AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 1998
REGISTRATION NO. 333-67137
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
THE ROUSE COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of incorporation or organization)
52-0735512
(I.R.S. Employer Identification No.)
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
(410) 992-6000
(Address including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
----------------------
BRUCE I. ROTHSCHILD
VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
(410) 992-6400
(Name, address including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPY TO:
KENNETH R. BLACKMAN
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004-1980
(212) 859-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon
as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |X|
----------------------
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF PROPOSED MAXIMUM
SECURITIES AGGREGATE AMOUNT OF REGISTRATION
TO BE REGISTERED (1) OFFERING PRICE (2)(3)(4) FEE
- -------------------------------------------------------------------------------
Common Stock, $0.01 par value
Preferred Stock, $0.01 par
value
Debt Securities............. $2,251,000,000 $666,062(4)
- -------------------------------------------------------------------------------
(1) Also includes such indeterminate number of shares of Common Stock and
Debt Securities as may be issued upon conversion of or exchange for
Preferred Stock or other Debt Securities.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457.
(3) In U.S. dollars or the equivalent thereof in foreign currency or
currency units.
(4) Includes $2,251,000,000 of Common Stock, Preferred Stock and Debt
Securities being carried forward from the registrant's Registration
Statement on Form S-3 (No. 333-51555) (the "Previous Registration
Statement") which registration statement was declared effective on May
13, 1998. The registration fee for the securities being carried
forward was paid in full at the time the Previous Registration
Statement was filed.
----------------------
This Amendment No. 1 to the Registration Statement on Form S-3 (No.
333-67137) ("Amendment No. 1") also constitutes Post-Effective Amendment
No. 2 to the Registration Statement on Form S-3 (No. 333-51555)
("Post-Effective Amendment No. 2") previously filed by the registrant and
declared effective on May 13, 1998 (the "Previous Registration Statement").
Such Post-Effective Amendment No. 2 shall hereafter become effective
concurrently with the effectiveness of this Amendment No. 1 and in
accordance with Section 8(c) of the Securities Act of 1933. Pursuant to
Rule 429 under the Securities Act of 1933, the prospectus filed as part of
this Amendment No. 1 also constitutes a prospectus for the Previous
Registration Statement.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
(Redherring)
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 30, 1998
THE ROUSE COMPANY
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
----------------------
We are one of the largest publicly-traded real estate companies in the
United States. Through this prospectus, we may periodically offer shares of
our common stock, shares of our preferred stock and/or debt securities, and
one of our securityholders may periodically offer up to 3,525,782 shares of
our common stock and up to $58,000,000 principal amount of our 6.94% notes
due 2008 that have been issued to it, in the amounts, at the prices and on
such other terms as will be determined at the time of offering. The
offering price of all securities issued under this prospectus may not
exceed $2,251,000,000.
We may offer any of the securities described in this prospectus in one
or more series or issue any of those securities all at once or over time.
We will describe the specific terms of any securities we offer in a
prospectus supplement that will accompany this prospectus. If we offer
common stock, we will specify the number of shares, the public offering
price and other terms relating to the offer and sale of those shares in the
prospectus supplement. If we offer preferred stock, we will specify the
title of the preferred stock, the number of shares, the public offering
price, any dividend, liquidation, redemption, voting, conversion, exchange
and other rights, and any other terms relating to the offer and sale of
those shares in the prospectus supplement. If we offer debt securities, we
will specify the title of the debt securities, the principal amount, the
public offering price, the denomination, the maturity, any premium, any
interest rate (which may be fixed, floating or adjustable), the time and
method of calculating any interest payment, the place where the principal
of and any premium and interest may be paid, the currency in which the
principal of and any premium and interest may be paid, any redemption or
repayment terms at our or the holder's option, any sinking fund, conversion
or exchange provisions, any other special terms, and any other terms
relating to the offer and sale of those debt securities in the prospectus
supplement.
Any securities to be sold by the selling securityholder under this
prospectus may be sold directly or through agents or broker-dealers on
terms to be determined at the time of sale. The terms of any sale will be
described in a prospectus supplement that will accompany this prospectus.
We will receive no proceeds from any sales of our securities by the selling
securityholder, but we have agreed to pay certain expenses associated with
the registration and sale of those securities.
Our common stock trades on the New York Stock Exchange under the
symbol "RSE." We will list any shares of common stock sold under this
prospectus on the New York Stock Exchange. Unless we otherwise specify in a
prospectus supplement, any debt securities we issue under this prospectus
will be unsecured and unsubordinated obligations and will rank equally with
all of our other unsecured and unsubordinated indebtedness.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
- - - - - - - - - -
The date of this prospectus is , 1998.
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND IN ANY PROSPECTUS SUPPLEMENT ACCOMPANYING
THIS PROSPECTUS OR INFORMATION THAT WE OR THE SELLING SECURITYHOLDER HAVE
REFERRED YOU TO, SUCH AS THE INFORMATION REFERRED TO BELOW THAT WE FILE
WITH THE SEC. NEITHER WE NOR THE SELLING SECURITYHOLDER HAS AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR IN ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF
THOSE DOCUMENTS.
- - - - - - - - - -
ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov and at
the public reference room of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all
the securities offered under this prospectus. This prospectus is part of
the registration statement we filed with the SEC.
1. Annual Report on Form 10-K for the year ended December 31, 1997
(the "1997 10-K").
2. Current Report on Form 8-K dated January 15, 1998.
3. Quarterly Report on Form 10-Q for the quarter ended March 31,
1998.
4. Quarterly Report on Form 10-Q for the quarter ended June 30,
1998.
5. Quarterly Report on Form 10-Q for the quarter ended September 30,
1998.
6. Current Report on Form 8-K dated August 14, 1998.
7. Current Report on Form 8-K/A dated October 9, 1998.
8. Current Report on Form 8-K dated October 21, 1998.
9. Current Report on Form 8-K dated November 5, 1998.
10. Current Report on Form 8-K/A dated November 16, 1998.
11. Description of Contingent Stock Agreement (as described elsewhere
in this prospectus) is incorporated by reference to the caption
"The Contingent Stock Agreement; The Contractual Rights"
contained in the registration statement on Form S-4 (File No.
333-1693) filed March 13, 1996, as amended.
You may request a copy of these filings, at no cost, by writing or
telephoning David L. Tripp, Vice President and Director of Investor
Relations and Corporate Communications, The Rouse Company, 10275 Little
Patuxent Parkway, Columbia, Maryland 21044-3456, Telephone: (410) 992-6000.
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference in
this prospectus, contains forward-looking statements which reflected our
views at the times the documents were filed regarding future events and
financial performance. These forward-looking statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from historical results or the results we expected at the time
of filing. See Exhibit 99.2 to the 1997 10-K. The words "believe,"
"expect," "anticipate" and similar expressions identify forward-looking
statements, which speak only as of the dates on which they were made. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise. You should not unduly rely on these forward-looking statements.
THE ROUSE COMPANY
The Rouse Company is one of the largest publicly-traded real estate
companies in the United States. We intend to elect to be taxed as a real
estate investment trust (a "REIT") effective January 1, 1998. Through our
subsidiaries, affiliates and non-REIT subsidiaries, we engage in or have a
material financial interest in (i) the ownership, management, acquisition
and development of income-producing and other real estate in the United
States, including retail centers, office buildings, mixed-use projects and
community retail centers, and the management of one retail center in Canada
and (ii) the development and sale of land primarily in Maryland and the Las
Vegas, Nevada metropolitan area for residential, commercial and industrial
uses. Our principal offices are located at The Rouse Company Building,
10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456, and our
telephone number is (410) 992-6000. The Rouse Company and its subsidiaries,
affiliates and non-REIT subsidiaries are referred to collectively in this
prospectus as "we," "Rouse" or the "Company."
USE OF PROCEEDS
Unless we otherwise indicate in an accompanying prospectus supplement,
we intend to use the net proceeds from the sale of any securities we offer
for general corporate purposes, including the repayment of indebtedness and
for acquisitions. We will receive no proceeds from any sales of our
securities by the selling securityholder. See "Selling Securityholder."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our (i) ratio of earnings to fixed
charges and (ii) ratio of earnings to combined fixed charges and Preferred
stock dividend requirements for the periods indicated:
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
--------------- ------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1) .. 1.44 1.27 1.25 1.16 1.04 1.06 1.01
Ratio of earnings to combined fixed
charges and Preferred stock dividend
requirements(2)(3) ................... 1.36 1.19 1.20 1.08 -- -- --
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing fixed
charges into net earnings before income taxes, extraordinary loss and
cumulative effect of change in accounting principle, adjusted for
minority interest in earnings, amortization of interest costs
previously capitalized and certain other items, plus fixed charges
other than capitalized interest. Fixed charges include interest costs,
distributions on Company-obligated mandatorily redeemable preferred
securities, the estimated interest component of rent expense and
certain other items.
(2) The ratio of earnings to combined fixed charges and Preferred stock
dividend requirements is computed by dividing total combined fixed
charges and amounts of pre-tax earnings required to cover Preferred
stock dividend requirements into net earnings before income taxes,
extraordinary loss and cumulative effect of change in accounting
principle, adjusted for minority interest in earnings, amortization of
interest costs previously capitalized and certain other items, plus
fixed charges other than capitalized interest. Fixed charges include
interest costs, distributions on Company-obligated mandatorily
redeemable preferred securities, the estimated interest component of
rent expense and certain other items.
(3) Total combined fixed charges and Preferred stock dividend requirements
exceeded earnings available for combined fixed charges and Preferred
stock dividend requirements by $14,086,000, $8,934,000 and $17,722,000
for the years ended December 31, 1995, 1994 and 1993, respectively.
</TABLE>
<PAGE>
DESCRIPTION OF COMMON STOCK
GENERAL
The following summary of certain terms and provisions of Rouse's
common stock, $0.01 par value per share, does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Maryland General Corporation Law (the "MGCL") and to the terms and
provisions of the Amended and Restated Articles of Incorporation, as
amended, including all Articles Supplementary thereto, of Rouse (the
"Charter") and the Bylaws, as amended, of Rouse (the "Bylaws"), copies of
which are filed as exhibits to the registration statement of which this
prospectus forms a part.
The Charter authorizes the issuance of 250,000,000 shares of common
stock and, as of November 30, 1998, 72,158,705 shares of common stock were
issued and outstanding. The common stock is listed on the NYSE under the
trading symbol "RSE."
In connection with Rouse's acquisition in June 1996 (the "Hughes
Acquisition") of all the outstanding equity interests in The Hughes
Corporation and its affiliated partnership, Howard Hughes Properties,
Limited Partnership (collectively, "Hughes"), Rouse entered into an
agreement (the "Contingent Stock Agreement") for the benefit of the former
Hughes equity owners (or their successors) (the "Hughes Owners") pursuant
to which shares of common stock, or under certain circumstances, Increasing
Rate Cumulative Preferred Stock, par value $0.01 per share (the "Increasing
Rate Preferred Stock"), of Rouse may be issued to the Hughes Owners over a
14-year period ending in 2009. The number of shares of common stock (or,
under certain circumstances, Increasing Rate Preferred Stock) that may be
issued will be determined on the basis of the net cash flow generated from
and the appraised value of certain assets acquired in the Hughes
Acquisition. Any shares of Increasing Rate Preferred Stock, if issued, will
be exchangeable, at Rouse's option, for shares of common stock.
During the first quarter of 1997, Rouse issued 4,050,000 shares of its
Series B Convertible Preferred Stock, par value $0.01 per share (the
"Series B Convertible Preferred Stock"). The Series B Convertible Preferred
Stock is convertible, in whole or in part, at the option of the holder
thereof at any time, unless previously redeemed, into shares of common
stock, at a conversion price of $38.125 per share of common stock
(equivalent to a conversion rate of 1.311 shares of common stock per share
of Series B Convertible Preferred Stock), subject to adjustment in certain
circumstances. The Series B Convertible Preferred Stock is not redeemable
prior to April 1, 2000, and at no time is it redeemable for cash. On or
after April 1, 2000, the Series B Convertible Preferred Stock will be
redeemable by Rouse, in whole or in part, at Rouse's option and subject to
certain conditions, for such number of shares of common stock as are
issuable at a conversion rate of 1.311 shares of common stock for each
share of Series B Convertible Preferred Stock, subject to adjustment in
certain circumstances. See "Description of Preferred Stock -- Series B
Convertible Preferred Stock."
Rouse has outstanding $128,515,000 aggregate principal amount of 5
3/4% Convertible Subordinated Debentures due 2002. The debentures are
convertible by the holders thereof into common stock at a conversion price
equal to $28.625 principal amount of each debenture for each share of
common stock, subject to adjustment in certain circumstances.
DIVIDEND RIGHTS
The holders of common stock are entitled to receive such dividends as
are declared by the Board of Directors of Rouse, after payment of, or
provision for, full cumulative dividends for outstanding Preferred Stock.
VOTING RIGHTS
Each share of common stock is entitled to one vote on all matters
submitted to a vote of stockholders, including the election of directors.
Cumulative voting for directors is not permitted. Holders of common stock
and Rouse's preferred stock, $0.01 per share, when outstanding and when
entitled to vote, vote as a class, except with respect to matters that (i)
relate only to the rights, terms or conditions of preferred stock, (ii)
affect only the holders of preferred stock or (iii) relate to the rights of
the holders of preferred stock if Rouse fails to fulfill any of its
obligations regarding such stock.
LIQUIDATION RIGHTS
Upon any dissolution, liquidation or winding up of Rouse, the holders
of common stock are entitled to receive pro rata all of Rouse's assets and
funds remaining after payment of, or provision for, creditors and
distribution of, or provision for, preferential amounts and unpaid
accumulated dividends to holders of preferred stock.
PREEMPTIVE RIGHTS
Holders of common stock have no preemptive right to purchase or
subscribe for any shares of Rouse's capital stock.
SPECIAL STATUTORY REQUIREMENTS FOR CERTAIN TRANSACTIONS
The summaries of the following statutes do not purport to be complete
and are subject to and qualified in their entirety by reference to the
applicable provisions of the MGCL.
BUSINESS COMBINATION STATUTE. The MGCL establishes special
requirements with respect to "business combinations" between Maryland
corporations and "interested stockholders," unless exemptions are
applicable. Among other things, the law prohibits for a period of five
years a merger or other specified transactions between a company and an
interested stockholder and requires a super-majority vote for such
transactions after the end of such five-year period.
"Interested stockholders" are all persons owning beneficially,
directly or indirectly, 10% or more of the outstanding voting stock of a
Maryland corporation. "Business combinations" include any merger or similar
transaction subject to a statutory vote and additional transactions
involving transfers of assets or securities in specified amounts to
interested stockholders or their affiliates. Unless an exemption is
available, transactions of these types may not be consummated between a
Maryland corporation and an interested stockholder or its affiliates for a
period of five years after the date on which the stockholder first became
an interested stockholder and thereafter may not be consummated unless
recommended by the board of directors of the Maryland corporation and
approved by the affirmative vote of at least 80% of the votes entitled to
be cast by all holders of outstanding shares of voting stock and 66 2/3% of
the votes entitled to be cast by all holders of outstanding shares of
voting stock other than the interested stockholder. A business combination
with an interested stockholder which is approved by the board of directors
of a Maryland corporation at any time before an interested stockholder
first becomes an interested stockholder is not subject to the five-year
moratorium or special voting requirements. The Bylaws specifically provide
that the foregoing provisions apply to any such business combination with
Rouse. An amendment to a Maryland corporation's charter electing not to be
subject to the foregoing requirements must be approved by the affirmative
vote of at least 80% of the votes entitled to be cast by all holders of
outstanding shares of voting stock and 66 2/3% of the votes entitled to be
cast by holders of outstanding shares of voting stock who are not
interested stockholders. Any such amendment is not effective until 18
months after the vote of stockholders and does not apply to any business
combination of a corporation with a stockholder who was an interested
stockholder on the date of the stockholder vote. Rouse has not adopted any
such amendment to its charter.
CONTROL SHARE ACQUISITION STATUTE. The MGCL imposes limitations on the
voting rights of shares acquired in a "control share acquisition." The
Maryland statute defines a "control share acquisition" at the 20%, 33 1/3%
and 50% acquisition levels, and requires a two-thirds stockholder vote
(excluding shares owned by the acquiring person and certain members of
management) to accord voting rights to stock acquired in a control share
acquisition. The statute also requires Maryland corporations to hold a
special meeting at the request of an actual or proposed control share
acquirer generally within 50 days after a request is made with the
submission of an "acquiring person statement," but only if the acquiring
person (a) posts a bond for the cost of the meeting and (b) submits a
definitive financing agreement to the extent that financing is not provided
by the acquiring person. In addition, unless the charter or bylaws provide
otherwise, the statute gives the Maryland corporation, within certain time
limitations, various redemption rights if there is a stockholder vote on
the issue and the grant of voting rights is not approved, or if an
"acquiring person statement" is not delivered to the target within ten days
following a control share acquisition. Moreover, unless the charter or
bylaws provide otherwise, the statute provides that, if, before a control
share acquisition occurs, voting rights are accorded to control shares
which result in the acquiring person having majority voting power, then
minority stockholders have appraisal rights. An acquisition of shares may
be exempted from the control share statute provided that a charter or bylaw
provision is adopted for such purpose prior to the control share
acquisition. The Bylaws specifically provide that the statutory provisions
relating to control share acquisitions do not apply.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is The Bank of
New York, New York, New York.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The following summaries of certain terms and provisions of the
preferred stock do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the MGCL and the terms and
provisions of the Charter, including the Articles Supplementary setting
forth the particular terms of (i) the Series B Convertible Preferred Stock,
(ii) the Increasing Rate Preferred Stock and (iii) the 10.25% Junior
Preferred Stock, Series 1996 (the "Junior Preferred Stock"), and to the
Bylaws, copies of which are incorporated by reference into the registration
statement of which this prospectus forms a part.
The Charter authorizes the issuance of 50,000,000 shares of preferred
stock, of which (i) 4,600,000 shares have been classified as Series B
Convertible Preferred Stock, (ii) 10,000,000 shares have been classified as
Increasing Rate Cumulative Preferred Stock and (iii) 37,362 shares have
been classified as 10.25% Junior Preferred Stock, 1996 Series. Preferred
stock may be issued from time to time in one or more series, without
stockholder approval, with such voting powers (full or limited),
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions as shall be
established by the Board of Directors of Rouse. Thus, without stockholder
approval, Rouse could authorize the issuance of preferred stock with
voting, conversion and other rights that could dilute the voting power and
other rights of the holders of common stock.
The particular terms of any series of preferred stock offered by any
prospectus supplement will be described in the prospectus supplement
relating to such series of preferred stock. At any time that any series of
preferred stock is authorized, the Board of Directors of Rouse or a duly
authorized Committee of such Board of Directors will fix the dividend
rights, any conversion rights, any voting rights, redemption provisions,
liquidation preferences and any other rights, preferences, privileges and
restrictions of such series, as well as the number of shares constituting
such series and the designation thereof. The description of the terms of a
particular series of preferred stock that will be set forth in a prospectus
supplement does not purport to be complete and will be qualified in its
entirety by reference to the Articles Supplementary relating to such
series.
As of November 30, 1998, no shares of Increasing Rate Preferred Stock,
37,362 shares of Junior Preferred Stock and 4,050,000 shares of Series B
Convertible Preferred Stock are issued and outstanding.
SERIES B CONVERTIBLE PREFERRED STOCK
GENERAL. On January 30, 1997, the Board of Directors of Rouse
classified and authorized Rouse to issue up to an aggregate of 4,600,000
shares of the Series B Convertible Preferred Stock as part of the
50,000,000 shares of the authorized preferred stock.
The holders of the Series B Convertible Preferred Stock have no
preemptive rights with respect to any shares of capital stock of Rouse or
any other securities of Rouse convertible into or carrying rights or
options to purchase any such shares. The Series B Convertible Preferred
Stock is not subject to any sinking fund or other obligation of Rouse to
redeem or retire the Series B Convertible Preferred Stock. Unless converted
or redeemed by Rouse, the Series B Convertible Preferred Stock has a
perpetual term, with no maturity. The Series B Convertible Preferred Stock
is listed on the NYSE under the trading symbol "RSE Pr B." The shares of
common stock issuable upon conversion or redemption of the Series B
Convertible Preferred Stock are listed on the NYSE.
RANKING. The Series B Convertible Preferred Stock ranks senior to the
Increasing Rate Preferred Stock, the Junior Preferred Stock and the common
stock with respect to payment of dividends and amounts upon liquidation,
dissolution or winding up.
While any shares of Series B Convertible Preferred Stock are
outstanding, Rouse may not authorize, create or increase the authorized
amount of any class or series of stock that ranks senior to the Series B
Convertible Preferred Stock with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding up without the consent of
the holders of two-thirds of the outstanding shares of Series B Convertible
Preferred Stock and all other shares of Voting Preferred Shares (defined
below), voting as a single class. However, Rouse may create additional
classes of stock, increase the authorized number of shares of preferred
stock or issue series of preferred stock ranking on a parity with the
Series B Convertible Preferred Stock with respect, in each case, to the
payment of dividends and amounts upon liquidation, dissolution and winding
up (a "Series B Parity Stock") without the consent of any holder of Series
B Convertible Preferred Stock. See "-- Voting Rights" below.
DIVIDENDS. Holders of shares of Series B Convertible Preferred Stock
are entitled to receive, when, as and if declared by the Board of Directors
of Rouse, out of funds of Rouse legally available for payment, cumulative
cash dividends at the rate per annum of 6.0% per share on the liquidation
preference thereof or $3.00 per share of Series B Convertible Preferred
Stock. Dividends on the Series B Convertible Preferred Stock are payable
quarterly on the first calendar day of January, April, July and October of
each year (and, in the case of any accrued but unpaid dividends, at such
additional times and for such interim periods, if any, as determined by the
Board of Directors), at such annual rate. Each such dividend is payable to
holders of record as they appear on the stock records of Rouse at the close
of business on such record dates, not exceeding 60 days preceding the
payment dates thereof as shall be fixed by the Board of Directors of Rouse.
Dividends are cumulative from the most recent dividend payment date to
which dividends have been paid, whether or not in any dividend period or
periods there shall be funds of Rouse legally available for the payment of
such dividends. Accumulations of dividends on shares of Series B
Convertible Preferred Stock will not bear interest. Dividends payable on
the Series B Convertible Preferred Stock for any period greater or less
than a full dividend period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends payable on the Series B
Convertible Preferred Stock for each full dividend period are computed by
dividing the annual dividend rate by four.
No dividend may be declared or paid on any Series B Parity Stock
unless full cumulative dividends have been declared and paid or are
contemporaneously declared and funds sufficient for payment set aside on
the Series B Convertible Preferred Stock for all prior dividend periods,
provided, however, that if accrued dividends on the Series B Convertible
Preferred Stock for all prior dividend periods have not been paid in full
then any dividend declared on the Series B Convertible Preferred Stock for
any dividend period and on any Series B Parity Stock will be declared
ratably in proportion to accrued and unpaid dividends on the Series B
Convertible Preferred Stock and such Series B Parity Stock.
Rouse may not
(i) declare, pay or set apart funds for the payment of any dividend
or other distribution with respect to any Series B Junior Stock
(as defined below), or
(ii) redeem, purchase or otherwise acquire for consideration any
Series B Junior Stock through a sinking fund or otherwise
(other than (A) a redemption or purchase or other acquisition
of shares of common stock made for purposes of an employee
incentive or benefit plan of Rouse or any subsidiary or (B) a
purchase or other acquisition of shares of common stock made
for purposes of distribution pursuant to the Contingent Stock
Agreement),
unless
(1) all cumulative dividends with respect to the Series B
Convertible Preferred Stock and any Series B Parity Stock at
the time such dividends are payable have been paid or funds
have been set apart for payment of such dividends and
(2) sufficient funds have been paid or set apart for the payment of
the dividend for the current dividend period with respect to
the Series B Convertible Preferred Stock and any Series B
Parity Stock.
The foregoing limitations do not restrict Rouse's ability to take the
foregoing actions with respect to any Series B Parity Stock.
As used herein, (i) the term "dividend" does not include dividends
payable solely in shares of Series B Junior Stock on Series B Junior Stock,
or in options, warrants or rights to holders of Series B Junior Stock to
subscribe for or purchase any Series B Junior Stock, and (ii) the term
"Series B Junior Stock" means the common stock, and any other class of
capital stock of Rouse now or hereafter issued and outstanding that ranks
junior as to the payment of dividends or amounts upon liquidation,
dissolution and winding up to the Series B Convertible Preferred Stock.
REDEMPTION. Shares of Series B Convertible Preferred Stock are not
redeemable by Rouse prior to April 1, 2000, and at no time is the Series B
Convertible Preferred Stock redeemable for cash. On and after April 1,
2000, the shares of Series B Convertible Preferred Stock will be redeemable
at the option of Rouse, in whole or in part, for such number of shares of
common stock as equals the liquidation preference of the Series B
Convertible Preferred Stock to be redeemed divided by the Conversion Price
(as defined below under "-- Conversion Rights") as of the opening of
business on the date set for such redemption (equivalent to a conversion
rate of 1.311 shares of common stock for each share of Series B Convertible
Preferred Stock), subject to adjustment in certain circumstances. Rouse may
exercise this option only if for 20 trading days within any period of 30
consecutive trading days, including the last trading day of such period,
the closing price of the common stock on NYSE exceeds $45.75, subject to
adjustment in certain circumstances. In order to exercise its redemption
option, Rouse must issue a press release announcing the redemption prior to
the opening of business on the second trading day after the conditions in
the preceding sentences have, from time to time, been met, but in no event
prior to February 1, 2000.
On the redemption date, Rouse must pay on each share of Series B
Convertible Preferred Stock to be redeemed any accrued and unpaid
dividends, in arrears, for any dividend period ending on or prior to the
redemption date. In the case of a redemption date falling after a dividend
payment record date and prior to the related payment date, the holders of
the Series B Convertible Preferred Stock at the close of business on such
record date will be entitled to receive the dividend payable on such shares
on the corresponding dividend payment date, notwithstanding the redemption
of such shares prior to such dividend payment date. Except as provided for
in the preceding sentences, no payment or allowance will be made for
accrued dividends on any shares of Series B Convertible Preferred Stock
called for redemption or on the shares of common stock issuable upon such
redemption.
In the event that full cumulative dividends on the Series B
Convertible Preferred Stock and any Series B Parity Stock have not been
paid or declared and set apart for payment, the Series B Convertible
Preferred Stock may not be redeemed in part and Rouse may not purchase or
acquire shares of Series B Convertible Preferred Stock otherwise than
pursuant to a purchase or exchange offer made on the same terms to all
holders of shares of Series B Convertible Preferred Stock.
On and after the date fixed for redemption, provided that Rouse has
made available at the office of the Registrar and Transfer Agent a
sufficient number of shares of common stock and an amount of cash to effect
the redemption, dividends will cease to accrue on the Series B Convertible
Preferred Stock called for redemption (except that, in the case of a
redemption date after a dividend payment record date and prior to the
related dividend payment date, holders of Series B Convertible Preferred
Stock on the dividend payment record date will be entitled on such dividend
payment date to receive the dividend payable on such shares), such shares
shall no longer be deemed to be outstanding and all rights of the holders
of such shares as holders of Series B Convertible Preferred Stock shall
cease except the right to receive the shares of common stock upon such
redemption and any cash payable upon such redemption, without interest from
the date of such redemption. At the close of business on the redemption
date, each holder of Series B Convertible Preferred Stock (unless Rouse
defaults in the delivery of the shares of common stock or cash) will be,
without any further action, deemed a holder of the number of shares of
common stock for which such Series B Convertible Preferred Stock is
redeemable.
Fractional shares of common stock are not to be issued upon redemption
of the Series B Convertible Preferred Stock, but, in lieu thereof, Rouse
will pay a cash adjustment based on the current market price of the common
stock on the trading day prior to the redemption date.
LIQUIDATION PREFERENCE. The holders of shares of Series B Convertible
Preferred Stock are entitled to receive in the event of any liquidation,
dissolution or winding up of Rouse, whether voluntary or involuntary,
$50.00 per share of Series B Convertible Preferred Stock plus an amount per
share of Series B Convertible Preferred Stock equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders (the "Series B Liquidation
Preference"), and no more.
Until the holders of the Series B Convertible Preferred Stock have
been paid the Series B Liquidation Preference in full, no payment will be
made to any holder of Series B Junior Stock upon the liquidation,
dissolution or winding up of Rouse. If, upon any liquidation, dissolution
or winding up of Rouse, the assets of Rouse, or proceeds thereof,
distributable among the holders of the shares of Series B Convertible
Preferred Stock are insufficient to pay in full the Series B Liquidation
Preference and the liquidation preference with respect to any other shares
of Series B Parity Stock, then such assets, or the proceeds thereof, will
be distributed among the holders of shares of Series B Convertible
Preferred Stock and any such Series B Parity Stock ratably in accordance
with the respective amounts which would be payable on such shares of Series
B Convertible Preferred Stock and any such Series B Parity Stock if all
amounts payable thereon were paid in full. Neither a consolidation or
merger of Rouse with another corporation, a statutory share exchange by
Rouse nor a sale or transfer of all or substantially all of Rouse's assets
will be considered a liquidation, dissolution or winding up, voluntary or
involuntary, of Rouse.
VOTING RIGHTS. Except as indicated below, or except as otherwise from
time to time required by applicable law, the holders of shares of Series B
Convertible Preferred Stock have no voting rights.
If and whenever six quarterly dividends (whether or not consecutive)
payable on the Series B Convertible Preferred Stock or any other Series B
Parity Stock are in arrears, whether or not earned or declared, the number
of directors then constituting the Board of Directors of Rouse will be
increased by two and the holders of shares of Series B Convertible
Preferred Stock, voting together as a class with the holders of any other
series of Series B Parity Stock (any such other series, the "Voting
Preferred Shares"), will have the right to elect two additional directors
to serve on Rouse's Board of Directors at an annual meeting of stockholders
or a properly called special meeting of the holders of the Series B
Convertible Preferred Stock and such Voting Preferred Shares and at each
subsequent annual meeting of stockholders until all such dividends and
dividends for the current quarterly period on the Series B Convertible
Preferred Stock and such other Voting Preferred Shares have been paid or
declared and set aside for payment.
The approval of two-thirds of the outstanding shares of Series B
Convertible Preferred Stock and all other series of Voting Preferred
Shares, acting as a single class regardless of series either at a meeting
of shareholders or by written consent, is required in order to amend the
Charter and Articles Supplementary to affect materially and adversely the
rights, preferences or voting powers of the holders of the Series B
Convertible Preferred Stock or the Voting Preferred Shares or to authorize,
create, or increase the authorized amount of, any class of stock having
rights senior to the Series B Convertible Preferred Stock with respect to
the payment of dividends or amounts upon liquidation, dissolution or
winding up. However, Rouse may create additional classes of Series B Parity
Stock and Series B Junior Stock, increase the authorized number of shares
of Series B Parity Stock and Series B Junior Stock and issue additional
series of Series B Parity Stock and Series B Junior Stock without the
consent of any holder of Series B Convertible Preferred Stock.
Except as required by law, the holders of Series B Convertible
Preferred Stock are not entitled to vote on any merger or consolidation
involving Rouse or a sale of all or substantially all of the assets of
Rouse. See "-- Conversion Price Adjustments" below.
CONVERSION RIGHTS. Shares of Series B Convertible Preferred Stock are
convertible, in whole or in part, at any time, at the option of the holders
thereof, into shares of common stock at a conversion price of $38.125 per
share of common stock (equivalent to a conversion rate of 1.311 shares of
common stock for each share of Series B Convertible Preferred Stock),
subject to adjustment as described below ("Conversion Price"). The right to
convert shares of Series B Convertible Preferred Stock called for
redemption terminates at the close of business on a redemption date.
Each conversion will be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares
of Series B Convertible Preferred Stock shall have been surrendered and
notice shall have been received by Rouse as aforesaid (and if applicable,
payment of any amount equal to the dividend payable on such shares shall
have been received by Rouse as described below) and the conversion shall be
at the Conversion Price in effect at such time and on such date.
Holders of shares of Series B Convertible Preferred Stock at the close
of business on a dividend payment record date are entitled to receive the
dividend payable on such shares on the corresponding dividend payment date
notwithstanding the conversion of such shares following such dividend
payment record date and prior to such dividend payment date. However,
shares of Series B Convertible Preferred Stock surrendered for conversion
during the period between the close of business on any dividend payment
record date and ending with the opening of business on the corresponding
dividend payment date (except shares converted after the issuance of a
notice of redemption with respect to a redemption date during such period
or coinciding with such dividend payment date, which will be entitled to
such dividend) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such dividend payment date. A holder of
shares of Series B Convertible Preferred Stock on a dividend record date
who (or whose transferee) tenders any such shares for conversion into
shares of common stock on such dividend payment date will receive the
dividend payable by Rouse on such shares of Series B Convertible Preferred
Stock on such date, and the converting holder need not include payment of
the amount of such dividend upon surrender of shares of Series B
Convertible Preferred Stock for conversion. Except as provided above, Rouse
will make no payment or allowance for unpaid dividends, whether or not in
arrears, on converted shares or for dividends on the shares of common stock
issued upon such conversion.
Fractional shares of common stock are not to be issued upon conversion
but, in lieu thereof, Rouse will pay a cash adjustment based on the current
market price of the common stock on the trading day prior to the conversion
date.
CONVERSION PRICE ADJUSTMENTS. The Conversion Price is subject to
adjustment upon certain events, including:
(i) the payment of dividends (and other distributions) payable in
common stock on any class of capital stock of Rouse;
(ii) the issuance to all holders of common stock of certain rights
or warrants entitling them to subscribe for or purchase common
stock at a price per share less than the fair market value per
share of common stock;
(iii) subdivisions, combinations and reclassifications of common
stock; and
(iv) distributions to all holders of common stock of evidences of
indebtedness of Rouse or assets (including securities, but
excluding those dividends, rights, warrants and distributions
referred to above and dividends and distributions paid in cash
out of equity, including revaluation equity, applicable to
common stock).
In addition to the foregoing adjustments, Rouse may make such
reductions in the Conversion Price as it considers to be advisable in order
that any event treated for Federal income tax purposes as a dividend of
stock or stock rights will not be taxable to the holders of the common
stock.
In case Rouse shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer
for all or substantially all of the shares of common stock or sale of all
or substantially all of Rouse's assets), in each case as a result of which
shares of common stock will be converted into the right to receive stock,
securities or other property (including cash or any combination thereof),
each share of Series B Convertible Preferred Stock, if convertible after
the consummation of the transaction, will thereafter be convertible into
the kind and amount of shares of stock and other securities and property
receivable (including cash or any combination thereof) upon the
consummation of such transaction by a holder of that number of shares or
fraction thereof of common stock into which one share of Series B
Convertible Preferred Stock was convertible immediately prior to such
transaction (assuming such holder of common stock failed to exercise any
rights of election and received per share the kind and amount received per
share by a plurality of non-electing shares). Rouse may not become a party
to any such transaction unless the terms thereof are consistent with the
foregoing.
No adjustment of the Conversion Price is required to be made in any
case until cumulative adjustments amount to 1% or more of the Conversion
Price. Any adjustments not so required to be made will be carried forward
and taken into account in subsequent adjustments.
TRANSFER AGENT, REGISTRAR, DIVIDEND DISBURSING AGENT AND REDEMPTION
AGENT. The transfer agent, registrar, dividend disbursing agent and
redemption agent for the shares of Series B Convertible Preferred Stock is
The Bank of New York, New York, New York.
INCREASING RATE PREFERRED STOCK
GENERAL. On February 22, 1996, the Board of Directors of Rouse
classified, and authorized Rouse to issue, the Increasing Rate Preferred
Stock as part of the 50,000,000 shares of authorized preferred stock. The
Increasing Rate Preferred Stock is issuable only in connection with the
Hughes Acquisition and only to Hughes Owners. Pursuant to the terms of the
Contingent Stock Agreement, Rouse will be obligated to issue and deliver
shares of Increasing Rate Preferred Stock to Hughes Owners if the
representatives of the Hughes Owners (which representatives have been
appointed under the Contingent Stock Agreement (the "Representatives"))
require Rouse to issue and deliver such shares of Increasing Rate Preferred
Stock following certain events of default under the Agreement.
If and when issued, the Increasing Rate Preferred Stock will be
validly issued, fully paid and nonassessable. The holders of Increasing
Rate Preferred Stock will have no preemptive rights with respect to any
shares of capital stock of Rouse or any other securities of Rouse
convertible into or carrying rights or options to purchase any such shares.
The Increasing Rate Preferred Stock will not be subject to any sinking
fund. Unless exchanged for common stock or redeemed, the Increasing Rate
Preferred Stock will have a perpetual term, with no maturity. The shares of
common stock issuable upon the exchange of Increasing Rate Preferred Stock
will be listed on the NYSE.
RANKING. The Increasing Rate Preferred Stock will rank equally with
any Parity Stock (as defined below) and will rank senior to the Junior
Preferred Stock, the common stock and any other Increasing Rate Junior
Stock (as defined below) with respect to the payment of dividends and
amounts upon liquidation, dissolution or winding up.
While any shares of Increasing Rate Preferred Stock are outstanding,
unless Rouse first obtains the consent of the Representatives or the
consent of the holders of at least 66 2/3% of the outstanding shares of
Increasing Rate Preferred Stock, Rouse may not, either directly or
indirectly or through a merger or consolidation of Rouse with another
entity (a "Rouse Merger"):
(i) issue (or approve the issuance of) or increase the authorized
number of shares of any Increasing Rate Parity Dividend Stock,
Increasing Rate Parity Liquidation Stock or Increasing Rate
Prior Stock (as such terms are defined below);
(ii) declare, pay or set apart funds for the payment of any
dividends (other than dividends payable in Increasing Rate
Junior Stock) or make any other distribution on or with respect
to shares of Increasing Rate Junior Stock;
(iii) declare, pay or set apart funds for the payment of any
dividends (other than dividends payable in Increasing Rate
Junior Stock) or make any other distribution on or with respect
to shares of Increasing Rate Parity Dividend Stock or
Increasing Rate Parity Liquidation Stock, unless simultaneously
therewith a proportionate dividend on the Increasing Rate
Preferred Stock is ratably distributed; or
(iv) redeem, retire or otherwise acquire for value or set apart any
funds for the redemption or purchase of any shares of
Increasing Rate Junior Stock (other than common stock to effect
an Exchange (as defined below)) or any warrant, option or right
to acquire shares thereof.
"Increasing Rate Junior Stock" means the common stock and any other
capital stock of Rouse ranking junior to the Increasing Rate Preferred
Stock with respect to distributions of assets upon the dissolution,
liquidation or winding up of Rouse, whether voluntary or involuntary, or
with respect to the payment of dividends.
"Increasing Rate Parity Dividend Stock" means any capital stock of
Rouse ranking on a parity with the Increasing Rate Preferred Stock with
respect to the payment of dividends.
"Increasing Rate Parity Liquidation Stock" means any capital stock of
Rouse ranking on a parity with the Increasing Rate Preferred Stock with
respect to distributions of assets upon the dissolution, liquidation or
winding up of Rouse, whether voluntary or involuntary.
"Parity Stock" means any capital stock of Rouse ranking on a parity
with the Increasing Rate Preferred Stock with respect to distributions of
assets upon the dissolution, liquidation or winding up of Rouse, whether
voluntary or involuntary, or with respect to the payment of dividends.
"Increasing Rate Prior Stock" means any capital stock of Rouse ranking
prior to the Increasing Rate Preferred Stock with respect to distributions
of assets upon the dissolution, liquidation or winding up of Rouse, whether
voluntary or involuntary, or with respect to the payment of dividends.
DIVIDENDS. Holders of shares of Increasing Rate Preferred Stock will
be entitled to receive for each such share, when and as declared by the
Board of Directors of Rouse, out of funds of Rouse legally available for
payment, cumulative cash dividends on the Liquidation Value (as defined
below) of such share at the Dividend Rate (as defined below). Dividends on
the Increasing Rate Preferred Stock will be payable semi-annually (each, a
"Dividend Payment Date") at such rate on the first business day following
the end of each six-month period beginning January 1 and July 1 of each
year (each such six-month period, a "Dividend Period"). Dividends will be
payable to holders of record as they appear on the stock records of Rouse
at the close of business 15 days prior to the end of the applicable
Dividend Period. Dividends on shares of Increasing Rate Preferred Stock
(whether or not earned or declared) will accrue from the date of issuance
of such shares (the "Issue Date") until such shares are redeemed or
exchanged as described below. Dividends will be cumulative from the Issue
Date, whether or not in any Dividend Period or Periods there are funds of
Rouse legally available for the payment of such dividends. Accumulations of
dividends on shares of Increasing Rate Preferred Stock will not bear
interest.
Unless all accrued and unpaid dividends on Increasing Rate Preferred
Stock have been paid in full or funds sufficient for such payment have been
set apart therefor, Rouse may not:
(i) pay or set apart funds for the payment of any dividend with
respect to any Junior Dividend Stock (as defined below);
(ii) pay or set apart funds for the payment of any dividend with
respect to any Increasing Rate Parity Dividend Stock, other
than pro rata with, and recognizing all accrued and unpaid
dividends on, the Increasing Rate Preferred Stock and all other
classes or series of Increasing Rate Parity Dividend Stock;
(iii) make any distribution (other than in Junior Dividend Stock) on,
redeem or purchase any Junior Liquidation Stock; or
(iv) make any distribution on, redeem or purchase any Increasing
Rate Parity Liquidation Stock.
To the extent that Rouse does not have sufficient funds to pay (or set
apart for payment) the full amount of accrued but unpaid dividends on the
Increasing Rate Preferred Stock on any given Dividend Payment Date, any
payments made (or funds set apart for such payments) by Rouse in respect of
such dividends will be made ratably to the holders of such Increasing Rate
Preferred Stock in proportion to the number of shares held by them.
"Base Rate" means:
(i) with respect to the Dividend Period during which Rouse issues
shares of Increasing Rate Preferred Stock for the first time,
the dividend rate, as determined by a nationally recognized
investment banking firm selected by Rouse for such purpose and
reasonably acceptable to the Representatives, which would be
required in order for Rouse to successfully sell at par (i.e.,
stated liquidation value), in a private placement transaction,
a class or series of its perpetual preferred stock as of such
time; and
(ii) with respect to each subsequent Dividend Period, the dividend
rate, as determined by a nationally recognized investment
banking firm selected by Rouse for such purpose and reasonably
acceptable to the Representatives, which would be required in
order for Rouse to successfully sell at par (i.e., stated
liquidation value), in a private placement transaction, a class
of its perpetual preferred stock as of the first day of such
Dividend Period.
"Dividend Rate" means a rate per annum equal to the Base Rate plus the
Spread, in each case as in effect during a Dividend Period; provided,
however, that in the event that any share of Increasing Rate Preferred
Stock shall have an Issue Date other than on the first day of any Dividend
Period, the Dividend Rate with respect to such share during the Dividend
Period in which such Issue Date occurs shall be calculated on the basis of
the applicable Dividend Rate for such Dividend Period for the period
commencing with the Issue Date to and including the last day of such
Dividend Period.
"Junior Dividend Stock" means common stock and any other capital stock
of Rouse ranking junior to the Increasing Rate Preferred Stock with respect
to the payment of dividends.
"Junior Liquidation Stock" means common stock and any capital stock of
Rouse junior to the Increasing Rate Preferred Stock with respect to
distributions of assets upon the dissolution, liquidation or winding up of
Rouse, whether voluntary or involuntary.
"Liquidation Value" means, with respect to a share of Increasing Rate
Preferred Stock, $100 plus all dividends (whether or not earned or
declared), accrued and unpaid on such share.
"Spread" (i) for the Dividend Period during which Rouse issues shares
of Increasing Rate Preferred Stock for the first time shall be 3.50% per
annum and (ii) for each Dividend Period thereafter shall be the Spread for
the immediately preceding Dividend Period plus 0.50%.
REDEMPTION. Any holder of Increasing Rate Preferred Stock may elect to
have Rouse redeem all or any portion of such holder's shares on any
Dividend Payment Date (the "Redemption Date") by delivering to Rouse a
redemption notice at least 30 but not more than 60 days prior to such
Redemption Date; provided, however, that any shares subject to redemption
must have been issued at least one year prior to the date of such
redemption notice.
For each share of Increasing Rate Preferred Stock to be redeemed,
Rouse must pay on the Redemption Date an amount equal to the sum of (i)
110% of the Liquidation Value of such share as of such Redemption Date plus
(ii) all accrued and unpaid dividends (whether or not earned or declared)
on such share as of such Redemption Date. In the event Rouse is required to
redeem shares of the Increasing Rate Preferred Stock but does not have
sufficient funds legally available to redeem all such shares, Rouse must
apply the funds it does have legally available to redeem on a ratable basis
as many shares subject to redemption as is possible. If Rouse fails to
redeem all shares required to be redeemed by it on any given Redemption
Date because of insufficient legally available funds, the holders of
Increasing Rate Preferred Stock will be able to exercise the Special Voting
Right described below.
EXCHANGE. Rouse may, at its option, exchange shares of common stock on
any Dividend Payment Date (an "Exchange Date") for any or all shares of
Increasing Rate Preferred Stock outstanding on such Exchange Date (each, an
"Exchange"), provided that in connection with such Exchange, (i) Rouse
delivers an exchange notice at least 30 but not more than 60 days prior to
such Exchange Date and (ii) on the Exchange Date, Rouse pays each holder of
the shares of Increasing Rate Preferred Stock to be exchanged an amount
equal to all accrued but unpaid dividends on such shares to such Exchange
Date. The number of shares of common stock to be exchanged for each share
of Increasing Rate Preferred Stock will be a number equal to the
Liquidation Value divided by the Current Share Value on the last day of the
Dividend Period immediately preceding the Exchange Date. If, in connection
with an Exchange, Rouse intends to exchange fewer than all the outstanding
shares of Increasing Rate Preferred Stock, the number of shares of
Increasing Rate Preferred Stock to be exchanged will be determined ratably
among the holders of such stock according to the respective number of
shares held by them.
LIQUIDATION. The holders of shares of Increasing Rate Preferred Stock
will be entitled to receive in the event of any liquidation, dissolution or
winding up of Rouse, whether voluntary or involuntary, the Liquidation
Value for each share of Increasing Rate Preferred Stock (the "Junior
Preferred Liquidation Preference"), and no more.
Until the holders of the Increasing Rate Preferred Stock have been
paid the Junior Preferred Liquidation Preference in full, no payment may be
made to any holder of Junior Liquidation Stock upon the liquidation,
dissolution or winding up of Rouse. If, upon any liquidation, dissolution
or winding up of Rouse, the assets of Rouse, or any proceeds thereof,
distributable among the holders of the shares of Increasing Rate Preferred
Stock are insufficient to pay in full the Junior Preferred Liquidation
Preference, then such assets, or the proceeds thereof, will be distributed
among the holders of shares of Increasing Rate Preferred Stock ratably in
accordance with the respective amounts which would be payable on such
shares of Increasing Rate Preferred Stock if all amounts payable thereon
were paid in full. Neither a merger or consolidation of Rouse with or into
another entity nor a voluntary sale, lease, conveyance, exchange or
transfer of all or substantially all of Rouse's assets (except in
connection with a plan of liquidation, dissolution or winding up of Rouse)
will be considered a liquidation, dissolution or winding up, voluntary or
involuntary, of Rouse.
VOTING RIGHTS. Except as described below, or except as otherwise from
time to time required by applicable law, the holders of shares of
Increasing Rate Preferred Stock will have no voting rights.
Whenever
(i) any accrued but unpaid dividends on the Increasing Rate
Preferred Stock (whether or not earned or declared) are in
arrears for at least one Dividend Period,
(ii) Rouse fails to effect any redemption described above or
(iii) Rouse fails to effect any Exchange,
then
(x) the number of directors then constituting the Board of
Directors of Rouse will be increased by one and
(y) the holders of shares of Increasing Rate Preferred Stock,
voting separately as a class, will have the exclusive right
(the "Special Voting Right") to elect a director to fill such
vacancy either (1) at a properly called special meeting of the
holders of the Increasing Rate Preferred Stock called for such
purpose or (2) at any annual meeting of stockholders of Rouse.
Holders of Increasing Rate Preferred Stock will have the right to
exercise the Special Voting Right until such time as:
(i) all accumulated dividends on the Increasing Rate Preferred
Stock shall have been paid in full;
(ii) all redemptions required to be made on any Redemption Date
shall have been made; and
(iii) all Exchanges required to be made shall have been made.
In exercising the Special Voting Right, each share of Increasing Rate
Preferred Stock will be entitled to one vote.
In addition, so long as any shares of Increasing Rate Preferred Stock
are outstanding, the consent of the Representatives or the affirmative vote
of the holders of 66 2/3% of the shares of the Increasing Rate Preferred
Stock is required to issue any preferred stock on parity with or senior to
the Increasing Rate Preferred Stock, amend the articles supplementary
relating to the Increasing Rate Preferred Stock, issue or take certain
actions affecting the Increasing Rate Preferred Stock or make distributions
with respect to stock on parity with or junior to the Increasing Rate
Preferred Stock.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the
Increasing Rate Preferred Stock will be The Bank of New York, New York, New
York.
JUNIOR PREFERRED STOCK
GENERAL. On February 22, 1996, the Board of Directors of Rouse
classified, and authorized Rouse to issue, up to 37,362 shares of the
Junior Preferred Stock as part of the 50,000,000 shares of authorized
preferred stock.
In connection with the Hughes Acquisition, 37,362 shares of Junior
Preferred Stock were issued to a non-REIT subsidiary of Rouse and are
currently outstanding.
RANKING. The Junior Preferred Stock ranks senior to the common stock
and junior to all other preferred stock (unless the terms of such preferred
stock specifically provide that it will rank junior to or on parity with
the Junior Preferred Stock), with respect to payment of dividends and
amounts upon liquidation, dissolution or winding up.
DIVIDENDS. Holders of shares of Junior Preferred Stock are entitled to
receive for each such share, when and as declared by the Board of Directors
of Rouse, out of funds of Rouse legally available for payment, a cumulative
annual cash dividend equal to the greater of (i) 10.25% of the liquidation
preference of such Junior Preferred Stock (the "Junior Preferred
Liquidation Preference") or (ii) the lesser of 200% of the amount
determined under clause (i) above or the Junior Preferred Liquidation
Preference divided by the average closing price of common stock used to
determine the exchange ratio in connection with the Hughes Acquisition (the
"Multiplier") multiplied by the aggregate per share amount of all cash and
non-cash dividends (other than dividends payable in common stock), subject
to adjustment for stock splits, combinations and dividends on the common
stock. Accumulations of dividends on shares of Junior Preferred Stock will
not bear interest.
Until all accumulated dividends are paid in full, Rouse may not,
without first obtaining the consent of the holders of at least 66 2/3% of
the outstanding shares of Junior Preferred Stock, (i) declare or pay
dividends on or make any other distribution on, or redeem or purchase or
otherwise acquire for consideration any shares of Rouse's capital stock
ranking junior to the Junior Preferred Stock (other than such shares
acquired in exchange for other shares of Rouse's capital stock ranking
junior to the Junior Preferred Stock), (ii) declare or pay dividends on or
make any other distributions on any shares of Rouse's capital stock ranking
on parity with the Junior Preferred Stock other than dividends payable
ratably on the Junior Preferred Stock and any other parity stock or (iii)
redeem or purchase or otherwise acquire for consideration any shares of
Rouse's capital stock ranking on a parity with the Junior Preferred Stock,
except pursuant to an offer that treats fairly and equitably all holders of
Junior Preferred Stock and such parity stock.
REDEMPTION. The Junior Preferred Stock is not subject to redemption.
LIQUIDATION. The holders of shares of Junior Preferred Stock are
entitled to receive in the event of any liquidation, dissolution or winding
up of Rouse, whether voluntary or involuntary, a liquidation preference for
each share of Junior Preferred Stock equal to the greater of (i) the sum of
$4,148.60 plus all accrued and unpaid dividends on such share to the date
of payment and (ii) an amount equal to the Multiplier multiplied by the
aggregate per share amount to be distributed to holders of common stock in
connection with such liquidation, dissolution or winding up, in each case
subject to adjustment for stock splits, combinations and dividends on the
common stock. Until the holders of the Junior Preferred Stock have been
paid their aggregate liquidation preference in full, no payment will be
made to (i) any holder of Rouse's capital stock ranking on a parity with
the Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and any stock ranking on parity therewith or (ii) any
holder of Rouse's capital stock ranking junior to the Junior Preferred
Stock.
VOTING RIGHTS. Except as otherwise from time to time required by
applicable law, the holders of shares of Junior Preferred Stock have no
voting rights; however, when dividends are in arrears, a vote of 66 2/3% of
the outstanding shares is required for Rouse to pay distributions on or
redeem any stock junior to or on parity with the Junior Preferred Stock.
CONSOLIDATION, MERGER. In the event of a merger, consolidation or
other transaction in which shares of common stock are exchanged for cash,
stock, securities or other property, holders of Junior Preferred Stock are
entitled to receive for each share of their stock the per share
consideration received by holders of common stock multiplied by the
Multiplier, subject to adjustment for stock splits, combinations and
dividends on the common stock.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities that
Rouse may issue under this prospectus sets forth certain general terms and
provisions of the debt securities to which any prospectus supplement may
relate. The particular terms of the debt securities offered by the
prospectus supplement (the "Offered Debt Securities") and the extent, if
any, to which such general provisions may apply to the debt securities so
offered will be described in the prospectus supplement relating to such
Offered Debt Securities.
The Offered Debt Securities are to be issued under an Indenture (the
"Indenture") between Rouse and The First National Bank of Chicago, as
trustee (the "Trustee"), a copy of which Indenture is filed as an exhibit
to the registration statement. The following summaries of certain
provisions of the Indenture and the debt securities do not purport to be
complete and are subject to, and are qualified in their entirety by
reference to, all provisions of the Indenture, including the definitions
therein of certain terms and of those terms made a part thereof by the
Trust Indenture Act. Wherever particular provisions or defined terms of the
Indenture are referred to, such provisions or defined terms are
incorporated herein by reference. Certain defined terms in the Indenture
are capitalized herein.
GENERAL
The debt securities will be unsecured obligations of Rouse.
The debt securities to be offered by this prospectus are limited to
$2,251,000,000 in aggregate issue price. The Indenture does not limit the
amount of debt securities that may be issued thereunder and provides that
debt securities may be issued thereunder from time to time in one or more
series. All debt securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of any Holder, for issuances of additional debt securities of such
series. (Section 301) The Indenture provides that there may be more than
one Trustee thereunder, each with respect to one or more series of debt
securities.
Reference is made to the prospectus supplement relating to the Offered
Debt Securities for the following terms, where applicable, of the Offered
Debt Securities:
(1) the title of the Offered Debt Securities or series of which
they are a part;
(2) any limit on the aggregate principal amount of the Offered Debt
Securities;
(3) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal
of such Offered Debt Securities will be payable;
(4) the rate or rates (which may be fixed, floating or adjustable)
at which the Offered Debt Securities will bear interest, if
any, the date or dates from which such interest will accrue,
the Interest Payment Dates on which any such interest will be
payable and the Regular Record Date for any such interest
payable on any Interest Payment Date;
(5) the place or places where the principal of and any premium and
interest on such Offered Debt Securities will be payable;
(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Offered Debt
Securities may be redeemed, in whole or in part, at the option
of Rouse;
(7) the obligation, if any, of Rouse to redeem or purchase any of
such Offered Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and
the period or periods within which, the price or prices at
which and the terms and conditions on which any of such Offered
Debt Securities will be redeemed or purchased, in whole or in
part, pursuant to any such obligation;
(8) the denominations in which such Offered Debt Securities will be
issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(9) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal
of or any premium or interest on such Offered Debt Securities
will be payable (and the manner in which the equivalent of the
principal amount thereof in the currency of the United States
of America is to be determined for any purpose, including for
the purpose of determining the principal amount deemed to be
Outstanding at any time);
(10) if the amount of payments of principal of or any premium or
interest on such Offered Debt Securities may be determined with
reference to an index or pursuant to a formula, the manner in
which such amounts will be determined;
(11) if the principal of or any premium or interest on such
Securities is to be payable, at the election of Rouse or a
Holder thereof, in one or more currencies or currency units
other than those in which the Offered Debt Securities are
stated to be payable, the currency, currencies or currency
units in which payment of any such amount as to which such
election is made will be payable, and the periods within which
and the terms and conditions upon which such election is to be
made;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Offered Debt Securities which will be
payable upon declaration of acceleration of the Maturity
thereof;
(13) if applicable, that such Offered Debt Securities are defeasible
as provided in the Indenture;
(14) whether such Offered Debt Securities are convertible into or
exchangeable for common stock, preferred stock or other
securities and the terms and conditions upon which such
conversion or exchange will be effected;
(15) whether such Offered Debt Securities will be issuable in whole
or in part in the form of one or more Global Securities and, if
so, the Depositary or Depositaries for such Global Security or
Global Securities and any circumstances other than those
described under "Global Securities" in which any such Global
Security may be transferred to, and registered and exchanged
for Securities registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof
and in which any such transfer may be registered;
(16) any addition to, or modification or deletion of, any Events of
Default or covenants provided for with respect to the Offered
Debt Securities;
(17) the terms, if any, pursuant to which the Offered Debt
Securities will be made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness
of Rouse, and the definition of any such Senior Indebtedness;
and
(18) any other terms of such Offered Debt Securities not
inconsistent with the provisions of the Indenture. (Section
301)
Unless otherwise indicated in the prospectus supplement relating to
Offered Debt Securities, principal of and any premium or interest on the
debt securities will be payable, and the debt securities will be
exchangeable and transfers thereof will be registrable, at the office of
the Trustee at its principal executive offices (see "Concerning the
Trustee"), provided that, at the option of Rouse, payment of interest may
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register. (Sections 301, 305 and 1002) Any payment
of principal and any premium or interest required to be made on an Interest
Payment Date, Redemption Date or at Maturity which is not a Business Day
need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest
Payment Date, Redemption Date or at Maturity, as the case may be, and no
interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Maturity. (Section 113)
Unless otherwise indicated in the prospectus supplement relating to
Offered Debt Securities, the debt securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 or any
integral multiple thereof. (Section 302) No service charge will be made for
any transfer or exchange of the debt securities, but Rouse may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Section 305)
Debt securities may be issued under the Indenture as Original Issue
Discount Securities (as defined below) to be offered and sold at a
substantial discount from their stated principal amount. In addition, under
Treasury Regulations it is possible that debt securities which are offered
and sold at their stated principal amount would, under certain
circumstances, be treated as issued at an original issue discount for
federal income tax purposes. Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount
Securities (or other debt securities treated as issued at an original issue
discount) will be described in the prospectus supplement relating thereto.
"Original Issue Discount Security" means a security, including any security
that does not provide for the payment of interest prior to Maturity, which
is issued at a price lower than the principal amount thereof and which
provides that upon redemption or acceleration of the Stated Maturity
thereof an amount less than the principal amount thereof shall become due
and payable. (Section 101)
GLOBAL SECURITIES
The debt securities of a series may be issued in the form of one or
more Global Securities that will be deposited with a Depositary or its
nominee identified in the prospectus supplement relating to the Offered
Debt Securities. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of Outstanding Debt Securities of the series
to be represented by such Global Security or Securities.
Unless and until it is exchanged in whole or in part for debt
securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for
such Global Security to a nominee of such Depositary and except in the
circumstances described in the prospectus supplement relating to the
Offered Debt Securities. (Sections 204 and 305) The specific terms of the
depositary arrangement with respect to a series of debt securities will be
described in the prospectus supplement relating to such series.
CERTAIN COVENANTS
LIMITATION ON THE INCURRENCE OF DEBT. Rouse and its consolidated
Subsidiaries may not incur any Debt if, after giving effect to such
Incurrence, the Ratio Calculation is less than 1.1 to 1.
Notwithstanding the foregoing paragraph, Rouse and its consolidated
Subsidiaries may incur the following additional Debt without regard to the
foregoing limitation (although the additional Debt so incurred will be
included in the determination of the Consolidated Coverage Ratio
thereafter):
(i) the Debt Securities issued under the Indenture not to exceed an
aggregate issue price of $150,000,000;
(ii) intercompany Debt (representing Debt to which the only parties
are Rouse and any of its consolidated Subsidiaries (but only so
long as such Debt is held solely by any of Rouse and its
consolidated Subsidiaries));
(iii) any drawings or redrawings under lines of credit existing on
the date of the Indenture and any new lines of credit or
replacements, amendments or extensions of existing lines of
credit, provided, however, that the maximum amount that may be
drawn under all lines of credit pursuant to this clause (iii)
may not at any time exceed the maximum amount that may be drawn
under all lines of credit that exist as of the date of the
Indenture;
(iv) refinancings, renewals, refundings or extensions of any Debt,
in any case in an amount not to exceed the principal amount of
the Debt so refinanced plus any prepayment premium or accrued
interest, provided that
(a) such refinancing Debt is either
(I) Debt of Rouse that ranks equally with or junior
to the Debt being refinanced,
(II) Debt of a Subsidiary that Rouse or another
Subsidiary guarantees or
(III) Debt of a Subsidiary and
(b) such refinancing Debt (giving effect to any right of the
holder thereof to require, directly or indirectly, an
early repayment, defeasance or retirement of such Debt)
either has a weighted average life equal to or longer
than the remaining weighted average life of the Debt
being refinanced or has a minimum term of five years;
(v) third party Debt of a Subsidiary, including Debt of a
Subsidiary that carries a Rouse guarantee of repayment,
directly relating to the development of projects or the
expansion, renovation or improvement of existing properties;
(vi) third party Debt of a Subsidiary directly relating to the
acquisition of assets;
(vii) reimbursement obligations under letters of credit, bankers'
acceptances or similar facilities, provided that at the time of
incurring any additional obligations pursuant to this clause
(vii) the amount of all such obligations, whether or not
currently due, aggregate at any time less than 5% of
Consolidated Net Tangible Assets at such date;
(viii) Debt that by its terms is subordinate in right of payment to
the other Debt of Rouse, provided, however, that, pursuant to
clauses (i) through (ix), the aggregate issue price of such
subordinated Debt may not at any time exceed the aggregate
principal amount of such subordinated Debt as of the date of
the Indenture plus $100,000,000;
(ix) Attributable Debt; and
(x) in addition to Debt referred to in clauses (i) through (ix)
above, Debt in the aggregate principal amount of $50,000,000
which is to be used only for working capital purposes. (Section
1008)
LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Rouse will not, nor will it
permit any Restricted Subsidiary to, enter into any arrangement with any
bank, insurance company or other lender or investor (not including Rouse or
any consolidated Subsidiary) or to which any such lender or investor is a
party, providing for the leasing by Rouse or any such Restricted Subsidiary
for a period, including renewals, in excess of three years, of any
Principal Property owned by Rouse or such Restricted Subsidiary, which has
been or is to be sold or transferred more than one year after either the
acquisition thereof or the completion of construction and commencement of
full operation thereof by Rouse or any such Restricted Subsidiary, to such
lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such Principal
Property (herein referred to as a "Sale/Leaseback Transaction") unless (A)
the aggregate amount of Attributable Debt for the proposed and all existing
Sale/Leaseback Transactions is less than 10% of Consolidated Net Tangible
Assets and (B) if the Ratio Calculation is less than 1.1 to 1 after giving
effect to the proposed Sale/Leaseback Transaction, Rouse and its
Subsidiaries, within 270 days after the sale or transfer shall have been
made by Rouse or by any such Restricted Subsidiary, must apply an amount
equal to the net proceeds of the sale of the Principal Property sold and
leased back pursuant to such arrangement to either (or a combination of)
(x) the purchase of property, facilities or equipment (other than the
property, facilities or equipment involved in such Sale/Leaseback
Transaction) or (y) the retirement of Debt of Rouse or a Restricted
Subsidiary, including the debt securities issued under the Indenture, which
either has an initial term of greater than 12 months or is a bona fide
acquisition loan or a construction or bridge loan entered in connection
with a construction project or other real estate development. (Section
1009)
CERTAIN DEFINITIONS
"Asset" means, with respect to one or more transactions occurring
within any 12-month period, any asset or group of assets of Rouse or its
Subsidiaries (including, but not limited to, all balance sheet items and
all intangible assets including management contracts, goodwill and trade
secrets) with a fair market or book value, whichever is larger, greater
than 5% of Consolidated Net Tangible Assets on the date of such
transaction.
"Attributable Debt" shall mean, as to any particular lease under which
Rouse or any Restricted Subsidiary is at the time liable, at any date as of
which the amount thereof is to be determined, the lesser of (i) the fair
value of the property subject to such lease (as determined by certain
officers of Rouse as set forth in the Indenture) or (ii) the total net
amount of rent required to be paid by Rouse under such lease during the
remaining term thereof, discounted from the respective due dates thereof to
such date at the rate of interest per annum equal to 8.5%, compounded
semi-annually. The net amount of rent required to be paid under any such
lease for any such period shall be the amount of the rent payable by the
lessee with respect to such period, after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount
shall also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first
date upon which it may be so terminated.
"Capital Lease Obligations" of any Person means the obligations to pay
rent or other amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which
are required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles, and the amount of such
obligations shall be the capitalized amount thereof in accordance with
generally accepted accounting principles and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Consolidated Coverage Ratio" of any Person means for any period the
ratio of (i) EBDT for such period plus Consolidated Interest Expense for
the same period for such Person to (ii) Consolidated Interest Expense for
the same period for such Person.
"Consolidated Interest Expense" means with respect to any Person for
any period the Consolidated Interest Expense included in a consolidated
income statement (without deduction of consolidated interest income) of
such Person for such period (based on the accounting principles reflected
in Rouse's Consolidated Statement of Operations for the nine months ended
September 30, 1994 contained in Rouse's Form 10-Q for such period),
including without limitation or duplication (or, to the extent not so
included, with the addition of):
(i) the portion of any rental obligation in respect of any Capital
Lease Obligation allocable to interest expense in accordance
with generally accepted accounting principles;
(ii) the amortization of Debt discount;
(iii) any payments or fees (other than up-front fees) with respect to
letters of credit, bankers' acceptances or similar facilities;
(iv) fees (other than up-front fees) with respect to interest rate
swap or similar agreements, or foreign currency hedge, exchange
or similar agreements;
(v) the interest portion of any rental obligation with respect to
any Sale/Leaseback Transaction (determined as if such
obligations were treated as a Capital Lease Obligation); and
(vi) any dividends attributable to any equity security which may be
converted into a debt security of Rouse at any time or is
mandatorily redeemable for cash within 20 years from its
initial issuance.
"Consolidated Net Tangible Assets" shall mean the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom
(i) all current liabilities (excluding any thereof which are by
their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as
of which the amount thereof is being computed and excluding
current maturities of long-term indebtedness and Capital Lease
Obligations) and
(ii) all goodwill, all as shown in the consolidated balance sheet of
Rouse and its Subsidiaries as of the end of the latest fiscal
quarter for which consolidated Financial Statements are
available.
"Debt" means (without duplication), with respect to any Person:
(i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets
or businesses, but excluding any trade payments and other
accrued current liabilities arising in the ordinary course of
business;
(iii) every currently due reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of such Person;
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property (but excluding trade
accounts payable and other accrued current liabilities arising
in the ordinary course of business which are not overdue by
more than 90 days or which are being contested in good faith);
(v) every Capital Lease Obligation of such Person;
(vi) the maximum fixed redemption or repurchase price of any equity
security which may be converted into a debt security of such
Person at any time or is mandatorily redeemable for cash within
20 years from its initial issuance; and
(vii) every obligation of the type referred to in clauses (i) through
(vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or
for which such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise.
"EBDT" shall mean Earnings Before Depreciation and Deferred Taxes from
Operations for Rouse and its consolidated Subsidiaries based on the
accounting principles reflected in Rouse's Consolidated Statement of
Operations for the nine months ended September 30, 1994 contained in
Rouse's Form 10-Q for such period, and assuming that any dividends paid on
any equity security shall not be deducted in calculating EBDT unless such
equity security may be converted into a debt security at any time or is
mandatorily redeemable for cash within 20 years from its initial issuance.
"incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Debt or
other obligation or the recording, as required pursuant to generally
accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of any such Person (and "incurrence,"
"incurred," "incurrable" and "incurring" shall have meanings correlative to
the foregoing); provided that a change in generally accepted accounting
principles that results in an obligation of such Person that exists at such
time becoming Debt shall not be deemed an incurrence of such Debt.
"Principal Property" shall mean any land, and any building, structure
or other facility, together with the land upon which it is erected and
fixtures comprising a part thereof, in each case the net book value of
which on the date as of which the determination is being made exceeds 2% of
Consolidated Net Tangible Assets at such date; provided, however, that
Principal Property shall not include:
(i) any building, structure or facility which, in the opinion of
the Board of Directors of Rouse, is not of material importance
to the total business conducted by Rouse and its Subsidiaries
as an entirety; or
(ii) any portion of a particular building, structure or facility
which, in the opinion of the Board of Directors of Rouse, is
not of material importance to the use or operation of such
building, structure or facility.
"Ratio Calculation" shall mean that, immediately after either the
incurrence of such Debt or the sale of or other disposal of such Asset, as
the case may be, Rouse, or its agent, shall calculate the Consolidated
Coverage Ratio for the four full fiscal quarter period preceding such
incurrence, sale or disposal for which consolidated Financial Statements
are available. In making such calculation, (a) the Consolidated Interest
Expense attributable to interest on any Debt to be incurred bearing a
floating interest rate shall be computed on a pro forma basis as if the
rate in effect on the date of computation had been the applicable rate for
the entire period and (b) with respect to any Debt which bears, at the
option of Rouse, a fixed or floating rate of interest, Rouse shall apply
the same rate for purposes of calculating the Consolidated Coverage Ratio
as it chooses to apply to the Debt. In addition, such calculation shall be
performed using the consolidated Financial Statements which shall be
reformulated on a pro forma basis as if such Debt had been incurred or such
Asset had been sold or otherwise disposed of, as the case may be, at the
beginning of such four fiscal quarter period. Such reformulation shall give
effect, as if the relevant event had occurred at the beginning of such four
fiscal quarter period, to any actual use of proceeds of such Debt being
incurred or Asset being sold or disposed of and to any incurrences or
repayments of Debt and other sales, disposals or acquisitions of Assets
occurring after the end of the last quarter for which there are
consolidated Financial Statements available. If any portion of the proceeds
has not been used, it shall be assumed that such portion of the proceeds
was invested in one-year Treasury bills on the first day of such four
fiscal quarter period.
"Restricted Subsidiary" shall mean any subsidiary of Rouse which has a
50% or greater ownership interest in a Principal Property or Properties.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect
to debt securities of any series issued under the Indenture:
(a) failure to pay principal of or premium, if any, on any debt
security of that series when due;
(b) failure to pay any interest on any debt security of that series
when due, continued for 30 days;
(c) failure to deposit any sinking fund payment, when due, in
respect of any debt security of that series;
(d) failure to perform any other covenant of Rouse in the Indenture
(other than a covenant included in the Indenture solely for the
benefit of a series of debt securities other than that series),
continued for 60 days after written notice as provided in the
Indenture;
(e) certain events in bankruptcy, insolvency or reorganization;
(f) a default under any bond, debenture, note, mortgage, indenture
or other evidence of indebtedness for money borrowed by Rouse
(or by any Subsidiary, the repayment of which Rouse has
guaranteed or for which Rouse is directly responsible or liable
as obligor or guarantor) having an aggregate principal amount
outstanding of at least $10,000,000, whether such indebtedness
now exists or shall hereafter be created, which default shall
have resulted in such indebtedness being declared due and
payable prior to the date on which it would otherwise have
become due and payable, without such acceleration having been
rescinded or annulled within 10 days after written notice as
provided in the Indenture; and
(g) any other Event of Default provided with respect to debt
securities of that series. (Section 501) No Event of Default
with respect to a particular series of debt securities issued
under the Indenture necessarily constitutes an Event of Default
with respect to any other series of debt securities issued
thereunder.
The Trustee shall, within 90 days after the occurrence of a default
with respect to debt securities of any series, give all holders of debt
securities of such series then outstanding notice of all uncured defaults
known to it (the term default to mean the events specified above without
grace periods), provided that, except in the case of a default in the
payment of principal of and any premium or interest on any debt security of
any series, or in the payment of any sinking fund installment with respect
to debt securities of any series, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding
of such notice is in the interest of all holders of debt securities of such
series then outstanding. (Trust Indenture Act of 1939)
If an Event of Default with respect to Outstanding debt securities of
any series shall occur and be continuing, either the Trustee or the Holders
of at least 25% in aggregate principal amount of the Outstanding debt
securities of that series may declare the principal amount (or, if the debt
securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that
series) of all the debt securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect
to debt securities of any series has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority
in principal amount of the Outstanding debt securities of that series may,
under certain circumstances, rescind and annul such acceleration. (Section
502) For information as to waiver of defaults, see "Modification and
Waiver."
Reference is made to the prospectus supplement relating to each series
of Offered Debt Securities which are Original Issue Discount Securities for
the particular provisions relating to acceleration of the Maturity of a
portion of the principal amount of such Original Issue Discount Securities
upon the occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during the default to act with the
required standard of care, to exercise any of its rights or powers under
the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity.
(Section 601) Subject to such provisions for indemnification of the
Trustee, the Holders of a majority in principal amount of the Outstanding
debt securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the debt securities of that series. (Section 512)
Rouse will furnish to the Trustee annually a certificate as to
compliance by Rouse with all conditions and covenants under the Indenture.
(Section 1004)
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
The Indenture permits Rouse to consolidate or merge with or into any
other entity or entities, or to sell, convey or lease all or substantially
all of its Assets to any other entity authorized to acquire and operate the
same; provided, however, that
(i) the Person (if other than Rouse) formed by such consolidation,
or into which Rouse is merged or which acquires or leases
substantially all of the Assets of Rouse, expressly assumes
Rouse's obligations on debt securities issued under the
Indenture and under the Indenture itself,
(ii) Rouse or such successor entity shall not immediately after such
consolidation or merger, or such sale, conveyance or lease, be
in default in the performance of any covenant or condition of
the Indenture,
(iii) Rouse or such successor entity shall not, immediately after
giving effect to such consolidation or merger, or such sale,
conveyance or lease, have a Ratio Calculation of less than 1.1
to 1 and
(iv) certain other conditions are met. (Section 801)
SATISFACTION, DISCHARGE AND DEFEASANCE
The prospectus supplement will state if any defeasance provision will
apply to the Offered Debt Securities.
The Indenture provides that, if applicable, Rouse will be discharged
from any and all obligations in respect of the debt securities of any
series issued under the Indenture (except for certain obligations to
register the transfer or exchange of debt securities of such series, to
replace stolen, lost or mutilated debt securities of such series, to
maintain paying agencies and to hold monies for payment in trust) upon the
deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations (as defined) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
money in an amount sufficient to pay the principal of and any premium and
interest on the debt securities of such series on the respective Stated
Maturities in accordance with the terms of the Indenture and the debt
securities of such series. Such a trust may only be established if, among
other things, Rouse has delivered to the Trustee an Opinion of Counsel to
the effect that Rouse has received from, or there has been published by,
the Internal Revenue Service a ruling, or there has been a change in tax
law, in either case to the effect that Holders of the debt securities of
such series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit, defeasance
and discharge had not occurred. (Sections 1302 and 1304)
The Indenture provides that, if applicable, Rouse shall be released
from its obligations with respect to such debt securities then outstanding
under Sections 1005 through 1009, inclusive, Section 1011 and Section 801
of the Indenture and such other obligations as shall be set forth in any
supplemental indenture for the debt securities, and the occurrence of an
Event of Default specified in Sections 501(3), 501(4) (with respect to any
of Sections 1005 through 1009, inclusive, Section 1011 and Section 801 and
such other obligations), 501(5) and 501(8) of the Indenture shall be deemed
not to result in an Event of Default, upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations (as defined) which
through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to
pay the principal of and any premium and interest on the debt securities of
such series on the Stated Maturities in accordance with the terms of the
Indenture and the debt securities of such series. The obligations of Rouse
under the Indenture and the debt securities of such series other than with
respect to the covenants referred to above and the Events of Default other
than the Event of Default referred to above shall remain in full force and
effect. Such a trust may only be established if, among other things, Rouse
has delivered to the Trustee an Opinion of Counsel (who may be an employee
of or counsel for Rouse) to the effect that the Holders of the debt
securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain covenants and Events of Default and will be subject to federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit and defeasance had not
occurred. In the event Rouse exercises this option with respect to the debt
securities of any series as described above and the debt securities of such
series are declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the debt
securities of such series at the time of their Stated Maturity but may not
be sufficient to pay amounts due on the debt securities of such series at
the time of the acceleration resulting from such Event of Default. However,
Rouse shall remain liable for such payments. (Sections 1303 and 1304)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by Rouse and
the Trustee with the consent of the Holders of a majority in principal
amount of the Outstanding debt securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding debt
security affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any debt security,
(b) reduce the principal amount of, or any premium or interest on,
any debt security,
(c) reduce the amount of principal of an Original Issue Discount
Security or other security payable upon acceleration of the
Maturity thereof,
(d) change the place or currency of payment of principal of, or any
premium or interest on, any debt security,
(e) impair the right to institute suit for the enforcement of any
payment on or with respect to any debt security,
(f) reduce the percentage in principal amount of Outstanding debt
securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture,
(g) reduce the percentage in principal amount of Outstanding debt
securities of any series necessary for waiver of certain
defaults or
(h) modify such provisions with respect to modification and waiver.
(Section 902)
The Holders of a majority in principal amount of the Outstanding debt
securities of any series may on behalf of the Holders of all debt
securities of that series waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of
or premium, if any, or interest on any debt security of that series or in
respect of a provision which under the Indenture cannot be modified or
amended without the consent of the Holder of each Outstanding debt security
of that series affected. (Section 513)
GOVERNING LAW
The Indenture and the debt securities will be governed by, and
construed in accordance with, the law of the State of New York, but without
regard to principles of conflict of laws. (Section 112)
CONCERNING THE TRUSTEE
The First National Bank of Chicago, a national banking association
duly organized and existing under the laws of the United States of America,
with its principal offices at One First National Plaza, Suite 0126,
Chicago, Illinois 60670, will act as Trustee for the benefit of the Holders
of the debt securities under the Indenture. The Trustee also serves as the
trustee under the indenture in respect of (i) Rouse's $120,000,000
aggregate principal amount of 8.5% Notes due January 15, 2003, (ii) Rouse's
$150,000,000 aggregate issue amount of Medium-Term Notes due Nine Months or
More from Date of Issue and (iii) $141,753,000 aggregate principal amount
of 9 1/4% Junior Subordinated Debentures due 2025. Rouse maintains other
banking relationships with the Trustee in the ordinary course of business,
including (i) maintaining a $450,000,000 unsecured revolving line of credit
in which the Trustee is a participating lender and the Administrative
Agent, and a $350,000,000 unsecured term loan (which is subject to
reduction in certain circumstances) that provides bridge financing for
certain acquisitions by Rouse, as to which term loan the Trustee is a
participating lender and the Administrative Agent and (ii) obtaining other
loans from the Trustee.
SELLING SECURITYHOLDER
All of the shares of common stock (the "Shares") and notes (the
"Notes") of Rouse offered by the selling securityholder (collectively, the
"Selling Securityholder Securities") are beneficially owned by Teachers
Insurance and Annuity Association of America, a New York corporation, and
were issued to the selling securityholder in connection with the sale in
November, 1998 by the selling securityholder to Rouse of the selling
securityholder's interests in certain real property previously jointly
owned by the selling securityholder and Rouse through Rouse-Teachers
Properties, Inc., a Delaware corporation. In addition to the joint
ownership of this real property and the ownership of the Shares, the
selling securityholder has acted as a mortgage lender to Rouse with respect
certain real property owned by Rouse and certain of its affiliates within
the past three years. Other than the joint ownership of this real property,
the ownership of the Shares and the financing arrangements referred to
above, the selling securityholder has had no material relationship with
Rouse or any of its affiliates within the past three years. In addition to
the Shares, the selling securityholder beneficially owns the number of
shares of common stock set forth in the table below. Since the selling
securityholder may sell all, some or none of the Shares, no estimate can be
made of the aggregate number of Shares that are to be offered hereby or
that will be beneficially owned by the selling securityholder upon
completion of the offering contemplated by this prospectus. The terms of
Notes will be described in a prospectus supplement to this prospectus.
MAXIMUM AGGREGATE
NUMBER OF SHARES NUMBER OF SHARES
SELLING HELD AT WHICH MAY
SECURITYHOLDER NOVEMBER 30, 1998 BE OFFERED
----------------------- ----------------- ----------------------
Teachers Insurance and
Annuity Association of
America 3,545,782 3,525,782
PLAN OF DISTRIBUTION
SALE OF SECURITIES BY ROUSE
Rouse may sell securities to or through one or more underwriters or
dealers and also may sell securities directly to institutional investors or
other purchasers, or through agents.
The distribution of the securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with the sale of securities, underwriters or agents may
receive compensation from Rouse or from purchasers of securities for whom
they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of securities may be deemed to be
underwriters, and any discounts or commissions received by them from Rouse
and any profit on the resale of securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received
from Rouse will be described, in the related prospectus supplement.
Under agreements which may be entered into by Rouse, underwriters and
agents who participate in the distribution of securities may be entitled to
indemnification by Rouse against certain liabilities, including liabilities
under the Securities Act, or to contribution by Rouse with respect to
payments they may be required to make in respect thereof.
If so indicated in the related prospectus supplement, Rouse will
authorize underwriters or other persons acting as Rouse's agents to solicit
offers by certain institutions to purchase securities from Rouse pursuant
to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by Rouse. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase
of the securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in
respect of the validity or performance of such contracts.
Until the distribution of the securities is completed, the rules of
the Commission may limit the ability of underwriters and certain selling
group members to bid for and purchase the securities. As an exception to
these rules, underwriters are permitted to engage in certain transactions
that stabilize the price of the securities. Such transactions consist of
bids or purchases for the purpose of pegging, fixing or maintaining the
price of the securities.
If any underwriters create a short position in the securities in
connection with the offering, i.e., if they sell more securities than are
set forth on the cover page of the applicable prospectus supplement, the
underwriters may reduce that short position by purchasing securities in the
open market.
Underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase securities in the
open market to reduce the underwriters' short position or to stabilize the
price of the securities, they may reclaim the amount of the selling
concession from the selling group members who sold those securities as part
of the offering.
In general, purchases of a security for the purpose of stabilization
or to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases. The imposition of
a penalty bid might also have an effect on the price of the securities to
the extent that it discourages resales of the securities.
Neither Rouse nor any underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the securities. In
addition, neither Rouse nor any underwriter makes any representation that
the underwriter will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
The securities may or may not be listed on a national securities
exchange (other than the common stock, which is listed on the NYSE). Any
common stock sold pursuant to a prospectus supplement will be listed on the
NYSE, subject to official notice of issuance. No assurances can be given
that there will be an active trading market for the securities.
Certain of the underwriters or agents and their associates may engage
in transactions with and perform services for Rouse or its affiliates in
the ordinary course of their respective businesses.
SALE OF SELLING SECURITYHOLDER SECURITIES BY THE SELLING SECURITYHOLDER
The Selling Securityholder Securities may be sold from time to time by
the selling securityholder, or by pledgees, donees, transferees or other
successors in interest, if any, who acquire the Selling Securityholder
Securities. Sales of the Shares may be made on one or more exchanges or in
the over-the-counter market, or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. Sales of the Notes may be made in negotiated
transactions. The Shares may be sold through one or more of the following
transactions: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d)
ordinary brokerage transactions and transactions in which the broker
solicits purchasers. The Notes may be sold through one or more of the
following types of transactions: (a) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to
this prospectus; and (b) transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the selling
securityholder may arrange for other brokers or dealers to participate.
Brokers or dealers may receive compensation from the selling securityholder
or from purchasers for whom they act in the form of discounts, concessions
or commissions. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales.
Upon Rouse being notified by the selling securityholder that any
material arrangement has been entered into with a broker-dealer for the
sale of Selling Securityholder Securities through a block trade, special
offering, exchange distribution, secondary distribution or a purchase by a
broker or dealer, a supplemented prospectus will be filed, if required,
pursuant to Rule 424(c) under the Securities Act, disclosing (i) the name
of the selling securityholder and of the participating broker-dealer(s),
(ii) the number of Shares or the principal amount of Notes involved, (iii)
the price at which such Selling Securityholder Securities were sold, (iv)
the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated
by reference in this prospectus and (vi) other facts material to the
transaction.
The selling securityholder has agreed to pay any brokerage fees or
commissions, underwriting discounts and fees of any counsel for the selling
securityholder in connection with the sale of the Selling Securityholder
Securities. All expenses in connection with the registration of the Selling
Securityholder Securities under this prospectus will be paid by Rouse.
Rouse has agreed to indemnify the selling securityholder for certain
liabilities under the Securities Act.
The securities laws of a particular state might require that the
Selling Securityholder Securities be sold in that state only through
registered or licensed brokers or dealers. In addition, in certain states,
the Selling Securityholder Securities may not be sold unless they have been
registered or qualified for sale in such states or an exemption from such
registration or qualification requirement is available and is complied
with.
<PAGE>
EXPERTS
The consolidated financial statements and schedules of Rouse and its
subsidiaries as of December 31, 1997 and 1996, and for each of the years in
the three-year period ended December 31, 1997, and the statements of
revenues and certain expenses of The Fashion Show, Westdale Mall and Towson
Town Center for the year ended December 31, 1997, incorporated by reference
in this registration statement have been incorporated by reference in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein and upon the authority
of said firm as experts in accounting and auditing. The reports on the
statements of revenues and certain expenses of The Fashion Show, Westdale
Mall and Towson Town Center contain a paragraph that states that the
statements of revenues and certain operating expenses were prepared for the
purpose of complying with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission and are not intended to be a complete presentation of
revenues and expenses.
The statements of revenues and certain operating expenses of the
Fashion Place Property, Valley Fair Property and Park Meadows Mall Property
for the year ended December 31, 1997, incorporated by reference in this
registration statement have been incorporated by reference in reliance upon
the reports of PricewaterhouseCoopers LLP, independent accountants,
incorporated by reference herein and upon the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the common stock and the preferred stock will be
passed upon for Rouse by Bruce I. Rothschild, Esq., Vice President and
General Counsel of Rouse. The validity of the debt securities will be
passed upon for Rouse by Fried, Frank, Harris, Shriver & Jacobson (a
partnership including professional corporations), New York, New York.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
Securities and Exchange Commission registration fee...... $ 0
Printing expenses........................................ 0
Rating agency fees....................................... 0
New York Stock Exchange listing fee...................... 0
Trustee's fees........................................... 0
Legal fees and expenses.................................. 0
Accounting expenses...................................... 0
Blue Sky fees and expenses............................... 0
Other.................................................... 0
---------
Total.............................................. $ 0
=========
- ----------
* The amounts indicated in the table reflect the incremental additional
expenses associated with the issuance and distribution of securities
under this Registration Statement. As all the securities registered
under this Registration Statement were carried forward from Rouse's
Registration Statement on Form S-3 (No. 333-51555), reference is made
to such registration statement for the original estimate of the
expenses of issuance and distribution.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the Bylaws of Rouse provides that directors and officers
of Rouse shall be indemnified by Rouse to the fullest extent permitted by
Maryland law as now or hereafter in force, including the advance of related
expenses. If any determination is required under applicable law as to
whether a director or officer is entitled to indemnification, such
determination shall be made by independent legal counsel retained by Rouse
and appointed by either the Board of Directors or the Chief Executive
Officer. Paragraph (f) of Article Seventh of the Amended and Restated
Articles of Incorporation of Rouse provides that to the fullest extent
permitted by Maryland statutory or decisional law, as amended or
interpreted, no director or officer of Rouse shall be personally liable to
Rouse or its stockholders for money damages. A copy of Section 2-418 of the
Corporations and Associations Article of the Annotated Code of Maryland is
incorporated by reference into this registration statement.
Rouse maintains directors and officers insurance on behalf of its
directors, officers and certain other persons against any liability
asserted against them in any such capacity. The form of Underwriting
Agreement contained in Exhibit 1.1 provides for indemnification of the
directors and officers signing the registration statement and certain
controlling persons of Rouse against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended, in certain
instances by each underwriter participating in an offering of preferred
stock.
ITEM 16. EXHIBITS
Set forth below is a list of the exhibits included as part of this
registration statement.
EXHIBIT
NO. DESCRIPTION
------- -----------
1.1 Form of Underwriting Agreement for common stock or preferred
stock (which is incorporated by reference from the Exhibits to
Rouse's Form S-3 Registration Statement (No. 333-51555))
1.2 Form of Underwriting Agreement for debt securities (which is
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-51555))
1.3 Form of Distribution Agreement for debt securities (which is
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-51555))
4.1 Charter of Rouse, as amended and restated effective May 27,
1988 (which is incorporated by reference from the Exhibits to
Rouse's Form 10-K Annual Report for the fiscal year ended
December 31, 1988 (see Commission File No. 0-1743))
4.2 Articles of Amendment to the Charter of Rouse, effective
January 10, 1991 (which are incorporated by reference from the
Exhibits to Rouse's Form 10-K Annual Report for the fiscal year
ended December 31, 1990 (see Commission File No. 0-1743))
4.3 The Articles Supplementary to the Charter of Rouse, dated
February 17, 1993 (which are incorporated by reference from the
Exhibits to Rouse's Form 10-K Annual Report for the fiscal year
ended December 31, 1992 (see Commission File No. 0-1743))
4.4 The Articles Supplementary to the Charter of Rouse, dated
September 26, 1994 (which are incorporated by reference from
the Exhibits to Rouse's Form S-3 Registration Statement (No.
33-57707))
4.5 The Articles Supplementary to the Charter of Rouse, dated
December 27, 1994 (which are incorporated by reference from the
Exhibits to Rouse's Form S-3 Registration Statement (No.
33-57707))
4.6 The Articles Supplementary to the Charter of Rouse, dated June
5, 1996, relating to Rouse's Increasing Rate Cumulative
Preferred Stock, par value $0.01 per share (which are
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-20781))
4.7 The Articles Supplementary to the Charter of Rouse, dated June
11, 1996, relating to Rouse's 10.25% Junior Preferred Stock,
1996 Series, par value $0.01 per share (which are incorporated
by reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-20781))
4.8 The Articles Supplementary to the Charter of Rouse, dated
February 21, 1997, relating to Rouse's Series B Convertible
Preferred Stock, par value $0.01 per share (which are
incorporated by reference from the Exhibits to Rouse's Current
Report on Form 8-K, dated February 26, 1997 (see Commission
File No. 0-1743))
4.9 The Bylaws of Rouse, as amended November 19, 1996 and January
30, 1997 (which are incorporated by reference from the Exhibits
to Rouse's Form S-3 Registration Statement (No. 333-20781))
4.10 Contingent Stock Agreement, effective as of January 1, 1996, by
Rouse in favor of and for the benefit of the Holders and
Representatives named therein (which is incorporated by
reference to Exhibit 2.3 to Rouse's Form S-4 Registration
Statement (No. 333-1693)).
4.11 Indenture, dated as of February 24, 1995, between Rouse and The
First National Bank of Chicago, as trustee (which is
incorporated by reference from the Exhibits to Rouse's Form
10-K Annual Report for the fiscal year ended December 31, 1995
(see Commission File No. 0-1743))
4.12 Form of Fixed Rate Medium-Term Note (which is incorporated by
reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-51555))
4.13 Form of Floating Rate Medium-Term Note (which is incorporated
by reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-51555))
4.14 Form of 6.94% Note due November 30, 1998 of Rouse**
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson*
5.2 Opinion of Bruce I. Rothschild, Esq., Vice President and
General Counsel of Rouse*
12.1 Computation of Ratio of Earnings to Fixed Charges**
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements**
23.1 Consent of KPMG Peat Marwick LLP**
23.2 Consent of Fried, Frank, Harris, Shriver & Jacobson (included
in Exhibit 5.1 above)
23.3 Consent of Bruce I. Rothschild, Esq., Vice President and
General Counsel of Rouse (included in Exhibit 5.2 above)
23.4 Consent of KPMG Peat Marwick LLP**
23.5 Consent of PricewaterhouseCoopers LLP**
24.1 Power of Attorney, effective September 24, 1998*
24.2 Power of Attorney, effective September 24, 1998*
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as trustee
under the Indenture*
99.1 Section 2-418 of the Corporations and Associations Article of
the Annotated Code of Maryland (which is incorporated by
reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 33-56646))
- ----------------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement;
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act of 1933 if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such information
in this registration statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense
of any action, suit, or proceeding) is asserted by such director, officer,
or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the questions whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to provide to the
underwriter, at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required
by the underwriter to permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustees to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Rouse
Company certifies that it has duly caused this Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-67137) to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of
Howard, State of Maryland, on the 30th day of November, 1998.
THE ROUSE COMPANY
By: /s/ Anthony W. Deering
---------------------------------------
Anthony W. Deering
Chairman of the Board,
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-67137)
has been signed by the following persons in the capacities and on the date
indicated.
Principal Executive Officer:
/s/ Anthony W. Deering Chairman of the Board, November 30, 1998
- ------------------------- President and Chief
Anthony W. Deering Executive Officer
Principal Financial Officer:
/s/ Jeffrey H. Donahue Senior Vice President November 30, 1998
- ------------------------- and Chief Financial
Jeffrey H. Donahue Officer
Principal Accounting Officer:
/s/ George L. Yungmann Senior Vice President November 30, 1998
- ------------------------- and Controller
George L. Yungmann
<PAGE>
THE BOARD OF DIRECTORS
David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
Mathias J. DeVito, Juanita T. James, William R. Lummis, Thomas J. McHugh,
Hanne M. Merriman, Roger W. Schipke, Alexander B. Trowbridge and Gerard
J.M. Vlak.
/s/ Anthony W. Deering For himself November 30, 1998
- ------------------------ and as
Anthony W. Deering Attorney-in-Fact
Attorney-in-Fact for the
above-named
members of
the Board of
Directors
<PAGE>
EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
1.1 Form of Underwriting Agreement for common stock or preferred
stock (which is incorporated by reference from the Exhibits to
Rouse's Form S-3 Registration Statement (No. 333-51555))
1.2 Form of Underwriting Agreement for debt securities (which is
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-51555))
1.3 Form of Distribution Agreement for debt securities (which is
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-51555))
4.1 Charter of Rouse, as amended and restated effective May 27,
1988 (which is incorporated by reference from the Exhibits to
Rouse's Form 10-K Annual Report for the fiscal year ended
December 31, 1988 (see Commission File No. 0-1743))
4.2 Articles of Amendment to the Charter of Rouse, effective
January 10, 1991 (which are incorporated by reference from the
Exhibits to Rouse's Form 10-K Annual Report for the fiscal year
ended December 31, 1990 (see Commission File No. 0-1743))
4.3 The Articles Supplementary to the Charter of Rouse, dated
February 17, 1993 (which are incorporated by reference from the
Exhibits to Rouse's Form 10-K Annual Report for the fiscal year
ended December 31, 1992 (see Commission File No. 0-1743))
4.4 The Articles Supplementary to the Charter of Rouse, dated
September 26, 1994 (which are incorporated by reference from
the Exhibits to Rouse's Form S-3 Registration Statement (No.
33-57707))
4.5 The Articles Supplementary to the Charter of Rouse, dated
December 27, 1994 (which are incorporated by reference from the
Exhibits to Rouse's Form S-3 Registration Statement (No.
33-57707))
4.6 The Articles Supplementary to the Charter of Rouse, dated June
5, 1996, relating to Rouse's Increasing Rate Cumulative
Preferred Stock, par value $0.01 per share (which are
incorporated by reference from the Exhibits to Rouse's Form S-3
Registration Statement (No. 333-20781))
4.7 The Articles Supplementary to the Charter of Rouse, dated June
11, 1996, relating to Rouse's 10.25% Junior Preferred Stock,
1996 Series, par value $0.01 per share (which are incorporated
by reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-20781))
4.8 The Articles Supplementary to the Charter of Rouse, dated
February 21, 1997, relating to Rouse's Series B Convertible
Preferred Stock, par value $0.01 per share (which are
incorporated by reference from the Exhibits to Rouse's Current
Report on Form 8-K, dated February 26, 1997 (see Commission
File No. 0-1743))
4.9 The Bylaws of Rouse, as amended November 19, 1996 and January
30, 1997 (which are incorporated by reference from the Exhibits
to Rouse's Form S-3 Registration Statement (No. 333-20781))
4.10 Contingent Stock Agreement, effective as of January 1, 1996, by
Rouse in favor of and for the benefit of the Holders and
Representatives named therein (which is incorporated by
reference to Exhibit 2.3 to Rouse's Form S-4 Registration
Statement (No. 333-1693)).
4.11 Indenture, dated as of February 24, 1995, between Rouse and The
First National Bank of Chicago, as trustee (which is
incorporated by reference from the Exhibits to Rouse's Form
10-K Annual Report for the fiscal year ended December 31, 1995
(see Commission File No. 0-1743))
4.12 Form of Fixed Rate Medium-Term Note (which is incorporated by
reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-51555))
4.13 Form of Floating Rate Medium-Term Note (which is incorporated
by reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 333-51555))
4.14 Form of 6.94% Note due November 30, 1998 of Rouse**
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson*
5.2 Opinion of Bruce I. Rothschild, Esq., Vice President and
General Counsel of Rouse*
12.1 Computation of Ratio of Earnings to Fixed Charges**
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements**
23.1 Consent of KPMG Peat Marwick LLP**
23.2 Consent of Fried, Frank, Harris, Shriver & Jacobson (included
in Exhibit 5.1 above)
23.3 Consent of Bruce I. Rothschild, Esq., Vice President and
General Counsel of Rouse (included in Exhibit 5.2 above)
23.4 Consent of KPMG Peat Marwick LLP**
23.5 Consent of PricewaterhouseCoopers LLP**
24.1 Power of Attorney, effective September 24, 1998*
24.2 Power of Attorney, effective September 24, 1998*
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as trustee
under the Indenture*
99.1 Section 2-418 of the Corporations and Associations Article of
the Annotated Code of Maryland (which is incorporated by
reference from the Exhibits to Rouse's Form S-3 Registration
Statement (No. 33-56646))
- ----------------------
* Previously filed.
** Filed herewith.
EXHIBIT 4.14
IF THE HOLDER OF THIS NOTE IS THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY, THIS NOTE IS A GLOBAL NOTE AND THE FOLLOWING LEGEND APPLIES:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH NOTE IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN..
THE ROUSE COMPANY
6.94% Notes due November 30, 2008
No. $
--------
THE ROUSE COMPANY, a corporation duly organized and existing under the
laws of the State of Maryland (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of ________________ United States Dollars (U.S.
$___________) on November 30, 2008 and to pay interest thereon from
November 30, 1998 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on May 31 and
November 30 of each year, commencing May 31, 1999, at the rate of 6.94% per
annum, until the principal hereof is paid or made available for payment.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture (as defined
on the reverse side), be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be May 15 or
November 15 (whether or not a Business Day) next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on
this Security will be made at the Corporate Trust Office of the Trustee, in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made
by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Reference is made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officers and its
corporate seal to be affixed or imported thereon.
THE ROUSE COMPANY
By:
----------------------------
Jeffrey H. Donahue
Senior Vice President and
Chief Financial Officer
Attest:
- ------------------------
David R. Schwiesow
Assistant Secretary
<PAGE>
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By:
----------------------------
Authorized Officer
<PAGE>
Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of February 24, 1995 (herein
called the "Indenture"), between the Company and The First National Bank of
Chicago, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to $58,000,000.
The Securities of this series may be redeemed at any time, in whole or
in part, in increments of $1,000,000. Such redemption shall be at a
Redemption Price equal to the sum of: (i) 100% of the outstanding principal
amount of each Security to be redeemed, (ii) the accrued but unpaid
interest thereon from the most recent Interest Payment Date to (but
excluding) the Redemption Date (computed on the basis of a 360 day year
composed of twelve 30-day months), and (iii) the Make-Whole Premium. The
Make-Whole Premium shall be calculated in the manner specified in Section
203 of the Indenture, but with the discount rate equal to one-half
multiplied by the Treasury Yield plus 50 basis points. Notice of redemption
shall be mailed to the registered holders of the Securities of this series
designated for redemption at their addresses as the same shall appear on
the register for Securities of this series not less than 30 days nor more
than 60 days prior to the date or redemption, subject to all the conditions
and provisions of the Indenture. In the event of redemption of Securities
of this series in part only, new Securities of this series for the amount
of the unredeemed portion hereof shall be issued in the name of the Holder
thereof upon the presentation and cancellation thereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in
the Indenture, provided, however, that the amount due to any Holder of
Securities of this series shall be calculated in the same manner as the
Redemption Price specified in second preceding paragraph.
The Indenture permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Company and the
rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Securities at the
time Outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security
and of any Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities of this series, the Holders
of not less than 25% in principal amount of the Securities of this series
at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and
offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities
of this series at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this
Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the security registrar duly executed
by, the Holder hereof or its attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made to a Holder for any such registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
EXHIBIT 12.1
<TABLE>
<CAPTION>
The Rouse Company and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
Nine months ended
September 30, Year ended December 31,
---------------------- ------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before income taxes,
extraordinary items and cumulative
effect of change in accounting principle $ 85,544 $ 58,442 $ 73,826 $ 43,605 $ 10,169 $ 13,336 $ 3,072
Fixed charges:
Interest costs 155,578 174,127 231,098 230,960 219,838 220,971 219,705
Capitalized interest (16,206) (16,965) (23,608) (10,579) (6,875) (7,388) (8,899)
Amortization of debt issuance costs 1,070 1,478 1,645 2,066 2,527 2,146 2,801
Distributions on Company-obligated
mandatorily redeemable preferred
securities of a trust holding
solely Parent Company
subordinated debt securities 9,539 9,539 12,719 12,719 1,204 -- --
Portion of rental expense
representative of interest factor (1) 4,613 4,949 7,949 8,487 8,266 10,788 15,988
Support for debt service costs
provided to affiliates accounted
for under the equity method -- -- -- -- -- -- 31
Adjustments to earnings (loss):
Minority interest in earnings of
majority-owned subsidiaries
having fixed charges 2,090 2,270 3,178 1,164 2,026 2,234 1,909
Undistributed earnings of less
than 50%-owned subsidiaries -- -- (34) (88) (189) (564) (68)
Previously capitalized interest
amortized into earnings:
Depreciation of operating
properties (2) 3,144 2,972 3,962 3,866 3,764 3,670 3,605
Cost of land sales (3) -- 3,831 5,025 1,778 1,421 1,580 1,627
--------- --------- --------- --------- --------- --------- ---------
Earnings available for
fixed charges $ 245,372 $ 240,643 $ 315,760 $ 293,978 $ 242,151 $ 246,773 $ 239,771
========= ========= ========= ========= ========= ========= =========
Fixed charges:
Interest costs $ 155,578 $ 174,127 $ 231,098 $ 230,960 $ 219,838 $ 220,971 $ 219,705
Amortization of debt issuance costs 1,070 1,478 1,645 2,066 2,527 2,146 2,801
Distributions on Company-obligated
mandatorily redeemable preferred
securities of a trust holding solely
Parent Company subordinated
debt securities 9,539 9,539 12,719 12,719 1,204 -- --
Portion of rental expense represen-
tative of interest factor (1) 4,613 4,949 7,949 8,487 8,266 10,788 15,988
Support for debt service costs
provided to affiliates accounted
for under the equity method -- -- -- -- -- -- 31
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges $ 170,800 $ 190,093 $ 253,411 $ 254,232 $ 231,835 $ 233,905 $ 238,525
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges 1.44 1.27 1.25 1.16 1.04 1.06 1.01
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
EXHIBIT 12.1, continued
The Rouse Company and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(1) Includes (a) 80% of minimum rentals, the portion of such rentals
considered to be a reasonable estimate of the interest factor and (b)
100% of contingent rentals of $1,479,000 and $1,608,000 for the nine
months ended September 30, 1998 and 1997, respectively, and
$3,158,000, $3,844,000, $3,644,000, $6,232,000 and $10,006,000 for the
years ended December 31, 1997, 1996, 1995, 1994 and 1993,
respectively.
(2) Represents an estimate of depreciation of capitalized interest costs
based on the Company's established depreciation policy and an analysis
of interest costs capitalized since 1971.
(3) Represents 10% of cost of Columbia land sales and 5% of the cost of
Summerlin land sales, the portions of such costs considered to be
reasonable estimates of the interest factor prior to 1998. On December
31, 1997 certain wholly owned subsidiaries, including those that
conducted substantially all of the Company's land sales and community
development activities, issued 91% of their voting common stock to The
Rouse Company Incentive Compensation Statutory Trust. These sales were
made at fair value and as part of the Company's plan to meet the
qualifications for REIT status. The Company retained the remaining
voting stock of the ventures and holds shares of nonvoting common
and/or preferred stock which, taken together, comprise substantially
all (at least 98%) of the financial interest in them. As a result of
its disposition of the majority voting interests in the ventures, the
Company began accounting for its investment in them using the equity
method effective December 31, 1997. Accordingly, the period after
December 31, 1997 includes no adjustment for the interest portion of
the cost of land sales.
EXHIBIT 12.2
<TABLE>
<CAPTION>
The Rouse Company and Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements
(dollars in thousands)
Nine Months ended
September 30, Year ended December 31,
---------------------- ------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before income taxes, extraordinary
items and cumulative effect of change
in accounting principle $ 85,544 $ 58,442 $ 73,826 $ 43,605 $ 10,169 $ 13,336 $ 3,072
Fixed charges:
Interest costs 155,578 174,127 231,098 230,960 219,838 220,971 219,705
Capitalized interest (16,206) (16,965) (23,608) (10,579) (6,875) (7,388) (8,899)
Amortization of debt issuance costs 1,070 1,478 1,645 2,066 2,527 2,146 2,801
Distributions on Company-obligated
mandatorily redeemable preferred
securities of a trust holding solely
Parent Company subordinated
debt securities 9,539 9,539 12,719 12,719 1,204 -- --
Portion of rental expense representative
of interest factor (1) 4,613 4,949 7,949 8,487 8,266 10,788 15,988
Support for debt service costs provided
to affiliates accounted for under the
equity method -- -- -- -- -- -- 31
Adjustments to earnings (loss):
Minority interest in earnings of
majority-owned subsidiaries having
fixed charges 2,090 2,270 3,178 1,164 2,026 2,234 1,909
Undistributed earnings of less than
50%-owned subsidiaries -- -- (34) (88) (189) (564) (68)
Previously capitalized interest amortized
into earnings:
Depreciation of operating properties (2) 3,144 2,972 3,962 3,866 3,764 3,670 3,605
Cost of land sales (3) -- 3,831 5,025 1,778 1,421 1,580 1,627
--------- --------- --------- --------- --------- --------- ---------
Earnings available for fixed charges
and Preferred stock dividend
requirements $ 245,372 $ 240,643 $ 315,760 $ 293,978 $ 242,151 $ 246,773 $ 239,771
========= ========= ========= ========= ========= ========= =========
Combined fixed charges and Preferred stock
dividend requirements:
Interest costs $ 155,578 $ 174,127 $ 231,098 $ 230,960 $ 219,838 $ 220,971 $ 219,705
Amortization of debt expense 1,070 1,478 1,645 2,066 2,527 2,146 2,801
Distributions on Company-obligated
mandatorily redeemable preferred
securities of a trust holding solely
Parent Company subordinated debt
securities 9,539 9,539 12,719 12,719 1,204 -- --
Portion of rental expense representative
of interest factor (1) 4,613 4,949 7,949 8,487 8,266 10,788 15,988
Support for debt service costs provided
to affiliates accounted for under
the equity method -- -- -- -- -- -- 31
Preferred stock dividend requirements (4) 9,114 12,125 10,313 17,555 24,402 21,802 18,968
--------- --------- --------- --------- --------- --------- ---------
Total combined fixed charges and Preferred
stock dividend requirements $ 179,914 $ 202,218 $ 263,724 $ 271,787 $ 256,237 $ 255,707 $ 257,493
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to combined fixed charges
and Preferred stock dividend requirements (5) 1.36 1.19 1.20 1.08 -- -- --
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
EXHIBIT 12.2, continued
The Rouse Company and Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements
(1) Includes (a) 80% of minimum rentals, the portion of such rentals
considered to be a reasonable estimate of the interest factor and (b)
100% of contingent rentals of $1,479,000 and $1,608,000 for the nine
months ended September 30, 1998 and 1997, respectively, and $3,158,000
$3,844,000, $3,644,000, $6,232,000 and $10,006,000 for the years ended
December 31, 1997, 1996, 1995, 1994 and 1993, respectively.
(2) Represents an estimate of depreciation of capitalized interest costs
based on the Company's established depreciation policy and an analysis
of interest costs capitalized since 1971.
(3) Represents 10% of cost of Columbia land sales and 5% of cost of
Summerlin land sales, the portions of such costs considered to be
reasonable estimates of the interest factor prior to 1998. On December
31, 1997 certain wholly owned subsidiaries, including those that
conducted substantially all of the Company's land sales and community
development activities, issued 91% of their voting common stock to The
Rouse Company Incentive Compensation Statutory Trust. These sales were
made at fair value and as part of the Company's plan to meet the
qualifications for REIT status. The Company retained the remaining
voting stock of the ventures and holds shares of nonvoting common
and/or preferred stock which, taken together, comprise substantially
all (at least 98%) of the financial interest in them. As a result of
its disposition of the majority voting interests in the ventures, the
Company began accounting for its investment in them using the equity
method effective December 31, 1997. Accordingly, the period after
December 31, 1997 includes no adjustment for the interest portion of
the cost of land sales.
(4) Represents estimated pre-tax earnings required to cover Preferred
stock dividend requirements. Amounts are calculated based on actual
Preferred stock dividends and an estimated effective tax rate of 0%
for the nine months ended September 30, 1998 and for the year ended
December 31, 1997. Amounts are calculated based on actual Preferred
stock dividends and an estimated effective tax rate of 40% for the
nine months ended September 30, 1997 and for the years ended December
31, 1996, 1995, 1994 and 1993. The Company will elect to be taxed as a
REIT beginning in 1998. Management believes that the Company met the
qualifications for REIT status as of December 31, 1997, intends for it
to continue to meet the qualifications in the future and does not
expect the Company will be liable for income taxes or taxes on
"built-in gains" on its assets at the Federal level or in most states
in future years. Accordingly, the Company eliminated substantially all
of its existing deferred tax assets and liabilities at December 31,
1997 and does not expect to provide for Federal or most state deferred
income taxes in 1998 or future years.
(5) Total combined fixed charges and Preferred stock dividend requirements
exceeded the Company's earnings available for combined fixed charges
and Preferred stock dividend requirements by $14,086,000, $8,934,000
and $17,722,000 for the years ended December 31, 1995, 1994 and 1993,
respectively.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
The Rouse Company:
We consent to the incorporation by reference in this registration
statement on Form S-3 of The Rouse Company of our report dated February 28,
1998, on our audits of the consolidated financial statements and schedules
of Rouse and its subsidiaries as of December 31, 1997 and 1996, and for
each of the years in the three-year period ended December 31, 1997, and our
report dated September 15, 1998, on our audit of the statement of revenues
and certain expenses of The Fashion Show for the year ended December 31,
1997. Our report on the statement of revenues and certain expenses of The
Fashion Show contains a paragraph that states that the statement of
revenues and certain operating expenses was prepared for the purpose of
complying with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and is not intended to be a complete presentation of The Fashion
Show's revenues and expenses.
We also consent to the reference to our firm under the heading
"Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
November 30, 1998
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
The Rouse Company:
We consent to the incorporation by reference in the registration
statement (no. 333-67137) on Form S-3 of The Rouse Company of our reports
dated June 8, 1998, with respect to the statements of revenue and certain
expenses of Towson Town Center and Westdale Mall for the year ended
December 31, 1997, which reports appear in the Form 8-K/A of The Rouse
Company, dated November 16, 1998 (date of the earliest event reported
October 7, 1998). Such reports contain a paragraph that states that the
statements of revenue and certain expenses were prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission as described in Note 1. They are not intended to be a complete
presentation of Towson Town Center's and Westdale Mall's revenue and
expenses.
We also consent to the reference to our firm under the heading
"Experts" in the prospectus.
KPMG PEAT MARWICK LLP
San Diego, California
November 30, 1998
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this registration statement
of The Rouse Company on Form S-3 of our report dated June 19, 1998, on our
audit of the statement of revenues and certain expenses of the Fashion
Place Property for the year ended December 31, 1997 which report is
included in the filing on Form 8-K/A filed November 16, 1998. We consent to
the incorporation by reference in this registration statement on Form S-3
of our report dated June 15, 1998, on our audit of the statement of
revenues and certain expenses of the Valley Fair Property for the year
ended December 31, 1997 and of our report dated June 15, 1998, on our audit
of the statement of revenues and certain expenses of the Park Meadows Mall
Property for the year ended December 31, 1997 which reports are included in
the filings on Form 8-K/A dated October 9, 1998 and November 16, 1998. We
also consent to the reference to our firm under the caption "Experts".
PRICEWATERHOUSECOOPERS LLP
Newport Beach, CA
November 30, 1998
