualitative Disclosure about Market Risk . . . . 20
8. Financial Statements and Supplementary Data . . . . . . . . . . . 21
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . 39
PART III
10. Trust Managers and Executive Officers of the Registrant . . . . . 39
11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . 39
12. Security Ownership of Certain Beneficial Owners and
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13. Certain Relationships and Related Transactions. . . . . . . . . . 39
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . 39
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PART I
ITEM 1. BUSINESS
General. Weingarten Realty Investors, 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. WRI is self-advised and self-managed. As of December 31,
1999, we owned or operated under long-term leases interests in 239 developed
income-producing real estate projects. We owned 187 shopping centers located in
the Houston metropolitan area and in other parts of Texas and in Louisiana,
Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado,
Missouri, Illinois, Florida and Maine. We also owned 50 industrial projects
located in Tennessee, Nevada and Houston, Austin and Dallas, Texas.
Additionally, we owned one multi-family residential project and one office
building, which serves, in part, as WRI's headquarters. Our interests in these
projects aggregated approximately 27.8 million square feet of building area and
104.1 million square feet of land area. We also owned interests in 31 parcels
of unimproved land under development or held for future development which
aggregated approximately 8.2 million square feet.
WRI currently employs 203 persons and its principal executive offices are
located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and its phone number
is (713) 866-6000.
Location of Properties. Historically, WRI has emphasized investments in
properties located primarily in the Houston area. Since 1987, we actively
acquired properties outside of Houston. Of our 270 properties which were owned
or operated under long-term leases as of December 31, 1999, 100 of our 239
developed properties and 14 of our 31 parcels of unimproved land were located in
the Houston metropolitan area. In addition to these properties, we owned 79
developed properties and eight parcels of unimproved land located in other parts
of Texas. Because of our 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 WRI.
In 1999, the economies of Houston and Texas continued to grow, albeit at a
slower pace than 1998, but still exceeding the national average; the economy of
the entire southwestern United States, where WRI has its primary operations,
also remained strong relative to the national average. The Houston economy,
because of its strengths in energy and engineering and construction, has become
much more integrated into the international economy and is somewhat affected by
the international climate. Thus, while Houston's expansion slowed in 1999, it
is expected to continue to expand in 2000 and beyond. A deterioration in the
Houston or Texas economies could adversely affect WRI. However, WRI's centers
are generally anchored by grocery and drug stores under long-term leases, and
these types of stores, which deal in basic necessity-type items, tend to be less
affected by economic change.
Competition. There are other developers and owner-operators engaged in the
development, acquisition and operation of shopping centers and commercial
property who compete with us in our 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 WRI and its competitors develop, acquire and manage.
We believe that the principal competitive factors in attracting tenants in
our market areas are location, price, anchor tenants and maintenance of
properties. We also believe that our competitive advantages include the
favorable locations of our properties, our ability to provide a retailer with
multiple locations with anchor tenants in the Houston area and the practice of
continuous maintenance and renovation of our properties.
Financial Information. Additional financial information concerning WRI is
included in the Consolidated Financial Statements located on pages 22 through 38
herein.
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ITEM 2. PROPERTIES
At December 31, 1999, WRI's real estate properties consisted of 270
locations in fourteen states. A complete listing of these properties, including
the name, location, building area and land area (in square feet), as applicable,
is set forth below:
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SHOPPING CENTERS
Building
Name and Location Area Land Area
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HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . 7,647,000 29,720,000
Alabama-Shepherd, S. Shepherd at W. Alabama . . . . . . . . . 28,000 * 88,000 *
Almeda Road, Almeda at Southmore. . . . . . . . . . . . . . . 17,000 37,000
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.. . . . . . . 184,000 505,000
Champions Village, F.M. 1960 at Champions Forest Dr.. . . . . 408,000 1,391,000
Copperfield Village, Hwy. 6 at F.M. 529 . . . . . . . . . . . 157,000 712,000
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
Cypress Village, Louetta at Grant Road. . . . . . . . . . . . 25,000 134,000
Del Sol Market Place, Telephone at Monroe . . . . . . . . . . 21,000 87,000
Eastpark, Mesa Rd. at Tidwell . . . . . . . . . . . . . . . . 140,000 665,000
Edgebrook, Edgebrook at Gulf Fwy. . . . . . . . . . . . . . . 78,000 360,000
Fiesta Village, Quitman at Fulton . . . . . . . . . . . . . . 30,000 80,000
Fondren Southwest Village, Fondren at W. Bellfort . . . . . . 323,000 1,362,000
Fondren/West Airport, Fondren at W. Airport . . . . . . . . . 62,000 223,000
45/York Plaza, I-45 at W. Little York . . . . . . . . . . . . 218,000 840,000
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
I-45/Telephone Rd. Center, I-45 at Maxwell Street . . . . . . 178,000 819,000
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 Chestnut 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. . . . . . . . . . 118,000 486,000
Long Point, Long Point at Wirt (77%). . . . . . . . . . . . . 58,000 * 257,000 *
Lyons Avenue, Lyons at Shotwell . . . . . . . . . . . . . . . 68,000 179,000
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 . . . . . . . . . . 322,000 1,246,000
North Triangle, I-45 at F.M. 1960. . . . . . . . . . . . . . . 16,000 113,000
Northway, Northwest Fwy. at 34th . . . . . . . . . . . . . . . 212,000 793,000
Northwest Crossing, N.W. Fwy. at Hollister (75%) . . . . . . . 135,000 * 671,000 *
Northwest Park Plaza, F.M. 149 at Champions Forest . . . . . . 32,000 268,000
Oak Forest, W. 43rd at Oak Forest. . . . . . . . . . . . . . . 164,000 541,000
Orchard Green, Gulfton at Renwick. . . . . . . . . . . . . . . 74,000 273,000
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. . . . . . . . . 33,000 136,000
River Oaks, East, W. Gray at Woodhead. . . . . . . . . . . . . 71,000 206,000
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. . . . . . . . . . . . 191,000 414,000
West Junction, Hwy. 6 at Keith 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 78,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . 6,246,000 26,820,000
McDermott Commons, McDermott at Custer Rd., Allen. . . . . . . 12,000 72,000
Bell Plaza, 45th Ave. at Bell St., Amarillo. . . . . . . . . . 144,000 682,000
Coronado, S.W. 34th St. at Wimberly Dr., Amarillo. . . . . . . 49,000 201,000
Grand Plaza, Interstate Hwy 40 at Grand Ave., Amarillo . . . . 157,000 637,000
Puckett Plaza, Bell Road, Amarillo . . . . . . . . . . . . . . 133,000 621,000
Spanish Crossroads, Bell St. at Atkinsen St., Amarillo . . . . 72,000 275,000
Wolflin Village, Wolflin Ave. at Georgia St., Amarillo . . . . 191,000 421,000
Brodie Oaks, South Lamar Blvd. at Loop 360, Austin . . . . . . 245,000 1,050,000
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 at I-45, Conroe. . . . . . . . . . . 315,000 1,156,000
River Pointe, I-45 at Loop 336, Conroe . . . . . . . . . . . . . . . 42,000 329,000
Moore Plaza, S. Padre Island Dr. at Staples, Corpus Christi. . . . . 360,000 1,492,000
Portairs, 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. . . . . . . . . . . . . . . 127,000 575,000
Southcliff, I-20 at Grandbury Rd., Ft. Worth . . . . . . . . . . . . 116,000 568,000
Broadway, Broadway at 59th St., Galveston (77%). . . . . . . . . . . 58,000 * 167,000 *
Galveston Place, Central City Blvd. at 61st St., Galveston . . . . . 206,000 828,000
Food King Place, 25th St. at Avenue P, Galveston . . . . . . . . . . 28,000 78,000
Fiesta, Belt Line Rd. at Marshall Dr., Grand Prairie . . . . . . . . 32,000 236,000
Cedar Bayou, Bayou Rd., La Marque. . . . . . . . . . . . . . . . . . 15,000 51,000
Corum South, I-45 at F.M. 518, League City . . . . . . . . . . . . . 112,000 680,000
Caprock Center, 50th at Boston Ave., Lubbock . . . . . . . . . . . . 375,000 1,255,000
Central Plaza, Loop 289 at Slide Rd., Lubbock. . . . . . . . . . . . 152,000 529,000
Town & Country, 4th St. at University, Lubbock . . . . . . . . . . . 134,000 339,000
Angelina Village, Hwy. 59 at Loop 287, Lufkin. . . . . . . . . . . . 254,000 1,835,000
Independence Plaza, Town East Blvd., Mesquite. . . . . . . . . . . . 179,000 787,000
McKinney Centre, US Hwy 380 at U.S.Hwy 75, McKinney . . . . . . . . 27,000 145,000
Murphy Crossing, F.M. 544 at Murphy Rd., Murphy. . . . . . . . . . . 8,000 71,000
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
Gillham Circle, Gillham 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 . . . . . . . . 392,000 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 . . . . . . . . 97,000 335,000
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
Watauga Towne Center, Hwy. 377 at Bursey Rd., Watauga. . . . . . . . 22,000 120,000
LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,343,000 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
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Building
Name and Location Area Land Area
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LOUISIANA, (CONT'D.)
Orleans Station, Paris, Robert E. Lee at Chatham, New Orleans. . . . 5,000 31,000
Southgate, 70th at Mansfield, Shreveport . . . . . . . . . . . . . . 73,000 359,000
Westwood, Jewella at Greenwood, Shreveport . . . . . . . . . . . . . 113,000 393,000
NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,091,000 4,397,000
Francisco Centre, E. Desert Inn Rd. at S. Eastern Ave., Las Vegas. . 116,000 639,000
Mission Center, Flamingo Rd. at Maryland Pkwy, Las Vegas . . . . . . 152,000 570,000
Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas. . . . . . 149,000 536,000
Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas. . . . . 280,000 1,062,000
Rancho Towne & Country, Rancho Dr. at Charleston Blvd., Las Vegas. . 87,000 350,000
Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas . . . . . 143,000 519,000
College Park, E. Lake Mead Blvd. at Civic Ctr. Dr., North Las Vegas. 164,000 721,000
ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058,000 4,733,000
Palmilla Center, Dysart Rd. at McDowell Rd., Avondale. . . . . . . . 6,000 31,000
University Plaza, Plaza Way at Milton Rd., Flagstaff . . . . . . . . 166,000 918,000
Arrowhead Festival, 75th Ave. at W. Bell Rd., Glendale . . . . . . . 26,000 157,000
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
Rancho Encanto, 35th Avenue at Greenway Rd., Phoenix . . . . . . . . 71,000 259,000
Fountain Plaza, 77th St. at McDowell, Scottsdale . . . . . . . . . . 112,000 460,000
Broadway Marketplace, Broadway at Rural, Tempe . . . . . . . . . . . 86,000 347,000
Fry's Valley Plaza, S. McClintock at E. Southern, Tempe. . . . . . . 145,000 570,000
Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe . . . . . . . 152,000 769,000
Desert Square Shopping Center, Golf Links at Kolb, Tucson. . . . . . 98,000 459,000
NEW MEXICO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 893,000 3,787,000
Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque. . . . . . . . 111,000 601,000
North Towne Plaza, Academy Rd. at 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 . . . . . . . 326,000 1,309,000
DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe . . . . . . . . 247,000 795,000
OKLAHOMA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000
Bryant Square, Bryant Ave. at 2nd St., Edmond. . . . . . . . . . . . 282,000 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. . . . . . 138,000 540,000
Windsor Hills Center, Meridian at Windsor Place, Oklahoma City . . . 246,000 1,232,000
ARKANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 596,000 2,322,000
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. . . . . . . . 153,000 414,000
Markham Square, W. Markham at John Barrow, Little Rock . . . . . . . 134,000 535,000
Markham West, 11400 W. Markham, Little Rock (35%). . . . . . . . . . 62,000 * 269,000 *
Westgate, Cantrell at Bryant, Little Rock. . . . . . . . . . . . . . 50,000 206,000
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<CAPTION>
Building
Name and Location Area Land Area
- ---------------------------------------------------------------- --------- ----------
<S> <C> <C> <C> <C>
KANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 2,231,000
West State Plaza, State Ave. at 78th St., Kansas City. . . . . . 94,000 401,000
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. . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000
Ballwin Plaza, Manchester Rd. at Vlasis Dr., Ballwin . . . . . . 203,000 653,000
PineTree Plaza, U.S. Hwy. 50 at Hwy. 291, Lee's Summit . . . . . 135,000 448,000
FLORIDA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 316,000 1,394,000
Pembroke Commons, University at Pines Blvd., Pembroke Pines. . . 316,000 1,394,000
COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 217,000 902,000
Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs. 127,000 460,000
Academy Place, Academy Blvd. at Union Blvd., Colorado Springs. . 84,000 407,000
Gold Creek Center, Hwy. 86 at Elizabeth St., Elizabeth . . . . . 6,000 * 35,000 *
MAINE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000
The Promenade, Essex at Summit, Lewiston . . . . . . . . . . . . 124,000 * 482,000 *
ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 93,000 464,000
Lincoln Place Centre, Hwy. 59, Fairview Heights (99%). . . . . . 93,000 * 464,000 *
TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . 20,000 84,000
Highland Square, Summer at Highland, Memphis . . . . . . . . . . 20,000 84,000
Building
INDUSTRIAL Area Land Area
- ---------------------------------------------------------------- --------- ----------
HOUSTON AND HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . 3,330,000 9,537,000
Beltway 8 Business Park, Beltway 8 at Petersham Dr.. . . . . . . 52,000 166,000
Blankenship Building, Kempwood Drive . . . . . . . . . . . . . . 59,000 175,000
Brookhollow Business Center, Dacoma at Directors Row . . . . . . 133,000 405,000
Cannon/So. Loop Business Park, Cannon Street (20%) . . . . . . . 59,000 * 96,000 *
Central Park North, W. Hardy Rd. at Kendrick Dr. . . . . . . . . 155,000 466,000
Central Park Northwest VI, Central Pkwy. at Dacoma . . . . . . . 175,000 518,000
Central Park Northwest VII, Central Pkwy. at Dacoma. . . . . . . 103,000 283,000
Claywood Industrial Park, Clay at Hollister. . . . . . . . . . . 330,000 1,761,000
Crosspoint Warehouse, Crosspoint . . . . . . . . . . . . . . . . 73,000 179,000
Jester Plaza, West T.C. Jester . . . . . . . . . . . . . . . . . 101,000 244,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr. . . . . . . 113,000 327,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr. (20%) . . . 42,000 * 106,000 *
Lathrop Warehouse, Lathrop St. at Larimer St. (20%). . . . . . . 51,000 * 87,000 *
Levitz Furniture Warehouse, Loop 610 South . . . . . . . . . . . 184,000 450,000
Little York Mini-Storage, West Little York . . . . . . . . . . . 32,000 * 124,000 *
Navigation Business Park, Navigation at N. York (20%). . . . . . 47,000 * 111,000 *
Northway Park II, Loop 610 East at Homestead (20%) . . . . . . . 61,000 * 149,000 *
Park Southwest, Stancliff at Brooklet. . . . . . . . . . . . . . 52,000 160,000
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Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C> <C> <C>
HOUSTON AND HARRIS COUNTY, (CONT'D)
Railwood Industrial Park, Mesa at U.S. 90. . . . . . . . . . . . . . 616,000 1,651,000
Railwood Industrial Park, Mesa at U.S. 90 (20%). . . . . . . . . . . 99,000 * 213,000 *
South Loop Business Park, S. Loop at Long Dr.. . . . . . . . . . . . 46,000 * 103,000 *
Southport Business Park 5, South Loop 610. . . . . . . . . . . . . . 157,000 358,000
Southwest Park II, Rockley Road. . . . . . . . . . . . . . . . . . . 68,000 216,000
Stonecrest Business Center, Wilcrest at Fallstone. . . . . . . . . . 111,000 308,000
West-10 Business Center, Wirt Rd. at I-10. . . . . . . . . . . . . . 141,000 331,000
West-10 Business Center II, Wirt Rd. at I-10 . . . . . . . . . . . . 83,000 149,000
West Loop Commerce Center, W. Loop N. at I-10. . . . . . . . . . . . 34,000 91,000
610 and 11th St. Warehouse, Loop 610 at 11th St. . . . . . . . . . . 105,000 202,000
610 and 11th St. Warehouse, Loop 610 at 11th St. (20%) . . . . . . . 48,000 * 108,000 *
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 2,197,000 5,085,000
Randol Mill Place, Randol Mill Road, Arlington . . . . . . . . . . . 55,000 178,000
Corporate Center I & II, Putnam Dr. at Research Blvd., Austin. . . . 117,000 326,000
Southpoint Service Center, Burleson at Promontory Point Dr., Austin. 54,000 234,000
Walnut Creek Office Park, Cameron Rd., Austin. . . . . . . . . . . . 34,000 122,000
Wells Branch Corporate Center, Wells Branch Pkwy., Austin. . . . . . 60,000 183,000
Midway Business Center, Midway at Boyington, Carrollton. . . . . . . 142,000 309,000
River Pointe Mini-Storage, I-45 at Hwy. 336, Conroe. . . . . . . . . 32,000 * 97,000 *
Manana Office Center, I-35 at Manana, Dallas . . . . . . . . . . . . 223,000 473,000
Newkirk Service Center, Newkirk near N.W. Hwy., Dallas . . . . . . . 106,000 223,000
Northaven Business Center, Northaven Rd., Dallas . . . . . . . . . . 151,000 178,000
Northeast Crossing Off/Svc Ctr., East N.W. Hwy. at Shiloh, Dallas. . 79,000 199,000
Northwest Crossing Off/Svc Ctr., N.W. Hwy. at Walton Walker, Dallas. 127,000 290,000
Redbird Distribution Center, Joseph Hardin Drive, Dallas . . . . . . 111,000 234,000
Regal Distribution Center, Leston Avenue, Dallas . . . . . . . . . . 203,000 318,000
Space Center Industrial Park, Pulaski St. at Irving Blvd., Dallas. . 265,000 426,000
Walnut Trails Business Park, Walnut Hill Lane, Dallas. . . . . . . . 103,000 311,000
DFW-Port America, Port America Place, Grapevine. . . . . . . . . . . 45,000 110,000
Jupiter Service Center, Jupiter near Plano Pkwy., Plano. . . . . . . 78,000 234,000
Sherman Plaza Business Park, Sherman at Phillips, Richardson . . . . 100,000 312,000
Nasa One Business Center, Nasa Road One at Hwy. 3, Webster . . . . . 112,000 328,000
TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 679,000 1,470,000
Southwide Warehouse # 2, Federal Compress Ind. Pk., Memphis. . . . . 124,000 302,000
Southwide Warehouse # 3, Federal Compress Ind. Pk., Memphis. . . . . 112,000 209,000
Southwide Warehouse # 4, Federal Compress Ind. Pk., Memphis. . . . . 120,000 220,000
Thomas Street Warehouse, N. Thomas Street, Memphis . . . . . . . . . 164,000 423,000
Crowfarn Drive Warehouse, Crowfarn Dr. at Getwell Rd., Memphis . . . 159,000 316,000
NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 162,000
East Sahara Off/Svc Ctr., E. Sahara Blvd., Las Vegas . . . . . . . . 66,000 162,000
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Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
<S> <C> <C> <C> <C>
OFFICE BUILDING
HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 121,000 171,000
Citadel Plaza, N. Loop 610 at Citadel Plaza Dr.. . . . . . . . . . . 121,000 171,000
MULTI-FAMILY RESIDENTIAL
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 236,000 595,000
River Pointe Drive at I-45, Conroe . . . . . . . . . . . . . . . . . 236,000 595,000
UNIMPROVED LAND
HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 3,875,000
Beltway 8 at W. Belfort. . . . . . . . . . . . . . . . . . . . . . . 333,000
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
Mowery at Cullen . . . . . . . . . . . . . . . . . . . . . . . . . . 118,000
Northwest Fwy. at Gessner. . . . . . . . . . . . . . . . . . . . . . 484,000
Redman at W. Denham. . . . . . . . . . . . . . . . . . . . . . . . . 17,000
Sheldon at I-10. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
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. . . . . . . . . . . . 1,657,000
McDermott Drive at Custer Rd., Allen . . . . . . . . . . . . . . . . 297,000
Phelan Blvd., Beaumont . . . . . . . . . . . . . . . . . . . . . . . 63,000
US Hwy 380 (University Drive) and US Hwy 75, McKinney. . . . . . . . 189,000
F.M. 544 at Murphy Rd., Murphy . . . . . . . . . . . . . . . . . . . 293,000
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
Hwy 377 at Bursey Road, Watauga. . . . . . . . . . . . . . . . . . . 274,000
LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,480,000
U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . . . . . . . . 462,000
Ambassador Caffery Pkwy. at Congress St., Lafayette. . . . . . . . . 196,000
Woodland Hwy., Plaquemines Parish (5%) . . . . . . . . . . . . . . . 822,000 *
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<CAPTION>
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ----------
<S> <C> <C> <C> <C>
UNIMPROVED LAND (CONT'D.)
ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 606,000
Dysart Rd. at McDowell Rd., Avondale . . . . . . . . . . . . . . . . 240,000
Warner Rd. at Val Vista, Gilbert . . . . . . . . . . . . . . . . . . 366,000
COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 507,000
Jordan Rd. at Lincoln Ave., Parker (38%) . . . . . . . . . . . . . . 326,000 *
Smokey Hill Rd. at S. Picadilly St. , Aurora . . . . . . . . . . . . 136,000 *
Hwy. 86 at Elizabeth St., Elizabeth. . . . . . . . . . . . . . . . . 45,000 *
ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000
Lincoln Place Centre, SBI Rt. 159 at Matilda , Fairview Heights (99%) 34,000 *
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Building
Name and Location Area Land Area
- -------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
ALL PROPERTIES-BY LOCATION
GRAND TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,779,000 112,293,000
Houston & Harris County. . . . . . . . . . . . . . . . . . . . . . . 11,098,000 43,303,000
Texas (excluding Houston & Harris County). . . . . . . . . . . . . . 8,679,000 34,157,000
Louisiana. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,343,000 6,984,000
Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,157,000 4,559,000
Arizona. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058,000 5,339,000
New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,000 3,787,000
Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000
Tennessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699,000 1,554,000
Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596,000 2,322,000
Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 2,231,000
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000
Florida. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316,000 1,394,000
Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,000 1,409,000
Maine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,000 498,000
ALL PROPERTIES-BY CLASSIFICATION
GRAND TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,779,000 112,293,000
Shopping Centers . . . . . . . . . . . . . . . . . . . . . . . . . . 21,150,000 87,114,000
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,272,000 16,254,000
Multi-Family Residential . . . . . . . . . . . . . . . . . . . . . . 236,000 595,000
Office Building. . . . . . . . . . . . . . . . . . . . . . . . . . . 121,000 171,000
Unimproved Land. . . . . . . . . . . . . . . . . . . . . . . . . . . 8,159,000
<FN>
Note: Total square footage includes 8,041,000 square feet of land leased and
450,000 square feet of building leased from others.
* Denotes partial ownership. WRI's interest is 50% except where noted.
The square feet figures represent WRI's proportionate ownership of
the entire property.
</TABLE>
<PAGE>
General. In 1999, no single property accounted for more than 2.9% of WRI's
total assets or 2.6% of gross revenues. Four properties, in the aggregate,
represented approximately 9.27% of our gross revenues for the year ended
December 31, 1999; otherwise, none of the remaining properties accounted for
more than 1.9% of our gross revenues during the same period. The weighted
average occupancy rate for all of our improved properties as of December 31,
1999 was 91.3%.
Substantially all of our properties are owned directly by WRI (subject in
some cases to mortgages), although our interests in some properties are held
indirectly through interests in joint ventures or under long-term leases. In
our opinion, our properties are well maintained and in good repair, suitable for
their intended uses, and adequately covered by insurance.
Shopping Centers. As of December 31, 1999, WRI owned or operated under
long-term leases, either directly or through its interests in joint ventures,
187 shopping centers with approximately 21.1 million square feet of building
area. The shopping centers were located predominantly in Texas with other
locations in Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma,
Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and Maine.
WRI'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. Our 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 our centers.
We have approximately 4,200 separate leases with 3,300 different tenants,
including national and regional supermarket chains, drug stores, discount
department stores, junior department stores, other nationally or regionally
known stores and a great variety of other regional and local retailers. The
large number of locations offered by WRI and the types of traditional anchor
tenants help attract prospective new tenants. Some of the national and regional
supermarket chains which are tenants in our centers include Albertson's, Fiesta,
Smith's, H.E.B., Kroger Company, Randall's Food Markets, Fry's Food Stores and
Safeway. In addition to these supermarket chains, WRI's nationally and
regionally known retail store tenants include Eckerd, Walgreen and Osco
drugstores; Kmart discount stores; Bealls, Palais Royal and Weiner's junior
department stores; Marshall's, Office Depot, Office Max, Babies 'R' Us, Ross,
Stein Mart and T.J. Maxx off-price specialty stores; Luby's, Piccadilly and
Furr's cafeterias; Academy sporting goods; FAO Schwarz toy store; Cost Plus
Imports; Linens 'N Things; Barnes & Noble bookstore; Home Depot; CompUSA; 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. We also lease space in 3,000 to 10,000 square foot
areas to national chains such as the Limited Store, The Gap, One Price Stores,
Eddie Bauer and Radio Shack.
WRI'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, with each of these periods 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.
Most of our 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
these items). They also provide for the payment of additional rentals based on
a percentage of the tenants' sales. Utilities are generally paid directly
<PAGE>
by tenants except where common metering exists with respect to a center. In
this case, WRI makes the payments for the utilities and is reimbursed
by the tenants on a monthly basis. Generally, our leases prohibit the
tenant from assigning or subletting its space. They also require the tenant
to use its space for the purpose designated in its lease agreement and to
operate its business on a continuous basis. Some of the lease agreements with
major tenants contain modifications of these basic provisions in view of the
financial condition, stability or desirability of those tenants. Where a tenant
is granted the right to assign its space, the lease agreement generally provides
that the original lessee will remain liable for the payment of the lease
obligations under that lease agreement.
During 1999, we added approximately 2.8 million square feet to our
portfolio of properties through acquisitions and another .4 million square feet
of space through development. Regarding the retail portfolio, we purchased
three anchored shopping centers in Texas, a supermarket-anchored retail center
in Florida and a building adjacent to one of our shopping centers in Houston,
Texas. We also purchased our joint venture partner's 77% interest in a shopping
center in Santa Fe, New Mexico and executed a lease on a retail center in
Ballwin, Missouri, a suburb of St. Louis. These transactions increased our
retail portfolio by 1.4 million square feet of building area and represent an
investment of $107.3 million.
With respect to new development, construction was completed on .1 million
square feet of retail space. WRI currently has seven retail centers under
development and has investments in three additional retail centers in joint
ventures with our Denver-based development partner.
Industrial Properties. At December 31, 1999, WRI owned a total of 50
industrial projects. During 1999, we purchased twelve facilities, including
seven facilities in the Dallas/Fort Worth metroplex and our first industrial
project in Las Vegas, Nevada. We also acquired three buildings in Austin, Texas,
and one facility in Houston, Texas. These projects added 1.4 million square
feet to the industrial portfolio and represent an investment of $43.2 million.
During 1999, WRI completed the development of one 52,500 square foot
building of a three-building office/service facility in Houston, Texas. The
remaining two buildings are currently under development.
In December 1999, WRI sold seven industrial properties totaling 2.0 million
square feet of building area to a joint venture in which we retained a 20%
ownership interest, with the other 80% purchased by American National Insurance
Company.
Office Building. We own 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 our headquarters. Other than WRI, the major tenant of the
building is Bank of America, which currently occupies 9% of the office space.
Multi-family Residential Properties. WRI completed development of a
260-unit luxury apartment complex within a multi-use master-planned project we
developed in a suburb north of Houston. An unrelated Houston-based multi-family
operator manages the property on our behalf.
Unimproved Land. At December 31, 1999, WRI owned, directly or through its
interest in a joint venture, 31 parcels of unimproved land aggregating
approximately 8.2 million square feet of land area located in Texas, Louisiana,
Arizona, Colorado and Illinois. These properties include approximately 2.6
million square feet of land adjacent to certain of our existing developed
properties, which may be used for expansion of these developments, as well as
approximately 5.6 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 or industrial projects, and WRI intends to
emphasize the development of these parcels for such purpose.
In December 1999, WRI and WRI Holdings, Inc., an affiliated company, sold
28.5 acres and 102.6 acres, respectively, of undeveloped land to American
National Insurance Company with WRI retaining the right to co-develop this land
with American National.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to its business or litigation we believe is
substantially covered by insurance, to which WRI 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 WRI as of February 22, 2000. All executive officers of
WRI are elected annually by our Board of Trust Managers and serve until the
successors are elected and qualified.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Stanford Alexander. . . . . . . 71 Chairman/Chief Executive Officer
Martin Debrovner. . . . . . . . 63 Vice Chairman
Andrew M. Alexander . . . . . . 43 President
Joseph W. Robertson, Jr.. . . . 52 Executive Vice President/Chief Financial Officer
Stephen C. Richter. . . . . . . 45 Senior Vice President/Financial
Administration and Treasurer
</TABLE>
Mr. S. Alexander is WRI's Chairman and its Chief Executive Officer. He has
been employed by WRI 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 WRI since 1962. Mr. Alexander is President,
Chief Executive Officer and a Trust Manager of Weingarten Properties Trust.
Mr. Debrovner became Vice Chairman of WRI 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 Weingarten
Realty Management Company since WRI's reorganization in December 1984. Prior to
such time, Mr. Debrovner was an employee of WRI 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 WRI's operations. Mr. Debrovner is also a Trust
Manager of Weingarten Properties Trust.
Mr. A. Alexander became President of WRI on February 25, 1997. Prior to
his present position, Mr. Alexander was Executive Vice President/Asset
Management of WRI and President of Weingarten Realty 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 WRI's reorganization in December 1984, was Vice President and an
employee of WRI since 1978. Mr. Alexander has been primarily involved with
leasing operations at both WRI and the Management Company. Mr. Alexander is
also a Trust Manager of Weingarten Properties Trust and a Director of Academy
Sports and Outdoors, Inc.
Mr. Robertson became Executive Vice President of WRI 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 WRI 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 WRI 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
WRI's common shares are listed and traded on the New York Stock Exchange under
the symbol "WRI". The number of holders of record of our common shares as of
February 22, 2000 was 3,324. The high and low sale prices per share of our
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>
1999:
Fourth. . . $ 39 3/8 $ 37 $ 0.71
Third . . . 42 7/16 37 1/4 0.71
Second. . . 43 7/16 38 1/4 0.71
First . . . 45 5/8 38 3/8 0.71
1998:
Fourth. . . $ 46 7/8 $ 39 3/4 $ 0.67
Third . . . 43 35 15/16 0.67
Second. . . 44 15/16 40 5/8 0.67
First . . . 45 5/8 43 7/8 0.67
</TABLE>
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with respect
to WRI 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,
1999 1998 1997 1996 1995
----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues (primarily real estate rentals). $ 230,469 $ 198,467 $ 174,512 $151,123 $134,197
----------- ----------- ----------- --------- ---------
Expenses:
Depreciation and amortization . . . . 49,612 41,946 37,976 33,769 30,060
Interest. . . . . . . . . . . . . . . 33,186 33,654 30,009 21,975 16,707
Other . . . . . . . . . . . . . . . . 71,947 61,995 54,888 47,004 42,614
----------- ----------- ----------- --------- ---------
Total. . . . . . . . . . . . . . 154,745 137,595 122,873 102,748 89,381
----------- ----------- ----------- --------- ---------
Income before gain (loss) on sales of
property and securities and
extraordinary charge. . . . . . . . . . 75,724 60,872 51,639 48,375 44,816
Gain (loss) on sales of property and
securities. . . . . . . . . . . . . . . 20,596 885 3,327 5,563 (14)
----------- ----------- ----------- --------- ---------
Income before extraordinary charge. . . . 96,320 61,757 54,966 53,938 44,802
Extraordinary charge (early retirement
of debt) . . . . . . . . . . . . . . . (190) (1,392)
----------- ----------- ----------- --------- ---------
Net income . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966 $ 53,938 $ 44,802
=========== =========== =========== ========= =========
Net income available to common
shareholders . . . . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 $ 53,938 $ 44,802
=========== =========== =========== ========= =========
Cash flows from operations . . . . . . . $ 118,476 $ 97,464 $ 89,902 $ 76,299 $ 72,498
=========== =========== =========== ========= =========
Per share data - basic:
Income before extraordinary charge . $ 2.88 $ 2.09 $ 2.06 $ 2.03 $ 1.69
Net income . . . . . . . . . . . . . $ 2.87 $ 2.04 $ 2.06 $ 2.03 $ 1.69
Weighted average number of shares. . 26,690 26,667 26,638 26,555 26,464
Per share data - diluted:
Income before extraordinary charge . $ 2.86 $ 2.08 $ 2.05 $ 2.03 $ 1.69
Net income . . . . . . . . . . . . . $ 2.85 $ 2.03 $ 2.05 $ 2.03 $ 1.69
Weighted average number of shares. . 26,890 26,869 26,771 26,598 26,493
Cash dividends per common share. . . . . $ 2.84 $ 2.68 $ 2.56 $ 2.48 $ 2.40
Property (at cost) . . . . . . . . . . . $1,514,139 $1,294,632 $1,118,758 $970,418 $849,894
Total assets . . . . . . . . . . . . . . $1,309,396 $1,107,043 $ 946,793 $831,097 $734,824
Debt . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 $ 507,366 $389,225 $289,339
Other data:
Funds from operations (1)
Net income available to common
shareholders. . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 $ 53,938 $ 44,802
Depreciation and amortization. . . 49,256 41,580 37,544 33,414 29,813
(Gain) loss on sales of property
and securities. . . . . . . . . . (20,596) (885) (3,327) (5,563) 14
Extraordinary charge (early retirement
of debt) . . . . . . . . . . . . . . . 190 1,392
----------- ----------- ----------- --------- ---------
Total . . . . . . . . . . . . . $ 105,387 $ 96,571 $ 89,183 $ 81,789 $ 74,629
=========== =========== =========== ========= =========
<FN>
(1) 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 WRI's operating performance or to cash flows as a measure of liquidity.
</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 or operated under long-term leases 187
shopping centers, 50 industrial properties, one multi-family residential project
and one office building at December 31, 1999. Of our 239 developed properties,
179 are located in Texas (including 100 in Houston and Harris County). Our
remaining properties are located in Louisiana (11), Arizona (11), Nevada (8),
Arkansas (6), New Mexico (5), Oklahoma (4), Tennessee (4), Kansas (3), Colorado
(3), Missouri (2), Illinois (1), Florida (1) and Maine (1). WRI has nearly
4,200 leases and 3,300 different tenants. Leases for our 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 our anchor tenants are supermarkets,
drugstores, value-oriented apparel and discount stores and other retailers,
which generally sell basic necessity-type items.
CAPITAL RESOURCES AND LIQUIDITY
WRI anticipates that cash flows from operating activities will continue to
provide adequate capital for all dividend payments in accordance with REIT
requirements. Cash on hand, internally-generated cash flow, borrowings under
our existing credit facilities, issuance of unsecured debt 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 $118.5
million for 1999 from $97.5 million for 1998 and $89.9 million for 1997.
Common and preferred dividends increased to $95.4 million in 1999, compared to
$77.3 million in 1998 and $68.2 million in 1997. WRI satisfied its REIT
requirement of distributing at least 95% of ordinary taxable income for each of
the three years ended December 31, 1999, and, accordingly, federal income taxes
were not required to be paid in these years. Our dividend payout ratio on
common equity for 1999, 1998 and 1997 approximated 71.9%, 74.4% and 76.4%,
respectively, based on funds from operations for the applicable year.
WRI invested $150.5 million in acquisitions in 1999, adding 2.8 million square
feet to its portfolio of properties. Regarding the retail portfolio, we
purchased three anchored shopping centers in Texas, a supermarket-anchored
retail center in Florida and a building adjacent to one of our shopping centers
in Houston, Texas. We also purchased our joint venture partner's 77% interest
in a shopping center in Santa Fe, New Mexico and executed a lease on a retail
center in Ballwin, Missouri, a suburb of St. Louis. These transactions
increased our retail portfolio by 1.4 million square feet of building area and
represent an investment of $107.3 million.
WRI currently owns a total of 50 industrial projects. During 1999, we purchased
twelve properties, including seven facilities in the Dallas/Fort Worth metroplex
and our first industrial project in Las Vegas, Nevada. We also acquired three
buildings in Austin, Texas, and one facility in Houston, Texas. These projects
added 1.4 million square feet to the industrial portfolio and represent an
investment of $43.2 million. In December 1999, we sold seven industrial
properties totaling 2.0 million square feet to a joint venture in which we
retained 20% ownership, with the remainder owned by American National Insurance
Company. Additionally, American National purchased 131 acres of undeveloped
land in our Railwood Industrial Park. WRI retained the right to co-develop this
land with American National. WRI owned 28.5 acres of this land and WRI
Holdings, Inc., an affiliated entity, owned 102.6 acres. The proceeds of $8.1
million received by WRI Holdings were remitted to WRI in payment of mortgage
bonds and notes. Including the payment received from WRI Holdings, these
transactions provided WRI with $21 million of cash and a six-month $33 million
note receivable from American National. We have retained the leasing and
management of the properties and also contracted to lease and manage an
additional 1.4 million square feet of Houston industrial properties owned by
American National.
With respect to new development, construction was completed on retail and
industrial space totaling .2 million square feet. An additional .2 million
square feet was added with the completion of a 260-unit luxury apartment complex
within a multi-use master-planned project WRI developed in a suburb north of
Houston. WRI currently has several other facilities under development,
including seven retail centers, an industrial office/service center and three
additional retail centers in joint ventures with our Denver-based development
partner. The projects under construction or completed in 1999 represent an
estimated investment by WRI of approximately $77 million and will add .9
million square feet to our portfolio.
<PAGE>
Additionally, WRI 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,
$224.3, $176.5 and $152.6 during 1999, 1998 and 1997, respectively. All of the
acquisitions and new development during 1999 were either initially financed
under WRI's revolving credit facility, funded with excess cash balances or
funded with excess cash flow from our existing portfolio of properties.
In January 1999, we issued $115 million of 7.0% Series C cumulative redeemable
preferred shares with a liquidation preference of $50 per share and no stated
maturity. We can elect to redeem these shares anytime after March 15, 2004.
The Series C preferred shares are redeemable by the holder only upon their death
and are also redeemable in either cash or common shares at WRI's option. There
are limitations on the number of shares per shareholder and in the aggregate
that may be redeemed per year. The proceeds of this offering were used to pay
down all amounts outstanding under our revolving credit facilities and retire
$82 million of variable-rate, unsecured medium term notes, resulting in an
extraordinary loss of $.2 million. Any redemption of preferred shares initiated
by WRI must be funded with proceeds from an offering of additional common or
preferred shares.
In July 1999, WRI issued $20 million of ten-year 7.35% fixed-rate, unsecured
medium term notes. Including the effect of a loss of $1.2 million on the sale
of Treasury locks, which were designated as a hedge against future issuance of
fixed-rate notes, the effective interest rate is 8.0%.
In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate,
unsecured medium term notes. In connection with this debt issuance, we entered
into a ten-year interest rate swap agreement with a notional amount of $10.5
million to swap 8.25% fixed-rate interest for floating-rate interest.
WRI has a $200 million unsecured revolving credit facility which expires in
November of 2000. WRI has an annual option to request a one-year extension of
the commitment. Upon expiration, we have an option to convert amounts
outstanding under the facility to a term loan payable over a two-year period.
Additionally, WRI has an unsecured and uncommitted overnight credit facility
totaling $20 million to be used for cash management purposes. WRI 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. WRI has
three interest rate swap contracts with an aggregate notional amount of $40
million which fix interest rates on variable-rate debt at 8.1% and expire
through 2004.
Subsequent to year-end, WRI finalized an additional $100 million revolving
credit agreement with a major bank. This one-year facility became effective on
March 1, 2000 and is renewable at our option for an additional two-year period.
We also filed a new $400 million shelf registration statement in August of this
year, all of which was available at year-end.
Total debt outstanding increased to $594.2 million at December 31, 1999 from
$516.4 million at December 31, 1998, primarily to fund acquisitions and new
development. WRI will continue to closely monitor both the debt and equity
markets and carefully consider its available alternatives, including both public
and private placements.
FUNDS FROM OPERATIONS
Industry analysts generally consider funds from operations to be an appropriate
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 WRI's operating performance or to cash flows as a
measure of liquidity.
Funds from operations increased to $105.4 million in 1999, as compared to $96.6
million in 1998 and $89.2 million in 1997. These increases relate primarily to
the impact of WRI's acquisitions, new developments and activity at its existing
properties. For further information on changes between years, see "Results of
Operations" below.
<PAGE>
RESULTS OF OPERATIONS
Rental revenues increased 15.7%, or $30.6 million, from $194.6 million in 1998
to $225.2 million in 1999 and by 15.1%, or $25.6 million, from $169.0 million in
1997. Of these increases, property acquisitions and new development contributed
$24.8 million in 1999 and $18.4 million in 1998. The remaining portion of these
increases is due to activity at our existing properties. Occupancy of our
shopping centers, industrial properties and total portfolio decreased to 91% at
December 31, 1999 from 93% at the end of 1998. This is primarily the result of
the loss of certain large tenants in the latter half of the year. Among the
larger losses were Builders Square, which occupied a 105,000 square foot space
in Corpus Christi, Texas, a 91,500 square foot Kmart in Houston, Texas, a 63,000
square foot Service Merchandise in Lake Charles, Louisiana and a 60,000 square
foot Pay & Save in Lubbock, Texas. In 1999, we completed 894 renewals or new
leases comprising 4.8 million square feet at an average rental rate increase of
9.5%. Net of the amortized portion of capital costs for tenant improvements,
the increase averaged 5.9%. Occupancy of our total portfolio increased to 93% at
December 31, 1998 from 92% at the end of 1997. In 1998, we completed 830
renewals or new leases comprising 3.4 million square feet at an average rental
rate increase of 5.8%. Net of the amortized portion of capital costs for tenant
improvements, the increase averaged 3.2%.
Interest income totaled $3.1 million in 1999, $2.1 million in 1998 and $2.5
million in 1997. The increase in income in 1999 is due to the funding of loans
to our joint venture partners. The decrease from 1997 to 1998 was due to the
sale of $12.2 million of marketable debt securities during the first quarter of
1998.
Equity in earnings of real estate joint ventures and partnerships totaled $.2
million in 1999, $.3 million in 1998 and $1.0 million in 1997. The decrease in
1999 and 1998 is due to the purchase at December 31, 1997 of our joint venture
partner's 85% interest in four shopping centers and the purchase of our joint
venture partner's 77% interest in a shopping center in July 1999.
Direct costs and expenses of operating our properties (i.e., operating and ad
valorem tax expenses) increased to $64.4 million in 1999 from $54.8 million in
1998 and $49.2 million in 1997. 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 were 29% in 1999, 28% in 1998
and 29% in 1997. Depreciation and amortization have increased to $49.6 million
in 1999 from $41.9 million in 1998 and $38.0 million in 1997, also as a result
of the properties acquired and developed during these periods. General and
administrative expense has increased to $7.5 million in 1999 from $7.1 million
in 1998 and $5.6 million in 1997. The increase in 1998 results primarily from
the adoption of a new Emerging Issues Task Force consensus decision which
required that internal costs of identifying and acquiring operating property
incurred subsequent to March 19, 1998 be expensed. WRI realized an increase in
expense of $1.1 million in 1998 due to the adoption of this standard. The
remainder of the increase in 1998 and the majority of the increase in 1999 are
due to normal compensation increases as well as slight increases in staffing.
Gross interest costs, before capitalization of interest to development projects,
increased from $35.0 million in 1998 to $35.9 million in 1999. This increase in
interest cost was due mainly to an increase in the average debt outstanding from
$492.2 million for 1998 to $501.6 million for 1999. The weighted-average
interest rate increased from 7.11% in 1998 to 7.15% in 1999. Interest expense,
net of amounts capitalized, decreased $.5 million from 1998. The amount of
interest capitalized increased to $2.7 million in 1999 from $1.4 million in 1998
due to an increase in the amount of development activity during the year.
Comparing 1998 to 1997, gross interest costs increased from $30.8 million in
1997 to $35.0 million in 1998. This was due to an increase in the average debt
outstanding from $422.9 million in 1997 to $492.2 million in 1998. The
weighted-average interest rate decreased between the two periods from 7.27% in
1997 to 7.11% in 1998. Interest expense, net of amounts capitalized, increased
$3.6 million from 1997. The amount of interest capitalized increased by $.6
million in 1998 due to an increase in the amount of development activity during
the year. Included in interest expense during 1997 was $.7 million related to
repurchase agreements collateralized by our investment in marketable debt
securities which were sold during the first quarter of 1998.
The gain on sale of $20.6 million in 1999 was due primarily to the sale of 28.5
acres of undeveloped land and an 80% interest in certain industrial properties
to American National Insurance Company.
<PAGE>
EFFECTS OF INFLATION
The rate of inflation was relatively unchanged in 1999. WRI 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 WRI 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 WRI's leases are for terms
of less than ten years, which allows WRI to adjust rental rates to changing
market conditions when the leases expire. Most of WRI's leases require the
tenants 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 WRI's operating results.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" was issued. This statement
requires that an entity recognize all derivatives as either assets or
liabilities and measure the instruments at fair value. The accounting for
changes in fair value of a derivative depends upon its intended use. WRI will
adopt the provisions of this statement in the first quarter of fiscal year 2001.
WRI is still evaluating the effects of adopting this statement, however, we do
not expect the impact to be material to our operating results or our financial
position.
In December 1999, the SEC Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" was issued. This bulletin requires that
revenue based on a percentage of tenants' sales be recognized only after the
tenant exceeds their sales breakpoint. Implementation of this bulletin is
expected to reduce revenue by $.6 million in 2000.
YEAR 2000
Based on a review of our mission critical and non-mission critical software and
hardware, we concluded that our company's systems were Year 2000 compliant. No
significant problems related to the Year 2000 were experienced or are expected
in the future. Our major tenants, financial institutions and utility companies
represented to us that they also were Year 2000 compliant. While we have not
been affected by any Year 2000 issues experienced by these third parties, we
have no guarantee that these third-party systems will continue to operate as
represented.
FORWARD-LOOKING STATEMENTS
This Annual Report includes certain forward-looking statements reflecting WRI's
expectations in the near term that involve a number of risks and uncertainties;
however, many factors may materially affect the actual results, including demand
for our properties, changes in rental and occupancy rates, changes in property
operating costs, interest rate fluctuations, and changes in local and general
economic conditions. Accordingly, there is no assurance that WRI's expectations
will be realized.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
WRI uses fixed and floating-rate debt to finance its capital requirements.
These transactions expose WRI to market risk related to changes in interest
rates. Derivative financial instruments are used to manage a portion of this
risk. We do not engage in the trading of derivative financial instruments in
the normal course of business. During 1998, we entered into and settled three
forward Treasury lock agreements with a total notional amount of $85 million as
a hedge against potential changes in interest rates of prospective issuances of
fixed-rate debt. Amounts paid or received upon settlement of these contracts
are deferred and amortized as an adjustment to interest expense over the life of
the fixed-rate debt. At December 31, 1999, WRI had fixed-rate debt of $499.9
million and variable-rate debt of $94.3 million, after adjusting for the effect
of interest rate swaps. We also had variable-rate notes receivable totaling
$44.8 million at year-end. In the event that interest rates were to increase
100 basis points, the fair value of fixed-rate debt would decrease by $21.8
million and net income, funds from operations and future cash flows would
decrease $.5 million based upon the variable-rate debt and notes receivable
outstanding at December 31, 1999.
<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, 1999 and 1998, and the
related statements of consolidated income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1999. 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, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 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 22, 2000
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31,
-------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Rentals . . . . . . . . . . . . . . . . . . . . . $225,244 $194,624 $169,041
Interest:
Affiliates. . . . . . . . . . . . . . . . . . . 2,403 1,578 1,434
Securities and Other. . . . . . . . . . . . . . 721 511 1,053
Equity in earnings of real estate joint ventures
and partnerships. . . . . . . . . . . . . . . . 213 342 1,003
Other . . . . . . . . . . . . . . . . . . . . . . 1,888 1,412 1,981
--------- --------- ---------
Total . . . . . . . . . . . . . . . . . . . 230,469 198,467 174,512
--------- --------- ---------
Expenses:
Depreciation and amortization . . . . . . . . . . 49,612 41,946 37,976
Operating . . . . . . . . . . . . . . . . . . . . 36,112 30,413 27,131
Interest. . . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009
Ad valorem taxes. . . . . . . . . . . . . . . . . 28,323 24,436 22,110
General and administrative. . . . . . . . . . . . 7,512 7,146 5,647
--------- --------- ---------
Total . . . . . . . . . . . . . . . . . . . 154,745 137,595 122,873
--------- --------- ---------
Income Before Gain on Sales of Property
and Extraordinary Charge. . . . . . . . . . . . . 75,724 60,872 51,639
Gain on Sales of Property . . . . . . . . . . . . . 20,596 885 3,327
--------- --------- ---------
Income Before Extraordinary Charge. . . . . . . . . 96,320 61,757 54,966
Extraordinary Charge (early retirement of debt) . . (190) (1,392)
--------- --------- ---------
Net Income. . . . . . . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966
========= ========= =========
Net Income Available to Common Shareholders . . . . $ 76,537 $ 54,484 $ 54,966
========= ========= =========
Net Income Per Common Share - Basic:
Income Before Extraordinary Charge. . . . . . . $ 2.88 $ 2.09 $ 2.06
Extraordinary Charge. . . . . . . . . . . . . . (.01) (.05)
--------- --------- ---------
Net Income. . . . . . . . . . . . . . . . . . . $ 2.87 $ 2.04 $ 2.06
========= ========= =========
Net Income Per Common Share - Diluted:
Income Before Extraordinary Charge. . . . . . . $ 2.86 $ 2.08 $ 2.05
Extraordinary Charge. . . . . . . . . . . . . . (.01) (.05)
--------- --------- ---------
Net Income. . . . . . . . . . . . . . . . . . . $ 2.85 $ 2.03 $ 2.05
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
December 31,
------------------------
1999 1998
----------- -----------
ASSETS
<S> <C> <C>
Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,514,139 $1,294,632
Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . (328,645) (296,989)
----------- -----------
Property - net. . . . . . . . . . . . . . . . . . . . . . . . . . 1,185,494 997,643
Investment in Real Estate Joint Ventures and Partnerships . . . . . . 2,006 2,741
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,187,500 1,000,384
Mortgage Bonds and Notes Receivable from:
Real Estate Joint Ventures and Partnerships . . . . . . . . . . . . 52,824 23,388
Affiliate (net of deferred gain of $3,050 in 1999 and $4,487 in 1998) 3,907 13,444
Marketable Debt Securities. . . . . . . . . . . . . . . . . . . . . . 14,951
Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . . . . . 29,986 25,612
Accrued Rent and Accounts Receivable (net of allowance for doubtful
accounts of $908 in 1999 and $888 in 1998). . . . . . . . . . . . . 16,874 15,197
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . 5,842 1,672
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,463 12,395
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $1,309,396 $1,107,043
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366
Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . 57,518 49,269
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,791 8,229
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663,494 573,864
----------- -----------
Commitments and Contingencies
Shareholders' Equity:
Preferred Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 10,000
7.44% Series A cumulative redeemable preferred shares of
beneficial interest; 3,000 shares issued and outstanding;
liquidation preference $25 per share. . . . . . . . . . . . . 90 90
7.125% Series B cumulative redeemable preferred shares of
beneficial interest; 3,600 shares issued and outstanding;
liquidation preference $25 per share. . . . . . . . . . . . . 108 108
7.0% Series C cumulative redeemable preferred shares of
beneficial interest; 2,300 shares issued and 2,297 shares
outstanding; liquidation preference $50 per share. . . . . . 69
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 150,000; shares issued and outstanding:
26,695 in 1999 and 26,673 in 1998 . . . . . . . . . . . . . . . . 801 800
Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 753,030 641,180
Accumulated Dividends in Excess of Net Income . . . . . . . . . . . (108,193) (108,926)
Deferred Compensation Obligation. . . . . . . . . . . . . . . . . . (3) (73)
----------- -----------
Shareholders' Equity. . . . . . . . . . . . . . . . . . . . . . 645,902 533,179
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $1,309,396 $1,107,043
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED CASH FLOWS
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
---------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization . . . . . . . . . . . . 49,612 41,946 37,976
Equity in earnings of real estate joint ventures and
partnerships . . . . . . . . . . . . . . . . . . . . (213) (342) (1,003)
Gain on sales of property . . . . . . . . . . . . . . (20,596) (885) (3,327)
Extraordinary charge (early retirement of debt) . . . 190 1,392
Changes in accrued rent and accounts receivable . . . (1,532) (621) (2,462)
Changes in other assets . . . . . . . . . . . . . . . (12,616) (12,662) (6,105)
Changes in accounts payable and accrued expenses. . . 6,924 7,614 9,113
Other, net. . . . . . . . . . . . . . . . . . . . . . 577 657 744
---------- ---------- ----------
Net cash provided by operating activities . . . . 118,476 97,464 89,902
---------- ---------- ----------
Cash Flows from Investing Activities:
Investment in properties. . . . . . . . . . . . . . . . (198,741) (172,470) (136,632)
Mortgage bonds and notes receivable:
Advances. . . . . . . . . . . . . . . . . . . . . . . (8,187) (12,598) (1,501)
Collections . . . . . . . . . . . . . . . . . . . . . 9,719 3,745 2,090
Proceeds from sales and disposition of property . . . . 15,010 1,109 11,741
Purchase of marketable debt securities. . . . . . . . . (14,951)
Proceeds from sales of marketable debt securities . . . 15,000 12,229
Real estate joint ventures and partnerships:
Investments . . . . . . . . . . . . . . . . . . . . . (1,643) (453) (59)
Distributions . . . . . . . . . . . . . . . . . . . . 216 345 808
Other, net. . . . . . . . . . . . . . . . . . . . . . . (4) 241 2,517
---------- ---------- ----------
Net cash used in investing activities . . . . . . (168,630) (182,803) (121,036)
---------- ---------- ----------
Cash Flows from Financing Activities:
Proceeds from issuance of:
Debt. . . . . . . . . . . . . . . . . . . . . . . . . 124,100 136,575 104,526
Common shares of beneficial interest. . . . . . . . . 546 301 1,325
Preferred shares of beneficial interest . . . . . . . 111,263 159,552
Principal payments of debt. . . . . . . . . . . . . . . (85,532) (134,443) (3,644)
Common and preferred dividends paid . . . . . . . . . . (95,397) (77,347) (68,200)
Other, net. . . . . . . . . . . . . . . . . . . . . . . (656) (381) (288)
---------- ---------- ----------
Net cash provided by financing activities . . . . 54,324 84,257 33,719
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents. . . 4,170 (1,082) 2,585
Cash and cash equivalents at January 1. . . . . . . . . . 1,672 2,754 169
---------- ---------- ----------
Cash and cash equivalents at December 31. . . . . . . . . $ 5,842 $ 1,672 $ 2,754
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
Years Ended December 31, 1999, 1998 and 1997
Preferred Common Accumulated
Shares of Shares of Dividends in Deferred
Beneficial Beneficial Capital Excess of Compensation
Interest Interest Surplus Net Income Obligation
----------- ----------- --------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1997 . . . . . . . . . . . . $ 797 $478,911 $ (78,710)
Net income . . . . . . . . . . . . . . . . . . 54,966
Shares exchanged for property. . . . . . . . . 1 275
Shares issued under benefit plans. . . . . . . 2 1,733
Dividends declared - common shares . . . . . . (68,200)
Other. . . . . . . . . . . . . . . . . . . . . 211
----------- ----------- --------- -------------- --------------
Balance, December 31, 1997 . . . . . . . . . . . 800 481,130 (91,944)
Net income . . . . . . . . . . . . . . . . . . 60,365
Issuance of Series A preferred shares. . . . .$ 90 72,422
Issuance of Series B preferred shares. . . . . 108 86,932
Shares issued under benefit plans. . . . . . . 696
Dividends declared - common shares . . . . . . (71,466)
Dividends declared - preferred shares. . . . . (5,881)
Adjustment for cumulative effect of adopting
accounting for deferred compensation plan:
Common shares held in plan . . . . . . . . $ (3,531)
Deferred compensation obligation . . . . . 3,458
----------- ----------- --------- -------------- --------------
Balance, December 31, 1998 . . . . . . . . . . . 198 800 641,180 (108,926) (73)
Net income . . . . . . . . . . . . . . . . . . 96,130
Issuance of Series C preferred shares. . . . . 69 111,119
Shares issued under benefit plans. . . . . . . 1 883
Dividends declared - common shares . . . . . . (75,804)
Dividends declared - preferred shares. . . . . (19,593)
Redemption of Series C preferred shares. . . . (152)
Deferred compensation obligation . . . . . . . 70
----------- ----------- --------- -------------- --------------
Balance, December 31, 1999 . . . . . . . . . . .$ 267 $ 801 $753,030 $ (108,193) $ (3)
=========== =========== ========= ============== ==============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Weingarten Realty Investors, a Texas real estate investment trust, is engaged in
the acquisition, development and management of real estate, primarily anchored
neighborhood and community shopping centers and, to a lesser extent, industrial
properties. Over 74% of WRI's properties are located in Texas, with the
remainder located primarily throughout the southwestern part of the United
States. WRI's major tenants include supermarkets, drugstores and other
retailers who generally sell basic necessity-type commodities. WRI currently
operates and intends to operate in the future as a real estate investment trust.
Basis of Presentation
The consolidated financial statements include the accounts of WRI, its
subsidiaries and its interest in joint ventures and partnerships over which WRI
exercises control. All significant intercompany balances and transactions have
been eliminated. Investments in less than 50%-owned joint ventures and
partnerships where WRI does not exercise control 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. Revenue from tenant reimbursements of taxes, maintenance expenses
and insurance is recognized in the period the related expense is recorded.
Revenue based on a percentage of tenants' sales is estimated and accrued ratably
over the year. Beginning January 1, 2000, such revenue will be recognized only
after the tenant exceeds their sales breakpoint, in accordance with the SEC
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements." Implementation of this bulletin is expected to reduce revenue by
$.6 million in 2000.
Property
Real estate assets are stated at cost less accumulated depreciation, which, in
the opinion of management, is not in excess of the individual property's
estimated undiscounted future cash flows, including estimated proceeds from
disposition. 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.
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.
WRI had also capitalized the direct internal costs of identifying and acquiring
operating property. In March 1998, the Emerging Issues Task Force of the
Financial Accounting Standards Board reached a consensus decision on Issue No.
97-11, "Accounting for Internal Costs Relating to Real Estate Property
Acquisitions." This consensus requires that internal costs of identifying and
acquiring operating property incurred subsequent to March 19, 1998 be expensed.
Such amounts capitalized totaled $.2 million and $1.1 million in 1998 and 1997,
respectively.
Deferred Charges
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
WRI'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.
<PAGE>
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.
Per Share Data
Net income per common share - basic is computed using net income available to
common shareholders and the weighted average shares outstanding. Net income per
common share - diluted includes the effect of potentially dilutive securities
for the periods indicated, as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
------- ------- -------
Numerator:
Net income available to common shareholders - basic. . . . . . $76,537 $54,484 $54,966
Income attributable to operating partnership units . . . . . . 141 37
------- ------- -------
Net income available to common shareholders - diluted. . . . . $76,678 $54,521 $54,966
======= ======= =======
Denominator:
Weighted average shares outstanding - basic. . . . . . . . . . 26,690 26,667 26,638
Effect of dilutive securities:
Share options and awards . . . . . . . . . . . . . . . . . 58 132 132
Operating partnership units. . . . . . . . . . . . . . . . 142 70 1
------- ------- -------
Weighted average shares outstanding - diluted. . . . . . . . . 26,890 26,869 26,771
======= ======= =======
</TABLE>
Options to purchase 550,200, 13,200 and 800 common shares in 1999, 1998 and
1997, respectively, were not included in the calculation of net income per
common share - diluted as the exercise prices were greater than the average
market price for the year.
Statements of Cash Flows
WRI considers all highly liquid investments with original maturities of three
months or less as cash equivalents. WRI issued .1 million common shares of
beneficial interest in 1997 valued at $.2 million in connection with purchases
of property. We assumed debt and/or capital lease obligations totaling $39.1
million, $6.7 million and $17.3 million in connection with purchases of property
during 1999, 1998 and 1997, respectively. We issued limited partnership
interests in exchange for property valued at $4.0 million and $1.7 million in
1998 and 1997, respectively. In connection with the sale of improved properties
in 1999, we received notes receivable totaling $33.1 million.
Comprehensive Income
WRI adopted Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" in 1998. Net income differs from comprehensive income by
less than $50,000 in each year presented.
Reclassifications
Certain reclassifications of prior years' amounts have been made to conform with
the current year presentation, including the classification of "accumulated
dividends in excess of net income" as a separate caption on the Consolidated
Balance Sheets.
<PAGE>
NOTE 2. DEBT
WRI's debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1999 1998
---------- ---------
<S> <C> <C>
Fixed-rate debt payable to 2015 at 6.0% to 10.5% . . . . . . . $ 423,906 $ 404,061
Variable-rate unsecured notes payable. . . . . . . . . . . . . 82,000
Unsecured notes payable under revolving credit agreements. . . 114,000 10,250
Obligations under capital leases . . . . . . . . . . . . . . . 48,467 12,467
Industrial revenue bonds payable to 2015 at 5.6% to 6.4% . . . 6,141 6,262
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,671 1,326
--------- ---------
Total. . . . . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366
========= =========
</TABLE>
WRI has an unsecured $200 million revolving credit agreement with a syndicate of
banks. The agreement expires in November 2000, but WRI 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 WRI has the option to convert all amounts
outstanding under the credit agreement to a term loan payable over a two-year
period. We also have an agreement for an unsecured and uncommitted overnight
credit facility totaling $20 million with a bank to be used for cash management
purposes. We will maintain adequate funds available under our revolving credit
facilities at all times to cover the outstanding balance under the $20 million
facility. WRI also has letters of credit totaling $16.0 million outstanding
under the $200 million revolving credit facility at December 31, 1999. The
revolving credit agreements are subject to normal banking terms and conditions
and do not adversely restrict our operations or liquidity. Subsequent to
year-end, we finalized an additional $100 million revolving credit agreement
with a bank which became effective March 1, 2000. This one-year facility is
renewable at our option for an additional two-year period.
At December 31, 1999, the variable interest rate for notes payable under the $20
million revolving credit agreement was 5.3%. During 1999, the maximum balance
and weighted average balance outstanding under both credit facilities were
$114.0 million and $53.2 million, respectively, at an average interest rate of
6.0%. WRI made cash payments for interest on debt, net of amounts capitalized,
of $32.3 million in 1999, $32.6 million in 1998 and $27.4 million in 1997.
Various leases and properties and current and future rentals from those leases
and properties collateralize certain debt. At December 31, 1999 and 1998, the
carrying value of such property aggregated $174 million and $177 million,
respectively.
WRI 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. We intend to hold such contracts through their
expiration date and to use them as a means of managing interest rate risk by
fixing the interest rate on a portion of our 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 by $1.0 million in 1999 and $.9 million in both 1998 and
1997. The interest rate swaps increased the average interest rate for our debt
by .2% for 1999, 1998 and 1997. WRI could be exposed to credit losses in the
event of non-performance by the counterparty; however, the likelihood of such
non-performance is remote.
In February 1999, WRI retired $82 million of variable-rate, unsecured medium
term notes resulting in an extra-ordinary charge to earnings of $.2 million. In
July 1999, we issued $20 million of ten-year 7.35% fixed-rate, unsecured medium
term notes. Including the effect of a loss of $1.2 million on the sale of
Treasury locks which were designated as a hedge against future issuance of
fixed-rate notes, the effective interest rate is 8.0%.
<PAGE>
WRI's debt can be summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
--------- ---------
<S> <C> <C>
As to interest rate (including the effects of
interest rate swaps):
Fixed-rate debt . . . . . . . . . . . . . . . . . $ 499,919 $ 444,060
Variable-rate debt. . . . . . . . . . . . . . . . 94,266 72,306
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366
========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
As to collateralization:
Unsecured debt. . . . . . . . . . . . . . . . . . $ 482,671 $ 440,433
Secured debt. . . . . . . . . . . . . . . . . . . 111,514 75,933
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366
========= =========
</TABLE>
Scheduled principal payments on our debt (excluding $114.0 million potentially
due under our revolving credit agreements and $36 million of capital leases) are
due during the following years (in thousands):
<TABLE>
<CAPTION>
<S> <C>
2000. . . . . . . . . $ 32,480
2001. . . . . . . . . 30,152
2002. . . . . . . . . 33,636
2003. . . . . . . . . 27,709
2004. . . . . . . . . 51,921
2005 through 2009 . . 237,769
2010 through 2014 . . 29,345
Thereafter. . . . . . 936
</TABLE>
In the event our $200 million revolving credit agreement expires in November
2000 and we elect to convert amounts outstanding under the revolver at that time
to a term loan, such amounts would be payable as follows; 50% in 2001 and 50% in
2002.
Various debt agreements contain restrictive covenants, the most restrictive of
which requires WRI to produce annual consolidated distributable cash flow, as
defined by the agreements, of not less than 250% of interest payments, to limit
total debt to no more than 60% of total assets (as defined) and to maintain
uncollateralized assets equal to at least 150% of unsecured debt. Management
believes that WRI is in compliance with all restrictive covenants.
In the third quarter of 1999, WRI filed a $400 million shelf registration
statement with the SEC which allows for the issuance of debt or equity
securities or warrants. The shelf registration was totally available at
December 31, 1999.
In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate,
unsecured medium term notes. In connection with this debt issuance, we entered
into a ten-year interest rate swap agreement with a notional amount of $10.5
million to swap 8.25% fixed-rate interest for floating-rate interest.
<PAGE>
NOTE 3. PREFERRED SHARES
In February 1998, WRI issued $75 million of 7.44% Series A cumulative redeemable
preferred shares with a liquidation preference of $25 per share. The shares are
callable at WRI's option any time after March 31, 2003 and have no stated
maturity. In October 1998, WRI issued $90 million of 7.125% Series B cumulative
redeemable preferred shares with a liquidation preference of $25 per share and
no stated maturity. WRI can elect to redeem the shares anytime after October
20, 2003. The Series B shares are redeemable by the holder only upon their
death and are also redeemable in either cash or common shares at our option.
There are limitations on the number of shares per shareholder and in the
aggregate that may be redeemed per year.
In January 1999, WRI issued $115 million of 7.0% Series C cumulative redeemable
preferred shares with a liquidation preference of $50 per share and no stated
maturity. WRI can elect to redeem these shares anytime after March 15, 2004.
The redemption rights of the shareholders and the related restrictions are
effectively the same as for the Series B preferred shares.
The proceeds of these offerings were used to pay down amounts outstanding under
WRI's revolving credit facilities, to fund acquisition and new development
activity, to retire $35 million of 9.11% secured notes payable and to retire $82
million of variable-rate, medium term notes due in 2000. Any redemption of
preferred shares initiated by WRI must be funded with proceeds from an offering
of additional common or preferred shares.
NOTE 4. PROPERTY
WRI's property consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
---------- ----------
<S> <C> <C>
Land . . . . . . . . . . . . . . $ 279,871 $ 236,221
Land held for development. . . . 24,509 30,156
Land under development . . . . . 12,139 13,024
Buildings and improvements . . . 1,189,687 1,009,166
Construction in-progress . . . . 7,933 6,065
---------- ----------
Total. . . . . . . . . . . $1,514,139 $1,294,632
========== ==========
</TABLE>
The following carrying charges were capitalized (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Interest . . . . . . . . . . . . $2,722 $1,375 $ 812
Ad valorem taxes . . . . . . . . 333 50 33
------ ------ ------
Total. . . . . . . . . . . $3,055 $1,425 $ 845
====== ====== ======
</TABLE>
During 1999, WRI purchased five shopping centers and twelve industrial
facilities. Additionally, we purchased a building adjacent to a WRI-owned
shopping center and purchased our joint venture partner's 77% interest in a
shopping center. These transactions added 2.8 million square feet to our
portfolio and represent an investment of $150.5 million. We also completed new
development totaling $35.4 million, which added .4 million square feet to the
portfolio.
<PAGE>
In December 1999, WRI sold 28.5 acres of undeveloped land and an 80% interest in
2.0 million square feet of industrial properties for $46.4 million, resulting in
a gain of $20.6 million.
NOTE 5. MARKETABLE DEBT SECURITIES
WRI's investment in marketable debt securities at December 31, 1998 consisted of
short-term commercial paper that matured January 4, 1999. The proceeds were
used to pay down amounts outstanding under our $20 million credit facility.
NOTE 6. RELATED PARTY TRANSACTIONS
WRI has mortgage bonds and notes receivable from WRI Holdings, Inc. of $3.9
million and $13.4 million, net of deferred gain of $3.0 million and $4.5 million
at December 31, 1999 and 1998, respectively. WRI and WRI Holdings share certain
directors and are under common management. Unimproved land and an investment in
a joint venture which owns and manages a motor hotel collateralize these
receivables. The bonds and notes bear interest at rates of 16% and prime plus
1%, respectively. However, due to WRI Holdings' poor financial condition, WRI
has limited the recognition of interest income for financial statement purposes
to the amount of cash payments received. WRI did not receive any interest
payments in 1999 and does not anticipate receiving such payments in the near
term. Interest income recognized for financial reporting purposes was $.1
million in 1997.
In the second quarter of 1998, WRI purchased 13.7 acres of undeveloped land from
WRI Holdings to be used for the development of a luxury apartment complex in
Conroe, Texas. The purchase price was $2.2 million and was based upon an
independent third party appraisal. WRI Holdings used the proceeds to pay down
amounts outstanding under mortgage bonds and notes payable to WRI.
In December 1999, undeveloped land from WRI Holdings of 102.6 acres was sold and
the net proceeds of $8.1 million were used to pay down amounts outstanding under
mortgage bonds and notes payable to WRI.
Management of WRI believes that the fair market value of the security
collateralizing debt from WRI Holdings approximates the net investment in such
debt and that there would not be a charge to operations if WRI were to
foreclose on the debt. If foreclosure were required, the net investment in
such debt would become WRI's basis of the repossessed assets. WRI's management
believes that the net investment in the mortgage bonds and notes receivable from
WRI Holdings is not impaired.
WRI's unrecorded receivable for interest on the mortgage bonds and notes
receivable was $20.9 million and $31.1 million at December 31, 1999 and 1998,
respectively. Interest income not recognized by WRI for financial reporting
purposes aggregated, in millions, $4.2, $4.8 and $4.0 for 1999, 1998 and 1997,
respectively. WRI does not anticipate recovery of the unrecorded receivable in
the future.
WRI owns interests in several joint ventures and partnerships. Notes receivable
from these entities bear interest at 8% to 10.5% at December 31, 1999, are due
at various dates through 2028 and are generally secured by real estate assets.
WRI recognized interest income on these notes as follows, in millions: $2.3 in
1999; $1.5 in 1998 and $1.4 in 1997.
Chase Bank of Texas, National Association is a significant participant in and
the agent for the banks that provide WRI's $200 million revolving credit
agreement and is a counterparty in three interest rate swap agreements with WRI.
An executive officer of Chase serves on the WRI Board of Trustees.
NOTE 7. FEDERAL INCOME TAX CONSIDERATIONS
Federal income taxes are not provided because WRI believes it qualifies as a
REIT under the provisions of the Internal Revenue Code. Shareholders of WRI
include their proportionate taxable income in their individual tax returns. As
a REIT, we must distribute at least 95% of our ordinary taxable income to our
shareholders and meet certain income source and investment restriction
requirements.
<PAGE>
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
our net assets exceeds the tax basis by $23.3 million at December 31, 1999.
For federal income tax purposes, the cash dividends distributed to common
shareholders are characterized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Ordinary income . . . . . . . . . . . . . . . 84.2% 97.0% 95.9%
Return of capital (generally non-taxable) . . 4.0 2.1 2.9
Capital gain distributions. . . . . . . . . . 11.8 .9 1.2
------ ------ ------
Total . . . . . . . . . . . . . . 100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
NOTE 8. LEASING OPERATIONS
WRI'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 (payments for taxes,
maintenance and insurance by lessees and for an amount based on a percentage of
the tenants' sales). Future minimum rental income from non-cancelable tenant
leases at December 31, 1999, in millions, is: $172.4 in 2000; $151.5 in 2001;
$127.6 in 2002; $107.9 in 2003; $90.5 in 2004 and $627.5 thereafter. The future
minimum rental amounts do not include estimates for contingent rentals. Such
contingent rentals, in millions, aggregated $44.4 in 1999, $40.9 in 1998, and
$36.8 in 1997.
NOTE 9. COMMITMENTS AND CONTINGENCIES
WRI leases land and one shopping center from the owners and then subleases these
properties to other parties. Future minimum rental payments under these
operating leases, in millions, are: $1.8 in 2000; $1.7 in 2001; $1.7 in 2002;
$1.6 in 2003; $1.4 in 2004 and $11.7 thereafter. Future minimum rental
payments on these leases have not been reduced by future minimum sublease
rentals aggregating $22.1 million through 2036 that are due under various
non-cancelable subleases. Rental expense (including insignificant amounts for
contingent rentals) for operating leases aggregated, in millions: $4.9 in 1999,
$2.6 in 1998 and $2.0 in 1997. Sublease rental revenue (excluding amounts for
improvements constructed by WRI on the leased land) from these leased properties
was as follows, in millions: $2.9 in 1999 and 1998 and $2.4 in 1997.
Property under capital leases, consisting of five shopping centers, aggregated
$41.1 and $12.3 million, respectively, at December 31, 1999 and 1998 and is
included in buildings and improvements. Amortization of property under capital
leases is included in depreciation and amortization expense. Future minimum
lease payments under these capital leases total $89.6 million, with annual
payments due, in millions, of $3.2 in each of 2000 through 2002; $18.3 in 2003;
$1.9 in 2004; and $59.8 thereafter. The amount of these total payments
representing interest is $41.1 million. Accordingly, the present value of the
net minimum lease payments is $48.5 million at December 31, 1999.
In 1998 and 1997, WRI formed limited partnerships to acquire certain property.
WRI controls the partnerships and consolidates their operations in the
accompanying consolidated financial statements. The partnership agreements
allow for the outside limited partners to put their interests to the partnership
after the second anniversary of the agreement for the original consideration of
$4.0 million and $1.7 million in 1998 and 1997, respectively, payable in cash or
WRI common shares at the option of WRI. Subsequent to year-end, one limited
partner put its interest in a partnership to WRI. We expect to issue common
shares or remit cash to the limited partner in early 2000.
WRI is involved in various matters of litigation arising in the normal course of
business. While WRI is unable to predict with certainty the amounts involved,
WRI's management and counsel are of the opinion that, when such litigation is
resolved, WRI's resulting liability, if any, will not have a material effect on
WRI's consolidated financial statements.
<PAGE>
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of WRI's financial instruments was determined using available
market information and appropriate valuation methodologies as of December 31,
1999. Unless otherwise described below, all other financial instruments are
carried at amounts which approximate their fair values.
Based on rates currently available to WRI for debt with similar terms and
average maturities, fixed-rate debt with carrying values of $499.9 million and
$444.1 million have fair values of approximately $485.6 million and $443.9
million at December 31, 1999 and 1998, respectively. The fair value of WRI's
variable-rate debt approximates its carrying values of $94.3 million and $72.3
million at year-end 1999 and 1998, respectively.
The fair value of the interest rate swap agreements is based on the estimated
amounts WRI would receive or pay to terminate the contracts. If WRI had
terminated these agreements at December 31, 1999 and 1998, WRI would have paid
$1.1 million and $3.8 million at each year-end, respectively.
The fair value of the mortgage bonds and notes receivable from WRI Holdings was
not determined because it is not practicable to reasonably assess the credit
adjustment that would be applied in the marketplace for such bonds and notes
receivable.
NOTE 11. SHARE OPTIONS AND AWARDS
WRI had an incentive share option plan which provided for the issuance of
options and share awards up to a maximum of 700,000 common shares that expired
in December 1997. Options granted under this plan become exercisable in equal
increments over a three-year period. WRI has an additional share option plan
which grants 100 share options to every employee of WRI, excluding 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. Options
granted under this plan are exercisable immediately. For both of these share
option plans, options are granted to employees of WRI at an exercise price equal
to the quoted fair market value of the common shares on the date the options are
granted and expire upon termination of employment or ten years from the date of
grant.
In 1999, WRI granted 16,000 share options under a compensatory incentive share
plan. This plan, which expires in 2002, provides for the issuance of up to
1,750,000 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 our common
shares. The share options generally vest over a three-year period beginning one
year after the date of grant. Share options were granted at the quoted fair
market value on the date of grant. Restricted shares are issued at no cost to
the employee, and as such we recognized compensation expense relating to
restricted shares as follows, in millions: $.3 in 1999, 1998 and 1997.
WRI does not recognize compensation cost for share options when the option
exercise price equals or exceeds the quoted fair market value on the date of the
grant. Had we determined compensation cost for our share option and award plans
based on the fair value of the options granted at the grant dates, our proforma
net income available to common shareholders would have been as follows, in
millions: $75.9, $53.8 and $54.3 in 1999, 1998 and 1997, respectively. Proforma
net income per common share - basic would have been $2.84, $2.02 and $2.04 in
1999, 1998 and 1997, respectively.
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 in 1999, 1998 and 1997, respectively: dividend yield of 7.3%, 6.5%
and 6.0%; expected volatility of 18.1%, 18.1% and 18.0%; expected lives of 6.9,
6.9 and 6.9 and risk-free interest rates of 6.6%, 4.8% and 6.5%.
<PAGE>
Following is a summary of the option activity for the three years ended December
31, 1999:
<TABLE>
<CAPTION>
SHARES WEIGHTED
UNDER AVERAGE
OPTION EXERCISE PRICE
----------- --------------
<S> <C> <C>
Outstanding, January 1, 1997 . . . . . . . 687,735 $ 35.40
Granted. . . . . . . . . . . . . . . . . . 558,600 40.25
Canceled . . . . . . . . . . . . . . . . . (9,400) 37.60
Exercised. . . . . . . . . . . . . . . . . (61,910) 32.00
-----------
Outstanding, December 31, 1997 . . . . . . 1,175,025 37.85
Granted. . . . . . . . . . . . . . . . . . 14,900 42.99
Canceled . . . . . . . . . . . . . . . . . (7,802) 40.14
Exercised. . . . . . . . . . . . . . . . . (29,344) 34.01
-----------
Outstanding, December 31, 1998 . . . . . . 1,152,779 37.99
Granted. . . . . . . . . . . . . . . . . . 17,900 41.29
Canceled . . . . . . . . . . . . . . . . . (14,800) 40.23
Exercised. . . . . . . . . . . . . . . . . (39,089) 32.95
-----------
Outstanding, December 31, 1999 . . . . . . 1,116,790 $ 38.19
===========
</TABLE>
The number of share options exercisable at December 31, 1999, 1998 and 1997 was
728,000, 432,000 and 296,000, respectively. Options exercisable at year-end
1999 had a weighted average exercise price of $37.74. The weighted average fair
value of share options granted during 1999, 1998 and 1997 was $4.25, $4.05 and
$5.35, respectively. Share options outstanding at December 31, 1999 had
exercise prices ranging from $25.00 to $45.81 and a weighted average remaining
contractual life of 5.7 years. Approximately 89% of the options outstanding at
year-end 1999 have exercise prices between $37.00 and $40.25 and a weighted
average contractual life of 6.0 years. There were 1,011,000 common shares
available for the future grant of options or awards at December 31, 1999.
NOTE 12. EMPLOYEE BENEFIT PLANS
WRI 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 WRI 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 $.3 million in 1999 and 1998 and
$.2 million in 1997.
Effective April 1, 1999, WRI adopted an Employee Share Purchase Plan under which
250,000 WRI common shares have been authorized. These shares, as well as common
shares purchased by WRI on the open market, are made available for sale to
employees at a discount of 15%. Shares purchased by the employee under the plan
are restricted from being sold for two years from the date of purchase or until
termination of employment with WRI. During 1999, a total of 8,028 shares were
purchased by employees at an average price of $33.01.
WRI 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. Our funding policy is to
make annual contributions as required by applicable regulations, however, we
have not been required to make contributions for any of the past three years.
Reconciliations of the benefit obligation, plan assets at fair value and
<PAGE>
the funded status of the plan are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Benefit obligation at beginning of year . . . . . . . $10,485 $ 9,318
Service cost. . . . . . . . . . . . . . . . . . . . . 533 457
Interest cost . . . . . . . . . . . . . . . . . . . . 729 663
Actuarial (gain) loss . . . . . . . . . . . . . . . . (841) 245
Benefit payments. . . . . . . . . . . . . . . . . . . (203) (198)
-------- --------
Benefit obligation at end of year . . . . . . . . . . $10,703 $10,485
======== ========
Fair value of plan assets at beginning of year. . . . $10,676 $10,348
Actual return on plan assets. . . . . . . . . . . . . 1,584 526
Benefit payments. . . . . . . . . . . . . . . . . . . (203) (198)
-------- --------
Fair value of plan assets at end of year. . . . . . . $12,057 $10,676
======== ========
Plan assets at fair value less benefit obligation . . $ 1,354 $ 191
Unrecognized prior service cost . . . . . . . . . . . 8
Unrecognized gain . . . . . . . . . . . . . . . . . . (3,096) (1,681)
-------- --------
Pension liability . . . . . . . . . . . . . . . . . . $(1,742) $(1,482)
======== ========
</TABLE>
The components of net periodic pension cost are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Service cost . . . . . . . . . . . . . . . . . . . $ 533 $ 457 $ 430
Interest cost. . . . . . . . . . . . . . . . . . . 729 663 587
Expected return on plan assets . . . . . . . . . . (950) (923) (703)
Amortization of transition asset . . . . . . . . . (54)
Prior service cost . . . . . . . . . . . . . . . . 8 47 47
Recognized gains . . . . . . . . . . . . . . . . . (59) (124) (44)
------ ------ ------
Total. . . . . . . . . . . . . . . . . . $ 261 $ 120 $ 263
====== ====== ======
</TABLE>
Assumptions used to develop periodic expense and the actuarial present value of
the benefit obligations were:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Weighted average discount rate . . . . . . . . . . 7.5% 6.7% 7.0%
Expected long-term rate of return on plan assets . 9.0% 9.0% 9.0%
Rate of increase in compensation levels. . . . . . 5.0% 5.0% 5.0%
</TABLE>
WRI also has a non-qualified supplemental retirement plan for officers of WRI
which provides for benefits in excess of the statutory limits of its defined
benefit pension plan. The obligation is funded in a grantor trust with our
common shares. We recognized expense as follows, in millions: $.3 in 1999,
1998 and 1997.
<PAGE>
NOTE 13. SEGMENT INFORMATION
The operating segments presented are the segments of WRI for which separate
financial information is available and operating performance is evaluated
regularly by senior management in deciding how to allocate resources and in
assessing performance. WRI evaluates the performance of its operating segments
based on net operating income that is defined as total revenues less operating
expenses and ad valorem taxes. Management does not consider the effect of gains
or losses from the sale of property in evaluating ongoing operating performance.
The shopping center segment is engaged in the acquisition, development and
management of real estate, primarily anchored neighborhood and community
shopping centers located in Texas, Louisiana, Arizona, Nevada, Arkansas, New
Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and
Maine. The customer base includes supermarkets, drugstores and other retailers
who generally sell basic necessity-type commodities. The industrial segment is
engaged in the acquisition, development and management of bulk warehouses and
office/service centers. Its properties are located in Texas, Nevada and
Tennessee, and the customer base is diverse. Included in "Other" are
corporate-related items, insignificant operations and costs that are not
allocated to the reportable segments.
Information concerning WRI's reportable segments is as follows (in thousands):
<TABLE>
<CAPTION>
SHOPPING
CENTER INDUSTRIAL OTHER TOTAL
--------- ----------- -------- ------------
<S> <C> <C> <C> <C>
1999:
Revenues . . . . . . . . . $ 197,084 $ 28,331 $ 5,054 $ 230,469
Net operating income . . . 140,191 20,127 5,716 166,034
Total assets . . . . . . . 1,025,090 173,502 110,804 1,309,396
Capital expenditures . . . 189,445 56,461 12,777 258,683
1998:
Revenues . . . . . . . . . $ 176,269 $ 18,574 $ 3,624 $ 198,467
Net operating income . . . 125,949 13,342 4,327 143,618
Total assets . . . . . . . 898,805 133,379 74,859 1,107,043
Capital expenditures . . . 118,746 54,790 6,051 179,587
1997:
Revenues . . . . . . . . . $ 154,979 $ 14,912 $ 4,621 $ 174,512
Net operating income . . . 109,776 10,855 4,640 125,271
Total assets . . . . . . . 816,852 88,091 41,850 946,793
Capital expenditures . . . 138,365 16,908 2,985 158,258
</TABLE>
<PAGE>
Net operating income reconciles to income before extraordinary charge as shown
on the Statements of Consolidated Income as follows (in thousands):
<TABLE>
<CAPTION>
-------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Total segment net operating income . . $166,034 $143,618 $125,271
Less:
Depreciation and amortization. . . 49,612 41,946 37,976
Interest . . . . . . . . . . . . . 33,186 33,654 30,009
General and administrative . . . . 7,512 7,146 5,647
Gain on sales of property. . . . . (20,596) (885) (3,327)
--------- --------- ---------
Income before extraordinary charge . . $ 96,320 $ 61,757 $ 54,966
========= ========= =========
</TABLE>
Equity in earnings of real estate joint ventures and partnerships as shown on
the Statements of Consolidated Income and the corresponding investment balances
are included in net operating income of the shopping center segment.
NOTE 14. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the year ended December 31, 1999, WRI acquired five retail centers, a
building adjacent to a WRI-owned shopping center, a joint venture partner's 77%
interest in a retail center and twelve industrial projects for a total of $150.5
million. The pro forma financial information for the years ended December 31,
1999 and 1998 is based on the historical statements of WRI after giving effect
to the acquisitions as if such acquisitions took place on January 1, 1999 and
1998, respectively.
The pro forma financial information shown below 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
(in thousands, except per share amounts).
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Pro forma revenues . . . . . . . . . . . . . . . . . . . . . . $241,091 $219,827
======== ========
Pro forma net income available to common shareholders. . . . . $ 78,544 $ 57,977
======== ========
Pro forma net income per common share - basic. . . . . . . . . $ 2.94 $ 2.17
======== ========
Pro forma net income per common share - diluted. . . . . . . . $ 2.93 $ 2.16
======== ========
</TABLE>
<PAGE>
NOTE 15. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data is as follows (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
1999:
Revenues . . . . . . . . . . . . . . . . . . . . . $54,764 $56,312 $58,387 $61,006
Net income available to common shareholders. . . . 13,524 14,174 14,562 34,277 (1)
Net income per common share - basic. . . . . . . . 0.51 0.53 0.55 1.28 (1)
Net income per common share - diluted. . . . . . . 0.50 0.53 0.54 1.28 (1)
1998:
Revenues . . . . . . . . . . . . . . . . . . . . . $46,962 $48,808 $49,955 $52,742
Net income available to common shareholders. . . . 12,329 13,682 14,304 14,169
Net income per common share - basic. . . . . . . . 0.46 0.51 0.54 0.53
Net income per common share - diluted. . . . . . . 0.46 0.51 0.53 0.53
<FN>
(1) Increase is primarily the result of a gain on the sale of property
during the quarter.
</TABLE>
NOTE 16. PRICE RANGE OF COMMON SHARES (UNAUDITED)
The high and low sale prices per share of WRI's common shares, as reported on
the New York Stock Exchange composite tape, and dividends per common share paid
for the fiscal quarters indicated were as follows:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
--------- --------- ---------
<S> <C> <C> <C>
1999:
Fourth. . . $ 39 3/8 $ 37 $ 0.71
Third . . . 42 7/16 37 1/4 0.71
Second. . . 43 7/16 38 1/4 0.71
First . . . 45 5/8 38 3/8 0.71
1998:
Fourth. . . $ 46 7/8 $ 39 3/4 $ 0.67
Third . . . 43 35 15/16 0.67
Second. . . 44 15/16 40 5/8 0.67
First . . . 45 5/8 43 7/8 0.67
</TABLE>
<PAGE>
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 WRI's Trust Managers is incorporated
herein by reference to the "Election of Trust Managers" section of WRI's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held
April 24, 2000.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to the "Executive Compensation" and
"Pension Plan" sections of WRI's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April 24, 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to the "Election of Trust Managers"
section of WRI's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held April 24, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to the "Compensation Committee Interlocks
and Insider Participation" section of WRI's definitive Proxy Statement for the
Annual Meeting of Shareholders to be held April 24, 2000.
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 . . . . . . . . . . . . . . 21
(B) Financial Statements
(i) Statements of Consolidated Income for the years
ended December 31, 1999, 1998 and 1997. . . . . . 22
(ii) Consolidated Balance Sheets as of December 31,
1999 and 1998 . . . . . . . . . . . . . . . . . 23
(iii) Statements of Consolidated Cash Flows for the
years ended December 31, 1999, 1998 and 1997. . . 24
(iv) Statements of Consolidated Shareholders'
Equity for the years ended December 31, 1999,
1998 and 1997.. . . . . . . . . . . . . . . . . 25
(v) Notes to Consolidated Financial Statements. . . . . 26
<PAGE>
(2) Financial Statement Schedules:
SCHEDULE PAGE
-------- ----
II Valuation and Qualifying Accounts . . . . . . . . . . 45
III Real Estate and Accumulated Depreciation. . . . . . 46
IV Mortgage Loans on Real Estate . . . . . . . . . . . 48
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>
3.1 - Restated Declaration of Trust (filed as Exhibit 3.1 to WRI's Registration Statement on Form S-3
(No. 33-49206) and incorporated herein by reference).
3.2 - Amendment of the Restated Declaration of Trust (filed as Exhibit 3.2 to WRI's Registration
Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference).
3.3 - Second Amendment of the Restated Declaration of Trust (filed as Exhibit 3.3 to WRI's
Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by
reference).
3.4 - Third Amendment of the Restated Declaration of Trust (filed as Exhibit 3.4 to WRI's
Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by
reference).
3.5 - Amended and Restated Bylaws of WRI (filed as Exhibit 3.2 to WRI's Registration Statement on
Form S-3 (No. 33-49206) and incorporated herein by reference).
4.1 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28, 1984, payable to
WRI in the original principal amount of $16,682,000 (filed as Exhibit 10.10 to WRI's
Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference).
4.2 - 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. dated December 28, 1984, payable to
WRI in the original principal amount of $3,150,000 (filed as Exhibit 10.8 to WRI's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by reference).
4.2.1* - Sixth Bonds Renewal and Extension Agreement, effective December 28, 2000, for the 16%
Mortgage Bonds of WRI Holdings, Inc., payable to WRI in the original principal amount of
3,150,000.
4.3 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of
Texas, National Association (formerly, 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 WRI's Registration Statement on Form
S-4 (No. 33-19730) and incorporated herein by reference).
4.3.1 - Supplemental Indenture of Trust, dated February 22, 1995, between WRI Holdings, Inc. and
Chase Bank of Texas, National Association (formerly, 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 WRI's Annual
Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by
reference).
4.4* - Sixth Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas,
National Association (formerly, Texas Commerce Trust Company of New York), as Trustee,
amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase
Bank of Texas, National Association (formerly, 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.
4.5 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of
Texas, National Association (formerly, 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 WRI's Registration Statement on
Form S-4 (No. 33-19730) and incorporated herein by reference).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.5.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas,
National Association (formerly, Texas Commerce Trust Company of New York), as Trustee,
amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase
Bank of Texas, National Association (formerly, 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 WRI's Annual Report on Form 10-K
for the year ended December 31, 1989 and incorporated herein by reference).
4.6 - 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 WRI (filed as Exhibit 10.8 to WRI's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference).
4.7 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28, 1984, payable to
WRI in the original principal amount of $7,000,000 (filed as Exhibit 10.13 to WRI's Registration
Statement on Form S-4 (No. 33-19730) and incorporated herein by reference).
4.8 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of
Texas, National Association (formerly, 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 WRI's Registration Statement on Form
S-4 (No. 33-19730) and incorporated herein by reference).
4.8.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas,
National Association (formerly, Texas Commerce Trust Company of New York), as Trustee,
amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase
Bank of Texas, National Association (formerly, 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 WRI's Annual Report on Form 10-K
for the year ended December 31, 1989 and incorporated herein by reference).
4.9 - 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 WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated
herein by reference).
4.10 - Amendment to Note Purchase Agreement, dated March 31, 1991, amending loan agreement,
dated August 6, 1987, Life and Accident Insurance Company for $5,000,000, American
General Life Insurance Company of Delaware for $5,000,000, 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 WRI's Annual Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by reference).
4.11 - Promissory Note in the amount of $12,000,000 between WRI, as payee, and Plaza
Construction, Inc., as maker (filed as Exhibit 10.23 to WRI's Annual Report on Form 10-K for
the year ended December 31, 1991 and incorporated herein by reference).
4.11.1* - Eleventh Renewal and Extension of Promissory Note in the amount of $12,000,000, effective
as of December 1, 2000, between WRI, as payee, and Plaza Construction, Inc., as maker.
4.12 - Amended and Restated Master Swap Agreement dated as of January 29, 1992, between WRI
and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National
Association) (filed as Exhibit 10.24 to WRI's Annual Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by reference).
4.12.1 - Rate Swap Transaction, dated as of May 15, 1992, between WRI and Chase Bank of Texas,
National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit
10.24.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference).
4.12.2 - Rate Swap Transaction, dated as of June 24, 1992, between WRI and Chase Bank of Texas,
National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit
10.24.2 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference).
4.12.3 - Rate Swap Transaction, dated as of July 2, 1992, between WRI and Chase Bank of Texas,
National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit
10.24.3 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.13 - Amended and Restated Credit Agreement dated as of November 21, 1996 between WRI and
Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National
Association), as Agent, and individually as a Bank, and the Banks defined therein (filed as
Exhibit 10.17 to WRI's Annual Report on Form 10-K for the year ended December 31, 1997
and incorporated herein by reference).
4.13.1 - First, Second and Third Amendments to the Amended and Restated Credit Agreement dated
November 21, 1996 between WRI and Chase Bank of Texas, National Association (formerly,
Texas Commerce Bank National Association) (filed as Exhibit 10.17.1 to WRI's Annual Report
on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference).
4.14 - Note Purchase Agreement, dated April 1, 1994, between The Variable Annuity Life Insurance
Company, American General Life Insurance Company and WRI in the amount of $30,000,000
(filed as Exhibit 10.25 to WRI's Annual Report on Form 10-K for the year ended December 31,
1994 and incorporated herein by reference).
4.15 - Master Promissory Note in the amount of $20,000,000 between WRI, as payee, and Chase
Bank of Texas, National Association (formerly, Texas Commerce Bank National Association),
as maker, effective December 30, 1998 (filed as Exhibit 4.15 to WRI's Annual Report on Form
10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.16 - Distribution Agreement among WRI and the Agents dated November 15, 1996 relating to the
Medium Term Notes (filed as Exhibit 1.1 to WRI's Current Report of Form 8-K dated November
15, 1996 and incorporated herein by reference).
4.17 - Senior Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas, National
Association (formerly, Texas Commerce Bank National Association), as trustee (filed as Exhibit
4(a) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by
reference).
4.18 - Subordinated Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas,
National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit
4(b) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by
reference).
4.19 - Form of Fixed Rate Senior Medium Term Note (filed as Exhibit 4.19 to WRI's Annual Report on
Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.20 - Form of Floating Rate Senior Medium Term Note (filed as Exhibit 4.20 to WRI's Annual Report
on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.21 - Form of Fixed Rate Subordinated Medium Term Note (filed as Exhibit 4.21 to WRI's Annual
Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by
reference).
4.22 - Form of Floating Rate Subordinated Medium Term Note (filed as Exhibit 4.22 to WRI's Annual
Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by
reference).
4.23 - Statement of Designation of 7.44% Series A Cumulative Redeemable Preferred Shares (filed
as Exhibit 99 to WRI's Current Report on Form 8-A dated February 18, 1998 and incorporated
herein by reference).
4.24 - Statement of Designation of 7.125% Series B Cumulative Redeemable Preferred Shares (filed
as Exhibit 4.2 to WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated
herein by reference).
4.25 - Statement of Designation of 7.00% Series C Cumulative Redeemable Preferred Shares (filed
as Exhibit 4.1 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and
incorporated herein by reference).
4.26 - 7.44% Series A Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4 to
WRI's Current Report on Form 8-K dated February 23, 1998 and incorporated herein by
reference).
4.27 - 7.125% Series B Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.1 to
WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated herein by
reference).
4.28 - 7.00% Series C Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.2 to
WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by
reference).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.29 - Distribution Agreement among WRI and the Agents dated August 10, 1998 relating to the
Medium Term Notes (filed as Exhibit 1.1 to WRI's current report on Form 8-K dated August 12,
1998 and incorporated herein by reference).
4.30* - Credit Agreement, dated January 6, 2000, between WRI and Bank of America, N.A.
4.30.1* - First Amendment to Credit Agreement, dated February 24, 2000, between WRI and Bank of
America, N.A.
4.31* - Promissory Note in the amount of $100,000,000, or aggregate principal amount outstanding
under Credit Agreement, between WRI, as payee, and Bank of America, N.A., as maker, dated
January 6, 2000.
10.1** - 1988 Share Option Plan of WRI, as amended (filed as Exhibit 10.1 to WRI's Annual Report on
Form 10-K for the year ended December 31, 1990 and incorporated herein by reference).
10.2** - Weingarten Realty Investors Supplemental Retirement Account Plan, as amended and
restated (filed as Exhibit 10.26 to WRI's Annual Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by reference).
10.3** - The Savings and Investment Plan for Employees of WRI, as amended (filed as Exhibit 4.1 to
WRI's Registration Statement on Form S-8 (No. 33-25581) and incorporated herein by
reference).
10.4** - The Fifth Amendment to Savings and Investment Plan for Employees of WRI (filed as Exhibit
4.1.1 to WRI's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (No.
33-25581) and incorporated herein by reference).
10.5** - The 1993 Incentive Share Plan of WRI (filed as Exhibit 4.1 to WRI's Registration Statement on
Form S-8 (No. 33-52473) and incorporated herein by reference).
10.6*** - 1999 WRI Employee Share Purchase Plan
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.
<FN>
* Filed with this report.
** Management contract or compensatory plan or arrangement.
</TABLE>
<PAGE>
SIGNATURES
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.
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
<S> <C> <C>
By: Stanford Alexander
---------------------------------
Stanford Alexander
Chairman/Chief Executive Officer
</TABLE>
Date: March 17, 2000
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:
SIGNATURE TITLE DATE
--------- ----- ----
<TABLE>
<CAPTION>
<S> <C> <C> <C>
By: Stanford Alexander Chairman and Trust Manager March 17, 2000
------------------------
Stanford Alexander (Chief Executive Officer)
By: Andrew M. Alexander President March 17, 2000
------------------------
Andrew M. Alexander and Trust Manager
By: Robert J. Cruikshank Trust Manager March 17, 2000
------------------------
Robert J. Cruikshank
By: Martin Debrovner Vice Chairman March 17, 2000
------------------------
Martin Debrovner and Trust Manager
By: Melvin Dow Trust Manager March 17, 2000
------------------------
Melvin Dow
By: Stephen A. Lasher Trust Manager March 17, 2000
------------------------
Stephen A. Lasher
By: Joseph W. Robertson, Jr. Executive Vice President and March 17, 2000
------------------------
Joseph W. Robertson, Jr. Trust Manager (Chief Financial Officer)
By: Douglas W. Schnitzer Trust Manager March 17, 2000
------------------------
Douglas W. Schnitzer
By: Marc J. Shapiro Trust Manager March 17, 2000
------------------------
Marc J. Shapiro
By: J.T. Trotter Trust Manager March 17, 2000
------------------------
J.T. Trotter
By: Stephen C. Richter Senior Vice President/ March 17, 2000
------------------------
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, 1999, 1998 AND 1997
(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>
1999:
Allowance for Doubtful Accounts. . . $ 888 $ 1,047 $ 1,027 $ 908
1998:
Allowance for Doubtful Accounts. . . $ 1,000 $ 683 $ 795 $ 888
1997:
Allowance for Doubtful Accounts. . . $ 1,236 $ 877 $ 1,113 $ 1,000
</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, 1999
(AMOUNTS IN THOUSANDS)
Total Cost
-------------------------------------
Buildings Projects
and Under Total Accumulated Encumbrances
Land Improvements Development Cost Depreciation (A)
-------- ------------- ------------ ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
Texas . . . . . . . . . . .$167,757 $ 659,682 $ 827,439 $ 230,568 $ 11,709
Other States. . . . . . . . 78,388 316,309 394,697 61,746 23,948
-------- ------------- ------------ ---------- ------------- --------------
Total Shopping Centers. . 246,145 975,991 1,222,136 292,314 35,657
INDUSTRIAL:
Texas . . . . . . . . . . . 28,404 133,564 161,968 20,234 3,974
Other States. . . . . . . . 2,512 10,665 13,177 317
-------- ------------- ------------ ---------- ------------- --------------
Total Industrial. . . . . 30,916 144,229 175,145 20,551 3,974
OFFICE BUILDING:
Texas . . . . . . . . . . . 534 15,650 16,184 10,782
-------- ------------- ------------ ---------- ------------- --------------
MULTI-FAMILY
RESIDENTIAL:
Texas . . . . . . . . . . . 2,276 12,724 15,000 215
-------- ------------- ------------ ---------- ------------- --------------
Total Improved
Properties . . . . . . . 279,871 1,148,594 1,428,465 323,862 39,631
-------- ------------- ------------ ---------- ------------- --------------
LAND UNDER DEVELOPMENT
OR HELD FOR
DEVELOPMENT:
Texas . . . . . . . . . . . $ 29,544 29,544
Other States. . . . . . . . 7,104 7,104
-------- ------------- ------------ ---------- ------------- --------------
Total Land Under
Development or Held
for Development. . . . . 36,648 36,648
-------- ------------- ------------ ---------- ------------- --------------
LEASED PROPERTY
(SHOPPING CENTER)
UNDER CAPITAL LEASE:
Other States. . . . . . . . 41,093 41,093 4,783 5,857
-------- ------------- ------------ ---------- ------------- --------------
CONSTRUCTION IN
PROGRESS:
Texas . . . . . . . . . . . 5,240 5,240
Other States. . . . . . . . 2,693 2,693
-------- ------------- ------------ ---------- ------------- --------------
Total Construction in
Progress . . . . . . . . 7,933 7,933
-------- ------------- ------------ ---------- ------------- --------------
TOTAL OF ALL
PROPERTIES. . . . . . . . . .$279,871 $ 1,189,687 $ 44,581 $1,514,139 $ 328,645 $ 45,488
======== ============= ============ ========== ============= ==============
____________
<FN>
Note A - Encumbrances do not include $24.9 million outstanding under a $30 million 20-year term loan,
payable to a group of insurance companies secured by a property collateral pool including all
or part of three shopping centers.
</TABLE>
<PAGE>
SCHEDULE III
(CONTINUED)
The changes in total cost of the properties for the years ended December
31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year. . . . . . . $1,294,632 $1,118,758 $ 970,418
Additions at cost . . . . . . . . . . . . 258,683 179,587 158,258
Retirements or sales. . . . . . . . . . . (39,176) (3,713) (9,918)
----------- ----------- -----------
Balance at end of year. . . . . . . . . . $1,514,139 $1,294,632 $1,118,758
=========== =========== ===========
</TABLE>
The changes in accumulated depreciation for the years ended December 31,
1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year. . . . . . . $ 296,989 $ 262,551 $ 233,514
Additions at cost . . . . . . . . . . . . 43,930 35,678 32,226
Retirements or sales. . . . . . . . . . . (12,274) (1,240) (3,189)
----------- ----------- -----------
Balance at end of year. . . . . . . . . . $ 328,645 $ 296,989 $ 262,551
=========== =========== ===========
</TABLE>
<PAGE>
SCHEDULE IV
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(A)
-------- -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
FIRST MORTGAGES:
Eastex Venture
Beaumont, TX (Note B). . . 8% 10-31-09 $335 $ 2,300 $ 2,288
Annual
P & I
Main/O.S.T., Ltd.
Houston, TX. . . . . . . . 9.3% 02-01-20 $476 4,800 4,524
Annual
P & I
($1,241
balloon)
INDUSTRIAL:
FIRST MORTGAGES:
River Pointe, Conroe,TX
(Note C) . . . . . . . . . Prime 11-30-03 Varying 2,133 1,891
+2%
Little York, Houston, TX
(Note C) . . . . . . . . . Prime 12-31-03 Varying 1,922 1,760
+2%
AN/WRI Partnership, Ltd.
Houston, TX. . . . . . . . Libor 06-05-00 Varying 33,149 33,149
+2%
South Loop Business Park
Houston, TX. . . . . . . . 9.25% 11-01-07 $74 439 410
Annual
P & I
</TABLE>
Schedule continued on next page
<PAGE>
SCHEDULE IV
(CONTINUED)
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(A)
-------- -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
UNIMPROVED LAND:
SECOND MORTGAGE:
River Pointe
Conroe, TX . . . . . . . . Prime 12-01-00 Varying $ 12,000 $ 3,806
+1% ($3,806
balloon)
--------- ------------
TOTAL MORTGAGE LOANS ON
REAL ESTATE (Note D) . . . . $ 56,743 $ 47,828
========= ============
<FN>
Note A - The aggregate cost at December 31, 1999 for federal income tax purposes
is $47,828.
Note B - The periodic payment terms were 6% interest only through October 31, 1999
and 8% interest and principal commencing November 1, 1999 through the
maturity date.
Note C - Principal payments are due monthly to the extent of cash flow generated
by the underlying property.
Note D - Changes in mortgage loans for the years ended December 31, 1999, 1998
and 1997 are summarized below:
</TABLE>
<TABLE>
<CAPTION>
--------- --------- ---------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Balance, Beginning of Year . . . . $ 28,359 $ 25,653 $ 27,157
New Mortgage Loans. . . . . . . . . 33,588 3,116
Additions to Existing Loans . . . . 1,773 1,560 589
Collections of Principal. . . . . . (15,892) (1,970) (2,093)
--------- --------- ---------
Balance, End of Year . . . . . . . $ 47,828 $ 28,359 $ 25,653
========= ========= =========
</TABLE>
SIXTH BONDS RENEWAL AND EXTENSION AGREEMENT
This SIXTH BONDS RENEWAL AND EXTENSION AGREEMENT (this "Sixth Renewal") is
executed this 1st day of March, 2000 (the "Execution Date"), but effective as of
December 28, 1999, 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, a national banking association (now known
as Chase Bank of Texas, N.A.) ("Trustee");
(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 Second Renewal and Extension Agreement dated
as of December 28, 1995 ("Second Renewal"); and
<PAGE>
WHEREAS, effective as of December 28, 1996, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1997 pursuant
to the terms of that certain Third Bonds Renewal and Extension Agreement, dated
as of December 28, 1996 ("Third Renewal"); and
WHEREAS, effective as of December 28, 1997, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1998 pursuant
to the terms of that certain Fourth Bonds Renewal and Extension Agreement, dated
as of December 28, 1997 ("Fourth Renewal"); and
WHEREAS, effective as of December 28, 1998, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1999 pursuant
to the terms of that certain Fifth Bonds Renewal and Extension Agreement, dated
as of December 28, 1998 ("Fifth Renewal") (the Original Bonds, Original Negative
Pledge, and Original Security Instruments, each as modified, renewed, and
extended by the First Renewal, Second Renewal, Third Renewal, Fourth Renewal,
and Fifth 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, Second Renewal, Third Renewal, Fourth Renewal, and Fifth
Renewal, such amendments being evidenced by (i) that certain Supplemental Trust
Indenture dated as of December 28, 1994 among Maker, Trustee, and Payee, (ii)
that certain Second Supplemental Trust Indenture dated as of December 28, 1995,
among Maker, Trustee, and Payee, (iii) that certain Third Supplemental Trust
Indenture dated as of December 28, 1996, among Maker, Trustee, and Payee, (iv)
that certain Fourth Supplemental Trust Indenture dated as of December 28, 1997,
among Maker, Trustee, and Payee, and (v) that certain Fifth Supplemental Trust
Indenture dated as of December 28, 1998, among Maker, Trustee, and Payee; and
WHEREAS, of even date herewith, Maker, Trustee, and Payee have further
amended and supplemented the terms of the Trust Indenture pursuant to that
certain Sixth Supplemental Trust Indenture (the Original Trust Indenture, as
amended and supplemented by the Supplemental Trust Indenture, the Second
Supplemental Trust Indenture, the Third Supplemental Trust Indenture, the Fourth
Supplemental Trust Indenture, the Fifth Supplemental Trust Indenture, and the
Sixth Supplemental Trust Indenture, being called the "Trust Indenture"); and
WHEREAS, the Bonds mature on December 28, 1999, 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:
<PAGE>
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, 2000, 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, 2000.
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 Sixth Renewal without joinder and consent of any
other party; and (c) the execution, delivery and performance of this Sixth
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
Sixth Renewal, the Bonds are hereby modified and amended to conform with this
Sixth Renewal. Except as modified, renewed and extended by this Sixth 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 Sixth 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 Sixth Renewal, and to carry forward all liens,
pledges, and security interests securing the same, which are acknowledged by
Maker to be valid and subsisting.
<PAGE>
5. Maker covenants and warrants that the Payee is not in default under
the Bonds or the Security Instruments, or this Sixth 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 Sixth 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, 1999 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, 1999.
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"
<PAGE>
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
______________, 2000, 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
______________, 2000, 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
SIXTH SUPPLEMENTAL TRUST INDENTURE
This SIXTH SUPPLEMENTAL TRUST INDENTURE (this "Sixth Supplemental
Indenture") is executed this 1st day of March, 2000 (the "Execution Date"), but
effective as of December 28, 1999, by and between WRI HOLDINGS, INC. (the
"Company"), a Texas corporation, and CHASE BANK OF TEXAS, N.A. (formerly known
as 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/100 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"); and
WHEREAS, effective as of December 28, 1996, the Company and Weingarten
again renewed and extended the maturity date of the Original Bonds to December
28, 1997 pursuant to the terms of that certain Third Bonds Renewal and Extension
Agreement dated as of December 28, 1996 ("Third Renewal"); and
WHEREAS, effective as of December 28, 1997, the Company and Weingarten
again renewed and extended the maturity date of the Original Bonds to December
28, 1998 pursuant to the terms of that certain Fourth Bonds Renewal and
Extension Agreement dated as of December 28, 1997 ("Fourth Renewal");
<PAGE>
WHEREAS, effective as of December 28, 1998, the Company and Weingarten
again renewed and extended the maturity date of the Original Bonds to December
28, 1999 pursuant to the terms of that certain Fifth Bonds Renewal and Extension
Agreement dated as of December 28, 1998 ("Fifth Renewal") (the Original Bonds,
as renewed and extended by the First Renewal, Second Renewal, Third Renewal,
Fourth Renewal, and Fifth 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, Second Renewal, Third Renewal, Fourth Renewal,
and Fifth Renewal, such amendments being evidenced by (i) that certain
Supplemental Trust Indenture dated as of December 28, 1994 among the Company,
the Trustee, and Weingarten, (ii) that certain Second Supplemental Trust
Indenture dated as of December 28, 1995, among the Company, the Trustee, and
Weingarten, (iii) that certain Third Supplemental Trust Indenture dated as of
December 28, 1996 among the Company, the Trustee, and Weingarten, (iv) that
certain Fourth Supplemental Trust Indenture dated as of December 28, 1997, among
the Company, the Trustee, and Weingarten, and (v) that certain Fifth
Supplemental Trust Indenture dated as of December 28, 1998, among the Company,
the Trustee, and Weingarten (the Original Trust Indenture, as amended and
supplemented by the Supplemental Trust Indenture, Second Supplemental Trust
Indenture, Third Supplemental Trust Indenture, Fourth Supplemental Trust
Indenture, and Fifth Supplemental Trust Indenture being herein called the "Trust
Indenture"); and
WHEREAS, the Bonds mature on December 28, 1999, 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 Sixth Bonds Renewal and Extension Agreement
("Sixth Renewal") dated effective as of December 28, 1999, 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, 2000.
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 Sixth Supplemental Indenture,
all capitalized terms used in this Sixth Supplemental Indenture shall have the
meanings ascribed to those terms in the Trust Indenture.
<PAGE>
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, 2000, 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, 2000.
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 Sixth Supplemental Indenture without joinder and consent of any other
party; and (c) the execution, delivery and performance of this Sixth
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 Sixth Supplemental Indenture, the Trust Indenture is hereby
modified and amended to conform with this Sixth Supplemental Indenture. Except
as modified, renewed and supplemented by this Sixth 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 Sixth 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 Sixth 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, 1999 is $3,150,000.00.
<PAGE>
9. Weingarten joins herein to consent to the amendment and supplement
of the terms of the Trust Indenture, as set forth in this Sixth 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 written, but effective for all
purposes as of December 28, 1999.
WRI HOLDINGS, INC.
By:__________________________________________
Martin Debrovner, Vice President
"COMPANY"
CHASE BANK OF TEXAS, N.A.
By:__________________________________________
Rhonda L. Parman, Trust Officer
"TRUSTEE"
WEINGARTEN REALTY INVESTORS
By:__________________________________________
Bill Robertson, Jr., Executive Vice President
"WEINGARTEN"
<PAGE>
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ______ day of
_____________, 2000, 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
_____________, 2000, by Rhonda L. Parman, Trust Officer of CHASE BANK OF TEXAS,
N.A., 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 _________,
2000, 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
ELEVENTH RENEWAL AND EXTENSION AGREEMENT
THE STATE OF TEXAS
COUNTY OF MONTGOMERY
This ELEVENTH RENEWAL AND EXTENSION AGREEMENT (the "Eleventh Renewal") is
executed this 1st day of March, 2000 (the "Execution Date"), but effective as of
December 1, 1999, 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. ###-##-#### 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. ###-##-####, 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 Original
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; and
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; and
<PAGE>
WHEREAS, by instrument entitled Eighth Renewal and Extension Agreement
dated February 21, 1997, but effective December 1, 1996 (the "Eighth Renewal")
filed on Nov. 5, 1997, under Clerk=s File No. 9771746 and under Film Code
Reference No. 316-00-0327, 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 Ninth Renewal and Extension Agreement dated
December 15, 1998, but effective December 1, 1997 (the "Ninth Renewal") filed on
March 22, 1999, under Clerk=s File No. 99021470 and under Film Code Reference
No. 509-00-0781, 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 Tenth Renewal and Extension Agreement dated
January 7, 1999, but effective December 1, 1998 (the "Tenth Renewal") filed on
March 22, 1999, under Clerk=s File No. 99021471 and under Film Code Reference
No. 509-00-0786, 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, 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, Seventh Renewal, Eighth Renewal, Ninth Renewal,
and Tenth 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, 2000, at which time the unpaid principal
balance of the Note, together with all accrued but unpaid interest, shall be due
and payable.
<PAGE>
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, 2000. 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, 2000.
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 Eleventh Renewal, without
joinder and consent of any other party; and (c) the execution, delivery and
performance of this Eleventh 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 Note is inconsistent with the terms of this
Eleventh Renewal, the Note is hereby modified and amended to conform with this
Eleventh Renewal. Except as modified, renewed and extended by this Eleventh
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 Eleventh
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 Eleventh 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 Eleventh 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 Eleventh 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, 1999.
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"
THE STATE OF TEXAS
COUNTY OF MONTGOMERY
This instrument was acknowledged before me on this ______ day of
____________, 2000, by Martin Debrovner, Vice President of PLAZA CONSTRUCTION,
INC., a Texas corporation, on behalf of said corporation.
_________________________________
Notary Public, State of Texas
<PAGE>
THE STATE OF TEXAS
COUNTY OF MONTGOMERY
This instrument was acknowledged before me on this ______ day of
______________, 2000, 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
CREDIT AGREEMENT
----------------
This Credit Agreement is executed by the parties hereto on
___________________, but is effective as of the Effective Date (as hereinafter
defined). Weingarten Realty Investors, a Texas real estate investment trust
(the "Borrower"), Bank of America, N.A., a national banking association (in its
individual capacity "BOA") and any bank that may hereafter become a party hereto
in accordance with the provisions hereof (each individually, a "Bank" and
collectively, the "Banks"), and BOA as Agent hereunder (in such capacity, the
"Agent") for the Banks hereunder, hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.1. 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.
-----------------------
"Adjusted Tangible Net Worth" means, as of any date, (a) Net Worth, less
------------------------------ ----
(b) the aggregate book value of Intangible Assets shown on the balance sheet of
the Borrower prepared in accordance with GAAP, plus (c) accumulated depreciation
----
shown on the balance sheet of the Borrower prepared in accordance with GAAP.
"Advance" means the Advances under the Revolving Credit Loan provided for
-------
in Section 2.01 hereof.
"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 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).
<PAGE>
"Annual Service Charge Coverage Ratio" has the meaning specified in Section
------------------------------------
7.07(a).
"Applicable Margin" shall mean with respect to any LIBOR Rate Advance, a
------------------
rate per annum equal to fifty-five one hundredths of one percent (.55%).
"Assignee" has the meaning specified in Section 10.08(a) hereof.
--------
"Assignment and Acceptance" has the meaning specified in Section 10.08(a)
---------------------------
hereof.
"Bell Plaza" has the meaning specified in Section 6.10 hereof.
-----------
"Bell Plaza Shopping Center" has the meaning specified in Section 6.10
-----------------------------
hereof.
"Borrowing" means a revolving credit loan borrowing under Section 2.01
---------
hereof consisting of one Advance from each Bank, of the same Type made on the
same day.
"Business Day" means a day of the year on which banks are not required or
-------------
authorized to close in Dallas, 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 Period" shall mean the applicable period specified in this
-------------------
Agreement for the particular test or other calculation required hereunder.
"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.
"Central Plaza" has the meaning specified in Section 6.09 hereof.
--------------
<PAGE>
"Central Plaza Shopping Center" has the meaning specified in Section 6.09
-------------------------------
hereof.
"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
----------
$100,000,000, 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 includes its commitment
in respect of the Revolving Credit Loan as described in Section 2.01, and
"Commitments" means, collectively, the Commitments for all the Banks.
------
"Commitment Fee" means, the $75,000 nonrefundable Commitment Fee, to be
---------------
paid to Agent in consideration of the commitment of Agent to make the proceeds
of the Revolving Loan available to the Borrower from time to time during the
term of, and as provided in, this Agreement. The Borrower and Agent acknowledge
and agree that the Commitment Fee is a bona fide commitment fee and is intended
as reasonable compensation to Agent for committing to make funds available to
the Borrower as described herein and for no other purpose.
"Compliance Certificate" has the meaning specified in Section 6.01(c).
-----------------------
"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,
(vi) Guaranties, or
<PAGE>
(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 the 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 Date" shall mean the earlier to occur of (i) Borrower's giving
---------------
Agent written notice designating an effective date (which designated date shall
be no earlier than 3 Business Days following the giving of such notice), or (ii)
March 1, 2000, provided, in either case, that Borrower has wire transferred to
Agent the Commitment Fee.
"Eligible Assignee" means any of (i) a commercial bank organized under the
------------------
laws of the United States, or any State thereof or the District of Columbia; and
(ii) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia, provided,
however, that no institution described in clause (i) or (ii) above shall be an
------
Eligible Assignee unless it has total assets in excess of $20 billion and unless
debt obligations issued by such financial institution (or by a parent entity
owning beneficially all of the capital stock of such financial institution) are
rated "Baa2" or higher by Moody's or "BBB" or higher by S & P.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
<PAGE>
"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.
"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 Asubstantial 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.
-------------------
"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.
"Fixed 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) principal payments on Debt
----
scheduled to be paid during such period (excluding any balloon payment on notes
or other obligations which are normally refinanced) plus (iii) amounts accrued
----
by the Borrower and its Subsidiaries in respect of Borrower's (and its
Subsidiaries') outstanding preferred stock (including, without limitation,
dividends payable thereon).
"Fixed Charge Coverage Ratio" has the meaning specified in Section 7.07(b).
---------------------------
<PAGE>
"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 a Guaranty Agreement executed by each
-------------------
Guarantor substantially in the form of Exhibit 1.01-A, attached hereto.
<PAGE>
"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.
"Intangible Assets" means those assets of the Borrower which are (a)
------------------
deferred assets, other than prepaid insurance and prepaid taxes, (b) patents,
copyrights, trademarks, tradenames, franchises, goodwill, experimental expenses
and other similar assets which would be classified as intangible assets on a
balance sheet of the Borrower, prepared in accordance with GAAP, and (c)
unamortized debt discount and expenses.
"Interest Period" means, for each LIBOR Rate Advance comprising part of
----------------
the same Borrowing, 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 elected 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.
"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.
"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.
<PAGE>
"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 Guaranty Agreements,
---------------
and any document or instrument executed in connection with the foregoing.
"Majority Banks means at any time Banks holding at least 66 2/3% 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 2/3% of the
Commitments.
"Margin Stock" shall have the meaning assigned to such term in any of
-------------
Regulation T, U or X.
"Moody's" means Moody's Investors Service, Inc.
-------
"Morgan Loan (Series 1995)" has the meaning specified in Section 6.09
----------------------------
hereof.
"Morgan Loan (Series 1996)" has the meaning specified in Section 6.10
----------------------------
hereof.
"Multiemployer Plan" means a Amultiemployer 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.
<PAGE>
"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.
"Net Worth" means, as of any date, Assets (which term, for the purposes
----------
hereof, means Assets as shown on a balance sheet prepared in accordance with
GAAP) minus Liabilities (which term, for the purposes hereof, means Liabilities
as shown on a balance sheet prepared in accordance with GAAP).
"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 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;
<PAGE>
(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.
"Prime Rate" shall mean for each Prime Rate Portion the rate per annum most
----------
recently established by Agent as its Aprime rate". 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 set by Agent as a general reference rate of interest,
taking into account such factors as Agent may deem appropriate, it being
understood that it is not necessarily the lowest or best rate actually charged
to any customer or a favored rate, that it may not correspond to any future
increases or decreases of interest rates charged by other lenders, or market
rates in general, and Agent may make various commercial or other loans at rates
of interest having no relationship to such rate.
"Prime Rate Advance" means an Advance which bears interest at the Prime
--------------------
Rate.
"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 Aratably" 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 $100,000,000.
"Rating Certificate" has the meaning specified in Section 6.01(h).
-------------------
<PAGE>
"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 T" "Regulation U" and "Regulation X" means Regulation T, U or
----------------------------------------------
aX,s 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 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 Loan" or "Revolving Loan" means the revolving credit loan
--------------------- --------------
to be made under Section 2.01 hereof.
"Revolving Credit Termination Date" means the earlier of (i) three hundred
----------------------------------
sixty-four (364) days from the Effective Date of this Agreement or (ii) the date
(x) the Commitments have been terminated in accordance with this Agreement
(including, without limitation, under Section 8.01 hereof) and (y) all amounts
due and owing under the Notes have been paid in full.
"S&P" means Standard & Poor's Rating Service, a division of The McGraw Hill
---
Companies.
"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 Amajority 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.
"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 Aintangible assets" in
accordance with GAAP.)
"Total Commitment" shall mean the sum of the Commitments in effect under
-----------------
this Agreement from time to time.
<PAGE>
"Type" refers to the determination whether an Advance is a Prime Rate
----
Advance or a LIBOR Rate Advance (or a Borrowing comprised of such Advances).
"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 Land Held For Development, as
--------------------------
reflected on the Financial Statements.
-
SECTION I.2. 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
SECTION II.1. The Revolving Credit Loan. 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 Effective 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. 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 Revolving Credit Termination Date.
SECTION II.2. Making the Advances on the Revolving Credit Loan.
-------------------------------------------------------
<PAGE>
(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. (Dallas, 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 Prime 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 three (3) 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. (Dallas 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 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 hereof, 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 Revolving Credit Termination Date.
SECTION II.3. INTENTIONALLY DELETED.
----------------------
SECTION II.4. INTENTIONALLY DELETED.
----------------------
SECTION II.5. 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 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. Any termination or
reduction pursuant to this Section 2.05 shall be a permanent termination or
reduction of the Commitments.
SECTION II.6. 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 Effective Date of this Agreement occurs, and on the Revolving Credit
Termination Date.
<PAGE>
(b) Prime Rate Advances. During such periods as such Advance is a Prime
-------------------
Rate Advance, a rate per annum equal at all times to the lesser of (i) the Prime
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 Effective Date of this Agreement occurs, and on
the Revolving Credit Termination Date.
(c) Interest Computations. All computations of interest hereunder at
----------------------
the Prime 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 a Prime 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.
(d) Past Due Rate. 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 Prime Rate in effect from time to time and
(ii) the Highest Lawful Rate.
SECTION II.7. 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 (a) the
LIBOR Rate for such Interest Period for such LIBOR Rate Advance from (b) 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 II.8. 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.
<PAGE>
(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 a Prime 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 Prime Rate Advances in
accordance with Section 2.09.
<PAGE>
SECTION II.9. Voluntary Interest Conversion of Advances. The Borrower may
-----------------------------------------
on any Business Day prior to the Revolving Credit 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. (Dallas, 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 Prime Rate Advances, (ii) convert
all LIBOR Rate Advances for a specified Interest Period into LIBOR Rate Advances
for a different Interest Period or (iii) convert all Prime Rate Advances into
LIBOR Rate Advances; 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 a Prime
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). 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 II.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.
<PAGE>
ARTICLE III
PAYMENTS, PREPAYMENTS,
INCREASED COSTS AND TAXES
SECTION III.1. Payments and Computations. (a) The Borrower shall
----------------------------
make each payment under this Agreement and under the Notes not later than 10:00
A.M. (Dallas 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 Prime Rate or (ii) the Highest Lawful Rate.
SECTION III.2. Voluntary Prepayments. Subject to Section 2.10, the Borrower
----------------------
may, upon notice delivered to the Agent prior to 11:00 A.M. (Dallas, Texas time)
on any Business Day prior to the Revolving Credit 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.
<PAGE>
SECTION III.3. Mandatory Prepayments. 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;
provided, however, such delivery of the Adjusted Net Proceeds shall only be
required to the extent of any Adjusted Net Proceeds not delivered pursuant to
that certain Amended and Restated Credit Agreement dated November 21, 1996, by
and among the Borrower, Chase Bank of Texas, N.A., as Agent for itself and the
other banks named thereon. 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.
SECTION III.4. 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 Prime 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, 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 Prime Rate Advances in accordance
with Section 2.09.
<PAGE>
SECTION III.5. Taxes (a) Any and all payments by the Borrower hereunder
-----
or under the Notes 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 III.6. 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 IV.1. Conditions Precedent to Initial Advances. The obligation of
----------------------------------------
each Bank to make its initial Advance 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.
<PAGE>
(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 ihe 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) Such other documents and instruments with respect to the transactions
contemplated hereby as the Agent may reasonably request.
SECTION IV.2. Conditions Precedent to Each Borrowing. The obligation of each
----------------------------------------
Bank to make an Advance under the Revolving Credit Loan 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 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, 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):
(a) 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
(b) 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.
<PAGE>
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 and the making of any Advance that:
SECTION V.1. 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, (y) has the power to own its property and carry on its business as
now conducted, and (z) 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 V.2. Financial Condition. The Borrower has furnished the Bank with
--------------------
consolidated financial statements as at and for the twelve-month period ended
December 31, 1998, accompanied by the opinion of Deloitte & Touche, and
quarterly unaudited consolidated financial statements as at and for the
three-month periods ending March 31, 1999, June 30, 1999, and September 30,
1999. 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 V.3. 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 Apurpose" 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 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.
<PAGE>
SECTION V.4. 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 V.5. 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 V.6. 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 V.7. 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 V.8. 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 V.9. 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.
<PAGE>
SECTION V.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 V.11. Investment Company Act. Neither the Borrower nor any Subsidiary is
----------------------
an Ainvestment company" or a company Acontrolled" by an Ainvestment company",
within the meaning of the Investment Company Act of 1940, as amended.
SECTION V.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 V.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 Amaterial" shall mean a
liability in excess of $10,000,000.
SECTION V.14. No Default or Event of Default. No Default or Event of Default
--------------------------------
hereunder has occurred and is continuing.
SECTION V.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.
<PAGE>
SECTION V.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 and shall continue for 366 days after the repayment of the
Notes; 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 Bank shall have any
Commitment hereunder, the Borrower covenants and agrees that:
SECTION VI.1. 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, 7.10, 7.13, 7.15 and 7.17 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.
<PAGE>
(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").
<PAGE>
(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 VI.2. 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 VI.3. 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.
<PAGE>
SECTION VI.4. 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 VI.5. Rights 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 VI.6. 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); and provided further compliance of the Borrower with the provisions of
this Section 6.06 are hereby waived with respect to the requirements (i) of a
guaranty to be executed by Central Plaza for the period from the Effective Date
and the date on which the Morgan Loan (Series 1995) is paid in full; and (ii) of
a guaranty to be executed by Bell Plaza for the period from the Effective Date
and the date on which the Morgan Loan (Series 1996) is paid in full. It is
agreed and understood that the obligation of the Borrower under this Section
6.06 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 VI.7. 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 Govemmental Authority having jurisdiction in
respect of the conduct of its business and the ownership of its Property.
SECTION VI.8. Delivery of Certain Certificates. The Borrower agrees that to the
--------------------------------
extent it was unable to provide certificates required under Section 4.01(e) and
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.
<PAGE>
SECTION VI.9. Payment of Net Income of Central Plaza to the Borrower.
----------------------------------------------------------
Notwithstanding anything herein to the contrary, the Borrower shall cause
WRI/Central Plaza, Inc., a Texas corporation and a wholly-owned Subsidiary of
the Borrower ("Central Plaza"), to dividend or otherwise transfer all net income
of Central Plaza to the Borrower to the extent not prohibited under the
documents as in effect on March 6, 1998 evidencing, securing, guaranteeing or
otherwise related to the mortgage loan assumed by Central Plaza in connection
with the acquisition of the shopping center (the "Central Plaza Shopping
Center") located at the intersection of Slide Road and Loop 259 in Lubbock,
Texas, which mortgage loan was in the original principal amount of $4,200,000,
is held as part of a collateralized mortgage pool with the current holder being
State Street Bank & Trust as trustee for JP Morgan Commercial Mortgage Finance
Corp. Mortgage Pass-Through Certificates, Series 1995-C1 and matures January 2,
2002 (the "Morgan Loan (Series 1995)").
SECTION VI.10. Payment of Net Income of Bell Plaza to the Borrower.
------------------------------------------------------------
Notwithstanding anything herein to the contrary, the Borrower shall cause
WRI/Bell Plaza, Inc., a Texas corporation and a wholly-owned Subsidiary of the
Borrower ("Bell Plaza"), to dividend or otherwise transfer all net income of
Bell Plaza to the Borrower to the extent not prohibited under the documents as
in effect on June 14, 1999 evidencing, securing, guaranteeing or otherwise
related to the mortgage loan assumed by Bell Plaza in connection with the
acquisition of the shopping center (the "Bell Plaza Shopping Center") located at
the intersection of 45th and Bell in Amarillo, Texas, which mortgage loan was in
the original principal amount of $3,300,000, is held as part of a collateralized
mortgage pool with the current holder being State Street Bank & Trust as trustee
for JP Morgan Commercial Mortgage Finance Corp. Mortgage Pass-Through
Certificates, Series 1996-C2 and matures July 1, 2002 (the "Morgan Loan (Series
1996)").
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 VII.1. 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.
<PAGE>
SECTION VII.2. Limitation 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 55% 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 occurrence 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 Areverse 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 VII.3. Unimproved Real Property. The Borrower will not permit Unimproved
-------------------------
Real Property to exceed 12.5% of Undepreciated Real Estate Assets.
SECTION VII.4. 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) (a) 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 (b) 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.
<PAGE>
SECTION VII.5. Mergers: Consolidation. 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 VII.6. 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;
<PAGE>
(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 tramctions) 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 Ahostile" 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 dequisition, 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, Adirect financing leases," reflected as such on the Financial
Statements).
SECTION VII.7. Coverage Ratios. (a) 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 "nnual Service Charge
Coverage Ratio") to be less than 2.5 to 1.0.
(b) The Borrower will not permit the ratio of (i) Funds From Operations, to
(ii) the Fixed Charge, determined as of the last day of each fiscal quarter for
the four (4) successive quarterly accounting periods ending on such date (the
"Fixed Charge Coverage Ratio") to be less than 2.0 to 1.0.
<PAGE>
SECTION VII.8. 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 VII.9. 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 VII.10. Minimum Adjusted Tangible Net Worth. The Borrower shall not
--------------------------------------
permit the Minimum Adjusted Tangible Net Worth to be less than $850,000,000.
SECTION VII.11. Amendment of Organizational Documents. The 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 VII.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;
(iv) to assure the owner of the indebtedness or obligation of the
Primary Obligor against loss in respect thereof; or
(v) in connection with the creation of a trust or other existing fund
for the purpose of securitizing assets of the Borrower or any Subsidiary.
<PAGE>
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 VII.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.
SECTION VII.14. Transfer of Assets to Central Plaza. Notwithstanding anything
-----------------------------------
herein to the contrary, the Borrower shall not transfer or convey any of its
assets or make any capital contributions, loans or other distributions to
Central Plaza, except (i) the capital contribution in the approximate amount of
$4,500,000 made by the Borrower to Central Plaza in connection with the
acquisition of the Central Plaza Shopping Center and (ii) loans or advances to
Central Plaza not to exceed $500,000 at any one time outstanding.
SECTION VII.15. Limitations on Central Plaza's Incurrence of Debt.
-------------------------------------------------------
Notwithstanding anything herein to the contrary, the Borrower shall not permit
Central Plaza to incur any Debt (secured or unsecured) other than (i) the Morgan
Loan (Series 1995); (ii) trade and operational Debt incurred in the ordinary
course of business with trade creditors, in amounts as are normal and customary
and (iii) loans from the Borrower; provided that the Debt permitted under
clauses (ii) and (iii) shall not exceed an aggregate amount of $500,000.
<PAGE>
SECTION VII.16. Transfer of Assets to Bell Plaza. Notwithstanding anything
--------------------------------
herein to the contrary, the Borrower shall not transfer or convey any of its
assets or make any capital contributions, loans or other distributions to Bell
Plaza, except (i) the capital contribution in the approximate amount of
$3,350,000 made by the Borrower to Bell Plaza in connection with the acquisition
of the Bell Plaza Shopping Center and (ii) loans or advances to Bell Plaza not
to exceed $1,200,000 at any one time outstanding.
SECTION VII.17. Limitations on Bell Plaza's Incurrence of Debt. Notwithstanding
----------------------------------------------
anything herein to the contrary, the Borrower shall not permit Bell Plaza to
incur any Debt (secured or unsecured) other than (i) the Morgan Loan (Series
1996), (ii) trade and operational Debt incurred in the ordinary course of
business with trade creditors, in amounts as are normal and customary and (iii)
loans from the Borrower; provided that the Debt permitted under clauses (ii) and
(iii) shall not exceed an aggregate amount of $1,200,000.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION VIII.1. 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 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 thari $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
<PAGE>
(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 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 any interest rate swap
agreement, 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;
<PAGE>
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 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 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 IX.1. 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 IX.2. 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 ftirnished
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.
<PAGE>
SECTION IX.3. BOA and Affiliates. With respect to its Commitment, the
--------------------
Advances made by it and the Note issued to it, BOA 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 BOA in its individual capacity. BOA 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 BOA were not the
Agent and without any duty to account therefor to the Banks.
SECTION IX.4. 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.
<PAGE>
SECTION IX.5. 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 INDEMNUY 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 IX.6. 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 IX.7. 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.
<PAGE>
SECTION IX.8. 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 X.1. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Agreement or the Notes, 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, (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 X.2. 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, Cogbum & 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 700 Louisiana, 5th Floor, Houston, Texas 77002, Attention: Cynthia C.
Sanford; with a copy to 901 Main Street, 51st Floor, Dallas, Texas 75202,
Attention: Joone Choe; 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 X.3. 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.
<PAGE>
SECTION X.4. 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 $25,000.00, 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 X.5. 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 X.6. 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.
<PAGE>
SECTION X.7. 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 X.8. 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 to any
financial institution (the "ssignee"); provided however, (i) prior to the
-------- --------
occurrence of an Event of Default, BOA shall not assign its rights and
obligations hereunder without the consent of the Borrower, which will not be
unreasonably withheld, if, the assignment is made to an Eligible Assignee and,
after giving effect to such assignment, the Commitment of BOA would not be
reduced to less than $25,000,000, (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).
<PAGE>
(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 Conumitment 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.
<PAGE>
SECTION X.9. 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 Chapter 303 of the Texas
Finance Code, as amended, is applicable to the determination of the Highest
Lawful Rate, the weekly 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 346 of
the Texas Finance Code, as amended, shall not apply to this Agreement or any
Note.
SECTION X.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.
<PAGE>
SECTION X.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 X.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 X.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 X.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.
<PAGE>
SECTION X.15. FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE GUARANTY, AND
----------------
THE NOTES 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.
[REMAINDER OF PAGE INTENTIONALLY BLANK -
SEE SIGNATURES ON FOLLOWING PAGE]
<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:_____________________________________
Name:___________________________________
Title:__________________________________
BANK OF AMERICA, N.A., in its individual
capacity and as Agent
Address:
- -------
700 Louisiana, 5th Floor
Houston, Texas 77002
Attention: Cynthia C.Sanford
By:_____________________________________
Name:___________________________________
Commitment: $100,000,000 Title:__________________________________
- ----------
FIRST AMENDMENT TO CREDIT AGREEMENT
---------------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of
---------
____________, 2000, is by and among Weingarten Realty Investors, a Texas real
estate investment trust ("Borrower") and Bank of America, N.A., a national
--------
banking association, in its capacities as Agent and a lender ("Bank of
-------
America").
WHEREAS, Borrower and Bank of America have entered into that certain Credit
Agreement dated January 6, 1999 ("Loan Agreement");
---------------
WHEREAS, Borrower has requested that Bank of America add a provision to the
Loan Agreement which would grant Borrower an option to renew the Loan Agreement
for a period of two additional years; and
WHEREAS, Bank of America has agreed, subject to the terms and conditions
stated herein, to provide terms for such renewal.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, Borrower and Bank
of America hereby covenant and agree as follows:
ARTICLE I - RENEWAL OPTION
------------------------------
1.1 Definitions. Any capitalized terms used herein and not otherwise
-----------
defined shall have the meaning ascribed to such term in the Loan Agreement. The
following definitions are applicable to this Amendment and are hereby added to
the Loan Agreement.
(a) "Adjusted EBIDA for Unencumbered Property" means, for any period, Funds
-----------------------------------------
From Operations from all Unencumbered Property less the Capital Improvement
Reserve for such period.
(b) "Capital Expenditures" means expenditures by Borrower or any of its
---------------------
Subsidiaries for fixed or capital assets, including without limitation
expenditures for maintenance and repairs.
(c) "Capital Improvement Reserve" means, for any period, a reserve for
-----------------------------
Capital Expenditures in an amount equal to the product obtained by multiplying
$.30 times the weighted average square feet of all Unencumbered Property owned
by Borrower and its Subsidiaries during such period.
(d) "Extended Revolving Credit Termination Date" means a date two (2) years
-------------------------------------------
after the Revolving Credit Termination Date.
<PAGE>
(e) "Facility Fee" is defined in Section 1.2 of this Amendment.
------------- ------------
<PAGE>
(f) "Renewal Option" is defined in Section 1.2 of this Amendment.
--------------- ------------
(g) "Renewal Period" means the two year period commencing on the first day
---------------
following the Revolving Credit Termination Date and terminating on the Extended
Revolving Credit Termination Date.
(h) "Secured Indebtedness" means Debt of Borrower and its Subsidiaries that
---------------------
is directly or indirectly secured by a Lien on any Real Property.
(i) "Total Unsecured Debt" means Debt excluding all Secured Indebtedness.
----------------------
(j) "Unencumbered Property" means all Real Property which is subject to no
----------------------
Liens other than Permitted Liens.
1.2 Terms of Renewal Option. The Agent and Banks hereby grant to
--------------------------
Borrower the option (the "Renewal Option") to extend the Revolving Credit
---------------
Termination Date for an additional two year period on the following terms and
conditions:
(a) At the time of the exercise of such Renewal Option and on the first day
of the Renewal Period, there shall then exist no Default or Event of Default.
(b) Borrower shall submit to Agent such financial statements and other
information as Agent may reasonably request in connection with the proposed
renewal, regarding Borrower and Guarantor. In Agent=s reasonable judgment,
there shall not have occurred a material adverse change in the financial
position of Borrower and Guarantor, taken as a whole, from the date hereof, as
reflected in the then most recent financial and operating statements submitted
to Agent pursuant to the Loan Agreement.
(c) All terms and conditions of the Loan Documents pertaining to the
Revolving Loan shall continue to apply during the Renewal Period except as
modified by this Amendment.
(d) Borrower and Guarantor shall have executed and delivered to Agent a
modification and extension agreement, providing for (i) the extension of the
Revolving Credit Termination Date, (ii) the reaffirmation by each of Borrower
and Guarantor of their respective obligations under the Loan Documents and the
Guaranty Agreement, respectively, and (iii) confirmation by Borrower and
Guarantor that neither Borrower nor Guarantor have any defenses, claims,
counterclaims, or rights of offset in respect of the Obligations.
<PAGE>
(e) The request for extension must be made to Agent in writing not more than
one hundred twenty (120) days, and not less than ninety (90) days prior to, the
Revolving Credit Termination Date.
<PAGE>
(f) On or before the first day of the Renewal Period, Borrower shall have
paid to Agent as a condition to such renewal all fees required pursuant to that
certain Side Letter Agreement of even date herewith executed by Agent and
Borrower (the "Side Letter Agreement").
-----------------------
(g) Borrower shall be in compliance with the following covenants:
(i) For the twelve (12) month period ending on the last day of the fiscal
quarter ending prior to the Renewal Period and as of the last day of each fiscal
quarter for the four (4) successive quarterly accounting periods ending on such
date during the Renewal Period, Borrower shall not permit the ratio of (i) Total
Unsecured Debt to (ii) Adjusted EBIDA for Unencumbered Property to exceed 6.66
to 1.00.
(ii) As of the first day of the Renewal Period and during the Renewal
Period, Borrower shall not permit the Adjusted Tangible Net Worth to be less
than an amount equal to the sum of (i) $850,000,000, and (ii) eighty percent
(80%) of the net proceeds (i.e. gross proceeds less actual and customary
transaction costs) received by Borrower from all equity offerings made by
Borrower after December 31, 1999.
(iii) Except to the extent required by applicable tax laws or regulations to
maintain its REIT status, during any fiscal year of Borrower during the Renewal
Period, Borrower shall not, nor shall Borrower permit any Subsidiary (other than
to Borrower or another Subsidiary) to, declare or pay any dividends or make any
distributions on its Capital Shares (other than dividends payable in its own
Capital Shares) or redeem, repurchase or otherwise acquire or retire any of its
Capital Shares at any time outstanding, in excess of an amount equal to
ninety-five percent (95%) of the Funds From Operations during such fiscal year.
(h) As of the first day of the Renewal Period and during the Renewal Period,
the definition of "Applicable Margin" in the Loan Agreement shall mean, with
respect to any LIBOR Rate Advance, the rate per annum for any LIBOR Rate Advance
indicated below for the credit rating assigned to (or in respect of) long-term
senior unsecured Debt of Borrower by S&P, as reflected on the most recent
Compliance Certificate of 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:
--
<PAGE>
CREDIT RATING APPLICABLE MARGIN FOR LIBOR RATE ADVANCE
-------------- ---------------------------------------------
A- or better .60%
BBB+ .70%
BBB .90%
BBB- or below 1.20%
(i) During the Renewal Period, Borrower agrees to pay to Agent, a commitment
fee (the "Facility Fee") on the average daily unused portion of the aggregate
Commitment under the Revolving Loan outstanding during the applicable period, at
a rate per annum equal to the rate per annum indicated below for the credit
rating assigned to long-term, senior unsecured Debt of Borrower by S&P, as
reflected on the most recent Compliance Certificate of Borrower delivered in
accordance with Section 6.01(c) of the Loan Agreement, or the most recent Rating
---------------
Certificate delivered in accordance with Section 6.01(h), as the case may be.
---------------
The Facility Fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the prior calendar quarter commencing on the first day of
the first calendar quarter occurring after commencement of the Renewal Period,
and continuing until the Extended Revolving Credit Termination Date.
CREDIT RATING FACILITY FEE
- -------------- -------------
A- or better .15%
BBB+ .20%
BBB .25%
BBB- or below .35%
Agent shall be entitled to allocate the Facility Fee among the Banks as Agent
considers appropriate in its sole discretion.
1.3 Compliance Certificate. As of the first day of the Renewal Period
-----------------------
and during the Renewal Period, together with and at the time of the delivery of
any information required by Section 6.01 (a) and (b) of the Loan Agreement,
-------------------------
Borrower shall deliver to Agent, a Compliance Certificate substantially in the
form of Exhibit A attached hereto.
----------
<PAGE>
ARTICLE II - MISCELLANEOUS
-----------------------------
2.1 Conditions Precedent. As conditions precedent to closing this
---------------------
Amendment, Borrower shall have executed, or caused to be executed, and delivered
to Agent (a) this Amendment and (b) the Side Letter Agreement.
<PAGE>
2.2 Representations of Borrower. Borrower hereby represents to the
-----------------------------
Banks the following:
(a) All of the representations and warranties contained in Article V of the
Loan Agreement are true and correct on and as of the date hereof and will be
true and correct after giving effect to this Amendment.
(b) No event which constitutes a Default or an Event of Default under the
Loan Agreement has occurred and is continuing, or would result from the
execution and delivery of this Amendment.
(c) Borrower has the power and authority under the Governmental Requirements
and the Organizational Documents to execute and deliver this Amendment and to
exercise the Renewal Option if it elects to do so; and the execution, delivery
and performance by Borrower of this Amendment has been duly authorized by all
necessary proceedings on the part of Borrower and each Guarantor.
2.3 Ratification. The Loan Agreement, as hereby amended, is in all respects
------------
ratified and confirmed, and all other rights and powers created thereby or
thereunder shall be and remain in full force and effect.
2.4 Counterparts. This Amendment may be executed in several counterparts,
------------
and each counterpart, when so executed and delivered, shall constitute an
original instrument, and all such separate counterparts shall constitute but one
and the same instrument.
2.5 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
--------------
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
<PAGE>
2.6 PRIOR AGREEMENTS. THE LOAN AGREEMENT, THIS AMENDMENT AND THE OTHER LOAN
----------------
DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE
TEXAS BUSINESS & COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG 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 AMONG THE PARTIES.
WEINGARTEN REALTY INVESTORS,
By:_______________________________________
Name:_____________________________________
Title:______________________________________
BANK OF AMERICA, N.A., in its individual
capacity and as Agent
By:_______________________________________
Name:_____________________________________
Title:______________________________________
<PAGE>
EXHIBIT A
----------
COMPLIANCE CERTIFICATE
-----------------------
1. 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
_______________.
2. Financial Covenants
Limit Actual In Compliance
----- ------ -------------
1. Total Debt
- ----
Not greater than 55%
-----------------------
2. Secured Debt
- ----
Not greater than 40%
-----------------------
3. Limitation of Unimproved Real Property
- ----
Not greater than 12.5%
-------------------------
4. Limitation on Sale or Other Disposition of Real Property
- ----
See Schedule A
(attached hereto)
------------------
5. Annual Service Charge Coverage Ratio
- ----
2.5 or more
-------------
6. Fixed Charge Coverage Ratio
- ----
2.0 or more
-------------
7. Minimum Adjusted Tangible Net Worth
- ---- ---------------------------------------
Not less than $850,000,000, plus 80% of equity offerings made by
----------------------------------------------------------------------
Borrower after 12/31/99
--------------------
8. Assets Retained
- ----
Not less than 150%
---------------------
9. Limitation on Central Plaza=s Incurrence of Debt
- ---- ------------------------------------------------------
Not more than $500,000
-------------------------
10. Limitation on Bell Plaza=s Incurrence of Debt
- ----- ---------------------------------------------------
Not more than $1,200,000
---------------------------
Total Unsecured Debt to Adjusted EBIDA for
11. Unencumbered Property
- ----- ----------------------
6.66 to 1.0
or less
--------
12. Dividends
- ----- ---------
95% of Funds from Operations
--------------------------------
3. Certification
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 dated
_______________, ______ by and among the Borrower, Bank of America, N.A., as
Agent, and the Banks named therein as modified or amended (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.
<PAGE>
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.
4. In 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).
5. 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.
6. Attached is Schedule A, computations and other information relevant in
connection with this Compliance Certificate.
By:
Name:
Title:
<PAGE>
SCHEDULE A
-----------
Debt
- ----
Calculation of "Limitations on Incurrence of Debt" as defined for purposes of
Section 7.02(a). Calculations as of __________________:
1. Components of Debt:
---- ---------------------
2. Debt
---- ----
3. Total Assets
---- -------------
4. Debt/Total Assets (Line (ii) divided by Line (iii))
---- ----------------------------------------------------------
"Debt" and "Total Assets" are defined terms in the Credit Agreement.
Secured Debt
- -------------
Calculation of "Limitations on Incurrence of Debt" as defined for purposes of
Section 7.02(b). Calculation as of _________________:
5. Components of Secured Debt:
---- ------------------------------
6. Secured Debt
---- -------------
7. Total Assets
---- -------------
8. Secured Debt/Total Assets (Line (ii) divided by Line (iii))
---- ------------------------------------------------------------------
"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
- ------------------------------------------
Calculation of "Unimproved Real Property" as defined for purposes of Section
7.03. Calculation as of _________________:
9. Unimproved Real Property
---- --------------------------
10. Undepreciated Real Estate Assets
----- -----------------------------------
Unimproved Real Property/
11. Undepreciated Real Estate Assets (Line (i) divided by Line (ii))
----- -----------------------------------------------------------------
"Unimproved Real Property" and "Undepreciated Real Estate Assets" are defined
terms in the Loan Agreement
Limitation on Sale or Other Disposition of Real Property
- ----------------------------------------------------------------
(1) Calculation of "Sale or Other Disposition of Real Property" as defined
for purposes of Section 7.04(a). Calculation as of ____________________:
(1)
<PAGE>
i. 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)
--------------------------------------------
12. Total Dispositions for last 12 calendar months (or if shorter,
----- -----------------------------------------------------------------
for the period from January 6, 2000, to such date).
----------------------------------------------------------
13. Total Dispositions/Undepreciated Real Estate Assets
----- -------------------------------------------------------
Undepreciated Real Estate Assets
14. (as of last day of preceding quarter)
----- -------------------------------------------
15. Ten Percent (10%) of line (iv)
----- -----------------------------------
Excess of line (ii) over line (v) -
16. 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
- ----------------------------------------------------------------
<PAGE>
- ------
Section 7.04
- -------------
(1) Calculation of "Sale or Other Disposition of Real Property" as defined
for purposes of Section 7.04(b). Calculation as of __________________:
i. 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)
--------------------------------------------
17. Total Dispositions for last 36 months (or if shorter, for the
----- -----------------------------------------------------------------
period from January 6, 2000, to such date).
-----------------------------------------------
18. Total Dispositions/Undepreciated Real Estate Assets
----- -------------------------------------------------------
Undepreciated Real Estate Assets
19. (as of last day of preceding quarter)
----- -------------------------------------------
20. Fifteen Percent (15%) of line (iv)
----- ---------------------------------------
Excess of line (ii) over line (v) -
21. Amount of Adjusted Net Proceeds
----- -----------------------------------
"Adjusted Net Proceeds" is a defined term in the Credit Agreement.
Annual Service Charge Coverage Ratio
- ----------------------------------------
Calculation of "Annual Service Charge Coverage Ratio" as defined for purposes
of Section 7.07(a). Calculation as of _________________ for the period
_____________ through __________________.:
22. Funds from Operations
----- -----------------------
23. Net Income
----- -----------
24. Plus:
----- -----
25. Depreciation and Amortization
----- -------------------------------
26. Interest/Original Issue Discount
----- ----------------------------------
27. Extraordinary Charges
----- ----------------------
28. Excess Distributable Funds
----- ----------------------------
29. Minus:
----- ------
30. Gains on Sale of Properties and investment securities
----- ------------------------------------------------------------
31. Excess Net income
----- -------------------
32. Total (Sum of Lines (ii) - (vii) minus Lines (ix) and (x))
----- -----------------------------------------------------------------
33. Annual Service Charge
-----
34. Interest/Original Issue Discount
-----
35. Amount accrued in respect of Disqualified Stock
-----
36. Total (Line (xiii) plus Line (xiv))
-----
Funds from Operations/
37. Annual Service Charge (Line (xi) divided by Line (xv))
-----
<PAGE>
FEX4_30_1.DOC
"Funds from Operations" and "Annual Service Charge" are defined terms in the
Credit Agreement.
Fixed Charge Coverage Ratio
- ------------------------------
Calculation of "Fixed Charge Coverage Ratio" as defined for purposes of Section
7.07(b). Calculation as of __________________ for the period __________ through
__________:
38. Funds from Operations;
-----
39. Net Income
----- -----------
40. Plus:
----- -----
41. Depreciation and Amortization
----- ------------------------------------
42. Interest/Original Issue Discount
----- ---------------------------------------
43. Extraordinary Charges
----- ---------------------------
44. Excess Distributable Funds
----- ---------------------------------
45. Minus:
----- ------
46. Gains on Sale of Properties and investment securities
----- -----------------------------------------------------------------
47. Excess Net Income
----- -------------------
48. Total (sums of Lines (ii) - (vii) minus Lines (ix) and (x))
----- -----------------------------------------------------------------
Interest/Original Issue Discount
----------------------------------
49. Fixed Charge:
----- --------------
50. Interest/Original Issue Discount
----- ---------------------------------------
51. Principal payments on Debt
----- ----------------------------------
52. Amounts accrued in respect of preferred stock
----- -----------------------------------------------------------------
53. Total (Sum of Line (xiii), Line (xiv) and Line xv))
----- ------------------------------------------------------------
54. Funds from Operations/Fixed Charge (Line (xi) divided by Line
----- -----------------------------------------------------------------
(xvi))
---
"Funds from Operations" and "Fixed Charge" are defined terms in the Credit
- --------------------------------------------------------------------------------
Agreement.
- ----------
Minimum Adjusted Tangible Net Worth
- ---------------------------------------
Calculation of Adjusted Tangible Net Worth
55. Net Worth
----- ----------
56. Aggregate Book Value of Intangible Assets of the Borrower
----- -----------------------------------------------------------------
57. Difference between Line (i) and Line (ii)
----- -----------------------------------------------
58. Accumulated Depreciation
----- -------------------------
59. Total (Sum of Line (iii) and Line (iv))
----- ----------------------------------------------
Assets Retained
- ----------------
Calculation of Undepreciated Real Estate Assets subject to no lien to Unsecured
Debt for purposes of Section 7.13.
60. Undepreciated Real Estate Assets subject to no lien (other than
----- -----------------------------------------------------------------
Permitted Liens)
----------------
61. Principal outstanding of unsecured debt
----- -------------------------------------------
62. 150% of line (ii)
----- --------------------
63. Excess of line (i) over line (iii)
----- ----------------------------------------
Total Unsecured Indebtedness to Adjusted EBIDA for Unencumbered Property.
- --------------------------------------------------------------------------------
Calculation as of _________________ for the period _________ through
__________.
i0 Total Unsecured Debt:
-- -----------------------
ii0 Debt
--- ----
iii0 Minus: Secured Indebtedness
---- -----------------------------
iv0 Total (Line 2 minus Line 3)
--- --------------------------------
v0 Adjusted EBIDA for Unencumbered Property
-- --------------------------------------------
Funds from Operation:
vi0 (components limited to Unencumbered Property)
--- -------------------------------------------------
vii0 Net Income
---- -----------
viii0 Plus:
----- -----
ix0 Depreciation and Amortization
--- -------------------------------
x0 Interest/Original Issue Discount
-- ----------------------------------
xi0 Extraordinary Charges
--- ----------------------
xii0 Excess Distributable Funds
---- ----------------------------
xiii0 Minus:
----- ------
xiv0 Gains on Sale of Properties and Investment Securities
---- ------------------------------------------------------------
xv0 Excess Net Income
--- -------------------
xvi0 Total (Sums of Lines (vii) - (xii) minus Lines (xiv) and (xv))
---- ------------------------------------------------------------------
Minus:
xvii0 Capital Improvement Reserve
----- -----------------------------
xviii0 Adjusted EBIDA for Unencumbered Property (Line (xvi) minus Line
------ ----------------------------------------------------------------
(xvii))
- -------
xix0 Total Unsecured Indebtedness/Adjusted EBIDA for Unencumbered
---- -----------------------------------------------------------------
Property (Line (iv) divided by Line (xviii))
----------------------------------------------
<PAGE>
February __, 2000
Weingarten Realty Investors
2600 Citadel Plaza Drive
Houston, Texas 77018
Attention: Bill Robertson
Re: First Amendment to Credit Agreement dated as of February __, 2000 (the
"Amendment") by and between Weingarten Realty Investors, a Texas real estate
investment trust ("Borrower"), and Bank of America, N.A., a national banking
association in its capacities as agent and a bank ("Bank of America")
Gentlemen:
This letter is delivered to you in connection with the Amendment. Unless
otherwise defined herein, capitalized terms shall have the meanings set forth in
the Loan Agreement and in the Amendment. In connection with, and in
consideration of the agreements contained in the Amendment, Borrower agrees with
Agent as follows:
Administrative Fee. On the first day of the Renewal Period, and on the
- -------------------
anniversary of such date each year during the Renewal Period, Borrower will pay
- --------
an administrative fee in the amount of $75,000 to Agent for its own account for
administrating the Loan during the following twelve (12) month period.
Renewal Fee. On the first day of the Renewal Period, Borrower shall pay to
- ------------
Agent a renewal fee in an amount equal to 50 bps on the entire commitment of
- ----
the Banks under the Revolving Loan on such date. Borrower acknowledges and
- --
agrees that the renewal fee is a bona fide commitment fee and is intended as
- --
reasonable compensation to Banks for committing to make funds available to
- --
Borrower and for no other purpose. Agent shall be entitled to allocate the
- --
Renewal Fee among the Banks as Agent considers appropriate in its sole
- --
discretion, but without prejudice to Borrower=s refund rights hereinafter
- --
specified.
- --
Subject to Borrower=s rights hereinafter specified, the fees payable above
shall be fully-earned upon becoming due and payable, shall be non-refundable for
any reason whatsoever and shall be in addition to any other fee, cost or expense
payable pursuant to the Loan Agreement.
<PAGE>
Weingarten Realty Investors
February __, 2000
Page 23
Borrower acknowledges that Bank of America desires that it be able to sell
down the Revolving Loan during the Renewal Period to the lesser of (a)
$35,000,000, or (b) 35% of Bank of America=s current commitment (the "Target
------
Hold Position"). Therefor, Borrower agrees that it shall consider actions which
-----------
are reasonably requested by Bank of America in order to enable Bank of America
to sell down the Revolving Loan to the Target Hold Position, including but not
limited to, modifying the Loan Documents to increase the price spread, increase
the renewal fee, revise financial covenants or make other structural changes to
the Loan Documents.
If Borrower notifies Bank of America that Borrower elects the Renewal
Option (the date of such notice being called the "Notice Date"), Bank of America
will endeavor to notify Borrower within fifteen (15) days after the Notice Date
of what changes (the "Anticipated Changes"), if any, need to be made to the
price spread, or any other part of the Revolving Loan, in order for Bank of
America to reach the Target Hold Position. Borrower shall then have seven (7)
days to elect by notice in writing to Bank of America to either (a) accept the
proposed modifications to the Revolving Loan, or (b) pay off the Revolving Loan
in full within sixty (60) days after expiration of the aforesaid seven (7) day
period.
If Borrower accepts the Anticipated Changes, but, thereafter, Bank of
America determines that changes to the Anticipated Changes or other changes (the
"Actual Changes") are necessary to enable Bank of America to reach the Target
Hold Position, Bank of America shall give written notice to Borrower of the
Actual Changes and Borrower shall have another seven (7) day period to either
accept (a) the Actual Changes or (b) elects to pay off the Revolving Loan within
sixty (60) days after expiration of the aforesaid seven (7) day period:
(x) because the all-in pricing, including, without limitation, interest
rate, price spread and fees, suggested by Bank of America in order to achieve
the Target Hold Position is such that Borrower would be required to pay interest
(including fees) at a rate greater than the highest applicable interest rate in
effect under this credit facility (as amended by the Amendment) or under any
other senior credit facility of Borrower (but limited to bank revolving credit
facilities) then outstanding or which was outstanding during the twelve month
period prior to the Renewal Period (herein collectively referred to as the
"Existing Senior Facilities"), or
(y) because the revisions to the financial covenants or the other
structural changes to the Loan Documents suggested by Bank of America in order
to achieve the Target Hold Position are such that the proposed new loan is
materially less favorable than any of the Existing Senior Facilities.
For purposes of comparing the highest applicable interest rate in effect on any
of the Existing Senior Facilities with that under the loan suggested by Bank of
America, all fees shall be amortized, prorated, allocated, and spread throughout
the term of the Indebtedness.
<PAGE>
If (i) Bank of America notifies Borrower in writing of the Actual Changes
to the Revolving Loan, and (ii) Borrower elects, for one or more of the reasons
specified in (x) and (y) above, to pay off the Revolving Loan in full within
sixty (60) days, then the Administrative Fee and Renewal Fee shall be refunded
at the time the Loan is completely paid off in the following manner: The refund
of the Administrative Fee shall be equal to the Administrative Fee paid by
Borrower multiplied by the quotient of (a) the number of days of the Renewal
Period which have not lapsed prior to Borrower=s paying off the Revolving Loan,
divided by (b) three hundred sixty-five (365). The refund of the Renewal Fee
shall be equal to the Renewal Fee paid by Borrower multiplied by the quotient of
(i) the number of days of the Renewal Period which have not lapsed prior to
Borrower=s paying off the Revolving Loan, divided by (b) seven hundred thirty
(730).
If the foregoing is in accordance with your understanding, please execute
and return this letter to us.
Very truly yours,
BANK OF AMERICA, N.A.,
as Agent and a Bank
By:
Name:
Title:
Accepted and Agreed to
as of February __, 2000:
WEINGARTEN REALTY INVESTORS
By:
Name:
Title:
PROMISSORY NOTE (WEINGARTEN REALTY INVESTORS)
-------------------------------------------------
$100,000,000.00 _________________, 2000
FOR VALUE RECEIVED, the undersigned, Weingarten Realty Investors, a Texas
real estate investment trust, hereby promises to pay to the order of BANK OF
AMERICA, N.A., a national association (the "Bank") the principal sum of ONE
----
HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00) 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 Revolving Credit 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 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, 901 Main Street, 51st Floor, Dallas, Texas,
75202, 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 and, for 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.
<PAGE>
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:
Name:
Title:
WEINGARTEN REALTY INVESTORS
1999 EMPLOYEE SHARE PURCHASE PLAN
1. Purpose
-------
The primary purpose of this Plan is to encourage Share ownership by each
Eligible Employee and each Eligible Trust Manager in the belief that such Share
ownership will increase his or her interest in the success of Weingarten Realty
Investors, a Texas real estate investment trust (the "Company").
2. Definitions
-----------
2.1. The term "Account" shall mean the separate bookkeeping account
established and maintained by the Plan Administrator for each Participant for
each Purchase Period to record the contributions made on his or her behalf to
purchase Shares under this Plan.
2.2. The term "Beneficiary" shall mean the person designated as such in
accordance with Section 8.
2.3. The term "Board" shall mean the Board of Trust Managers of the
Company.
2.4. The term "Closing Price" (a) for the first business day of any
Purchase Period shall mean the closing price for a share of Share as reported
for such day in The Wall Street Journal or in any successor to The Wall Street
Journal or, if there is no such successor, in any publication selected by the
Committee or, if no such closing price is so reported for such day, the first
such closing price which is so reported after such day or, if no such closing
price is so reported during the two week period which begins on the first day of
such Purchase Period, the fair market value of a Share as determined on the
first day of such Purchase Period by the Committee and (b) for the last business
day of a Purchase Period shall mean the closing price for a Share as reported
for such day in The Wall Street Journal or in any successor to The Wall Street
Journal or, if there is no such successor, in any publication selected by the
Committee or, if no such closing price is so reported for such day, the last
such closing price which is so reported before such day or, if no such closing
price is so reported during the two week period which ends on the last day of
such Purchase Period, the fair market value of a Share as determined as of the
last day of such Purchase Period by the Committee.
2.5. The term "Committee" shall mean the Compensation Committee of the
Board.
2.6. The term "Company" shall mean Weingarten Realty Investors, a Texas
real estate investment trust.
2.7. The term "Election Form" shall mean the form which an Eligible
Employee or Eligible Trust Manager shall be required to properly complete in
writing and timely file at least 15 days prior to the commencement of any
Purchase Period in order to make any of the elections available to an Eligible
Employee or Eligible Trust Manager under this Plan.
2.8. The term "Eligible Trust Manager" shall mean a person who is a
member of the Board.
2.9. The term "Eligible Employee" shall mean each officer or employee
of a Participating Employer who is shown on the payroll records of a
Participating Employer as a "benefits eligible" employee.
2.10. The term "Participant" shall mean (a) for each Purchase Period an
Eligible Employee or Eligible Trust Manager who has elected to purchase Shares
in accordance with Section 4 in such Purchase Period and (b) any person for whom
Shares are held pending delivery under Section 7.
2.11. The term "Participating Employer" shall mean the Company and any
affiliated entity which is designated as such by the Committee.
2.12. The term "Pay" means (i) in the case of an Eligible Employee, all
cash compensation paid to him or her for services to the Participating Employer,
including regular straight time earnings or draw, overtime, commissions and
bonuses, but excluding amounts paid as living allowance or reimbursement of
expenses and other similar payments; and (ii) in the case of an Eligible Trust
Manager, all retainers and meeting and other service fees paid to him or her by
the Participating Employer.
2.13. The term "Pay Day" means the day as of which Pay is paid to a
Participant.
2.14. The term "Plan" shall mean this Weingarten Realty Investors 1999
Share Purchase Plan, effective as of April 1, 1999, and as thereafter amended
from time to time.
2.15. The term "Plan Administrator" shall mean the Company or the
Company's delegate.
2.16. The term "Purchase Period" shall mean a period set by the
Committee. Unless changed by the Committee, each Purchase Period shall begin on
the first day of a calendar quarter and end on the last day of such calendar
quarter. The first Purchase Period shall commence on January 1, 1999 and
terminate on March 31, 1999.
2.17. The term "Purchase Price" for each Purchase Period shall mean 85%
of the lesser of: (a) the Closing Price for a Share on the last day of such
Purchase Period and (b) the greater of: (i) the Closing Price for a Share on
the first day of such Purchase Period and (ii) the average Closing Price for a
Share for all of the business days in the Purchase Period.
2.18. The term "Rule 16b-3" shall mean Rule 16b-3 promulgated under
Section 16(b) of the Securities Exchange Act of 1934, as amended, or any
successor to such rule.
2.19. The term "Share" shall mean the common shares of beneficial
interest, par value $.03 per share, of the Company. The aggregate number of
Shares available for grant under this Plan shall not exceed 250,000 subject to
adjustment pursuant to Section 17 hereof plus any Shares acquired by the Plan
Administrator in the open market for the Accounts of the Participants. Shares
subject to the Plan may be either authorized but unissued Shares, or Shares
hereafter acquired by the Company.
3. Administration
Except for the exercise of those powers expressly granted to the Committee
to determine the Closing Price, who is a Participating Employer and to set the
Purchase Period, the Plan Administrator shall be responsible for the
administration of this Plan and shall have the power in connection with such
administration to interpret the Plan and to take such other action in connection
with such administration as the Plan Administrator deems necessary or equitable
under the circumstances. The Plan Administrator also shall have the power to
delegate the duty to perform such administrative functions as the Plan
Administrator deems appropriate under the circumstances. Any person to whom the
duty to perform an administrative function is delegated shall act on behalf of
and shall be responsible to the Plan Administrator for such function. Any
action or inaction by or on behalf of the Plan Administrator under this Plan
shall be final and binding on each Eligible Employee, each Eligible Trust
Manager, each Participant and on each other person who makes a claim under this
Plan based on the rights, if any, of such Eligible Employee, Eligible Trust
Manager or Participant under this Plan.
4. Participation
4.1. Each person who is an Eligible Employee or an Eligible Trust
Manager shall be a Participant in this Plan for the related Purchase Period if
he or she properly completes and timely files an Election Form with the Plan
Administrator to elect to participate in this Plan. An Election Form may
require an Eligible Employee or Eligible Trust Manager to provide such
information and to agree to take such action (in addition to the action required
under Section 5) as the Plan Administrator deems necessary or appropriate in
light of the purpose of this Plan or for the orderly administration of this
Plan.
4.2. Notwithstanding anything herein to the contrary, no person shall
be deemed to be an Eligible Employee or an Eligible Trust Manager:
(a) if immediately after such participation, Participant would own
Shares, and/or hold outstanding options to purchase Shares, possessing 5% or
more of the total combined voting power or value of all classes of Shares of the
Company (for purposes of this paragraph, the rules of Section 424(d) of the
Internal Revenue Code of 1986, as amended, shall apply in determining Share
ownership of any Participant); or
(b) if such Participant's rights to purchase Shares under all employee
share purchase plans of the Company accrues at a rate which exceeds $25,000 in
fair market value of the Shares (determined at the time of Plan enrollment) for
each calendar year in which such purchase right is outstanding.
5. Contributions
-------------
5.1. Each Participant's Election Form under Section 4 shall specify the
contributions that he or she proposes to make for the related Purchase Period.
Such contributions shall be expressed as a specific dollar amount that
Participant proposes to contribute in cash or a percentage of the Participant's
Pay that his or her Participant Employer is authorized to deduct from his or her
Pay each Pay Day during the Purchase Period (or as a combination of such cash
and such payroll deduction contributions); provided, however:
(a) the minimum payroll deduction for a Participant for each Pay Day
for purposes under this Plan shall be $10.00, and
(b) the maximum contribution which a Participant may make for purposes
under this Plan for any calendar year shall be $25,000.
5.2. A Participant shall have the right to amend his or her Election
Form at any time to reduce or to stop his or her contributions, and such
election shall be effective immediately for cash contributions and as soon as
practicable after the Plan Administrator actually receives such amended Election
Form for payroll deductions. A withdrawal shall be deducted from the
participant's Account as of the date the Plan Administrator receives such
amended Election Form, and the actual withdrawal shall be effected by the Plan
Administrator as soon as practicable after such date. Participants who stop or
withhold contributions for any Purchase Period may not participate again for at
least six months.
5.3. All payroll deductions made for a Participant shall be credited to
his or her Account as of the Pay Day as of which the deduction is made. All
contributions made by a Participant under this Plan, whether in cash or through
payroll deductions, shall be held by the Company or by such Participant's
Participating Employer, as agent for the Company. All such contributions shall
be held as part of the general assets of the Company and shall not be held in
trust or otherwise segregated from the Company's general assets. No interest
shall be paid or accrued on any such contributions. Each Participant's right to
the contributions credited to his or her Account shall be that of a general and
unsecured creditor of the Company. Each Participating Employer shall have the
right to make such provisions as it deems necessary or appropriate to satisfy
any tax laws with respect to purchases of Shares made under this Plan.
5.4. The balance credited to the Account of an Eligible Employee
automatically shall be refunded in full (without interest) if his or her status
as an employee of all Participating Employers terminates for any reason
whatsoever during a Purchase Period and the balance credited to the Account of
an Eligible Trust Manager automatically shall be refunded in full (without
interest) if his or her status as a member of the Board terminates for any
reason whatsoever during a Purchase Period. Such refunds shall be made as soon
as practicable after the Plan Administrator has actual notice of any such
termination.
6. Purchase of Shares
--------------------
6.1. If a Participant is an Eligible Employee or an Eligible Trust
Manager through the end of a Purchase Period, the balance which remains credited
to his or her Account at the end of such Purchase Period automatically shall be
applied to purchase Shares at the Purchase Price for such Shares for such
Purchase Period. Such Shares shall be purchased on behalf of the Participant by
operation of this Plan in whole and fractional Shares.
6.2. Except as specifically provided herein, the Participants shall
have the same rights and privileges under the Plan. All rules and
determinations of the Board in the administration of the Plan shall be uniformly
and consistently applied to all persons in similar circumstances.
6.3. If the total Shares to be purchased on any date in accordance with
Section 6(a) exceeds the Shares then available under the Plan (after deduction
of all Shares that have been purchased under Section 6(a)), the Plan
Administrator shall make a pro rata allocation of the Shares remaining available
in as neatly a uniform manner as shall be practical and as it shall determine to
be equitable.
7. Delivery
--------
A book-entry record of the Shares purchased by each Participant shall be
maintained by the Company's transfer agent and no certificates shall be issued
for such Shares except to the extent that a Participant specifically so
requests. Notwithstanding the foregoing, when a refund is made to a participant
pursuant to Section 5.4, certificates shall be delivered to him or her for all
Shares then held for the Participant under the Plan. A Share certificate
delivered to a Participant shall be registered in his or her name or, if the
Participant so elects and is permissible under applicable law, in the names of
the Participant and one such other person as may be designated by the
Participant, as joint tenants with rights of survivorship. However, (a) no
Share certificate representing a fractional share of Share shall be delivered to
a Participant or to a Participant and any other person, (b) cash which the Plan
Administrator deems representative of the value of a Participant's fractional
share shall be distributed (when a participant requests a distribution of
certificates for all of the shares of Share held for him or her) in lieu of such
fractional share unless a Participant in light of Rule 16b-3 waives his or her
right to such cash payment and (c) the Plan Administrator shall have the right
to charge a participant for registering Share in the name of the Participant and
any other person. No Participant (or any person who makes a claim for, on behalf
of or in place of a participant) shall have any interest in any Share under this
Plan until they have been reflected in the book-entry record maintained by the
transfer agent or the certificate for such Share has been delivered to such
person.
8. Designation of Beneficiary
----------------------------
A Participant may designate on his or her Election Form a Beneficiary (a)
who shall receive the balance credited to his or her Account if the Participant
dies before the end of a Purchase Period and (b) who shall receive the Share, if
any, purchased for the Participant under this Plan if the Participant dies after
the end of a Purchase Period but before either the certificate representing such
Shares has been delivered to the Participant or before such Shares have been
credited to a brokerage account maintained for the Participant. Such
designation may be revised in writing at any time by the Participant by filing
an amended Election Form, and his or her revised designation shall be effective
at such time as the Plan Administrator receives such amended Election Form. If a
deceased Participant fails to designate a Beneficiary or, if no person so
designated survives a Participant or, if after checking his or her last known
mailing address, the whereabouts of the person so designated survives a
Participant or, if after checking his or her last known mailing address, the
whereabouts of the person so designated are unknown, then the Participant's
estate shall be treated as his or her designated Beneficiary under this Section
8.
9. Transferability and Dispositions
----------------------------------
9.1. Neither the balance credited to a Participant's Account nor any
rights to receive Shares under this Plan may be assigned, encumbered, alienated,
transferred, pledged or otherwise disposed of in any way by a Participant during
his or her lifetime or by his or her Beneficiary or by any other person during
his or her lifetime, and any attempt to do so shall be without effect.
9.2. Except as provided in the last sentence of this Section 9.2 or in
Section 7, no sale, transfer or other disposition may be made of any Shares
purchased under the Plan until the second anniversary of such purchase. If a
Participant violates the foregoing restriction, he or she shall remit to the
Company an amount of cash equal to the difference between the amount he or she
paid for such Shares and the Closing price of such Shares on the date they were
purchased. The amount to be remitted for purposes of the foregoing shall be
computed by the Plan Administrator, in its discretion, using a last-in-first-out
basis of accounting in the event that Shares for more than one Purchase Period
are involved. Notwithstanding the foregoing, if a Participant who owns Shares
subject to the foregoing restriction is determined by the Plan Administrator in
its discretion to have a serious financial need for the proceeds of the sale of
such Shares, then upon application made by the Participant, the Plan
Administrator shall consent to a sale of such Shares to the extent necessary to
satisfy the serious financial need, and the Participant will not be required to
make the remittance to the Company described in this Section 9.2.
10. Securities Registration
------------------------
If the Company shall deem it necessary to register under the Securities Act
of 1933, as amended, or any other applicable statute any Shares purchased under
this Plan or to qualify any such Shares for an exemption from any such statutes,
the Company shall take such action at its own expense. If Shares are listed on
any national securities exchange at the time any Shares are purchased hereunder,
the Company shall make prompt application for the listing on such national
securities exchange of such Shares, at its own expense. Purchases of Shares
hereunder shall be postponed as necessary pending any such action.
11. Compliance with Rule 16b-3
-----------------------------
All elections and transactions under this Plan by persons subject to Rule
16b-3 are intended to comply with at least one of the exemptive conditions under
Rule 16b-3. The Plan Administrator shall establish such administrative
guidelines to facilitate compliance with at least one such exemptive condition
under Rule 16b-3 as the Plan Administrator may deem necessary or appropriate.
If any provision of this Plan or such administrative guidelines or any act or
omission with respect to this Plan (including any act or omission by an Eligible
Employee or an Eligible Trust Manager) fails to satisfy such exemptive condition
under Rule 16b-3 or otherwise is inconsistent with such condition, such
provision, guidelines or act or omission shall be deemed null and void.
12. Amendment or Termination
--------------------------
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate, and any such amendment shall be
subject to the approval of the Company's shareholders to the extent such
approval is required under the laws of the State of Texas, federal tax laws or
to the extent such approval is required to meet the security holder approval
requirements under Rule 16b-3; provided, however, no amendment shall be
retroactive unless the Board in its discretion determines that such amendment is
in the best interest of the Company or such amendment is required by applicable
law to be retroactive. The Board also may terminate this Plan and any Purchase
Period at any time (together with any related contribution election) or may
terminate any Purchase Period (together with any related contribution elections)
at any time; provided, however, no such termination shall be retroactive unless
the Board determines that applicable law requires a retroactive termination.
13. Notices
-------
All Election Forms and other communications from a Participant to the Plan
Administrator under, or in connection with, this Plan shall be deemed to have
been filed with the Plan Administrator when actually received in the form
specified by the Plan Administrator at the location, or by the person,
designated by the Plan Administrator for the receipt of any such Election Form
and communications.
14. Employment
----------
The right to elect to participate in this Plan shall not constitute an
offer of employment or membership on the Board, and no election to participate
in this Plan shall constitute an employment agreement for an Eligible Employee
or an agreement with respect to Board membership for an Eligible Trust Manager.
Any such right or election shall have no bearing whatsoever on the employment
relationship between an Eligible Employee and any other person or on an Eligible
Trust Manager's status as a member of the Board. Finally, no Eligible Employee
shall be induced to participate in this Plan, or shall participate in this Plan,
with the expectation that such participation will lead to employment or
continued employment, and no Eligible Trust Manager shall be induced to
participate in this Plan, or shall participate in this Plan, with the
expectation that such participation will lead to continued membership on the
Board.
15. Changes in Capital Structure
-------------------------------
15.1. In the event that the outstanding Shares of the Company are
hereafter increased or decreased or changed into or exchanged for a different
number or kind of Shares or other securities of the Company or of another
corporation, by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, Share split-up, combination of Shares or
dividend payable in Shares, appropriate adjustment shall be made by the Board in
the number or kind of Shares as to which a right granted under this Plan shall
be exercisable, to the end that the right holder's proportionate interest shall
be maintained as before the occurrence of such event. Any such adjustment made
by the Board shall be conclusive.
15.2. If the Company is not the surviving or resulting corporation in
any reorganization, merger, consolidation or recapitalization, this Plan, and
the Company's rights, duties and obligations hereunder, shall be assumed by the
surviving or resulting corporation and the rights of a Participant to purchase
Shares shall continue in full force and effect.
16. Headings, References and Construction
----------------------------------------
The headings to sections in this Plan have been included for convenience of
reference only. This Plan shall be interpreted and construed in accordance with
the laws of the State of Texas.
17. Shareholder Approval
---------------------
17.1. This Plan is intended to be a "Qualified Plan" within the meaning
of Section 423 of the Internal Revenue Code of 1986, as amended. Accordingly,
the Company will seek shareholder approval of the Plan at the next annual
meeting of the Company's shareholders. If shareholder approval is not obtained,
the Board of Trust Managers may terminate the Plan in its sole discretion.
EXHIBIT 12.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
COMPUTATION OF RATIOS OF EARNINGS AND FUNDS FROM OPERATIONS
TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net income available to common shareholders . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966
Add:
Portion of rents representative of the interest factor. . . . . 1,281 882 667
Interest on indebtedness. . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009
Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881
Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432
---------- ---------- ----------
Net income as adjusted. . . . . . . . . . . . . . . . . . . $ 130,953 $ 95,267 $ 86,074
========== ========== ==========
Fixed charges:
Interest on indebtedness. . . . . . . . . . . . . . . . . . . . $ 33,186 $ 33,654 $ 30,009
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . 2,722 1,375 812
Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881
Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432
Portion of rents representative of the interest factor. . . . . 1,281 882 667
---------- ---------- ----------
Fixed charges . . . . . . . . . . . . . . . . . . . . . . . $ 57,138 $ 42,158 $ 31,920
========== ========== ==========
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . . . . . 2.29 2.26 2.70
========== ========== ==========
Net income available to common shareholders . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966
Depreciation and amortization . . . . . . . . . . . . . . . . . 49,256 41,580 37,544
Gain on sales of property and securities. . . . . . . . . . . . (20,596) (885) (3,327)
Extraordinary charge (early retirement of debt) . . . . . . . . 190 1,392
---------- ---------- ----------
Funds from operations . . . . . . . . . . . . . . . . . . . 105,387 96,571 89,183
Add:
Portion of rents representative of the interest factor. . . . . 1,281 882 667
Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881
Interest on indebtedness. . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009
Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432
---------- ---------- ----------
Funds from operations as adjusted . . . . . . . . . . . . . $ 159,803 $ 137,354 $ 120,291
========== ========== ==========
RATIO OF FUNDS FROM OPERATIONS TO COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . . 2.80 3.26 3.77
========== ========== ==========
</TABLE>
EXHIBIT 21.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
LIST OF SUBSIDIARIES OF THE REGISTRANT
STATE OF
SUBSIDIARY INCORPORATION
- -------------------------------------- -------------
<S> <C>
Weingarten Realty Management Company . . . . . . Texas
Weingarten/Nostat, Inc.. . . . . . . . . . . . . Texas
Weingarten/Lufkin, Inc.. . . . . . . . . . . . . Texas
WRI/Post Oak, Inc. . . . . . . . . . . . . . . . Texas
A.T.D.N.L., Inc. . . . . . . . . . . . . . . . . Texas
WRI/Central Plaza, Inc.. . . . . . . . . . . . . Texas
WRI/7080 Express Lane, Inc.. . . . . . . . . . . Texas
Weingarten Properties Trust. . . . . . . . . . . Texas
Main/O.S.T., Ltd.. . . . . . . . . . . . . . . . Texas
Phelan Boulevard Venture . . . . . . . . . . . . Texas
Northwest Hollister Venture. . . . . . . . . . . Texas
East Town Lake Charles Co. . . . . . . . . . . . Louisiana
Alabama-Shepherd Shopping Center . . . . . . . . Texas
Sheldon Center, Ltd. . . . . . . . . . . . . . . Texas
Jacinto City, Ltd. . . . . . . . . . . . . . . . Texas
Weingarten/Finger Venture. . . . . . . . . . . . Texas
Rosenberg, Ltd.. . . . . . . . . . . . . . . . . Texas
Eastex Venture . . . . . . . . . . . . . . . . . Texas
GJR/Weingarten River Pointe Venture. . . . . . . Texas
GJR/Weingarten Little York Venture . . . . . . . Texas
South Loop Long Wayside Company. . . . . . . . . Texas
Lisbon St. Shopping Trust. . . . . . . . . . . . Maine
WRI/Crosby . . . . . . . . . . . . . . . . . . . Texas
WRI/Dickinson. . . . . . . . . . . . . . . . . . Texas
Market at Town Center-Sugarland. . . . . . . . . Texas
Lincoln Place Limited Partnership. . . . . . . . Delaware
Markham West Shopping Center L. P. . . . . . . . Delaware
South Padre Drive L. P.. . . . . . . . . . . . . Texas
AN/WRI Partnership, Ltd. . . . . . . . . . . . . Texas
Bridges at Smoky Hills, LLC. . . . . . . . . . . Texas
Miller Elizabeth, LLC. . . . . . . . . . . . . . Texas
Miller/Weingarten Realty LLC . . . . . . . . . . Colorado
Weingarten/Colorado, Inc.. . . . . . . . . . . . Texas
Weingarten/Investments, Inc. . . . . . . . . . . Texas
Miller/Fiest, LLC. . . . . . . . . . . . . . . . Texas
Weingarten-Murphy, Ltd.. . . . . . . . . . . . . Texas
WRI/Bell Plaza, Inc. . . . . . . . . . . . . . . Texas
WRI/Pembroke, Ltd. . . . . . . . . . . . . . . . Texas
WRI/Shopping Centers I, Inc. . . . . . . . . . . Texas
Nano Corp. Inc.. . . . . . . . . . . . . . . . . Texas
WRI/Interest, Inc. . . . . . . . . . . . . . . . Texas
</TABLE>
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, No.
33-54404 and No. 333-94945 of Weingarten Realty Investors on Form S-8, in
Post-Effective Amendment No. 1 to Registration Statement No. 33-25581 of
Weingarten Realty Investors on Form S-8 and in Registration Statement
No. 333-85967 of Weingarten Realty Investors on Form S-3 of our report dated
February 22, 2000, appearing in this Annual Report on Form 10-K of Weingarten
Realty Investors for the year ended December 31, 1999.
DELOITTE & TOUCHE LLP
Houston, Texas
March 17, 2000
<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, 1999.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 5842
<SECURITIES> 0
<RECEIVABLES> 17782
<ALLOWANCES> 908
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1514139
<DEPRECIATION> 328645
<TOTAL-ASSETS> 1309396
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
267
<COMMON> 801
<OTHER-SE> 644834
<TOTAL-LIABILITY-AND-EQUITY> 1309396
<SALES> 0
<TOTAL-REVENUES> 230469
<CGS> 0
<TOTAL-COSTS> 64435
<OTHER-EXPENSES> 57124
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33186
<INCOME-PRETAX> 96320
<INCOME-TAX> 0
<INCOME-CONTINUING> 96320
<DISCONTINUED> 0
<EXTRAORDINARY> 190
<CHANGES> 0
<NET-INCOME> 96130
<EPS-BASIC> 2.87
<EPS-DILUTED> 2.85
</TABLE>
