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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 18, 1997
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DEVELOPERS DIVERSIFIED REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 1-11690 34-1723097
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(State or other Jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
34555 Chagrin Boulevard, Moreland Hills, Ohio 44022
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Registrant's telephone number, including area code (216) 247-4700
N/A
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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This Current Report on Form 8-K is being filed for the purpose of filing the
attached Exhibits pursuant to Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Form 8-K
Exhibit No. Description
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<S> <C>
1.1 Purchase Agreement, dated as of March 20, 1997,
between the DDR Pass-Through Asset Trust 1997-1
and UBS Securities LLC.
3.1 Amendment to Amended and Restated Articles of
Incorporation of the Company.
4.1 Loan Agreement dated as of May 15, 1997,
between Community Centers One L.L.C., Community
Centers Two L.L.C., Shoppers World Community
Center, L.P. and Lehman Brothers Holdings Inc.,
d/b/a/ Lehman Capital, a Division of Lehman
Brothers Holdings, Inc.
4.2 Amended and Restated Promissory Note, dated as
of May 15, 1997, between Community Centers Two
L.L.C. and Shoppers World Community Center,
L.P. and Lehman Brothers Holdings Inc., d/b/a/
Lehman Capital, a Division of Lehman Brothers
Holdings, Inc.
4.3 Amended and Restated Promissory Note, dated as
of May 15, 1997, between Community Centers One
L.L.C. and Lehman Brothers Holdings Inc., d/b/a/
Lehman Capital, a Division of Lehman Brothers
Holdings, Inc.
4.4 Amended and Restated Promissory Note, dated as
of May 15, 1997, between Community Centers One
L.L.C. and Lehman Brothers Holdings Inc., d/b/a/
Lehman Capital, a Division of Lehman Brothers
Holdings, Inc.
10.1 Restricted Shares Agreement, dated July 17,
1996, between the Company and Scott A.
Wolstein.
10.2 Performance Units Agreement, dated July 17,
1996, between the Company and Scott A.
Wolstein.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
Date June 18, 1997 /s/ William H. Schafer
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William H. Schafer
Vice President and Chief Financial Officer
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EXHIBIT 1.1
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(an Ohio corporation); and
DDR PASS-THROUGH ASSET TRUST 1997-1
(a New York trust)
7.125 % Pass-Through Asset Trust Securities Due March 15, 2002
PURCHASE AGREEMENT
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Dated as of March 20, 1997
UBS Securities LLC
c/o Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
DDR Pass-Through Asset Trust 1997-1 (the "Trust"), a trust
organized under the laws of the State of New York, confirms its agreement with
UBS Securities LLC (hereinafter, "you" or the "Initial Purchaser") to issue and
sell to you $75,000,000 aggregate principal amount of 7.125% Pass-Through Asset
Trust Securities Due March 15, 2002 (collectively, "PATS" or the
"Certificates"), each such Certificate representing a fractional undivided
beneficial interest in the Trust, and Developers Diversified Realty Corporation
(the "Company") confirms its agreement with you and the Trust with respect to
the issue and sale by the Company and the purchase by the Trust, on the terms
set forth herein, of $75,000,000 aggregate principal amount of 7.125 % Notes due
March 15, 2012 (the "Notes" and, together with the Certificates, the
"Securities") of the Company. The Notes will be the principal asset of the
Trust.
The Certificates will be offered and sold to the Initial
Purchaser without registration under the Securities Act of 1933, as amended (the
"Act"), in reliance upon an exemption from the registration requirements of the
Act. In connection with the sale of the Certificates, the Company has prepared a
final offering circular dated March 20, 1997 (the "Certificates Offering
Circular"), setting forth certain information concerning the Trust, the Company,
the Certificates and the Notes. In connection with the sale of the Notes, the
Company has prepared a final offering circular dated March 20, 1997 (the "Notes
Offering Circular" and, together with the Certificates Offering Circular, the
"Offering Circulars"), setting forth certain information concerning the Company
and the Notes. The Company hereby confirms that it has authorized the use of the
Offering Circulars in connection with the offer and sale of the Securities.
Unless stated to the contrary, all references herein to the Offering Circulars
are to the Offering Circulars as of the date hereof and are not meant to include
any amendment or supplement thereto subsequent to the date hereof.
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The Trust understands that the Initial Purchaser proposes to
make offerings ("Exempt Resales") of the Certificates only on the terms and in
the manner set forth in the Certificates Offering Circular and Section 3 hereof.
as soon as the Initial Purchaser deems advisable after this Agreement has been
executed and delivered only to persons in the United States whom the Initial
Purchaser reasonably believes to be .1 qualified institutional buyers" ("QlBs")
as defined in Rule 144A under the Act, as such rule may be amended from time to
time ("Rule 144A"), in transactions under Rule 144A.
When used herein in reference to the Trust and the Trustee,
the term "Operative Documents" shall refer collectively to this Agreement, the
Certificates, the Confirmation (the "Trust Call Option") to be dated as of March
25, 1997 between the Trust and Union Bank of Switzerland, London branch (the
"Callholder") and the Trust Agreement (the "Trust Agreement") to be dated as of
March 20, 1997 between the Company and National City Bank, as trustee (the
"Trustee"). When used herein in reference to the Company, the term Operative
Documents shall refer to this Agreement, the Notes, the Indenture, dated as of
May 1, 1994, as supplemented by the first supplement to the Indenture dated May
10, 1995, (as supplemented, the "Indenture"), between the Company and National
City Bank, as Trustee (the "Indenture Trustee"), the Trust Agreement, the
Calculation Agency Agreement dated as of March 25, 1997 between the Company and
the Initial Purchaser (the "Calculation Agency Agreement") and the Confirmation
(the "Company Call Option") dated as of March 25, 1997 between the Company and
the Callholder.
1. The Company represents and warrants to, and agrees with the
Trustee and the Initial Purchaser that:
(a) The Offering Circulars have been prepared in connection
with the offering of the Certificates and the Notes. Any reference to
the Offering Circulars shall be deemed to refer to and include all
information incorporated by reference therein and any Additional Issuer
Information (as defined in Section 5(e)) furnished by the Company prior
to the completion of the distribution of the Certificates. The Offering
Circulars and any amendments or supplements thereto did not and will
not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply with regard to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial
Purchaser, which the parties hereto acknowledge is solely the
information set forth on Schedule A attached hereto;
(b) The consolidated historical financial statements, together
with related schedules and notes, included or incorporated by reference
in the Offering Circulars (and any amendment or supplement thereto),
present fairly the consolidated financial position of the Company and
its subsidiaries at the respective dates indicated and the result-s of
their operations and their cash flows for the respective periods
indicated in accordance with generally accepted accounting principles
consistently applied throughout such periods; and there has been no
material adverse change not in the ordinary course of business in the
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consolidated financial position of the Company since December 31, 1996,
except as disclosed in the Offering Circular;
(c) The Company is a company duly incorporated and validly
existing under the laws of the State of Ohio, and the Company has full
corporate power and authority to conduct its business in each
jurisdiction where it carries on business;
(d) The Trust has been duly created and is validly existing as
a trust under the laws of the State of New York; based on the advice of
counsel, the Trust is not classified for United States federal income
tax purposes as an association taxable as a corporation;
(e) The issue of the Notes and the performance of the
obligations assumed thereunder by the Company and the performance of
the obligations assumed by the Company under the Operative Documents
have been duly authorized by the Company and, upon due execution,
issue, authentication and delivery, the same will constitute legal,
valid and binding obligations of the Company enforceable in accordance
with their respective terms, subject as to enforcement to the laws of
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors rights and to general
equity principles and except that rights to indemnity under this
Agreement may be limited;
(f) The execution and delivery of the Operative Documents to
be executed by the Company and the issue and sale of the Notes and the
performance of the obligations assumed under, and the terms of, such
Operative Documents are not contrary to the provisions of the Articles
of Incorporation or Code of Regulations of the Company and will not
result in any breach of the terms of, or constitute a default under,
any instrument, deed, indenture, mortgage, bond or agreement to which
the Company is a party or by which it or its property is bound and will
not, to the best of the Company's knowledge, infringe or constitute a
default under any laws or regulations of any governmental or regulatory
body having jurisdiction over the Company;
(g) The issue of the Certificates by the Trust and the
performance of the obligations assumed by the Trust under the Operative
Documents have been duly authorized by the Trust and upon due
execution, issue and delivery and payment therefor in accordance with
the terms hereof, the Certificates will constitute valid, fully paid
and non-assessable undivided beneficial interests in the Trust;
(h) Assuming the accuracy of the representations and
warranties and the performance or observance of the covenants of the
Initial Purchaser contained herein, all consents and approvals of any
court, government department or other regulatory body required by the
Company for the execution and delivery of the Operative Documents and
the issue and sale of the Notes and the Certificates
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and the performance of the obligations assumed under the terms of the
Notes, the Certificates and the Operative Documents have been obtained
and are in full force and effect; provided, that this representation
and warranty shall not apply to state securities or Blue Sky laws;
(i) No event has occurred in relation to the Company which
would constitute (after the issue of the Notes) an Event of Default
under the Notes or which with the giving of notice or lapse of time or
other condition would (after the issue of the Notes) constitute such an
Event of Default;
(j) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Notes or the Certificates) will violate or result in a violation
of Section 7 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any regulation promulgated thereunder, including,
without limitation, Regulations G, T, U, and X of the Board of
Governors of the Federal Reserve System;
(k) When the Certificates are issued and delivered pursuant to
this Agreement, the Certificates will not be of the same class (within
the meaning of Rule 144A) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
(l) Neither the Company, nor any affiliate of the Company, nor
any person acting on its or their behalf (other than the Initial
Purchaser, as to which the Company makes no representation) has offered
or sold the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act.
1A. The Trustee represents and warrants to, and agrees with, the
Company and the Initial Purchaser that:
(a) The execution and delivery of the Operative Documents to
be executed by the Trustee and the performance of its obligations
thereunder have been duly authorized by all necessary corporate action
of the Trustee and each of such Operative Documents has been duly
authorized, executed and delivered by the Trustee;
(b) The Operative Documents executed by the Trustee constitute
valid and binding obligations of the Trustee enforceable against the
Trustee in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting creditors' rights or general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(c) The execution, delivery or performance by the Trustee of
the applicable Operative Documents do not require any consent,
approval or
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authorization of, or any registration or filing with, any Ohio or
United States federal court or governmental agency or body; and
(d) The Trust is not a party to any documents or instruments
other than the Operative Documents and the execution and delivery by
the Trustee and the performance by the Trustee of the obligations
assumed under, and the terms of the Operative Documents will not
infringe or constitute a default under any laws or regulations of any
governmental or regulatory body having jurisdiction over the Trustee.
2. On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to the terms and conditions herein set
forth, (a) the Trust agrees to (i) issue and sell to the Initial Purchaser, and
the Initial Purchaser agrees to purchase from the Trust, at a purchase price of
99.53 % plus accrued interest, if any, $75,000,000 principal amount of
Certificates and (ii) issue and sell to the Callholder, in exchange for the sum
of $1,354,500 to be received from the Callholder, the Trust Call Option in
accordance with the terms thereof and (b) the Company agrees to (i) issue and
sell to the Trust at a purchase price of 101.336% plus accrued interest, if any,
$75,000,000 principal amount of the Notes, (ii) issue and sell to the Callholder
the Company Call Option in exchange for the sum of $75,000 to be received from
the Callholder and (iii) pay to the Initial Purchaser a placement fee of 0.50%
of the aggregate principal amount of the Certificates for placing the
Certificates (the "Placement Fee").
3. (a) The Initial Purchaser hereby represents and warrants to, and
agrees with the Trust and the Company that the Initial Purchaser (i) is
a QIB; (ii) has not and will not, and no affiliate of the Initial
Purchaser or any person acting on its or their behalf has or will,
solicit offers for, or offer or sell, the Certificates by means of any
form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Act, or in any manner involving a public
offering within the meaning of Section 4(2) of the Act and (iii) will
solicit offers for the Certificates only from, and will offer, sell or
deliver the Certificates, as part of their initial offering, only to
persons in the United States whom the Initial Purchaser reasonably
believes to be QlBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to the Initial Purchaser
that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A.
(b) [Reserved]
(c) The Initial Purchaser represents and warrants to and
agrees with the Trust and the Company that it shall, unless prohibited
by applicable law, furnish to each person to whom it offers or sells
Certificates a copy of the Offering Circular and that neither it, its
affiliates nor any person acting on its or their behalf shall give any
information or make any representation not contained in the Offering
Circulars in connection with the offer and sale of the Certificates.
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(d) The Initial Purchaser represents and warrants to and
agrees with the Company and the Trust that neither it, any of its
affiliates nor any person acting on its or their behalf has entered
into nor will enter into any contractual arrangement with respect to
the offer or sale of the Certificates except with a person from whom it
has obtained the representations contained in, and such person's
agreement to comply with, the provisions of Sections 3(a) and 3(c);
4. (a) The Certificates to be purchased by the Initial Purchaser
hereunder will be represented by one or more global Certificates in
book-entry form which will be deposited by or on behalf of the Trust
with The Depository Trust Company ("DTC") or its designated custodian.
The Trust will deliver the Certificates to the Initial Purchaser
against payment by or on behalf of such Initial Purchaser of the
purchase price therefor by electronic transfer to the order of the
Trust in Federal (same day) funds ("Wire Transfer"), by causing DTC to
credit the Certificates to the account of the Initial Purchaser at DTC.
The Company will cause the certificates representing the Certificates
to be made available to the Initial Purchaser for checking at least
twenty-four hours prior to the Time of Delivery at the office of DTC or
its designated custodian (the "Designated Office"). The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on
March 25, 1997 or such other time and date as the Initial Purchaser,
the Trust and the Company may agree upon in writing. Such time and date
are herein called the "Time of Delivery".
(b) The Notes to be purchased by the Trust hereunder will be
represented by a definitive Note registered in the name of the Trust.
The Company will deliver such Note to the Trust against payment by wire
transfer in Federal (same day) funds of the purchase price therefor.
The Company will cause the certificates' representing the Notes to be
made available to the Trustee for checking at least twenty-four hours
prior to the Time of Delivery. Simultaneously with the purchase by the
Trust of the Notes, the Company will pay to the Initial Purchaser by
wire transfer in Federal (same day) funds the Placement Fee.
(c) The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof,
including the Notes and the cross-receipts for the Certificates and the
Notes and any additional documents requested by the Initial Purchaser
pursuant to Section 7(a) hereof, will be delivered at such time and
date at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP (the
"Closing Location"). The Certificates will be delivered at the
Designated Office at the Time of Delivery.
5. The Company (and, where specified, the Trustee) agrees with
the Initial Purchaser:
(a) To prepare the Offering Circulars in a form approved by
you; before amending or supplementing the Offering Circulars, to
furnish the Initial Purchaser a copy of such proposed amendment or
supplement;
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(b) To cooperate with the Initial Purchaser and counsel to the
Initial Purchaser to qualify the Certificates for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the Exempt Resales, provided that in connection therewith
the Company shall not be required to register or qualify as a foreign
corporation, or to take any action that would subject it to taxation or
service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day (as defined below) next succeeding the date of this
Agreement and from time to time, to furnish the Initial Purchaser, in
New York City, with copies of the Offering Circulars in New York City
and each amendment or supplement thereto, together with any independent
accountants' report contained in the Offering Circular, and any
amendment or supplement containing amendments to the financial
statements covered by such report, signed by the accountants, and
additional copies thereof in such quantities as you may from time to
time reasonably request, and if, at any time prior to the consummation
of any Exempt Resale, any event shall have occurred as a result of
which the Offering Circulars as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Offering Circulars are delivered, not misleading, or, if for any other
reason it shall be necessary, during such same period to amend or
supplement the Offering Circulars, to notify you and upon your request
to prepare and furnish without charge to the Initial Purchaser and to
any dealer in securities as many copies as you may from time to time
reasonably request of the amended Offering Circulars or supplement to
the Offering Circulars which will correct such statement or omission or
effect such compliance. For the purposes of t@is Section 5, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close;
(d) The Company will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the United States
or to any U.S. person (as defined in Rule 902 under the Act) of any
Certificates or any substantially similar security issued by the Trust,
within six months subsequent to the date on which the distribution of
the Certificates has been completed (as notified to the Company by the
Initial Purchaser), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of
the Certificates in the United States contemplated by this Agreement as
transactions exempt from the registration provisions of the Act;
(e) At any time when the Trust is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of any holder of
Certificates ("Certificateholder"), the Trustee shall promptly furnish
to such Certificateholder or to a prospective purchaser of a
Certificate designated by such Certificateholder,
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as the case may be, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act ("Additional Issuer
Information") in order to permit compliance by such Certificateholder
with Rule 144A in connection with the resale of such Certificate by
such Certificateholder. The Company will provide the Trustee, in a
timely manner, the information required to be delivered by the Trust by
this subsection (e); and
(f) During the period of two years after the Time of Delivery,
the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Act) to, resell any of the Certificates
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them except pursuant to an effective registration
statement under the Act.
6. The Company covenants and agrees with the Initial Purchaser that the
Company will pay or cause to be paid all expenses incident to the performance of
the Trust's and the Company's obligations under this Agreement, including the
following: (i) the fees, disbursements and expenses of the Company's and the
Trust's counsel and accountants in connection with the issue of the Certificates
and the Notes and all other expenses in connection with the preparation,
printing and filing of the Offering Circulars and any amendments and supplements
thereto and the mailing and delivering of copies thereof to the Initial
Purchaser and dealers; (ii) all expenses in connection with the qualification of
the Certificates for offering and sale under state securities laws as provided
in Section 5(b) hereof, including the reasonable fees and disbursements of
counsel for the Initial Purchaser in connection with such qualification, except
as otherwise provided below; (iii) any fees charged by securities rating
services for rating the Certificates or the Notes; (iv) the cost of printing the
Certificates and the Notes; (v) the fees and expenses of the Trustee and the
Indenture Trustee and any agent of the Trustee and the Indenture Trustee and the
reasonable fees and disbursements of counsel for the Trustee and the Indenture
Trustee in connection with the Operative Documents; and (vii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Initial Purchaser will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on resale of any of the Certificates
by them, costs associated with the Blue Sky and legal investment surveys and any
advertising expenses connected with any offers they may make.
7. The obligations of the Initial Purchaser to purchase the
Certificates and the Call Option pursuant to Section 2 hereunder shall be
subject, in its discretion, to the condition that all representations and
warranties and other statements of the Trust and the Company herein are, at and
as of the Time of Delivery, true and correct, the condition that the Trust and
the Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) You shall have received from your counsel, Skadden, Arps,
Slate, Meagher & Flom, LLP, such opinion or opinions, dated the Time of
Delivery, with respect to the issuance and sale of the Certificates and
the Notes and other related matters as you may reasonably require, and
the Company shall have
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furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(b) There shall have been no material adverse change in the
condition of the Company and its subsidiaries, taken as a whole, from
that set forth in or contemplated by the Offering Circulars; and you
shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the
foregoing effect.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading of, nor shall any notice have been given of any review with
a negative implication with respect to, the rating accorded any of the
Company's securities by any of Standard & Poor's Corporation or Moody's
Investors Service, Inc.
(d) You shall have received on the Closing Date the favorable
opinion of Baker & Hostetler LLP, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company and each of its significant
subsidiaries (as defined in Rule 405 under the Act) has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of its incorporation
or formation, as the case may be, and is duly qualified to
transact business and is in good standing or in full force and
effect, as the case may be, in each jurisdiction in which it
owns real property, except where the failure to qualify and be
in good standing or full force and effect would not have a
material adverse effect on the condition of the Company its
subsidiaries and entities in which they own interests, taken
as, a whole;
(ii) Each of the Operative Documents of the Company
(other than this Agreement and the Notes) have been duly
authorized, executed and delivered by the Company and are
valid and binding instruments enforceable in accordance with
their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iii) the Notes, when duly executed by the Company
and authenticated by the Indenture Trustee and delivered to
and paid for by the Trust pursuant to this Agreement, will be
valid and binding obligations of the Company in accordance
with their terms, except as (A) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;
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(iv) This Agreement has been duly authorized, executed
and delivered by the Company;
(v) No authorization, consent or approval of, or
registration or filing with, any governmental or public body
or regulatory authority is required on the part of the Company
for the issuance of the Notes in accordance with the Indenture
or the sale of the Notes in accordance with the Purchase
Agreement, other than compliance with the securities or Blue
Sky laws of various jurisdictions; and
(vi) The execution and delivery of the Operative
Documents of the Company, the issuance of the Notes and
Certificates in accordance with the Indenture and Trust
Agreement respectively, and the sale of the Securities in
accordance with the Purchase Agreement will not result in any
violation by the Company of any of the terms or provisions of
the Articles of Incorporation or Code of Regulations of the
Company or of any indenture, mortgage or other agreement or
instrument known to such counsel, by which the Company is
bound (except, with respect to such indentures, mortgages,
agreements and instruments, for violations which would not
have a material adverse effect on the Company, its
subsidiaries and entities in which they own interests, taken
as a whole).
In addition, such counsel shall state that he has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent certified public accountants of the Company, and
representatives of the Initial Purchaser and its counsel at
which conferences the contents of the Offering Circulars and
any amendment thereof or supplement thereto and related
matters were discussed and, although such counsel has not
independently verified and is not passing upon and does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering
Circulars, or any amendment thereof or supplement thereto, on
the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and representatives
of the Company), no facts have come to the attention of such
counsel which would lead such counsel to believe that the
Offering Circulars or any amendment or supplement thereto at
any time from the date thereof through the Time of Delivery,
contained any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it
being understood that such counsel need express no view with
respect to financial, statistical and accounting data included
in the Offering Circulars).
(e) You shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to you, from
Price Waterhouse L.L.P., independent accountants, containing statements
and information of the type
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ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Offering
Circulars.
(f) Counsel to the Trustee shall have furnished to you and the
Company its written opinion, dated the Time of Delivery, in form and
substance satisfactory to you and the Company, to the effect that:
(i) The Trustee is a national banking association
duly organized and validly existing under the laws of the
United States of America.
(ii) The Trustee has the full power and authority to
accept the office of Trustee under the Trust Agreement and to
perform its obligations thereunder.
(iii) The execution and delivery of the Operative
Documents to be executed by the Trustee and the performance of
its obligations thereunder have been duly authorized by all
necessary corporate action of the Trustee and each of such
Operative Documents has been duly authorized, executed and
delivered by the Trustee.
(iv) The Trust Agreement, the Certificates and the
Trust Call Option constitute valid and binding obligations of
the Trustee enforceable against the Trustee in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting
creditors' rights or general principles of equity, regardless
of whether such enforceability is considered in a proceeding
in equity or at law.
(v) The execution, delivery or performance by the
Trustee of its obligations under the applicable Operative
Documents do not require any consent, approval or
authorization of, or any registration or filing with, any Ohio
or United States governmental agency or body having
jurisdiction over the banking or trust powers of the Trustee.
(vi) Each of the Certificates has been duly
authenticated by the Trustee upon the order of the Company.
As to matters of fact, such counsel listed in subsections (a),
(d) and (f) above may rely to the extent such counsel deems proper, on
certificates of responsible officers and other representatives of the
Company and its subsidiaries, certificates of public officials, and
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and its
subsidiaries. In addition, the opinion in subsection (d) and (f) above
may be limited to matters of United States federal and Ohio law.
(g) The Trust shall have delivered the Trust Call Option to
the Callholder.
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<PAGE> 12
(h) The Company shall have delivered the Company Call Option
to the Initial Purchaser.
8. The Company agrees to indemnify and hold harmless the Trustee and
the Initial Purchaser and each person, if any, who controls the Trustee and the
Initial Purchaser within the meaning of Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934, from and against any and
all losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Offering Circulars
(or any amendment or supplement thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements, in the light of the circumstances under which
they were made, not misleading, except, with respect to the Initial Purchaser,
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by the Initial Purchaser
expressly for use therein.
The Initial Purchaser agrees to indemnify and hold harmless
the Company, its directors and its officers and any person controlling the
Company to the same extent as the foregoing indemnity from the Company to the
Initial Purchaser, but only with reference to information relating to the
Initial Purchaser furnished in writing by such Initial Purchaser expressly for
use in the Offering Circulars which is set forth in Schedule A hereto.
The Initial Purchaser agrees to indemnify and hold harmless the Trustee
and the Company, each director and officer of the Trustee and the Company and
each person, if any, who controls (within the meaning of Section 15 of the
Securities Act) the Trustee or the Company against any and all losses, claims,
damages, liabilities, expenses, actions and demands to which they or any of them
may become subject (including all reasonable costs of investigating, disputing
or defending any such claim, action or demand) under the law of any jurisdiction
or which may be made against them arising out of, or in connection with actions
or omissions of the Initial Purchaser, or any person, if any who controls
(within the meaning of Section 15 of the Securities Act) the Initial Purchaser,
its affiliates or persons acting on their behalf or their respective officers
and directors, which are inconsistent with any applicable restrictions on offers
and sales of the Certificates (including, without limitation, their obligations
hereunder).
In case any claim, demand, action or proceeding (including any
governmental investigation) shall be brought or instituted involving any person
in respect of which indemnity may be sought pursuant to either of the three
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing (but the failure to so notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 8, unless the
indemnifying party is materially prejudiced as a result of such failure to
notify) and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding; provided, however, that in the event the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of any such proceeding, the indemnified party shall then be
entitled
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<PAGE> 13
to retain counsel reasonably satisfactory to itself and the indemnifying party
shall pay the reasonable fees and disbursements of such counsel related to the
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention OF
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to employ counsel satisfactory to the
indemnified party pursuant to the next preceding sentence. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to local counsel) for all
such indemnified parties. Such finn shall be designated in writing by the
Initial Purchaser in the case of parties indemnified pursuant to the second
preceding paragraph and by the Company in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify to the extent provided in
this Section 8 the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
The Company shall not be responsible for the failure of the
Initial Purchaser or any person acting on its behalf to comply with any
applicable restrictions on offers and sales of the Certificates nor shall the
Company have any obligation to indemnify the Initial Purchaser, or any person,
if any, who controls within the meaning of Section 15 of the Securities Act the
Initial Purchaser, and their respective directors and officers, from any losses,
liabilities, costs or claims (or actions in respect thereof) to which any of
them may become subject (including all reasonable costs of investigating,
disputing or defending any such claim or action), arising out of or resulting
from the failure of the Initial Purchaser, such person or such directors and
officers to comply with any applicable restrictions on offers and sales of the
Certificates.
9. (a) This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company prior to the Time of
Delivery, if (a) prior to the Time of Delivery (i) trading in
securities on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or materially limited, (ii) trading
in any securities of the Company shall have been suspended on any
national securities exchange in the United States or in any
over-the-counter market in the United States, (iii) a general
moratorium on banking activities in New York shall have been declared
by Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in the
financial markets or other calamity or crisis, any of which is material
and adverse or (v) any material adverse change in the condition,
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<PAGE> 14
financial or otherwise, or in the earnings, business affairs or
business prospects or properties of the Company and its subsidiaries
considered as one enterprise, not arising in the ordinary course of
business and (b) in the case of any of the events specified in clauses
(a)(i) through (iv), such event either singly or together make it, in
your reasonable judgment, impracticable to market the Certificates.
(b) If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any
other party except as provided in Section 6 hereof, and provided
further that Sections I and 8 shall survive such termination and remain
in full force and effect.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Company and the Initial Purchaser, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Initial Purchaser or any controlling person of the Initial Purchaser, or
the Trust, or the Company or any officer or director or controlling person of
the Company and shall survive delivery of and payment for the Certificates.
The parties hereto agree that the Trustee shall have no
personal liability hereunder and the liability of the Trustee shall under all
circumstances be limited to' the Trust Assets (as defined in the Trust
Agreement).
11. If, as a result of a breach by the Company, the Certificates are
not, delivered by or on behalf of the Trust or the Notes are not delivered by or
on behalf of the Company as provided herein, the Company will reimburse the
Initial Purchaser for all out-of-pocket expenses approved in writing by the
Initial Purchaser, including fees and disbursements of counsel, reasonably
incurred by the Initial Purchaser in making preparations for the purchase, sale
and delivery of the Certificates, but the Company shall then be under no further
liability to the Initial Purchaser except as provided in Sections 6 and 9
hereof.
12. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Initial Purchaser shall be delivered or sent by mail,
telex or facsimile transmission to you at 299 Park Avenue, New York, New York
10171, Attention: Mr. Richard Messina; if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the Company at 34555 Chagrin
Boulevard, Moreland Hills, Ohio 44022, Attention: Joan U. Allgood, Vice
President and General Counsel; and if to the Trust, to the Trustee at 629 Euclid
Avenue, Suite 635, Corporate Trust Division, Cleveland, Ohio 44114, Attention:
Corporate Trust Administration. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Initial Purchaser, the Trust, the Company and, to the extent
provided in Sections 9 and 11 hereof, the officers and directors of the Company
and each person who controls the Company or the Initial Purchaser, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have-any right under or by virtue of this
Agreement. No purchaser of any of the Certificates from the Initial Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
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<PAGE> 15
14. Each of the Trust and the Company irrevocably (i) agrees that any
legal suit, action or proceeding against it brought by the Initial Purchaser or
by any person who controls the Initial Purchaser arising out of or based upon
this Agreement or the transactions contemplated hereby may be instituted in any
New York court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the jurisdiction of such courts in any such
suit, action or proceeding.
15. Time shall be of the essence of this Agreement.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to choice of law or
conflicts of laws principles.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
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<PAGE> 16
If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance hereof
by you, this letter and such acceptance hereof shall constitute a binding
agreement between you, the Trust and the Company as of the date above written.
Very truly yours,
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By:_______________________________________
Name:
Title:
DDR Pass-Through Asset Trust 1997-1
By: NATIONAL CITY BANK, not in its
individual capacity but solely as
Trustee
By:_______________________________________
Name:
Title:
Accepted as of the date hereof:
UBS SECURITIES LLC
By:_______________________________
Name:
Title:
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<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
DEVELOPERS DIVERSIFIED CORPORATION
The undersigned, desiring to form a corporation for profit
under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, does
hereby certify:
FIRST: The name of the Corporation shall be Developers Diversified
Realty Corporation.
SECOND: The place in the State of Ohio where the principal office of
the Corporation is located is Moreland Hills, Cuyahoga County.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive of the Ohio Revised Code.
FOURTH: The authorized number of shares of the Corporation is
59,000,000, consisting of 50,000,000 Common Shares, without par value
(hereinafter called "Common Shares"), 1,500,000 Class A Cumulative Preferred
Shares, without par value (hereinafter called "Class A Shares"), 1,500,000 Class
B Cumulative Preferred Shares, without par value (hereinafter called "Class B
Shares"), 1,500,000 Class C Cumulative Preferred Shares, without par value
(hereinafter called "Class C Shares"), 1,500,000 Class D Cumulative Preferred
Shares, without par value (hereinafter called "Class D Shares"), 1,500,000 Class
E Cumulative Preferred Shares, without par value (hereinafter called "Class E
Shares"), and 1,500,000 Noncumulative Preferred Shares, without par value
(hereinafter called "Noncumulative Shares").
DIVISION A
I. The Class A Cumulative Preferred Shares. The Class A Shares shall
have the following express terms:
Section 1. Series. The Class A Shares may be issued from time
to time in one or more series. All Class A Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class A Shares shall rank on a parity with the Class B
Shares, the Class C Shares, the Class D Shares, the Class E Shares and
the Noncumulative Shares and shall be identical to all Class B Shares,
Class C Shares, Class D Shares, Class E Shares and Noncumulative Shares
except (1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares, Class B Shares,
Class C Shares, Class D Shares and Class E Shares shall be cumulative
as set forth herein. Subject to the provisions of Sections 2 through 5,
both inclusive, and Item VII of this Division, which provisions shall
apply to all Class A Shares, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and,
with respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such
<PAGE> 2
dates and periods may be established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item I) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class A Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Class A Shares, shall be entitled to
receive out of any funds legally available therefor, and when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Class A Shares for any
dividend period unless at the same time (i) a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual dividend
rates fixed therefor, shall have been paid upon or declared or set
apart for all Class A Shares of all series then issued and outstanding
and entitled to receive such dividend and (ii) the dividends payable
for the dividend periods terminating on the same or any earlier date
(but, with respect to Noncumulative Shares, only with respect to the
then current dividend period), ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or declared or
set apart for all Class B Shares, Class C Shares, Class D Shares, Class
E Shares and Noncumulative Shares then issued and outstanding and
entitled to receive such dividends.
(b) So long as any Class A Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Class A Shares, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Shares or any other shares ranking junior to the Class A Shares, nor
shall any Common Shares or any other shares ranking junior to the Class
A Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class A Shares
received by the Corporation subsequent to the date of first issuance of
Class A Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
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<PAGE> 3
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item I.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Class A Shares shall be inapplicable to
(i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares, or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation, as amended, with respect to any other class or series of
capital stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code, the portion
of the Capital Gains Amount that shall be allocable to holders of the
Class A Shares shall be the amount that the total dividends paid or
made available to the holders of the Class A Shares for the year bears
to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class A Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item I; and
(2) Shall, from time to time, make such redemptions
of each series of Class A Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item I; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class A Shares to be
redeemed at their respective addresses then appearing on the books of
the Corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to Section 1
of this Item I prior to the issuance thereof. At any time after notice
as provided above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of Class A Shares to be
redeemed, together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Cleveland, Ohio, or
New York, New York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be paid to the
respective holders of the Class A Shares so to be redeemed amounts
equal to the redemption price of the Class A Shares so to be redeemed,
together with such accrued and unpaid dividends thereon, on surrender
of the share certificate or certificates held by such holders; and upon
the deposit of such notice in the mail and the making of such deposit
of money with such bank or trust company, such holders shall cease to
be shareholders with respect to such shares; and from and after the
time such notice shall have been so deposited and such deposit of money
shall have been so made, such holders shall have no rights or claim
against the Corporation with respect to such shares, except only the
right to receive such money from such bank or trust company without
interest or to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the outstanding
Class A Shares are to be redeemed, the Corporation shall select by lot
the shares so to be redeemed in such manner as shall be prescribed by
the Board of Directors.
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<PAGE> 4
(2) If the holders of Class A Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class A Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Class A Shares without
serial designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital stock
hereafter created or authorized, the Corporation may not purchase or
redeem (for sinking fund purposes or otherwise) less than all of the
Class A Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class A Shares, unless
all dividends on all Class A Shares then outstanding for all previous
and current dividend periods shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class A Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class A Shares, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Item I, plus an
amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the net
assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed
ratably upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares in
proportion to the full preferential amount to which each such share is
entitled.
(2) After payment to the holders of Class A Shares of
the full preferential amounts as aforesaid, the holders of
Class A Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other Corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Class A Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class A Shares at
the time outstanding, whether or not earned or declared, for a number
of consecutive dividend payment periods which in the aggregate contain
at least 540 days, all holders of such Class A Shares, voting
separately as a class, together with all Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares upon
which like voting rights have been conferred and are exercisable under
the circumstances
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<PAGE> 5
described in Subsection 5(c), shall be entitled to elect, as herein
provided, a total of two members of the Board of Directors of the
Corporation; provided, however, that the holders of such Class A Shares
shall not exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which the holders
of not less than 50% of such Class A Shares are present in person or by
proxy; and provided further, that the special class voting rights
provided for in this paragraph when the same shall have become vested
shall remain so vested until all accrued and unpaid dividends on such
Class A Shares then outstanding shall have been paid or declared and a
sum sufficient for the payment thereof set aside for payment, whereupon
the holders of such Class A Shares shall be divested of their special
class voting rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights in the
event above specified in this paragraph.
(2) In the event of default entitling holders of
Class A Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class A Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class A Shares. At any meeting at
which such holders of Class A Shares shall be entitled to
elect directors, holders of 50% of such Class A Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
A Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class A Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class A Shares shall be elected annually
for terms expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class A Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class A Shares are
entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares then entitled to vote shall be
combined (with each class of shares having a number of votes
proportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class A Shares and of all such
other shares then entitled so to vote, voting as a class, shall elect
such directors. If the holders of any such other shares have elected
such directors prior to the happening of the default or event
permitting the holders of Class A Shares to elect directors, or prior
to a written request for the holding
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of a special meeting being received by the Secretary of the Corporation
as required above, then a new election shall be held with all such
other shares and the Class A Shares voting together as a single class
for such directors, resulting in the termination of the term of such
previously elected directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class A Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the
following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class A Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class A Shares
or of any shares ranking on a parity with or junior to the
Class A Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class A Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class A Shares.
(e) In the event, and only to the extent, that (1) Class A
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of capital stock to vote separately as a
class, the affirmative vote of the holders of at least two-thirds of
each series of Class A Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in writing or
at a meeting called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these Amended
and Restated Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects adversely and materially
the preferences or voting or other rights of the holders of such series
which are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the amendment of
these Amended and Restated Articles of Incorporation, as amended, so as
to authorize, create or change the authorized or outstanding number of
Class A Shares or of any shares ranking on a parity with or junior to
the Class A Shares nor the Amendment of the provisions of the Code of
Regulations so as to change the number or classification of directors
of the Corporation shall be deemed to affect adversely and materially
the preferences or voting or other rights of the holders of such
series.
Section 6. 9 1/2% Class A Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class A Shares, 460,000 shares are
designated as a series entitled "9 1/2% Class A Cumulative Redeemable
Preferred Shares" (hereinafter called "9 1/2% Class A Preferred
Shares"). The 9 1/2% Class A Preferred Shares shall have the express
terms set forth in this Item I as being applicable to all Class A
Shares as a class and, in addition, the following express terms
applicable to all 9 1/2% Class A Preferred Shares as a series of Class
A Shares:
(a) The annual dividend rate of the 9 1/2% Class A
Preferred Shares shall be 9 1/2% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9 1/2% Class A Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on
December 15, 1995. The dividends payable for each full
quarterly dividend period on each 9 1/2% Class A Preferred
Shares shall be $5.94.
Dividends for the initial dividend period on the
9 1/2% Class A
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<PAGE> 7
Preferred Shares, or for any period shorter or longer than a
full dividend period on the 9 1/2% Class A Preferred Shares,
shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. The aggregate dividend payable quarterly
to each holder of 9 1/2% Class A Preferred Shares shall be
rounded to the nearest one one-hundredth of one cent with
$.00005 being rounded upward. Each dividend shall be payable
to the holders of record on such record date, no less than 10
nor more than 30 days preceding the payment date thereof, as
shall be fixed from time to time by the Corporation's Board of
Directors.
(c) Dividends on 9 1/2% Class A Preferred Shares shall
be cumulative as follows:
(1) With respect to shares included in the
initial issue of 9 1/2% Class A Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 9 1/2% Class A Preferred
Shares, dividends shall be cumulative from the date
of the initial issue of 9 1/2% Class A Preferred
Shares; and
(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 9 1/2% Class A Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9 1/2% Class A Preferred
Shares may not be redeemed prior to November 15, 2000. At any
time or from time to time on and after November 15, 2000 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 9 1/2% Class A Preferred Shares at a
redemption price of $250.00 per share plus, in each case, an
amount equal to all dividends accrued and unpaid thereon to
the redemption date, without interest. The redemption price
(other than the portion thereof consisting of accrued and
unpaid dividends) is payable solely out of the sale proceeds
of other capital shares of the Corporation, which may include
any equity securities (including common shares and preferred
shares), shares, interests, participation or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 9 1/2% Class A Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9 1/2% Class A
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 9 1/2% Class A
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item I, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
II. The Class B Cumulative Preferred Shares. The Class B Cumulative
Preferred Shares shall have the following express terms:
Section 1. Series. The Class B Shares may be issued from time
to time in one or more series. All Class B Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class B Shares shall rank on a parity with the Class A
Shares, the Class C Shares, the Class D Shares, the Class E Shares and
the Noncumulative Shares and shall be identical to all Class A Shares,
Class C Shares,
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<PAGE> 8
Class D Shares, Class E Shares and Noncumulative Shares except (1) in
respect of the matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this Section 1 and
(2) only dividends on the Class A Shares, the Class B Shares, the Class
C Shares, the Class D Shares and the Class E Shares are cumulative as
set forth herein. Subject to the provisions of Sections 2 through 5,
both inclusive, and Item VII of this Division, which provisions shall
apply to all Class B Shares, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and
with respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item II) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), both inclusive, of this Section and is authorized to take such
actions with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class B Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Class B Shares, shall be entitled to
receive out of any funds legally available therefor, and when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Class B Shares for any
dividend period unless at the same time (i) a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual dividend
rates fixed therefor, shall have been paid upon or declared or set
apart for all Class B Shares of all series then issued and outstanding
and entitled to receive such dividend and (ii) the
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<PAGE> 9
dividends payable for the dividend periods terminating on the same or
any earlier date (but, with respect to the Noncumulative Shares, only
with respect to the then current dividend period), ratably in
proportion to the respective dividend rates fixed therefor, shall have
been paid upon or declared or set apart for all Class A Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares then
issued and outstanding and entitled to receive such dividends.
(b) So long as any Class B Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Class B Shares, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Shares or any other shares ranking junior to the Class B Shares, nor
shall any Common Shares or any other shares ranking junior to the Class
B Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class B Shares
received by the Corporation subsequent to the date of first issuance of
Class B Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment thereof set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item II.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption, retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Class B Shares shall be inapplicable to
(i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation, as amended, with respect to any other class or series of
capital stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent that it does not cause any dividends to fail to qualify
for the dividends paid deduction under Section 561 of the Code, the
portion of the Capital Gains Amount that shall be allocable to holders
of the Class B Shares shall be the amount that the total dividends paid
or made available to the holders of the Class B Shares for the year
bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class B Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item II; and
(2) Shall, from time to time, make such redemptions
of each series of Class B Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item II; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
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<PAGE> 10
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class B Shares to be
redeemed at their respective addresses then appearing on the books of
the Corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to Section 1
of this Item II prior to the issuance thereof. At any time after notice
as provided above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of Class B Shares to be
redeemed, together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Cleveland, Ohio, or
New York, New York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be paid to the
respective holders of the Class B Shares so to be redeemed amounts
equal to the redemption price of the Class B Shares so to be redeemed,
together with such accrued and unpaid dividends thereon, on surrender
of the share certificate or certificates held by such holders; and upon
the deposit of such notice in the mail and the making of such deposit
of money with such bank or trust company, such holders shall cease to
be shareholders with respect to such shares; and from and after the
time such notice shall have been so deposited and such deposit of money
shall have been so made, such holders shall have no rights or claim
against the Corporation with respect to such shares, except only the
right to receive such money from such bank or trust company without
interest or to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the outstanding
Class B Shares are to be redeemed, the Corporation shall select by lot
the shares so to be redeemed in such manner as shall be prescribed by
the Board of Directors.
(2) If the holders of Class B Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class B Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Class B Shares without
serial designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital stock
hereafter created or authorized, the Corporation may not purchase or
redeem (for sinking fund purposes or otherwise) less than all of the
Class B Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class B Shares, unless
all dividends on all Class B Shares then outstanding for all previous
and current dividend periods shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class B Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class B Shares, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Item II, plus an
amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the net
assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed
ratably upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and
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<PAGE> 11
Noncumulative Shares in proportion to the full preferential amount to
which each such share is entitled.
(2) After payment to the holders of Class B Shares of
the full preferential amounts as aforesaid, the holders of
Class B Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Class B Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class B Shares at
the time outstanding, whether or not earned or declared, for a number
of consecutive dividend payment periods which in the aggregate contain
at least 540 days, all holders of Class B Shares, voting separately as
a class, together with all Class A Shares, Class C Shares, Class D
Shares, Class E Shares and Noncumulative Shares upon which like voting
rights have been conferred and are exercisable under the circumstances
described in Subsection 5(c), shall be entitled to elect, as herein
provided, a total of two members of the Board of Directors of the
Corporation; provided, however, that the holders of such Class B Shares
shall not exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which the holders
of not less than 50% of such Class B Shares are present in person or by
proxy; and provided further, that the special class voting rights
provided for in this paragraph when the same shall have become vested
shall remain so vested until all accrued and unpaid dividends on such
Class B Shares then outstanding shall have been paid or declared and a
sum sufficient therefor set aside for payment, whereupon the holders of
such Class B Shares shall be divested of their special class voting
rights in respect of subsequent elections of directors, subject to the
revesting of such special class voting rights in the event above
specified in this paragraph.
(2) In the event of default entitling holders of
Class B Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class B Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class B Shares. At any meeting at
which such holders of Class B Shares shall be entitled to
elect directors, holders of 50% of such Class B Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
B Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class B Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require
the resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the Corporation, the
two directors elected by such holders of Class B
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<PAGE> 12
Shares shall be elected annually for terms expiring at the
next succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class B Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class B Shares are
entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class A Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares then entitled to vote shall be
combined (with class of shares having a number of votes proportional to
the aggregate liquidation preference of its outstanding shares). In
such case, the holders of Class B Shares and of all such other shares
then entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have elected such
directors prior to the happening of the default or event permitting the
holders of Class B Shares to elect directors, or prior to a written
request for the holding of a special meeting being received by the
Secretary of the Corporation as required above, then a new election
shall be held with all such other shares and the Class B Shares voting
together as a single class for such directors, resulting in the
termination of the term of such previously elected directors upon the
election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class B Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the
following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class B Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class B Shares
or of any shares ranking on a parity with or junior to the
Class B Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class B Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such Class B
Shares.
(e) In the event, and only to the extent, that (1) Class B
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of capital stock to vote separately as a
class, the affirmative vote of the holders of at least two-thirds of
each series of Class B Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in writing or
at a meeting called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these Amended
and Restated Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects adversely and materially
the preferences or voting or other rights of the holders of such series
which are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the amendment of
these Amended and Restated Articles of Incorporation, as amended, so as
to authorize,
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create or change the authorized or outstanding number of Class B Shares
or of any shares remaining on a parity with or junior to the Class B
Shares nor the amendment of the provisions of the Code of Regulations
so as to change the number of classification of directors of the
Corporation shall be deemed to affect adversely and materially
preferences or voting or other rights of the holders of such series.
Section 6. 9.44% Class B Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class B Shares, 177,500 shares are
designated as a series entitled "9.44% Class B Cumulative Redeemable
Preferred Shares" (hereinafter called "9.44% Class B Preferred
Shares"). The 9.44% Class B Preferred Shares shall have the express
terms set forth in this Item II as being applicable to all Class B
Shares as a class and, in addition, the following express terms
applicable to all 9.44% Class B Preferred Shares as a series of Class B
Shares:
(a) The annual dividend rate of the 9.44% Class B
Preferred Shares shall be 9.44% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9.44% Class B Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on March
15, 1996. The dividends payable for each full quarterly
dividend period on each 9.44% Class B Preferred Shares shall
be $5.90.
Dividends for the initial dividend period on the
9.44% Class B Preferred Shares, or for any period shorter or
longer than a full dividend period on the 9.44% Class B
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 9.44% Class B
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 9.44% Class B Preferred Shares shall
be cumulative as follows:
(1) With respect to shares included in the initial
issue of 9.44% Class B Preferred Shares and shares
issued any time thereafter up to and including the
record date for the payment of the first dividend on
the initial issue of 9.44% Class B Preferred Shares,
dividends shall be cumulative from the date of the
initial issue of 9.44% Class B Preferred Shares; and
(2) With respect to shares issued any time after the
aforesaid record date, dividends shall be cumulative
from the dividend payment date next preceding the
date of issue of such shares, except that if such
shares are issued during the period commencing the
day after the record date for the payment of a
dividend on 9.44% Class B Preferred Shares and ending
on the payment date of that dividend, dividends with
respect to such shares shall be cumulative from that
dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9.44% Class B Preferred
Shares may not be redeemed prior to December 26, 2000. At any
time or from time to time on and after December 26, 2000 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 9.44% Class B Preferred Shares at a redemption
price of $250.00 per share plus, in each case, an amount equal
to all dividends accrued and unpaid thereon to the redemption
date, without interest. The redemption price (other than the
portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital
shares of the Corporation, which may include any equity
securities (including common shares and preferred shares),
shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or
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<PAGE> 14
options to purchase any of the foregoing.
(e) The amount payable per 9.44% Class B Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9.44% Class B
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 9.44% Class B
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item II, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
III. The Class C Cumulative Preferred Shares. The Class C Shares
shall have the following express terms:
Section 1. Series. The Class C Shares may be issued from time
to time in one or more series. All Class C Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class C Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class D Shares, the Class E Shares and
the Noncumulative Shares and shall be identical to all Class A Shares,
Class B Shares, Class D Shares, Class E Shares and Noncumulative Shares
except (1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares, Class B Shares,
Class C Shares, Class D Shares and Class E Shares shall be cumulative
as set forth herein. Subject to the provisions of Sections 2 through 5,
both inclusive, and Item VII of this Division, which provisions shall
apply to all Class C Shares, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and,
with respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d)
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<PAGE> 15
or 5(e) of this Item III) on the issuance of shares of the
same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class C Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Class C Shares, shall be entitled to
receive out of any funds legally available therefor, and when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Class C Shares for any
dividend period unless at the same time (i) a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual dividend
rates fixed therefor, shall have been paid upon or declared or set
apart for all Class C Shares of all series then issued and outstanding
and entitled to receive such dividend and (ii) the dividends payable
for the dividend periods terminating on the same or any earlier date
(but, with respect to Noncumulative Shares, only with respect to the
then current dividend period), ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class D Shares, Class
E Shares and Noncumulative Shares then issued and outstanding and
entitled to receive such dividends.
(b) So long as any Class C Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Class C Shares, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Shares or any other shares ranking junior to the Class C Shares, nor
shall any Common Shares or any other shares ranking junior to the Class
C Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class C Shares
received by the Corporation subsequent to the date of first issuance of
Class C Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item III.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Class C Shares shall be inapplicable to
(i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares, or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation, as amended, with respect to any other class or series of
capital stock hereafter created or authorized.
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<PAGE> 16
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code, the portion
of the Capital Gains Amount that shall be allocable to holders of the
Class C Shares shall be the amount that the total dividends paid or
made available to the holders of the Class C Shares for the year bears
to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class C Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item III; and
(2) Shall, from time to time, make such redemptions
of each series of Class C Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item III; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class C Shares to be
redeemed at their respective addresses then appearing on the books of
the Corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to Section 1
of this Item III prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of Class C
Shares to be redeemed, together with accrued and unpaid dividends
thereon to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and surplus of
not less than $100,000,000, named in such notice and direct that there
be paid to the respective holders of the Class C Shares so to be
redeemed amounts equal to the redemption price of the Class C Shares so
to be redeemed, together with such accrued and unpaid dividends
thereon, on surrender of the share certificate or certificates held by
such holders; and upon the deposit of such notice in the mail and the
making of such deposit of money with such bank or trust company, such
holders shall cease to be shareholders with respect to such shares; and
from and after the time such notice shall have been so deposited and
such deposit of money shall have been so made, such holders shall have
no rights or claim against the Corporation with respect to such shares,
except only the right to receive such money from such bank or trust
company without interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all of the
outstanding Class C Shares are to be redeemed, the Corporation shall
select by lot the shares so to be redeemed in such manner as shall be
prescribed by the Board of Directors.
(2) If the holders of Class C Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class C Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Class C Shares without
serial designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles
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<PAGE> 17
of Incorporation, as amended, with respect to any other class or series
of capital stock hereafter created or authorized, the Corporation may
not purchase or redeem (for sinking fund purposes or otherwise) less
than all of the Class C Shares then outstanding except in accordance
with a stock purchase offer made to all holders of record of Class C
Shares, unless all dividends on all Class C Shares then outstanding for
all previous and current dividend periods shall have been declared and
paid or funds therefor set apart and all accrued sinking fund
obligations applicable thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class C Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class C Shares, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Item III, plus an
amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the net
assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed
ratably upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares in
proportion to the full preferential amount to which each such share is
entitled.
(2) After payment to the holders of Class C Shares of
the full preferential amounts as aforesaid, the holders of
Class C Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other Corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Class C Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class C Shares at
the time outstanding, whether or not earned or declared, for a number
of consecutive dividend payment periods which in the aggregate contain
at least 540 days, all holders of such Class C Shares, voting
separately as a class, together with all Class A Shares, Class B
Shares, Class D Shares, Class E Shares and Noncumulative Shares upon
which like voting rights have been conferred and are exercisable under
the circumstances described in Subsection 5(c), shall be entitled to
elect, as herein provided, a total of two members of the Board of
Directors of the Corporation; provided, however, that the holders of
such Class C Shares shall not exercise such special class voting rights
except at meetings of such shareholders for the election of directors
at which the holders of not less than 50% of such Class C Shares are
present in person or by proxy; and provided further, that the special
class voting rights provided for in this paragraph when the same shall
have become vested shall remain so vested until all accrued and unpaid
dividends on such Class C Shares then outstanding shall have been paid
or declared and a sum sufficient for the payment thereof set aside for
payment, whereupon the holders of such Class C Shares shall be divested
of their special class voting rights in respect of subsequent elections
of directors, subject to the revesting of such special class voting
rights in the event above specified in this paragraph. All dividend
payments made on the Class C Shares, at any time during which the
Corporation is in default in the payment of dividends on such Class C
Shares for any dividend period, shall be deemed to be made in respect
of the earliest dividend period with respect to which the Corporation
is in default.
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<PAGE> 18
(2) In the event of default entitling holders of
Class C Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class C Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class C Shares. At any meeting at
which such holders of Class C Shares shall be entitled to
elect directors, holders of 50% of such Class C Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
C Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class C Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class C Shares shall be elected annually
for terms expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class C Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class C Shares are
entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class A Shares, Class B Shares, Class D
Shares, Class E Shares or Noncumulative Shares are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares then entitled to vote shall be
combined (with each class of shares having a number of votes
proportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class C Shares and of all such
other shares then entitled so to vote, voting as a class, shall elect
such directors. If the holders of any such other shares have elected
such directors prior to the happening of the default or event
permitting the holders of Class C Shares to elect directors, or prior
to a written request for the holding of a special meeting being
received by the Secretary of the Corporation as required above, then a
new election shall be held with all such other shares and the Class C
Shares voting together as a single class for such directors, resulting
in the termination of the term of such previously elected directors
upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class C Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the
following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of
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Regulations of the Corporation which affects adversely and
materially the preferences or voting or other rights of the
holders of Class C Shares which are set forth in these Amended
and Restated Articles of Incorporation, as amended; provided,
however, neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to authorize,
create or change the authorized or outstanding number of Class
C Shares or of any shares ranking on a parity with or junior
to the Class C Shares nor the amendment of the provisions of
the Code of Regulations so as to change the number or
classification of directors of the Corporation shall be deemed
to affect adversely and materially preferences or voting or
other rights of the holders of Class C Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class C Shares.
(e) In the event, and only to the extent, that (1) Class C
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of capital stock to vote separately as a
class, the affirmative vote of the holders of at least two-thirds of
each series of Class C Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in writing or
at a meeting called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these Amended
and Restated Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects adversely and materially
the preferences or voting or other rights of the holders of such series
which are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the amendment of
these Amended and Restated Articles of Incorporation, as amended, so as
to authorize, create or change the authorized or outstanding number of
Class C Shares or of any shares ranking on a parity with or junior to
the Class C Shares nor the Amendment of the provisions of the Code of
Regulations so as to change the number or classification of directors
of the Corporation shall be deemed to affect adversely and materially
the preferences or voting or other rights of the holders of such
series.
IV. The Class D Cumulative Preferred Shares. The Class D Shares
shall have the following express terms:
Section 1. Series. The Class D Shares may be issued from time
to time in one or more series. All Class D Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class D Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class E Shares and
the Noncumulative Shares and shall be identical to all Class A Shares,
Class B Shares, Class C Shares, Class E Shares and Noncumulative Shares
except (1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares, Class B Shares,
Class C Shares, Class D Shares and Class E Shares shall be cumulative
as set forth herein. Subject to the provisions of Sections 2 through 5,
both inclusive, and Item VII of this Division, which provisions shall
apply to all Class D Shares, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more series and,
with respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in clause (b)
of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
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<PAGE> 20
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item IV) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class D Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Class D Shares, shall be entitled to
receive out of any funds legally available therefor, and when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Class D Shares for any
dividend period unless at the same time (i) a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual dividend
rates fixed therefor, shall have been paid upon or declared or set
apart for all Class D Shares of all series then issued and outstanding
and entitled to receive such dividend and (ii) the dividends payable
for the dividend periods terminating on the same or any earlier date
(but, with respect to Noncumulative Shares, only with respect to the
then current dividend period), ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C Shares, Class
E Shares and Noncumulative Shares then issued and outstanding and
entitled to receive such dividends.
(b) So long as any Class D Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Class D Shares, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Shares or any other shares ranking junior to the Class D Shares, nor
shall any Common Shares or any other shares ranking junior to the Class
D Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class D Shares
received by the Corporation subsequent to the date of first issuance of
Class D Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares, including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then
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current dividend period shall have been declared and paid or a
sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item IV.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Class D Shares shall be inapplicable to
(i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares, or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation, as amended, with respect to any other class or series of
capital stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code, the portion
of the Capital Gains Amount that shall be allocable to holders of the
Class D Shares shall be the amount that the total dividends paid or
made available to the holders of the Class D Shares for the year bears
to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class D Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item IV; and
(2) Shall, from time to time, make such redemptions
of each series of Class D Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item IV; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class D Shares to be
redeemed at their respective addresses then appearing on the books of
the Corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to Section 1
of this Item IV prior to the issuance thereof. At any time after notice
as provided above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of Class D Shares to be
redeemed, together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Cleveland, Ohio, or
New York, New York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be paid to the
respective holders of the Class D Shares so to be redeemed amounts
equal to the redemption price of the Class D Shares so to be redeemed,
together with such accrued and unpaid dividends thereon, on surrender
of the share certificate or certificates held by such holders; and upon
the deposit of such notice in the mail and the making of such deposit
of money with such bank or trust company, such holders shall cease to
be shareholders with respect to such shares; and from and after the
time such notice shall have been so deposited and such deposit of money
shall have been so made, such holders shall have no rights or claim
against the Corporation with respect to such shares, except only the
right to receive such money from such bank or trust company without
interest or to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all
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of the outstanding Class D Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such manner as
shall be prescribed by the Board of Directors.
(2) If the holders of Class D Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class D Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Class D Shares without
serial designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital stock
hereafter created or authorized, the Corporation may not purchase or
redeem (for sinking fund purposes or otherwise) less than all of the
Class D Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class D Shares, unless
all dividends on all Class D Shares then outstanding for all previous
and current dividend periods shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class D Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class D Shares, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Item IV, plus an
amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the net
assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed
ratably upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares in
proportion to the full preferential amount to which each such share is
entitled.
(2) After payment to the holders of Class D Shares of
the full preferential amounts as aforesaid, the holders of
Class D Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other Corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Class D Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class D Shares at
the time outstanding, whether or not earned or declared, for a number
of consecutive dividend payment
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<PAGE> 23
periods which in the aggregate contain at least 540 days, all holders
of such Class D Shares, voting separately as a class, together with all
Class A Shares, Class B Shares, Class C Shares, Class E Shares and
Noncumulative Shares upon which like voting rights have been conferred
and are exercisable under the circumstances described in Subsection
5(c), shall be entitled to elect, as herein provided, a total of two
members of the Board of Directors of the Corporation; provided,
however, that the holders of such Class D Shares shall not exercise
such special class voting rights except at meetings of such
shareholders for the election of directors at which the holders of not
less than 50% of such Class D Shares are present in person or by proxy;
and provided further, that the special class voting rights provided for
in this paragraph when the same shall have become vested shall remain
so vested until all accrued and unpaid dividends on such Class D Shares
then outstanding shall have been paid or declared and a sum sufficient
for the payment thereof set aside for payment, whereupon the holders of
such Class D Shares shall be divested of their special class voting
rights in respect of subsequent elections of directors, subject to the
revesting of such special class voting rights in the event above
specified in this paragraph. All dividend payments made on the Class D
Shares, at any time during which the Corporation is in default in the
payment of dividends on such Class D Shares for any dividend period,
shall be deemed to be made in respect of the earliest dividend period
with respect to which the Corporation is in default.
(2) In the event of default entitling holders of
Class D Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class D Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class D Shares. At any meeting at
which such holders of Class D Shares shall be entitled to
elect directors, holders of 50% of such Class D Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
D Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class D Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class D Shares shall be elected annually
for terms expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class D Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class D Shares are
entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class A Shares, Class B Shares, Class C
Shares, Class E Shares or Noncumulative Shares are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
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Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares then entitled to vote shall be
combined (with each class of shares having a number of votes
proportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class D Shares and of all such
other shares then entitled so to vote, voting as a class, shall elect
such directors. If the holders of any such other shares have elected
such directors prior to the happening of the default or event
permitting the holders of Class D Shares to elect directors, or prior
to a written request for the holding of a special meeting being
received by the Secretary of the Corporation as required above, then a
new election shall be held with all such other shares and the Class D
Shares voting together as a single class for such directors, resulting
in the termination of the term of such previously elected directors
upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class D Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the
following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class D Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class D Shares
or of any shares ranking on a parity with or junior to the
Class D Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class D Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class D Shares.
(e) In the event, and only to the extent, that (1) Class D
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of capital stock to vote separately as a
class, the affirmative vote of the holders of at least two-thirds of
each series of Class D Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in writing or
at a meeting called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these Amended
and Restated Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects adversely and materially
the preferences or voting or other rights of the holders of such series
which are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the amendment of
these Amended and Restated Articles of Incorporation, as amended, so as
to authorize, create or change the authorized or outstanding number of
Class D Shares or of any shares ranking on a parity with or junior to
the Class D Shares nor the Amendment of the provisions of the Code of
Regulations so as to change the number or classification of directors
of the Corporation shall be deemed to affect adversely and materially
the preferences or voting or other rights of the holders of such
series.
V. The Class E Cumulative Preferred Shares. The Class E Shares
shall have the following express terms:
Section 1. Series. The Class E Shares may be issued from time
to time in one or more series. All Class E Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class E Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares and
the Noncumulative Shares and shall be identical to all Class A Shares,
Class B Shares,
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<PAGE> 25
Class C Shares, Class D Shares and Noncumulative Shares except (1) in
respect of the matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this Section 1 and
(2) only dividends on Class A Shares, Class B Shares, Class C Shares,
Class D Shares and Class E Shares shall be cumulative as set forth
herein. Subject to the provisions of Sections 2 through 5, both
inclusive, and Item VII of this Division, which provisions shall apply
to all Class E Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and, with respect
to each such series to determine and fix prior to the issuance thereof
(and thereafter, to the extent provided in clause (b) of this Section)
the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item V) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class E Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Class E Shares, shall be entitled to
receive out of any funds legally available therefor, and when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividends shall be paid upon or
declared or set apart for any series of the Class E Shares for any
dividend period unless at the same time (i) a like proportionate
dividend for the dividend periods terminating on the same or any
earlier date, ratably in proportion to the respective annual dividend
rates fixed therefor, shall have been paid upon or declared or set
apart for all Class E Shares of all series then issued and outstanding
and entitled to receive such dividend and (ii) the
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dividends payable for the dividend periods terminating on the same or
any earlier date (but, with respect to Noncumulative Shares, only with
respect to the then current dividend period), ratably in proportion to
the respective dividend rates fixed therefor, shall have been paid upon
or declared or set apart for all Class A Shares, Class B Shares, Class
C Shares, Class D Shares and Noncumulative Shares then issued and
outstanding and entitled to receive such dividends.
(b) So long as any Class E Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Class E Shares, shall be paid or declared or any
distribution be made, except as aforesaid, in respect of the Common
Shares or any other shares ranking junior to the Class E Shares, nor
shall any Common Shares or any other shares ranking junior to the Class
E Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class E Shares
received by the Corporation subsequent to the date of first issuance of
Class E Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares, including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item V.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Class E Shares shall be inapplicable to
(i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares, or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation, as amended, with respect to any other class or series of
capital stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code, the portion
of the Capital Gains Amount that shall be allocable to holders of the
Class E Shares shall be the amount that the total dividends paid or
made available to the holders of the Class E Shares for the year bears
to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class E Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item V; and
(2) Shall, from time to time, make such redemptions
of each series of Class E Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item V; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
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(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class E Shares to be
redeemed at their respective addresses then appearing on the books of
the Corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to Section 1
of this Item V prior to the issuance thereof. At any time after notice
as provided above has been deposited in the mail, the Corporation may
deposit the aggregate redemption price of Class E Shares to be
redeemed, together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Cleveland, Ohio, or
New York, New York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be paid to the
respective holders of the Class E Shares so to be redeemed amounts
equal to the redemption price of the Class E Shares so to be redeemed,
together with such accrued and unpaid dividends thereon, on surrender
of the share certificate or certificates held by such holders; and upon
the deposit of such notice in the mail and the making of such deposit
of money with such bank or trust company, such holders shall cease to
be shareholders with respect to such shares; and from and after the
time such notice shall have been so deposited and such deposit of money
shall have been so made, such holders shall have no rights or claim
against the Corporation with respect to such shares, except only the
right to receive such money from such bank or trust company without
interest or to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the outstanding
Class E Shares are to be redeemed, the Corporation shall select by lot
the shares so to be redeemed in such manner as shall be prescribed by
the Board of Directors.
(2) If the holders of Class E Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class E Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Class E Shares without
serial designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital stock
hereafter created or authorized, the Corporation may not purchase or
redeem (for sinking fund purposes or otherwise) less than all of the
Class E Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class E Shares, unless
all dividends on all Class E Shares then outstanding for all previous
and current dividend periods shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class E Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class E Shares, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Item V, plus an
amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the net
assets of the Corporation legally available therefor are insufficient
to permit the payment upon all outstanding Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed
ratably upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and
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Noncumulative Shares in proportion to the full preferential amount to
which each such share is entitled.
(2) After payment to the holders of Class E Shares of
the full preferential amounts as aforesaid, the holders of
Class E Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other Corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Class E Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class E Shares at
the time outstanding, whether or not earned or declared, for a number
of consecutive dividend payment periods which in the aggregate contain
at least 540 days, all holders of such Class E Shares, voting
separately as a class, together with all Class A Shares, Class B
Shares, Class C Shares, Class D Shares and Noncumulative Shares upon
which like voting rights have been conferred and are exercisable under
the circumstances described in Subsection 5(c), shall be entitled to
elect, as herein provided, a total of two members of the Board of
Directors of the Corporation; provided, however, that the holders of
such Class E Shares shall not exercise such special class voting rights
except at meetings of such shareholders for the election of directors
at which the holders of not less than 50% of such Class E Shares are
present in person or by proxy; and provided further, that the special
class voting rights provided for in this paragraph when the same shall
have become vested shall remain so vested until all accrued and unpaid
dividends on such Class E Shares then outstanding shall have been paid
or declared and a sum sufficient for the payment thereof set aside for
payment, whereupon the holders of such Class E Shares shall be divested
of their special class voting rights in respect of subsequent elections
of directors, subject to the revesting of such special class voting
rights in the event above specified in this paragraph. All dividend
payments made on the Class E Shares, at any time during which the
Corporation is in default in the payment of dividends on such Class E
Shares for any dividend period, shall be deemed to be made in respect
of the earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling holders of
Class E Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class E Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class E Shares. At any meeting at
which such holders of Class E Shares shall be entitled to
elect directors, holders of 50% of such Class E Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
E Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class E Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in
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the total number of or classifications of directors of the
Corporation or require the resignation of any director elected
otherwise than pursuant to this Subsection. Notwithstanding
any classification of the other directors of the Corporation,
the two directors elected by such holders of Class E Shares
shall be elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class E Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class E Shares are
entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class A Shares, Class B Shares, Class C
Shares, Class D Shares or Noncumulative Shares are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares then entitled to vote shall be
combined (with each class of shares having a number of votes
proportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class E Shares and of all such
other shares then entitled so to vote, voting as a class, shall elect
such directors. If the holders of any such other shares have elected
such directors prior to the happening of the default or event
permitting the holders of Class E Shares to elect directors, or prior
to a written request for the holding of a special meeting being
received by the Secretary of the Corporation as required above, then a
new election shall be held with all such other shares and the Class E
Shares voting together as a single class for such directors, resulting
in the termination of the term of such previously elected directors
upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class E Shares at the time outstanding, voting separately as a
class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect either of the
following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class E Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class E Shares
or of any shares ranking on a parity with or junior to the
Class E Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class E Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class E Shares.
(e) In the event, and only to the extent, that (1) Class E
Shares are issued in more than one series and (2) Ohio law permits the
holders of a series of a class of capital stock to vote separately as a
class, the affirmative vote of the holders of at least two-thirds of
each series of Class E Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in writing or
at a meeting called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these Amended
and Restated Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which
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affects adversely and materially the preferences or voting or other
rights of the holders of such series which are set forth in these
Amended and Restated Articles of Incorporation, as amended; provided,
however, neither the amendment of these Amended and Restated Articles
of Incorporation, as amended, so as to authorize, create or change the
authorized or outstanding number of Class E Shares or of any shares
ranking on a parity with or junior to the Class E Shares nor the
Amendment of the provisions of the Code of Regulations so as to change
the number or classification of directors of the Corporation shall be
deemed to affect adversely and materially the preferences or voting or
other rights of the holders of such series.
VI. The Noncumulative Preferred Shares. The Noncumulative
Preferred Shares shall have the following express terms:
Section 1. Series. The Noncumulative Shares may be issued from
time to time in one or more series. All Noncumulative Shares shall be
of equal rank and shall be identical, except in respect of the matters
that may be fixed by the Board of Directors as hereinafter provided,
and each share of a series shall be identical with all other shares of
such series, except as to the dates on which and the periods for which
dividends may be payable. All Noncumulative Shares shall rank on a
parity with the Class A Shares, the Class B Shares, the Class C Shares,
the Class D Shares and the Class E Shares, and shall be identical to
all Class A Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares, except (1) in respect of the matters that may be fixed
by the Board of Directors as provided in clauses (a) through (i),
inclusive, of this Section 1 and (2) only dividends on the
Noncumulative Shares are noncumulative as set forth herein. Subject to
the provisions of Sections 2 through 5, inclusive, and Item VII of this
Division, which provisions shall apply to all Noncumulative Shares, the
Board of Directors hereby is authorized to cause such shares to be
issued in one or more series, and with respect to each such series, to
determine and fix prior to the issuance thereof (and thereafter, to the
extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The dates on which and the period or periods for
which dividends, if declared, shall be payable, including the
means by which such dates and periods may be established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if
any, for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item VI) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the
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Amended and Restated Articles of Incorporation, as amended, fixing, with respect
to each such series, the matters described in clauses (a) through (i), both
inclusive, of this Section and is authorized to take such actions with respect
thereto as may be required by law in order to effect such amendments.
Section 2. Dividends.
(a) The holders of Noncumulative Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Noncumulative Shares, shall be entitled to
receive out of any funds legally available therefor, if, when and as
declared by the Board of Directors, dividends in cash at the rate or
rates for such series fixed in accordance with the provisions of
Section 1 above and no more, payable on the dates fixed for such
series. Such dividends shall accrue, in the case of shares of each
particular series, from and after the date or dates fixed with respect
to such series; provided, however, that if the Board of Directors fails
to declare a dividend payable on a dividend payment date on any
Noncumulative Shares, the holders of the Noncumulative Shares shall
have no right to receive a dividend in respect of the dividend period
ending on such dividend payment date, and the Corporation shall have no
obligation to pay the dividend accrued for such period, whether or not
dividends on such Noncumulative Shares are declared payable on any
future dividend payment date. No dividends shall be paid upon or
declared or set apart for any series of the Noncumulative Shares for
any dividend period unless at the same time (i) a like proportionate
dividend for the then current dividend period, ratably in proportion to
the respective annual dividend rates fixed therefor, shall have been
paid upon or declared or set apart for all Noncumulative Shares of all
series then issued and outstanding and entitled to receive such
dividend and (ii) the dividends payable for the dividend periods
terminating on the same or any earlier date, ratably in proportion to
the respective dividend rates fixed therefor, shall have been paid upon
or declared or set apart for all Class A Shares, Class B Shares, Class
C Shares, Class D Shares and Class E Shares then issued and outstanding
and entitled to receive such dividends.
(b) So long as any Noncumulative Shares shall be outstanding
no dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Noncumulative Shares, shall be paid or declared
or any distribution be made, except as aforesaid, in respect of the
Common Shares or any other shares ranking junior to the Noncumulative
Shares, nor shall any Common Shares or any other shares ranking junior
to the Noncumulative Shares be purchased, retired or otherwise acquired
by the Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to the
Noncumulative Shares received by the Corporation subsequent to the date
of first issuance of Noncumulative Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item VI.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption retirement or
other acquisition of, Common Shares or any other shares ranking on a
parity with or junior to the Noncumulative Shares shall be inapplicable
to (i) any payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares or Noncumulative Shares into Common Shares or
(iii) the exercise by the Corporation of its rights pursuant to Item
VIII(d) of this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated Articles of
Incorporation with respect to
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any other class or series of capital stock hereafter created or
authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of stock (the
"Total Dividends"), then, to the extent permissible under the Code and
to the extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code, the portion
of the Capital Gains Amount that shall be allocable to holders of the
Noncumulative Shares shall be the amount that the total dividends paid
or made available to the holders of the Noncumulative Shares for the
year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Noncumulative Shares at the time outstanding at the
applicable redemption price for such series fixed in
accordance with the provisions of Section 1 of this Item VI;
and
(2) Shall, from time to time, make such redemptions
of each series of Noncumulative Shares as may be required to
fulfill the requirements of any sinking fund provided for
shares of such series at the applicable sinking fund
redemption price fixed in accordance with the provisions of
Section 1 of this Item VI; and shall, in each case, pay all
unpaid dividends for the then current dividend period to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Noncumulative Shares
to be redeemed at their respective addresses then appearing on the
books of the Corporation, not less than 30 days nor more than 60 days
prior to the date fixed for such redemption, or such other time prior
thereto as the Board of Directors shall fix for any series pursuant to
Section 1 of this Item VI prior to the issuance thereof. At any time
after notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of Noncumulative
Shares to be redeemed, together with accrued and unpaid dividends
thereon for the then current dividend period to the redemption date,
with any bank or trust company in Cleveland, Ohio, or New York, New
York, having capital and surplus of not less than $100,000,000, named
in such notice and direct that there be paid to the respective holders
of the Noncumulative Shares so to be redeemed amounts equal to the
redemption price of the Noncumulative Shares so to be redeemed together
with such accrued and unpaid dividends thereon for the then current
dividend period, on surrender of the share certificate or certificates
held by such holders; and upon the deposit of such notice in the mail
and the making of such deposit of money with such bank or trust
company, such holders shall cease to be shareholders with respect to
such shares; and from and after the time such notice shall have been so
deposited and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation with
respect to such shares, except only the right to receive such money
from such bank or trust company without interest or to exercise before
the redemption date any unexpired privileges of conversion. In the
event less than all of the outstanding Noncumulative Shares are to be
redeemed, the Corporation shall select by lot the shares so to be
redeemed in such manner as shall be prescribed by the Board of
Directors.
(2) If the holders of Noncumulative Shares which have
been called for redemption shall not within six years after
such deposit claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand,
pay over to the Corporation such unclaimed amounts and
thereupon such bank or trust company and the Corporation shall
be relieved of all responsibility in respect thereof and to
such holders.
(c) Any Noncumulative Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the Corporation, shall
resume the status of authorized but unissued Noncumulative Shares
without serial designation.
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(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of this
Division A, Section 4(d) of Division B or any similar Section hereafter
contained in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital stock
hereafter created or authorized, the Corporation may not purchase or
redeem (for sinking fund purposes or otherwise) of less than all of the
Noncumulative Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Noncumulative Shares,
unless all dividends on all Noncumulative Shares then outstanding for
the then current dividend period shall have been declared and paid or
funds therefor set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Noncumulative Shares of any series shall be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Noncumulative Shares, the amounts fixed with respect to
shares of such series in accordance with Section 1 of this Item VI,
plus an amount equal to all dividends accrued and unpaid thereon for
the then current dividend period to the date of payment of the amount
due pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation. In the event the net assets of the
Corporation legally available therefor are insufficient to permit the
payment upon all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative Shares of the
full preferential amount to which they are respectively entitled, then
such net assets shall be distributed ratably upon all outstanding
Noncumulative Shares in proportion to the full preferential amount to
which each such share is entitled.
(2) After payment to the holders of Noncumulative
Shares of the full preferential amounts as aforesaid, the
holders of Noncumulative Shares, as such, shall have no right
or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other Corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the Corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Noncumulative Shares shall have no voting
rights, except as provided in this Section or required by law.
(b)(1) If, and so often as, the Corporation shall not have
fully paid, or shall not have declared and set aside a sum sufficient
for the payment of, dividends on any series of Noncumulative Shares at
the time outstanding, for a number of consecutive dividend payment
periods which in the aggregate contain at least 540 days, the holders
of such Noncumulative Shares, voting separately as a class, together
with all Class A Shares, Class B Shares, Class C Shares, Class D Shares
and Class E Shares upon which like voting rights have been conferred
and are exercisable, shall be entitled to elect, as herein provided,
two members of the Board of Directors of the Corporation; provided,
however, that the holders of such Noncumulative Shares shall not
exercise such special class voting rights except at meetings of such
shareholders for the election of directors at which the holders of not
less than 50% of such Noncumulative Shares are present in person or by
proxy; and provided further, that the special class voting rights
provided for in this paragraph when the same shall have become vested
shall remain so vested until the Corporation shall have fully paid, or
shall have set aside a sum sufficient for the payment of, dividends on
such Noncumulative Shares then outstanding for a number of consecutive
dividend payment periods which in the aggregate contain at least 360
days, whereupon the holders of such Noncumulative Shares shall be
divested of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such special class
voting rights in the event above specified in this paragraph.
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(2) In the event of default entitling holders of
Noncumulative Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Noncumulative Shares upon which such default
in the payment of dividends exists and notice thereof shall be
given in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such special meeting
if the annual meeting of shareholders shall be called to be
held within 90 days after the date of receipt of the foregoing
written request from the holders of Noncumulative Shares. At
any meeting at which such holders of Noncumulative Shares
shall be entitled to elect directors, holders of 50% of such
Noncumulative Shares, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of the holders
of a majority of such shares so present at any such meeting at
which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which such holders
of Noncumulative Shares are entitled to elect as herein
provided. Notwithstanding any provision of these Amended and
Restated Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Noncumulative Shares pursuant to this
Subsection shall serve in addition to any other directors then
in office or proposed to be elected otherwise than pursuant to
this Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require
the resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the Corporation, the
two directors elected by such holders of Noncumulative Shares
shall be elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Noncumulative Shares in respect
of elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Noncumulative Shares
are entitled to elect directors pursuant to the foregoing provisions of
this Section the holders of any Class A Shares, Class B Shares, Class C
Shares, Class D Shares and Class E Shares, are entitled to elect
directors pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and Noncumulative Shares then entitled to vote shall be combined
(with class of shares having a number of votes proportional to the
aggregate liquidation preference of its outstanding shares). In such
case, the holders of Noncumulative Shares and of all such other shares
then entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have elected such
directors prior to the happening of the default or event permitting the
holders of Noncumulative Shares to elect directors, or prior to a
written request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new election
shall be held with all such other shares and the Noncumulative Shares
voting together as a single class for such directors, resulting in the
termination of the term of such previously elected directors upon the
election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Noncumulative Shares at the time outstanding, voting separately
as a class, given in person or by proxy either in writing or at a
meeting called for the purpose, shall be necessary to effect either of
the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and
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Restated Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects adversely and
materially the preferences or voting or other rights of the
holders of Noncumulative Shares which are set forth in these
Amended and Restated Articles of Incorporation, as amended;
provided, however, neither the amendment of these Amended and
Restated Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or outstanding
number of Noncumulative Shares or of any shares ranking on a
parity with or junior to the Noncumulative Shares nor the
amendment of the provisions of the Code of Regulations so as
to change the number or classification of directors of the
Corporation shall be deemed to affect adversely and materially
preferences or voting or other rights of the holders of
Noncumulative Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such
Noncumulative Shares.
(e) In the event, and only to the extent, that (1)
Noncumulative Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital stock to vote
separately as a class, the affirmative vote of the holders of at least
two-thirds of each series of the Noncumulative Shares at the time
outstanding, voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose of voting on
such matters, shall be required for any amendment, alteration or
repeal, whether by merger, consolidation or otherwise, of any of the
provisions of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation which affects
adversely and materially the preferences or voting or other rights of
the holders of such series which are set forth in these Amended and
Restated Articles of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or change the
authorized or outstanding number of Noncumulative Shares or of any
shares remaining on a parity with or junior to the Noncumulative Shares
nor the amendment of the provisions of the Code of Regulations so as to
change the number or classification of directors of the Corporation
shall be deemed to affect adversely and materially preferences or
voting or other rights of the holder of such series.
VII. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to"
Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E
Shares or Noncumulative Shares, such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof as to the payment of dividends or as to distributions
in the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation are given preference over
the rights of the holders of Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares or Noncumulative Shares, as the
case may be;
(b) Whenever reference is made to shares "on a parity with"
Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E
Shares or Noncumulative Shares, such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof as to the payment of dividends or as to distributions
in the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation rank equally (except as to
the amounts fixed therefor) with the rights of the holders of Class A
Shares, Class B Shares, Class C Shares, Class D Shares, Class E Shares
or Noncumulative Shares, as the case may be; and
(c) Whenever reference is made to shares "ranking junior to"
Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class E
Shares or Noncumulative Shares, such reference shall mean and include
all shares of the Corporation other than those defined under
Subsections (a) and (b) of this Section as shares "ranking prior to" or
"on a parity with" Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares, as the case may
be.
VIII. Restrictions on Transfer to Preserve Tax Benefit; Shares Subject
to Redemption.
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(a) Definitions. For the purposes of this Item VIII of this
Division A of this Article FOURTH, the following terms shall have the
following meanings:
"Beneficial Ownership" shall mean ownership of Preferred
Shares by a Person who would be treated as an owner of such Preferred
Shares either directly or constructively through the application of
Section 544 of the Code, as modified by Section 856(h) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Preferred
Shares by a Person who would be treated as an owner of such Preferred
Shares either directly or constructively through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code.
The terms "Constructive Owner," "Constructively Owns" and
"Constructively Owned" shall have the correlative meanings.
"Excess Preferred Shares" shall mean any Preferred Shares (i)
acquired or proposed to be acquired by any Person pursuant to a
Transfer to the extent that, if effective, such Transfer would result
in the transferee either Beneficially Owning Preferred Shares or
Constructively Owning Preferred Shares in excess of the Ownership
Limit, or (ii) which are the subject of a Transfer that, if effective,
which would result in the Corporation being "closely held" within the
meaning of Section 856(h) of the Code.
"Market Price" shall mean, with respect to any series of any
class of Preferred Shares, the last reported sales price of such series
reported on the New York Stock Exchange on the trading day immediately
preceding the relevant date or, if shares of such series are not then
traded on the New York Stock Exchange, the last reported sales price of
shares of such series on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system over
which the shares of such series may be traded, or if shares of such
series are not then traded over any exchange or quotation system, then
the market price of shares of such series on the relevant date as
determined in good faith by the Board of Directors of the Corporation.
"Ownership Limit" shall mean, with respect to each series of
each class of Preferred Shares, 9.8% of the outstanding shares of such
series.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for
or to be used exclusively for the purposes described in Section 642(c)
of the Code, an association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other entity or a
group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended; provided, however, that a
"person" does not mean an underwriter which participates in a public
offering of Preferred Shares, for a period of 35 days following the
purchase by such underwriter of such Preferred Shares.
"Preferred Shares" shall mean, collectively, Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Preferred Shares (including, without
limitation, (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Preferred
Shares or (ii) the sale, transfer, assignment or other disposition of
any securities or rights convertible into or exchangeable for Preferred
Shares), whether voluntary or involuntary, whether of record or
beneficially and whether by operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, no Person
shall Beneficially Own or
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Constructively Own shares of any series of any class of
Preferred Shares in excess of the Ownership Limit applicable
to such series.
(ii) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, any Transfer
that, if effective, would result in any Person Beneficially
Owning shares of any series of any class of Preferred Shares
in excess of the Ownership Limit applicable to such series
shall be void ab initio as to the Transfer of such Preferred
Shares which would be otherwise Beneficially Owned by such
Person in excess of such Ownership Limit, and the intended
transferee shall acquire no rights in such Preferred Shares.
(iii) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, any Transfer
that, if effective, would result in any Person Constructively
Owning shares of any series of any class of Preferred Shares
in excess of the Ownership Limit applicable to such series
shall be void ab initio as to the Transfer of such Preferred
Shares which would be otherwise Constructively Owned by such
Person in excess of such amount, and the intended transferee
shall acquire no rights in such Preferred Shares.
(iv) Notwithstanding any other provisions contained
in this Item VIII, any Transfer (whether or not such Transfer
is the result of a transaction entered into through the
facilities of the New York Stock Exchange) or other event
that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to
qualify as a REIT (including, but not limited to, a Transfer
or other event that would result in the Corporation owning
(directly or Constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income
derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income
requirement of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of the Preferred Shares or other
event which would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code or would
otherwise result in the Corporation failing to qualify as a
REIT; and the intended transferee or owner or Constructive or
Beneficial Owner shall acquire or retain no rights in such
Preferred Shares.
(v) For purposes of construing the foregoing
provisions, any attempt to transfer Preferred Shares in
violation of the Ownership Limit applicable to the series of
the class of such Preferred Shares (as such Ownership Limit
may be modified by the Board of Directors pursuant to Section
(h) of Item VIII) shall be construed as causing such Preferred
Shares to be transferred by operation of law to the
Corporation as trustee of a trust for the exclusive benefit of
the person or persons to whom such Preferred Shares can
ultimately be transferred without violating the Ownership
Limit and any Excess Preferred Shares while held in such trust
shall not have any voting rights, shall not be considered for
purposes of any shareholder vote or for determining a quorum
for such a vote, and shall not be entitled to any dividends or
other distributions.
(c) Remedies for Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a Transfer has
taken place in violation of Section (b) of Item VIII of this Division A
of this Article FOURTH or that a Person intends to acquire or has
attempted to acquire beneficial ownership (determined without reference
to any rules of attribution), Beneficial Ownership or Constructive
Ownership of any Preferred Shares of the Corporation in violation of
Section (b) of Item VIII of this Division A of this Article FOURTH, or
that any such Transfer, intended or attempted acquisition or
acquisition would jeopardize the status of the Corporation as a REIT
under the Code, the Board of Directors or its designees shall take such
actions as it deems advisable to refuse to give effect or to prevent
such Transfer, including, but not limited to, refusing to give effect
to such Transfer on the books of the Corporation or instituting
proceedings to enjoin such Transfer and, in addition, exercising its
rights under Section (d) of Item VIII of this Division A of Article
FOURTH.
(d) Purchase Right in Excess Preferred Shares. Beginning on
the date of the occurrence of a Transfer which, if consummated, in the
good faith judgment of
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the Board of Directors of the Corporation, could result in Excess
Preferred Shares the Excess Preferred Shares, subject to such transfer
shall be deemed to have been offered for sale to the Corporation, or
its designee, at a price per share equal to the lesser of (i) the price
per share in the transaction that created such Excess Preferred Shares
(or, in the case of a devise or gift, the Market Price at the time of
such devise or gift) and (ii) the Market Price on the date the
Corporation, or its designee, accepts such offer. The Corporation shall
have the right to accept such offer for a period of 90 days after the
later of (i) the date of such Transfer and (ii) if the Corporation does
not receive a notice of such Transfer pursuant to Section (e) of Item
VIII of this Division A of this Article FOURTH, the date the Board of
Directors determines in good faith that such Transfer has occurred.
Prompt payment of the purchase price shall be made in such reasonable
manner as may be determined by the Corporation. From and after the date
fixed for purchase by the Corporation, and so long as payment of the
purchase price for the Excess Preferred Shares to be so purchased shall
have been made or duly provided for, the holder of any Excess Preferred
Shares so called for purchase shall cease to be entitled to dividends,
distributions, voting rights and other benefits with respect to such
Excess Preferred Shares, excepting only the right to payment of the
purchase price fixed as aforesaid. Any dividend or distribution paid to
a proposed transferee of Excess Preferred Shares prior to the discovery
by the Corporation that the Excess Preferred Shares have been
transferred in violation of Section (b) of Item VIII of this Division A
of this Article FOURTH shall be repaid to the Corporation upon demand.
If the foregoing provisions are determined to be void or invalid by
virtue of any legal decision, statute, rule or regulation, then the
intended transferee of such Excess Preferred Shares shall be deemed, at
the option of the Corporation, to have acted as agent on behalf of the
Corporation in acquiring such Excess Preferred Shares and to hold such
Excess Preferred Shares on behalf of the Corporation.
(e) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire Preferred Shares or other securities in violation
of subparagraph (b) of this Item VIII, or any Person who owns or will
own Excess Preferred Shares as a result of an event under subparagraph
(b) of this Item VIII, shall immediately give written notice to the
Corporation of such event and shall provide to the Corporation such
other information as the Corporation may request in order to determine
the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT.
(f) Owners Required to Provide Information. From and after
the date of the Initial Public Offering:
(i) every Beneficial Owner of more than 5.0% (or such
other percentage, between 0.5% and 5.0%, as provided in the
regulations promulgated pursuant to the Code) of the
outstanding Preferred Shares of the Corporation shall, within
30 days after January 1 of each year, give written notice to
the Corporation stating the name and address of such
Beneficial Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such Beneficial
Owner shall provide to the Corporation such additional
information as the Corporation may request in order to
determine the effect, if any, of such Beneficial Ownership on
the Corporation's status as a REIT.
(ii) each Person who is a Beneficial Owner or
Constructive Owner of Preferred Shares and each Person
(including the shareholder of record) who is holding Preferred
Shares for a Beneficial Owner or Constructive Owner shall
provide to the Corporation such information that the
Corporation may request, in good faith, in order to determine
the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in this Division A
of this Article FOURTH shall limit the authority of the Board of
Directors to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its shareholders by
preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of Item VIII of this Division A of this
Article FOURTH, including any definition contained in Section (a) of
Item VIII, the Board of Directors shall have the power to determine the
application of the provisions of this Item VIII
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with respect to any situation based on the facts known to it.
(i) Exceptions.
(i) Subject to Section (b)(iv) of this Item VIII of
this Division A, the Board of Directors may exempt a Person
from the Ownership Limit applicable to a series of a class of
Preferred Shares if such Person is not an individual (other
than pension plans described in Section 856(h)(3)) for
purposes of Section 542(a)(2) of the Code if the Board of
Directors obtains such representations and undertakings from
such Person as are reasonably necessary to ascertain that no
individual's Beneficial Ownership of such Preferred Shares
will violate the Ownership Limit, and agrees that any
violation or attempted violation will result in such Preferred
Shares in excess of the Ownership Limit being subject to
repurchase by the Corporation as set forth in Section (d) of
Item VIII of this Division A of this Article FOURTH.
(ii) The Board of Directors may exempt a Person from
the limitation on such Person Constructively Owning Preferred
Shares in excess of the Ownership Limit applicable to a series
of a class of such Preferred Shares if such Person does not
own and represents that it will not own, directly or
constructively (by virtue of the application of Section 318 of
the Code, as modified by Section 856(d)(5) of the Code), more
than a 9.8% interest (as set forth in Section 856(d)(2)(B)) in
a tenant of any real property owned or leased by the
Corporation, if the Board of Directors obtains such
representations and undertakings from such Person as are
reasonably necessary to ascertain this fact and agrees that
any violation or attempted violation will result in such
Preferred Shares in excess of the Ownership Limit being deemed
to be Excess Preferred Shares and subject to repurchase by the
Corporation as set forth in Section (d) of Item VIII of this
Division A of this Article FOURTH.
IX. Legend. Each certificate for Preferred Shares shall bear the
following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own or Constructively Own shares of
any series of any class of Preferred Shares in excess of 9.8% of the outstanding
Preferred Shares of such series. Any Person who attempts to Beneficially Own or
Constructively Own shares of any series of any class of Preferred Shares in
excess of the above limitations must immediately notify the Corporation. All
capitalized terms in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Preferred Shares
represented hereby may be subject to repurchase by the Corporation on the terms
and conditions set forth in the Corporation's Articles of Incorporation.
DIVISION B
Subject to the terms of the Class A Cumulative Preferred Shares, the
Class B Cumulative Preferred Shares, the Class C Cumulative Preferred Shares,
the Class D Cumulative Preferred Shares, the Class E Cumulative Preferred Shares
and the Noncumulative Preferred Shares, the Common Shares shall have the
following express terms:
Section 1. Dividend Rights. The holders of Common Shares shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation, out of the assets of the Corporation which are by law available
therefor, dividends or distributions payable in cash, in property or in
securities of the Corporation.
Section 2. Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of Common Shares shall be entitled
to receive, ratably with each other holder of Common Shares, that portion of the
assets of the Corporation available for distribution to its shareholders as the
number of Common Shares held by such holder bears to the total number of Common
Shares then outstanding.
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Section 3. Voting Rights. The holders of Common Shares shall be
entitled to vote on all matters (for which holders of Common Shares shall be
entitled to vote thereon) at all meetings of the shareholders of the
Corporation, and shall be entitled to one vote for each Common Share entitled to
vote at such meeting.
Section 4. Restrictions on Transfer to Preserve Tax Benefit; Common
Shares Subject to Redemption.
(a) Definitions. For the purposes of this Section 4 of this
Division B of this Article FOURTH, the following terms shall have the
following meanings:
"Beneficial Ownership" shall mean ownership of Common Shares
by a Person who would be treated as an owner of such Common Shares
either directly or constructively through the application of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Common Shares
by a Person who would be treated as an owner of such Common Shares
either directly or Constructively through the application of Section
318 of the Code, as modified by Section 856(d)(5) of the Code. The
terms "Constructive Owner," "Constructively Owns" and "Constructively
Owned" shall have the correlative meanings.
"Excess Shares" shall mean any Common Shares (i) acquired or
proposed to be acquired by any Person (other than an Existing Holder)
pursuant to a Transfer to the extent that, if effective, such Transfer
would result in the transferee either (A) Beneficially Owning Common
Shares in excess of the Ownership Limit or (B) Constructively Owning
Common Shares in excess of the Related Party Limit, (ii) acquired or
proposed to be acquired by an Existing Holder pursuant to a Transfer to
the extent that, if effective, such Transfer would result in such
Existing Holder Beneficially Owning Common Shares in excess of the
Existing Holder Limit for such Existing Holder, or (iii) which are the
subject of a Transfer that, if effective, which would result in (A) the
Common Shares being owned by fewer than 100 Persons (determined without
reference to any rules of attribution), or (B) the Corporation being
"closely held" within the meaning of Section 856(h) of the Code.
"Existing Holder" shall mean (i) Bert L. Wolstein, (ii) Scott
A. Wolstein, (iii) James A. Schoff, and (iv) any Person to whom an
Existing Holder Transfers Beneficial Ownership of Common Shares causing
such transferee to Beneficially Own Common Shares in excess of the
Ownership Limit.
"Existing Holder Limit" (i) for any Existing Holder who is an
Existing Holder by virtue of clause (i), (ii) or (iii) of the
definition thereof, shall mean, initially, the percentage of the
outstanding Common Shares Beneficially Owned by such Existing Holder
upon the consummation of the Initial Public Offering, and after any
adjustment pursuant to Section (4)(i) of this Division B of this
Article FOURTH, shall mean such percentage of the outstanding Common
Shares as so adjusted; and (ii) for any Existing Holder who becomes an
Existing Holder by virtue of clause (iv) of the definition thereof,
shall mean, initially, the percentage of the outstanding Common Shares
Beneficially Owned by such Existing Holder at the time that such
Existing Holder becomes an Existing Holder, and after any adjustment
pursuant to Section 4(i) of this Division B of this Article FOURTH,
shall mean such percentage of the outstanding Common Shares as so
adjusted. From and after the date of the Initial Public Offering, the
secretary of the Corporation shall maintain and, upon request, make
available to each Existing Holder, a schedule which sets forth the then
current Existing Holder Limits for each Existing Holder.
"Initial Public Offering" means the sale of Common Shares
pursuant to the Corporation's first effective registration statement
for such Common Shares filed under the Securities Act of 1933, as
amended.
"Market Price" shall mean the last reported sales price of
Common Shares reported on the New York Stock Exchange on the trading
day immediately preceding the relevant date or, if the Common Shares
are not then traded on the New York Stock Exchange, the last reported
sales price of the Common Shares on the trading day immediately
preceding the relevant date as reported on any exchange or
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quotation system over which the Common Shares may be traded, or if the
Common Shares are not then traded over any exchange or quotation
system, then the market price of the Common Shares on the relevant date
as determined in good faith by the Board of Directors of the
Corporation.
"Ownership Limit" shall mean 5.0% of the outstanding Common
Shares of the Corporation.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for
or to be used exclusively for the purposes described in Section 642(c)
of the Code, an association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other entity or a
group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended; provided, however, that a
"Person" does not mean an underwriter which participates in a public
offering of the Common Shares, for a period of 35 days following the
purchase by such underwriter of the Common Shares.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Related Party Limit" shall mean 9.8% of the outstanding
Common Shares of the Corporation.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Common Shares (including, without
limitation, (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Common Shares
or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Common
Shares), whether voluntary or involuntary, whether of record or
beneficially and whether by operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, no Person (other than an Existing
Holder) shall Beneficially Own Common Shares in excess of the
Ownership Limit and no Existing Holder shall Beneficially Own
Common Shares in excess of the Existing Holder Limit for such
Existing Holder.
(ii) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in any Person (other than an Existing Holder)
Beneficially Owning Common Shares in excess of the Ownership
Limit shall be void ab initio as to the Transfer of such
Common Shares which would be otherwise Beneficially Owned by
such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such Common Shares.
(iii) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in any Existing Holder Beneficially Owning Common
Shares in excess of the applicable Existing Holder Limit shall
be void ab initio as to the Transfer of such Common Shares
which would be otherwise Beneficially Owned by such Existing
Holder in excess of the applicable Existing Holder Limit, and
such Existing Holder shall acquire no rights in such Common
Shares.
(iv) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in any Person Constructively Owning Common Shares
in excess of the Related Party Limit shall be void ab initio
as to the Transfer of such Common Shares which would be
otherwise Constructively Owned by such Person in excess of
such amount, and the intended transferee shall acquire no
rights in such Common Shares.
(v) Except as provided in Section 4(i) of this
Division B of this
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Article FOURTH, from and after the date of the Initial Public
Offering, any Transfer that, if effective, would result in the
Common Shares being beneficially owned by less than 100
Persons (determined without reference to any rules of
attribution) shall be void ab initio as to the Transfer of
such Common Shares which would be otherwise beneficially owned
by the transferee, and the intended transferee shall acquire
no rights in such Common Shares.
(vi) From and after the date of the Initial Public
Offering, any Transfer that, if effective, would result in the
Corporation being "closely held" within the meaning of Section
856(h) of the Code shall be void ab initio as to the Transfer
of the Common Shares which would cause the Corporation to be
"closely held" within the meaning of Section 856(h) of the
Code, and the intended transferee shall acquire no rights in
such Common Shares.
(c) Remedies for Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a Transfer has
taken place in violation of Section 4(b) of this Division B of this
Article FOURTH or that a Person intends to acquire or has attempted to
acquire beneficial ownership (determined without reference to any rules
of attribution), Beneficial Ownership or Constructive Ownership of any
Common Shares of the Corporation in violation of Section 4(b) of this
Division B of this Article FOURTH, or that any such Transfer, intended
or attempted acquisition or acquisition would jeopardize the status of
the Corporation as a REIT under the Code, the Board of Directors or its
designees shall take such actions as it deems advisable to refuse to
give effect or to prevent such Transfer, including, but not limited to,
refusing to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer and, in
addition, exercising its rights under Section 4(d) of this Division B
of this Article FOURTH.
(d) Purchase Right in Excess Shares. Beginning on the date of
the occurrence of a Transfer which, if consummated, in the good faith
judgment of the Board of Directors of the Corporation, could result in
Excess Shares, such Excess Shares shall be deemed to have been offered
for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that
created such Excess Shares (or, in the case of a devise or gift, the
Market Price at the time of such devise or gift) and (ii) the Market
Price on the date the Corporation, or its designee, accepts such offer.
The Corporation shall have the right to accept such offer for a period
of ninety days after the later of (i) the date of such Transfer and
(ii) if the Corporation does not receive a notice of such Transfer
pursuant to Section 4(e) of this Division B of this Article FOURTH, the
date the Board of Directors determines in good faith that such Transfer
has occurred. Prompt payment of the purchase price shall be made in
such reasonable manner as may be determined by the Corporation. From
and after the date fixed for purchase by the Corporation, and so long
as payment of the purchase price for the Excess Shares to be so
purchased shall have been made or duly provided for, the holder of any
Excess Shares so called for purchase shall cease to be entitled to
dividends, distributions, voting rights and other benefits with respect
to such Excess Shares, excepting only the right to payment of the
purchase price fixed as aforesaid. Any dividend or distribution paid to
a proposed transferee of Excess Shares prior to the discovery by the
Corporation that the Excess Shares have been transferred in violation
of Section 4(b) of this Division B of this Article FOURTH shall be
repaid to the Corporation upon demand. If the foregoing provisions are
determined to be void or invalid by virtue of any legal decision,
statute, rule or regulation, then the intended transferee of such
Excess Shares shall be deemed, at the option of the Corporation, to
have acted as agent on behalf of the Corporation in acquiring such
Excess Shares and to hold such Excess Shares on behalf of the
Corporation.
(e) Notice of Restricted Transfer. Any Person who acquires or
intends to acquire shares in violation of Section 4(b) of this Division
B of this Article FOURTH or any Person who is a transferee of Excess
Shares shall immediately give written notice to the Corporation of such
event and shall provide to the Corporation such other information as
the Corporation may request in order to determine the effect, if any,
of such Transfer or intended Transfer on the Corporation's status as a
REIT.
(f) Owners Required to Provide Information. From and after
the date of the
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Initial Public Offering:
(i) every Beneficial Owner of more than 5.0% (or such
other percentage, between 0.5% and 5.0%, as provided in the
regulations promulgated pursuant to the Code) of the
outstanding Common Shares of the Corporation shall, within 30
days after January 1 of each year, give written notice to the
Corporation stating the name and address of such Beneficial
Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such Beneficial
Owner shall provide to the Corporation such additional
information as the Corporation may request in order to
determine the effect, if any, of such Beneficial Ownership on
the Corporation's status as a REIT.
(ii) each Person who is a Beneficial Owner or
Constructive Owner of Common Shares and each Person (including
the shareholder of record) who is holding Common Shares for a
Beneficial Owner or Constructive Owner shall provide to the
Corporation such information that the Corporation may request,
in good faith, in order to determine the Corporation's status
as a REIT.
(g) Remedies Not Limited. Nothing contained in this Division B
of this Article FOURTH shall limit the authority of the Board of
Directors to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its shareholders by
preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of Section 4 of this Division B of this
Article FOURTH, including any definition contained in Section 4(a), the
Board of Directors shall have the power to determine the application of
the provisions of this Section 4 with respect to any situation based on
the facts known to it.
(i) Modification of Existing Holder Limits. Subject to the
provisions of Section 4(k) of this Division B, the Existing Holder
Limits may be modified as follows:
(i) Subject to the limitations provided in Section
4(k), any Existing Holder may Transfer Common Shares to a
Person who is already an Existing Holder up to the number of
Common Shares Beneficially Owned by such transferor Existing
Holder in excess of the Ownership Limit. Any such Transfer
will decrease the Existing Holder Limit for such transferor
Existing Holder and increase the Existing Holder Limit for
such transferee Existing Holder by the percentage of the
outstanding Common Shares so Transferred. The transferor
Existing Holder shall give the Board of Directors of the
Corporation prior written notice of any such Transfer.
(ii) Any grant of a stock option pursuant to a stock
option plan approved by the shareholders of the Corporation
shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under Section
4(k) to permit the Beneficial Ownership of the Common Shares
issuable upon the exercise of such stock option.
(iii) The Board of Directors may reduce the Existing
Holder Limit for any Existing Holder, with the written consent
of such Existing Holder, after any Transfer permitted in this
Section 4 by such Existing Holder to a Person other than an
Existing Holder or after the lapse (without exercise) of a
stock option described in Section 4(i)(ii).
(iv) Any Common Shares issued to an Existing Holder
pursuant to a dividend reinvestment plan adopted by the
Corporation shall increase the Existing Holder Limit for the
Existing Holder to the maximum extent possible under Section
4(k) to permit the Beneficial Ownership of such Common Shares.
(j) Modification of Ownership Limit. Subject to the
limitations provided in Section 4(k) of this Division B, the Board of
Directors may from time to time increase the Ownership Limit.
(k) Limitations on Modifications. Notwithstanding any other
provision of this Division B of this Article FOURTH:
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<PAGE> 44
(i) Neither the Ownership Limit nor any Existing
Holder Limit may be increased (nor may any additional Existing
Holder Limit be created) if, after giving effect to such
increase (or creation), five Beneficial Owners of Common
Shares (including all of the then Existing Holders) could
Beneficially Own, in the aggregate, more than 49.6% of the
outstanding Common Shares.
(ii) Prior to the modification of any Existing Holder
Limit or Ownership Limit pursuant to Section 4(i) or Section
4(j) of this Division B of this Article FOURTH, the Board of
Directors of the Corporation may require such opinions of
counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the
Corporation's status as a REIT.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
(iv) The Ownership Limit may not be increased to a
percentage which is greater than 9.8%.
(v) The Related Party Limit may not be increased to a
percentage which is greater than 9.8%.
(l) Exceptions.
(i) The Board of Directors, with a ruling from the
Internal Revenue Service or an opinion of counsel, may exempt
a Person from the Ownership Limits or the Existing Holder
Limits, as the case may be, if such Person is not an
individual for purposes of Section 542(a)(2) of the Code and
the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to
ascertain that no individual's Beneficial Ownership of such
Common Shares will violate the Ownership Limit or the
applicable Existing Holder Limit, as the case may be, and
agrees that any violation or attempted violation will result
in such Common Shares in excess of 5.0% of the outstanding
Common Shares being deemed to be Excess Shares and subject to
repurchase by the Corporation as set forth in Section 4(d) of
this Division B of this Article FOURTH.
(ii) The Board of Directors, with a ruling from the
Internal Revenue Service or an opinion of counsel, may exempt
a Person from the limitation on such Person Constructively
Owning Common Shares in excess of the Related Party Limit if
such Person does not own and represents that it will not own,
directly or constructively (by virtue of the application of
Section 318 of the Code, as modified by Section 856(d)(5) of
the Code), more than a 9.9% interest (as set forth in Section
856(d)(2)(B) in a tenant of any real property owned or leased
by the Corporation, and the Corporation obtains such
representations and undertakings from such Person as are
reasonably necessary to ascertain this fact and agrees that
any violation or attempted violation will result in such
Common Shares in excess of 9.8% being deemed to be Excess
Shares and subject to repurchase by the Corporation as set
forth in Section 4(d) of this Division B of this Article
FOURTH.
Section 5. Legend. Each certificate for Common Shares shall bear the
following legend:
"The Common Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the Corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own Common Shares in excess of 5.0% of
the outstanding Common Shares of the Corporation (unless such Person is an
Existing Holder) and no Person (other than an Existing Holder who Constructively
Owns in excess of 9.8% of the Common Shares immediately following the
consummation of the Initial Public Offering) may Constructively Own Common
Shares in excess of 9.8% of the outstanding Common Shares of the Corporation.
Any Person who attempts to Beneficially Own or Constructively Own Common Shares
in excess of the above limitations must immediately notify the Corporation. All
capitalized items in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Common
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<PAGE> 45
Shares represented may be subject to repurchase by the Corporation on the terms
and conditions set forth in the Corporation's Articles of Incorporation."
Section 6. SECURITIES EXCHANGE TRANSACTIONS. Notwithstanding any
provision contained herein to the contrary, nothing in these Amended and
Restated Articles of Incorporation shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock Exchange.
FIFTH: At all times following the consummation of the Initial Public
Offering (as defined in Article FOURTH), at least a majority of the members of
the Board of Directors shall, except during the period of a vacancy or vacancies
therein, be Independent Directors. An "Independent Director" shall mean a person
who is not (i) employed by the Corporation or (ii) an "affiliate" (as defined in
Rule 405 under the Securities Act of 1933, as amended) of (A) any entity which
is part of the Developers Diversified Group, including, without limitation,
Developers Diversified Limited Partnership, an Ohio limited partnership,
Developers Diversified, Ltd., an Ohio limited partnership, W & M Properties, an
Ohio general partnership, W & Z Properties, Ltd., an Ohio limited partnership,
and DE Properties Corporation, an Ohio corporation, or (B) any partnership which
is an affiliate (as declined above) of any entity listed in clause (A) of this
Article FIFTH.
SIXTH: No holder of shares of the corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares of
any class, now or hereafter authorized, or to subscribe for or purchase
securities convertible into or exchangeable for shares of the corporation or to
which shall be attached or appertain any warrants or rights entitling the holder
thereof to subscribe for or purchase shares, except such rights of subscription
or purchase, if any, for such considerations and upon such terms and conditions
as its Board of Directors from time to time may determine.
SEVENTH: Notwithstanding any provision of Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code, or any successor statutes now or hereafter
in force, requiring for the authorization or taking of any action the vote or
consent of the holders of shares entitling them to exercise two-thirds or any
other proportion of the voting power of the corporation or of any class or
classes of shares thereof, such action, unless otherwise expressly required by
law or these Articles of Incorporation, may be authorized or taken by the vote
or consent of the holders of shares entitling them to exercise a majority of the
voting power of the corporation or of such class or classes of shares thereof.
EIGHTH: To the extent permitted by law, the corporation, by action of
its Board of Directors, may purchase or otherwise acquire shares of any class
issued by it at such times, for such consideration and upon such terms and
conditions as its Board of Directors may determine.
NINTH: The provisions of Chapter 1701.831 of the Ohio Revised Code
shall not apply to the Corporation.
TENTH: The provisions of Chapter 1707.043 of the Ohio Revised Code
shall not apply to the Corporation.
ELEVENTH: If any provision (or portion thereof) of these Articles of
Incorporation shall be found to be invalid, prohibited, or unenforceable for any
reason, the remaining provisions (or portions thereof) of these Articles of
Incorporation shall be deemed to remain in full force and effect, and shall be
construed as if such invalid prohibited, or unenforceable provision had been
stricken herefrom or otherwise rendered inapplicable, it being the intent of the
Corporation and its shareholders that each such remaining provision (or portion
thereof) of these Articles of Incorporation remain, to the fullest extent
permitted by law, applicable and enforceable as to all shareholders,
notwithstanding any such finding.
TWELFTH: No shareholder of the Corporation may cumulate his voting
power in the election of directors.
THIRTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
shareholders herein are granted subject to this reservations.
FOURTEENTH: These Amended and Restated Articles of Incorporation shall
take the place of and supersede the Corporation's existing Articles of
Incorporation.
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<PAGE> 46
IN WITNESS WHEREOF, I have hereunto subscribed my name this 19th day of
November, 1992.
/s/ Albert T. Adams
-----------------------------------
Albert T. Adams, sole incorporator
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<PAGE> 1
EXHIBIT 4.1
- ------------------------------------------------------------------------------
COMMUNITY CENTERS ONE L.L.C.,
COMMUNITY CENTERS TWO L.L.C. and
SHOPPERS WORLD COMMUNITY CENTER, L.P.
(collectively, the Borrowers)
and
LEHMAN BROTHERS HOLDINGS INC., D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC.
(Lender)
--------------------
LOAN AGREEMENT
--------------------
Dated: As of May 15, 1997
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<PAGE> 2
THIS LOAN AGREEMENT made as of the ____ day of May, 1997,
between COMMUNITY CENTERS ONE L.L.C., a Delaware limited liability company ("CC
ONE") having an office at The Heritage, 34555 Chagrin Boulevard, Moreland Hills,
Ohio 44022, COMMUNITY CENTERS TWO L.L.C., a Delaware limited liability company
("CC TWO") having an office at The Heritage, 34555 Chagrin Boulevard, Moreland
Hills, Ohio 44022, and SHOPPERS WORLD COMMUNITY CENTER, L.P., a Delaware limited
partnership ("Shoppers World", and together with CC One and CC Two, sometimes
hereinafter referred to individually as a "Borrower" and collectively as the
"Borrowers"), having an office at The Heritage, 34555 Chagrin Boulevard,
Moreland Hills, Ohio 44022, and LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN
CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation,
having an office at Three World Financial Center, 200 Vesey Street, New York,
New York 10285 (hereinafter referred to as "Lender");
W I T N E S S E T H:
WHEREAS, Lender has made a loan to CC One in the principal
amount of $153,000,000.00 (the "153 Loan");
WHEREAS, Lender has also made a loan to CC One in the
principal amount of $37,000,000.00 (the "37 Loan");
WHEREAS, the 153 Loan is evidenced by that certain note dated
as of November 17, 1995 made by CC One to Lender, in the original principal
amount of $153,000,000.00 (the "Existing 153 Note") and secured by six (6)
certain Mortgages, Deeds of Trust, Deeds to Secure Debt and other real estate
security instruments, as the case may be, each dated as of November 17, 1995,
made by CC One and each in the principal amount of $153,000,000.00 as more
particularly described on Schedule C-1 attached hereto and made a part hereof
(collectively, the "Existing 153 Security Instruments"), covering six (6)
parcels of land more fully described in Schedule A-1 through A-6 attached hereto
and made a part hereof (the "153 Parcels") and subject to the terms of a certain
Loan Agreement dated as of November 17, 1995 made by and between CC One and
Lender (the "Original CC One Loan Agreement");
WHEREAS, the 37 Loan is evidenced by that certain note dated
as of November 17, 1995 made by CC One to Lender, in the original principal
amount of $37,000,000.00 (the "Existing 37 Note") and secured by a certain Deed
of Trust and other real estate security instruments, dated as of November 17,
1995, made by CC One in the principal amount of $37,000,000.00 as more
particularly described in said Schedule C-1 (the "Existing 37 Security
Instrument"; the Existing 153 Security Instruments and the Existing 37 Security
Instrument are hereinafter each individually referred to as an "Existing CC One
Security Instrument" and collectively, as the "Existing CC One Security
Instruments"), covering a parcel of land more fully described in Schedule A-7
attached hereto and made a part hereof (the "37 Parcel"; the 153 Parcels and the
37 Parcel are hereinafter each
<PAGE> 3
individually referred to as a "CC One Parcel", and collectively as the "CC One
Parcels");
WHEREAS, Lender is the owner and holder of six (6) notes, each
dated as of March 22, 1996 in the aggregate principal sum of $140,000,000.00
made by CC Two and Shoppers World, which notes have been endorsed to Lender as
of the date hereof (said notes, as endorsed, are hereinafter collectively
referred to as the "Existing UBS Notes");
WHEREAS, the Existing UBS Notes are secured by three (3)
Mortgages, Deeds of Trust, Deeds to Secure Debt and other real estate security
instruments, as the case may be, in the principal amount of $140,000,000.00, as
more particularly described on Schedule C-2 attached hereto and made a part
hereof (collectively, the "Existing UBS Security Instruments"), covering three
(3) parcels of land more fully described in Schedules A-8 through A-10 attached
hereto and made a part hereof (the "UBS Parcels");
WHEREAS, at the request of Borrowers, Lender has agreed to
extend, modify, amend and restate the terms of the Existing 153 Note, the
Existing 153 Security Instruments, the Existing 37 Note, the Existing 37
Security Instrument, the Existing UBS Notes and the Existing UBS Security
Instruments;
WHEREAS, the Existing 153 Note, the Existing 37 Note and the
Existing UBS Notes are collectively hereinafter referred to as the "Existing
Notes";
WHEREAS, the Existing 153 Security Instruments, the Existing
37 Security Instrument and the Existing UBS Security Instruments are
collectively hereinafter referred to as the "Existing Security Instruments", and
the CC One Parcels and the UBS Parcels shall be hereinafter referred to
individually as a "Parcel", and collectively as the "Parcels";
WHEREAS, in pursuance of said modification, on the date
hereof, Borrowers and Lender, among other things, are (i) entering into this
Agreement, (ii) modifying and restating the Existing Notes pursuant to certain
amended and restated promissory notes more particularly described on Schedule
D-1 attached hereto and made a part hereof (each Existing Note, as amended and
restated, a "Note", and collectively, the "Notes"), and (iii) modifying and
restating each of the Existing Security Instruments pursuant to those certain
amended and restated mortgages, deeds of trust or deeds to secure debt, as the
case may be, as more particularly described on Schedule D-2 attached hereto and
made a part hereof (each Existing Security Instrument, as modified and restated,
a "Security Instrument"; collectively, the "Security Instruments"), such that
each of the Security Instruments shall be in the principal amount of
$322,500,000.00 and shall secure each of the Notes (other than the Security
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<PAGE> 4
Instrument to be recorded in Collier County, Florida which shall
be in the principal sum of $153,000,000.00); and
WHEREAS, at the request of Borrowers, Lender has agreed, among
other things, to (i) establish the Operating Account (defined below) and (ii)
permit Borrowers to release certain Properties (hereinafter defined) from the
lien of the Security Instruments from and after the Defeasance Lockout
Termination Date (defined below) in certain instances upon defeasance of a
portion of the Notes as more fully set forth herein;
NOW, THEREFORE, in consideration of ten dollars ($10) and
other good and valuable consideration, the receipt of which is hereby
acknowledged, Lender and Borrowers hereby covenant and agree as follows:
1. THE NOTE AND THE SECURITY INSTRUMENTS. The indebtedness of
Borrowers shall be: (i) evidenced by the Notes, and (ii) secured by, among other
things, (a) the Security Instruments made by Borrowers covering the fee estate
of Borrowers in each Parcel, the Improvements (as such term is defined in the
Security Instruments) located on each Parcel and other property, rights and
interests of Borrowers in the same (individually, a "Property" and collectively,
the "Properties"), and (b) certain modification and restatement of assignments
of leases and rents each given by a Borrower to Lender dated the date hereof and
covering the Properties (the "Assignments of Rents").
2. LOAN DOCUMENTS. The term "Loan Documents" as used in this
Agreement shall collectively mean the Notes, the Security Instruments, the
Assignments of Rents, the Assignments of Agreements, Permits and Contracts, the
Certificates of Compliance and Indemnification Agreements, the Assignment of
Management Agreements and Subordination of Management Fees each dated the date
hereof between one or more Borrowers and Lender, this Agreement and all other
documents and instruments of any nature whatsoever executed or delivered in
connection with the Loan.
3. TERMINATION OF ORIGINAL LOAN AGREEMENT. The Original Loan
Agreement is hereby terminated, shall be null and void and of no further force
and effect and is hereby replaced and superseded in its entirety by this Loan
Agreement.
4. PROPERTY RELEASES. Subject to the terms and conditions set
forth herein, from and after the Defeasance LockOut Termination Date Borrowers
shall have the right, from time to time, on any Scheduled Payment Date (as
defined in the Notes) to obtain a release (a "Property Release") of a Property
from the lien of the related Security Instrument (i) provided that no default
under this Agreement, the Notes, the Security Instruments or any other Loan
Documents, that in Lender's sole judgment is
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<PAGE> 5
material, has occurred and is continuing, (ii) subject to compliance with the
provisions set forth below in this Section 4 and in Section 6 of this Agreement;
and (iii) provided that, unless Borrowers shall at the time of such Property
Release be an entity that complies with subsection 8.4(a)(iv)(B) of the Security
Instruments, legal, record, economic and beneficial ownership of the Property
for which a Property Release is being requested (the "Release Premises") is
simultaneously with the granting of the Property Release transferred (a "Release
Premises Transfer") to and shall be owned immediately after such Property
Release by a person(s), party(ies) or,entity(ies) other than any Borrower, the
managing member of any Borrower, or any general partner of any Borrower or any
person, party or entity owned or controlled by any of the foregoing ("Release
Premises Transferee"). In the event that the Borrowers seeks to release a
Property from the lien of the related Security Instrument, Lender shall release
such Property from the lien of the related Security Instrument and the Loan
Documents, but only upon receipt by Lender of the following:
A. At least thirty (30) days but no more than
sixty (60) days prior written notice of its request to obtain a
release of the Release Premises;
B. A certificate of each Borrower certifying the
requirements set forth in Paragraphs 4.I. and 4.J. of this
Loan Agreement shall be true after giving effect to such
transfer;
C. At least three (3) Business Days (as defined
in the Notes) prior to such Property Release an irrevocable
notice of defeasance and the certification by Borrowers in
the form attached hereto as Exhibit A;
D. Defeasance Collateral (defined below) with a
Collateral Value (defined below) required under Paragraph 6
hereof;
E. A wire transfer of immediately available
federal funds in an amount equal to all sums due under the
applicable Note or Notes under Section 6 of this Agreement
and under the Loan Documents in connection with a
defeasance;
F. Evidence satisfactory to Lender that, other than
the Security Instruments, there are no liens (except as permitted under
the Security Instruments), mortgages, deeds of trust or other security
instruments, as the case may be, encumbering the Properties remaining
encumbered by the lien of the Security Instruments, including without
limitation a "bring down" or "date down" of the title insurance
policies insuring the liens of the Security Instruments on such
remaining Properties;
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<PAGE> 6
G. All proposed documents related to the Release
Premises Transferee and such documents, certificates and assurances
that Lender shall request to evidence and confirm that the Release
Premises is simultaneously with the Property Release being transferred
to a Release Premises Transferee;
H. Payment of all Lender's costs and expenses,
including due diligence review costs and reasonable counsel fees and
disbursements incurred in connection with the release of the Property
from the lien of the related Security Instruments and the review and
approval of the documents and information required to be delivered in
connection therewith ("Property Release Expenses");
I. Evidence satisfactory to Lender that the Aggregate
Debt Service Coverage Ratio (hereinafter defined) for the twelve (12)
month period immediately after the Property Release with respect to the
Properties remaining encumbered by the liens of the Security
Instruments shall be equal to or greater than the greater of (i) the
Aggregate Debt Service Coverage Ratio with respect to all of the
Properties for the four (4) fiscal quarters immediately preceding the
date hereof (the "Origination DSCR") or (ii) the Aggregate Debt Service
Coverage Ratio with respect to the Properties then encumbered by the
liens of the Security Instruments immediately prior to such release,
for the four (4) fiscal quarters immediately preceding the proposed
Property Release (the "Current DSCR");
J. Evidence reasonably satisfactory to Lender
that Borrower is Solvent (hereinafter defined) and shall not
be rendered Insolvent (hereinafter defined) by the Property
Release of the Release Premises; and
K. If the Securities (as defined in the Security
Instruments) are then rated by the Rating Agencies (as defined in the
Security Instruments), the written confirmation of the Rating Agencies
that neither the Property Release nor the Defeasance (defined below)
shall result in a downgrade, withdrawal or qualification of the then
current ratings by the applicable Rating Agencies of the Securities and
otherwise in form and substance reasonably satisfactory to Lender and
its counsel.
The term "Aggregate Debt Service Coverage Ratio' shall mean
the ratio of (a) the product of (i) the Net Operating Income (as defined in the
Security Instruments) of each of the Properties other than the Release Premises
(if the calculation is being made in connection with a Property Release) and any
Property which has, prior to any particular Property Release, been theretofore
released, to be produced by the operation of such Properties during the
applicable period, times (ii) 97.5% to
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<PAGE> 7
(b) the payments that would be due under the Notes (excluding payments due on
any portion of the principal balance of the Notes theretofore defeased) after
giving effect to the Defeasance of principal to be received for such Property
Release for the applicable period, assuming for the purposes of this calculation
a loan constant of nine and 501100 percent (9.50%). For purposes of calculating
Aggregate Debt Service Coverage Ratio, all tenants under Leases that are in
occupancy as of the date hereof shall be deemed to have been paying rent for the
four (4) fiscal quarters immediately preceding July 1, 1997.
The term "IRS Code" as used herein shall mean the Internal
Revenue Code of 1986, as amended, and the related Treasury Department
regulations, including temporary regulations.
The term "Solvent" as used herein to any Person (hereinafter
defined) shall mean that (i) the sum of the assets of such Person, at a fair
valuation based upon appraisals or comparable valuation, will exceed its
liabilities, including contingent liabilities, (ii) such Person will have
sufficient capital with which to conduct its business as presently conducted and
as proposed to be conducted and (iii) such Person has not incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as they
mature. For purposes of this definition, "debt" means any liability on a claim,
and "claim" means (x) a right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, or (y) a right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed; undisputed, secured,
or unsecured. With respect to any such contingent liabilities, such liabilities
shall be computed in accordance with GAAP at the amount which, in light of all
the facts and circumstances existing at the time, represents the amount which
can reasonably be expected to become an actual or matured liability.
The term "Person" shall mean and include any individual,
partnership, limited liability company, joint venture, firm, corporation,
association, company, trust or other enterprise or any government or political
subdivision or agency, department or instrumentality thereof.
The term "Insolvent" as used herein shall have the meaning set
forth in Section 101(31) of Title 11 of the United States Code, as the same may
be amended from time to time.
5. OPERATING ACCOUNT. (a) Borrowers shall cause all monies
owing and paid in respect of the Properties or the Security Instruments and in
respect of all Rents (as defined in the Security Instruments) from any Leases
(as defined in the
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<PAGE> 8
Security Instruments) and Operating Agreements (as defined in the Security
Instruments) and all other operating income, and all income or other gains from
investment or reinvestment thereof to be directly deposited by the obligor or
tenant thereunder or the Manager or Qualified Manager (as such terms are defined
in the Security Instruments), as the case may be, in one or more
interest-bearing operating accounts that are Eligible Accounts (hereinafter
defined) for each Borrower (collectively, the "Operating Account") to be
established by each Borrower in the name of Lender or its designated agent in
accordance with this Paragraph 5 at The National City Bank or at another bank
which is an Eligible Institution (defined below) (the "Depository") selected by
Borrowers upon prior written notice to Lender (unless reasonably disapproved by
Lender), separate from all other monies of Borrower or Lender. Borrowers shall
irrevocably authorize and direct each tenant under a Lease and each counterparty
under an Operating Agreement to pay all Rents to the Depository for deposit in
the applicable Operating Account. Borrowers shall deposit into, and shall
maintain at all times, a minimum balance in the Operating Account equal to in
the aggregate $2,747,205.42 (the "Minimum Balance"), which Minimum Balance shall
be equal to the sum of (i) the Monthly Tax Escrow, (ii) the Monthly Insurance
Escrow (each as defined in any of the Security Instruments) and (iii) one
regularly scheduled payment of principal and interest due under the Notes, and
shall be adjusted by Lender from time to time based upon increases or decreases
in Taxes or Insurance Premiums (each as defined in the Security Instruments) as
determined by Lender in its reasonable discretion. Upon the occurrence of a
Primary Event or a Secondary Event (each defined below), Lender (or its
designated agent) shall be the only party entitled to withdraw any funds from
the Operating Account. Prior to the occurrence of a Primary Event or a Secondary
Event, Borrowers shall be the only parties entitled to withdraw any funds from
the respective Operating Account. Lender shall deliver to the Depository an
authorization, naming each Borrower as an authorized signatory under the
respective Operating Account and authorizing such Borrower to withdraw funds
from the Operating Account prior to such time as the Depository shall receive
notice from Lender (on which the Depository shall be entitled to rely,
notwithstanding any notice to the contrary from any Borrower, that a Primary
Event or a Secondary Event has occurred). Such account shall be established in a
manner satisfactory to Lender and consistent with the terms of this Paragraph 5
and the Depository shall acknowledge and agree in writing to hold such account
subject to Lender's first priority security interest therein and the rights and
obligations of Lender and Borrowers under the provisions of this Paragraph 5.
Borrowers hereby grant a security interest in, and assign, the Operating Account
to Lender to secure the Obligations (as defined in and under each of the
Security Instruments), to be used by Lender to pay amounts permitted to be
withdrawn by Lender in accordance with this Paragraph 5. Notwithstanding the
fact that the Operating Account shall be in the name of Lender, all
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<PAGE> 9
interest and other investment income shall, for all purposes, including under
the IRS Code, shall be the income and property of Borrowers (to be deposited and
held in the Operating Account in accordance with the provisions of this
paragraph 5 and subject to the security interests herein granted to Lender). All
initial and ongoing bank account and lock box maintenance fees and expenses
shall be paid by Borrowers.
(b) The provisions of this Subparagraph 5(b) shall apply at
all times after the occurrence of a Primary Event (unless a Secondary Event has
occurred, in which event, at Lender's option, the provisions of subparagraph
5(c) shall apply). On the first day of each calendar month (or if not a Business
Day, the next succeeding Business Day) Lender shall make a withdrawal (the
"Required Amounts Withdrawal") from the Operating Account equal to the aggregate
sum of (i) the monthly installments of interest (the "Interest Payment") due
under the Notes on the tenth day of each calendar month (or if not a Business
Day, the next succeeding Business Day) (the "Scheduled Payment Date"), and (ii)
an amount sufficient to satisfy all other payment obligations of Borrowers
pursuant to the Notes, the Security Instruments and the other Loan Documents
(collectively, the "Required Amounts"). The Required Amounts withdrawn by Lender
on each Scheduled Payment Date shall be applied to the Interest Payment then due
and payable and, if applicable, applied toward any other payment obligations,
including the deposit of such sums in the respective escrow accounts established
by Lender in accordance with the terms of the Notes, the Security Instruments or
the other Loan Documents including, without limitation, the Escrow Fund (as
defined in each Security Instrument). On each Scheduled Payment Date,
immediately after the Required Amounts Withdrawal, to the extent applicable,
Lender (or its designated agent) shall deliver to Borrowers a certificate via
facsimile certifying that the amounts withdrawn by Lender (or its designated
agent) on such Scheduled Payment Date equal the Required Amounts due and payable
on the Scheduled Payment Date and that such Required Amounts have been applied
to the Interest Payment then due and payable and, if applicable, applied toward
any other payment obligations. No person or entity shall withdraw any monies
from the Operating Account except Lender (or its designated agent) for the
purpose of making payments pursuant to this Subparagraph 5(b). Notwithstanding
the foregoing, provided that no Event of Default shall have occurred and be
continuing and the balance in the Operating Account on any Scheduled Payment
Date immediately after the Required Amounts Withdrawal is equal to or greater
than the Minimum Balance, then on and after each such Scheduled Payment Date,
Lender shall, upon the request of Borrowers, withdraw on behalf of Borrowers, on
a weekly basis through and including the last day of such calendar month in
which such Scheduled Payment Date falls, the amounts which have been deposited
into the Operating Account, and which are in available funds, on or prior to the
last day of such calendar month in excess of the Minimum Balance, provided
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<PAGE> 10
Borrowers deliver prior to each such withdrawal to the Depository and Lender via
facsimile transmission, a certificate of Borrowers in which each Borrower
certifies that as of the date of the requested withdrawal:
(i) all payments then due to Borrowers'
creditors and all Operating Expenses (as defined in each of
the Security Instruments) then due have been paid in full, or
are no more than sixty (60) days delinquent, unless Borrowers
are contesting the amount of such payments in accordance with
Section 3.17 of the related Security Instrument; and
(ii) Borrowers shall use the amounts
withdrawn to first pay such past due amounts to its creditors
and for Operating Expenses.
Notwithstanding anything to the contrary herein, in the event
that, and only for so long as, the balance in the Operating Account on any
Scheduled Payment Date immediately after the Required Amounts Withdrawal is less
than or equal to the Minimum Balance, Borrowers shall have no right to request
Lender to make withdrawals on its behalf.
(c) Upon the occurrence of a Secondary Event, Borrowers shall
not be entitled to any monies theretofore or thereafter deposited into the
Operating Account and Lender shall be entitled to all such monies and may apply
same to the payment of the Debt (as defined in this Security Instruments) in
such order and priority as is required or permitted by the Notes, the Security
Instruments, the other Loan Documents and applicable law.
(d) The term "Eligible Account" as used herein shall mean an
account that is (i) maintained with The National City Bank or a depository
institution or trust company the longterm unsecured debt obligations of which
(or, in the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the long-term unsecured debt
obligations of which) have been rated by the Rating Agencies in a rating
category of not less than A+ or Aa3, as applicable, or the short-term deposits
or commercial paper of which are rated in a rating category of not less than A-1
or PI, as applicable, (an "Eligible Institution") at the time of any deposit
therein; (ii) a segregated trust account or accounts maintained with a federal
or state chartered depository institution or trust company with trust powers
acting in its fiduciary capacity, which in the case of any state chartered
depository institution or trust company is subject to regulations or has
established internal guidelines regarding fiduciary funds on deposit
substantially similar to federal requirements; or (iii) such other account as is
reasonably acceptable to Lender, provided that Lender receives written
confirmation by the Rating Agencies that the selection of
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<PAGE> 11
such account shall not result in a downgrade, withdrawal or qualification of the
ratings then assigned to the Securities.
(e) The term "Primary Event" as used herein shall mean the
occurrence of one or more of the following: (i) the Aggregate Debt Service
Coverage Ratio for any four (4) consecutive quarters falls below 1.375 to 1.00,
unless such fall in the Aggregate Debt Service Coverage Ratio is due solely to
the construction of a Debt Service Alteration (as defined in the Security
Instruments) and Borrower has posted one or more Letters of Credit in accordance
with the terms of Subsection 4.5(g) of the Security Instruments; or (ii) the
long-term unsecured debt rating of the Manager (as defined in any of the
Security Instruments), or the Qualified Manager (as defined in any of the
Security Instruments) if such Qualified Manager has a Qualified Rating (defined
below), falls to BB+ or Ba1, as applicable; or (iii) if the Qualified Manager
does not have a Qualified Rating, and the Rating Agencies, as a condition to
confirming that the employment of the Qualified Manager would not result in a
downgrade, withdrawal or qualification of the ratings then assigned to the
Securities, require that a lock-box be established; or (iv) if the Qualified
Manager does not have a Qualified Rating and the Rating Agencies did NOT require
the establishment of a lock-box as a condition to confirming that the employment
of the Qualified Manager would not result in a downgrade, withdrawal or
qualification of the ratings then assigned to the Securities, any notice that
the continued employment of such Qualified Manager without the establishment of
a lock-box would result in the ratings then assigned to the Securities being
downgraded, withdrawn or qualified by the Rating Agencies. Upon the occurrence
thereof, a Primary Event shall NOT be deemed cured if one or more of the
foregoing conditions (i), (ii), (iii) and (iv) shall cease to exist and the
provisions of Section 5(b) shall control for so long as the indebtedness secured
by the Security Instruments shall remain outstanding. The term "Qualified
Rating" shall mean, with respect to a Qualified Manager, that its long term
unsecured debt is assigned a rating of at least BBB- or Baa3, as applicable, by
the Rating Agencies.
(f) The term "Secondary Event" as used herein shall mean (i)
the occurrence of an Event of Default under any of the Security Instruments, if
Lender, in its sole and absolute discretion, so elects by written notice to
Borrower after the occurrence thereof (prior to Lender making such election, any
such event shall constitute a Primary Event), (ii) Borrower fails at any time to
maintain the Minimum Balance in the Operating Account, or (iii) the acceleration
of the Debt.
(g) The term "Qualified Institutional Lender" as used herein
shall mean a financial institution or other lender with a long-term unsecured
debt rating that is not less than AA or Aa, as applicable.
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(h) If any Event of Default shall have occurred and be
continuing, the license granted in Section 1.2 of the Security Instruments shall
immediately cease and terminate, with or without any action or proceeding or the
intervention of a receiver appointed by a court, and Lender or an agent
appointed by Lender may, to the fullest extent permitted by the Leases and the
Operating Agreements, and in addition to, and not in limitation of, any and all
other rights and remedies that Lender may have under this Agreement, the Note,
the Security Instruments or any other Loan Documents, do any or all of the
following:
(i) exercise any of Borrowers' rights under the
Leases or the Operating Agreements, including notifying
tenants and counterparties thereunder or thereto to pay Rent
or other sums due to an account or location selected by
Lender;
(ii) enforce the Leases and the Operating Agreements;
(iii) demand, collect, sue for, attach, levy, recover,
receive, compromise and adjust, and make, execute and deliver
receipts and releases for all rents or other payments that may
then be or may thereafter become due, owing or payable with
respect to the Leases or the Operating Agreements;
(iv) demand that any sums held by Borrowers with respect
to any Lease (including, but not limited to, any security
deposits, other deposits or prepayments) or Operating
Agreement be immediately remitted to Lender; and
(v) generally, do, execute and perform any other act,
deed, matter or thing whatsoever that ought to be done,
executed and performed in and about or with respect to the
Leases and the Operating Agreements, as fully as allowed or
authorized by the Security Instruments.
(i) Borrowers hereby irrevocably authorize and direct, with
respect to each of the Properties, each tenant under a Lease and each
counterparty under an Operating Agreement, upon receipt of notice from Lender
that a Primary Event has occurred, to pay directly to Lender or as directed by
Lender, all rents, issues and profits accruing or due under such tenant's Lease
or counterparty's Operating Agreement from and after the receipt of such notice.
Borrowers agree that any tenant or counterparty to an Operating Agreement shall
have the right to rely upon the notice from Lender and shall pay such rents,
issues and profits to or as directed by Lender, notwithstanding any notice from
or contrary claim by Borrowers, and Borrowers shall have no right or claim for
any rents, issues and profits so paid to Lender.
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<PAGE> 13
(j) Nothing in this Paragraph 5 shall relieve Borrowers of
their obligations to make all payments due under the Note, the Security
Instruments and the other Loan Documents when due and payable.
6. DEFEASANCE.
(a) Subject to compliance with and satisfaction
of the terms and conditions of Paragraph 4 of this Agreement and the terms and
conditions of this Section 6, Borrowers may elect on any Scheduled Payment Date
after the earlier of (x) the third (3rd) anniversary of the date of this
Agreement or (y) two (2) years from the "startup day" within the meaning of
Section 86OG(a)(9) of the IRS Code of a REMIC Trust (defined below) (the
"Defeasance Lock-Out Termination Date"), to obtain a Property Release of one or
more Properties from the related Security Instruments by delivering to Lender,
as security for the payment of a portion of all interest due and to become due
throughout the term of the Notes on, and the portion of the principal balance of
the Notes equal to the lesser of (A) 125 % of the sum of the Allocated Loan
Amounts of each of such Release Premises, or (B) the then aggregate unpaid
principal balance of the Notes, Defeasance Collateral (defined below) with
Collateral Value (defined below) sufficient, without consideration of any
reinvestment of interest therefrom, to pay (i) all amounts then due relating to
such portion of the Notes, including accrued interest thereon, (ii) the portion
of the outstanding principal amount of the Notes equal to the lesser of (1) 125%
of Allocated Loan Amounts of each of such Release Premises or (2) the then
aggregate unpaid principal balance of the Notes (the lesser of such amount, the
"Defeasance Amount") and (iii) the portion of the interest that will become due
under such portion of the Notes on any date prior to and including the Maturity
Date (all such interest as described in this clause (iii) together with the
Defeasance Amount and such amounts described in clause (i) being hereinafter
referred to as the "Defeasance Property").
(b) As a condition to any Defeasance, prior to
any Defeasance, Borrowers shall have delivered to Lender:
(i) all necessary documents to amend and restate the
Note or Notes, as the case may be, to reflect that
the Note or Notes, as the case may be, evidence
the portion of the principal balance of the Notes
that has not been defeased and to issue a
substitute note having a principal balance equal
to the Defeasance Amount (the "Defeased Note") and
another substitute note having a principal balance
equal to the undefeased portion of the Note (the
"Undefeased Note"). The Undefeased Note shall
have terms identical to the terms of the Note,
except for the principal balance which shall be
equal to the undefeased principal portion of the
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<PAGE> 14
Note. Each Defeased Note shall (A) be in a principal
amount equal to the Defeasance Amount, (B) be payable
to the order of Lender, (C) be dated as of the date
hereof, (D) mature on the Maturity Date, (E) be
secured by the Defeasance Collateral and Cash
delivered in connection with the Defeasance and (F)
otherwise contain substantially the same terms as the
Note. Each Defeased Note shall evidence a portion of
the existing indebtedness hereunder and not any new
or additional indebtedness of Borrower. A Defeased
Note cannot be the subject of any further Defeasance.
(ii) an opinion of Borrowers' counsel in form
reasonably satisfactory to Lender stating (A) that
the Defeasance Collateral and the proceeds thereof
have been duly and validly assigned and delivered
to the Defeasance Obligor and that Lender has a
valid, perfected, first priority lien and security
interest in the Defeasance Collateral delivered by
Borrower and the proceeds thereof and all
obligations, rights and duties under and to the
Defeasance Note, (B) that if the holder of the
Notes or any Note shall at the time of the
Property Release be a REMIC (defined below), (x)
the Defeasance Collateral has been validly
assigned to the REMIC Trust, (y) the Defeasance
has been effected in accordance with the
requirements of Treasury Regulation 1.860(g)-
2(a)(8) (as such regulation may be amended or
substituted from time to time) and will not be
treated as an exchange pursuant to Section 1001 of
the IRS Code and (z) the tax qualification and
status of the REMIC Trust as a REMIC will not be
adversely affected or impaired as a result of the
Defeasance, and (C) such other matters as Lender
or its counsel may reasonably require.
"REMIC" shall mean a "real estate mortgage investment
conduit" within the meaning of Section 860D of,the
IRS Code.
"REMIC Trust" shall mean a REMIC which holds the
Notes.
(iii) written confirmation from the Rating Agencies that
such Defeasance will not result in a withdrawal,
downgrade or qualification of the then current
ratings by the applicable Rating Agencies of the
Securities and otherwise in form and substance
reasonably satisfactory to Lender and its counsel.
If required by the Rating Agencies, Borrower
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<PAGE> 15
shall, at Lender's expense (the cost of which shall
be subject to Lender's prior approval, which approval
shall not be unreasonably withheld), also deliver or
cause to be delivered a nonconsolidation opinion with
respect to the Defeasance Obligor in form and
substance satisfactory to Lender and the Rating
Agencies.
(iv) a certificate of Borrower's independent certified
public accountant certifying that the Defeasance
Collateral generates monthly amounts equal to or
greater than each monthly installment of principal
and interest required to be paid under the
Defeased Note through and including the Maturity
Date and payments due thereon.
(v) Borrower shall deliver such other certificates,
documents or instruments as Lender may reasonably
request.
(c) In connection with any Defeasance hereunder, Lender shall,
or if there are any outstanding Securities (as defined in the Security
Instruments), Lender may, at its option, and if it elects not to, Lehman
Brothers Realty Corporation ("LBRC") shall, at Lender's expense, establish or
designate a successor entity (the "Defeasance Obligor") and Borrower shall
transfer and assign all obligations, rights and duties under and to the Defeased
Note together with the pledged Defeasance Collateral to such Defeasance Obligor.
Such Defeasance Obligor shall assume the obligations under the defeased Note and
any security agreement executed in connection with the Defeasance or the
Defeasance Collateral delivered in connection therewith (the "Defeasance
Security Agreement"), and Borrower shall be relieved of its obligations under
such documents.
(d) Each of the obligations of the United States of America
that is part of the Defeasance Collateral shall be duly endorsed by the holder
thereof as directed by Lender or accompanied by a written instrument of transfer
in form and substance wholly satisfactory to Lender (including, without
limitation, such instruments as may be required by the depository institution
holding such securities or by the issuer thereof, as the case may be, to
effectuate book-entry transfers and pledges through the book-entry facilities of
such institution) in order to perfect upon the delivery of the Defeasance
Collateral the first priority security interest therein in favor of the Lender
in conformity with all applicable state and federal laws governing the granting
of such security interests. Borrower shall authorize and direct that the
payments received from such obligations shall be made directly to Lender or
Lender's designee and applied to satisfy the obligations of Borrower under the
Defeased Note. Borrower shall execute and deliver a Defeasance Security
Agreement in form and substance reasonably satisfactory
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<PAGE> 16
to Lender creating a first priority lien on the Defeasance Collateral delivered
in connection with the Defeasance and the Obligations purchased with the
Defeasance Collateral.
(e) The Defeasance Collateral shall generate payments on or
prior to, but as close as possible to, the Business Day prior to each successive
scheduled payment date after the Defeasance Date upon which payments are
required under this Agreement and the Defeased Note, including the amounts due
on the Maturity Date (the "Scheduled Defeasance Payments").
(f) Notwithstanding any release of any of the Security
Instruments granted pursuant to this Paragraph 6 and Paragraph 4 or any
Defeasance hereunder, Borrowers shall and hereby agree to continue to be bound
by and obligated under Subsections 7.4(a)(i) through (vii), inclusive, of each
of such Security Instruments, 10.1(a), 10.1(f), 11.1(a), 11.1(f), 11.1(i) and
11.1(l), Sections 3.1, 6.1, 7.2, 11.2, 11.5, 11.7, 11.10 and 13.2 and Articles
12 and 14 of each of such released Security Instruments; provided however that
all references therein to "Property" or "Personal Property" shall be deemed to
refer only to the Defeasance Collateral delivered to Lender.
(g) No Property Release or Defeasance to be made pursuant to
this Paragraph 6 shall be made or given or effective until the first day after
expiration of the period during which the delivery to Lender of Defeasance
Collateral in connection therewith is subject to avoidance and recovery as a
preferential transfer under 11 U.S.C. ss. 547 in the event of a bankruptcy of
the delivering person or entity without such avoidance and recovery (which day
shall be identified in writing by Borrower at any time that Borrower delivers
Defeasance Collateral to Lender), unless Lender receives, at the time of such
delivery, an opinion of counsel to the effect that such delivery of Defeasance
Collateral would not be avoided and recovered as a preferential transfer under
11 U.S. C. ss. 547 in the event of the filing of a bankruptcy petition in
respect of the conveying or delivering person or entity.
(h) All Defeasance Collateral shall be used and applied first
to defease a portion of the Note of Borrower which is the owner of the Property
that is subject to the Property Release, in a principal amount equal to the
Allocated Loan Amount relating to such Property, together with such amount that
is necessary for the payment of all interest due and to become due with respect
to such portion of such Note, and the balance of any Defeasance Collateral shall
be applied to Defease each of the Notes pro-rata. In no event shall the
Allocated Loan Amounts for the remaining Properties be reduced as a result of
any Defeasance. Upon any Property Release the Defeasance Collateral delivered in
connection therewith shall constitute Collateral which shall secure the
Obligations.
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<PAGE> 17
(i) Any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection with the creation of the Defeased Note,
the modification of the Note or Notes, as the case may be, or otherwise required
to accomplish the Defeasance shall be paid by Borrowers simultaneously with the
occurrence of any Defeasance.
(j) The term "Defeasance Collateral" as used herein shall mean
non-callable and non-redeemable securities evidencing an obligation to timely
pay principal and interest in a full and timely manner that are direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged.
(k) The term "Collateral Value" as used herein shall mean as
of any date with respect to Defeasance Collateral delivered to Lender, the
aggregate amount of payments of principal of such Defeasance Collateral and the
predetermined and certain income therefrom that will be paid or payable to
Lender on or before the Business Day prior to each day on which payments are due
on the obligations in respect of which such Defeasance Collateral was delivered,
without consideration of any reinvestment of such income, all as certified in
writing by a recognized and reputable independent certified public accounting
firm or investment banking firm selected by Borrower.
7. RELEASE OF OUT-PARCELS. Upon the request of Borrowers,
Lender shall release one or more Out-Parcels (defined below) from the lien of
the related Security Instrument and execute instruments of release or partial
release in duly recordable form (an "Out-Parcel Release") provided that
Borrowers shall, at their sole cost and expense, comply with all of the
following terms, conditions and provisions with respect to such Out-Parcel and
requested OutParcel Release:
(a) at the time of any such Out-Parcel Release, no Event of
Default shall have occurred and be continuing under the Note, the
Security Instruments or any of the other Loan Documents;
(b) ingress to and egress from all portions of the Property of
which the Out-Parcel forms a part remaining after the Out-Parcel
Release (the "Remaining Property") shall be over fully dedicated public
roads;
(c) Borrowers shall have obtained: (i) (x) subdivision,
zoning, building and all other governmental approvals necessary or
required so that the Out-Parcel and the Remaining Property, shall, upon
such Out-Parcel Release, together and separately, satisfy and comply,
in all material respects and so that any immaterial non-compliance does
not adversely affect the lien of the Security Instruments or the value
or utility of the Properties as regional power
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<PAGE> 18
centers, with all the applicable subdivision, zoning, building,
environmental protection and all other applicable laws, rules,
regulations and federal, state or local requirements, including sewer
capacity requirements, or (y) a legal opinion by counsel reasonably
satisfactory to Lender, that the Out-Parcel and the Remaining Property
are each entitled to be used and occupied as of right without reference
to or reliance on the other parcel, and (ii) either a legal opinion by
counsel reasonably satisfactory to Lender stating that, or an
endorsement to the title insurance policy insuring the lien of the
related Security Instrument insuring that, the Out-Parcel has been
designated, assessed and taxed as a separate tax lot independent from
the Remaining Property;
(d) prior to the Out-Parcel Release, Borrowers shall prepare
and provide to Lender: (i) subdivision map(s) of all those portions of
the Property which are approved by all governmental and
quasi-governmental authorities having jurisdiction over the OutParcel
and/or the Remaining Property, whose approval as to such plans and maps
is required; and (ii) copies of each and all proposed easements and
cross-easements and mutual or non-exclusive easements for ingress,
egress, access, pedestrian walkways, parking, traffic flow, utilities
and services and utilities shared by the Remaining Property and the
Out-Parcel and the like which may be required by any governmental or
quasi-governmental authority having jurisdiction or which are necessary
or advisable;
(e) such subdivision map(s) shall show such parking structures
and parking layouts as will afford, to the Improvements (as defined in
the Security Instruments) located on the Remaining Property, the
equivalent of the exclusive use of the aggregate number of parking
spaces to be provided on the Property under all Leases (as defined in
the Security Instruments) affecting the Remaining Property, and the
number of parking spaces required by the then applicable zoning
requirements for the Remaining Property;
(f) Borrowers shall provide Lender with such surveys,
drawings, plans, specifications, proposed easements and consents,
certificates and agreements, such legal opinions from attorneys
acceptable to Lender and such other evidence as Lender may reasonably
request or require to determine that the foregoing conditions have been
satisfied;
(g) all Leases demising any part of the Remaining Property
shall remain in full force and effect and unaffected in any manner as
a result of the Out-Parcel Release;
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<PAGE> 19
(h) all Operating Agreements (as defined in the Security
Instruments) affecting all or any part of the Remaining Property or the
Out-Parcel shall remain in full force and effect and remain otherwise
unaffected as a result of the Out-Parcel Release;
(i) Borrowers shall deliver to Lender evidence that, other
than the Security Instruments, there are no liens, mortgages, deeds of
trust or other security instruments, as the case may be, encumbering
the Properties remaining encumbered by the lien of the Security
Instruments, including the Remaining Property, including without
limitation a "bring down" or "date down" of the title insurance
policies insuring the liens of the Security Instruments on such
remaining Properties;
(j) The applicable Borrowers shall simultaneously with the
Out-Parcel Release transfer title to the Out-Parcel to a Release
Premises Transferee and such Release Premises Transferee shall assume
all obligations and liabilities (other than those related to the Notes,
which the Out-Parcel is being released from) related to the Out-Parcel,
if any, from and after the date of such transfer and such third party
Release Premises Transferee shall erect and operate additional
structures whose use is integrated and consistent with the use of the
related Property;
(k) Borrower shall pay all of Lender's costs and expenses
(including reasonable counsel fees and disbursements) incurred in
connection with Under's review of the foregoing items, the
determination of the satisfaction of such conditions and otherwise
incurred in connection with the Out-Parcel Release;
(l) Borrowers shall have delivered to Lender (i) a
certification of Borrowers that the Borrowers have reasonably
determined that the use of the Out-Parcel that is the subject of the
Out-Parcel Release shall not cause a material decrease in the Net
Operating Income of the applicable Property, which determination shall
be based on the changes to the related Property's base rents and common
area contributions directly caused by the intended use of the
Out-Parcel being released without regard to any percentage rents, which
Borrower may assume shall remain constant, together with such
documentation supporting the basis of such determination as may be
reasonably requested by Lender, and (ii) written confirmation from the
Rating Agencies that such Out-Parcel Release shall not result in a
downgrade, withdrawal or qualification of the rating then assigned to
the Securities by the Rating Agencies; and
(m) Lender shall release such Out-Parcel from the lien
of the related Security Instrument, promptly after: (i) all
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<PAGE> 20
such easements, consents and rights as described above shall have been
obtained; and (ii) all of the requirements of this paragraph 7 have
been satisfied.
All instruments of release shall be in duly recordable form
and contain such covenants, conditions and restrictions and shall reserve such
rights and easements with respect to the OutParcel as are necessary to protect
and preserve Lender's interests in the Remaining Property after any such
release.
With respect to such items requiring Lender's approval in this
Section 7, if Lender shall fail to either approve, disapprove or otherwise
respond to Borrowers' written request for such approval and delivery by
Borrowers to Lender of all such maps, plans, easements or cross easements and
all appropriate documentation relating to such request and such items, within
forty-five (45) days of Lender's receipt of such request and all such maps,
plans, easements or cross easements as the case may be, and all such
documentation and information, Lender's approval with respect to such request
shall be deemed given; provided, however, notwithstanding the foregoing,
Lender's consent or approval or deemed consent or approval of any item shall not
diminish, reduce or be deemed a waiver of Borrowers' obligation to comply with
each and every other term, condition and provision set forth herein.
The term "Out-Parcel" as used herein shall mean those certain
parcels of land constituting portions of the Properties known as (i) Broadway
Marketplace, Denver, Colorado; (ii) Fairfax Towne Center, Fairfax, Virginia;
(iii) Town Center Prado, Marietta, Georgia; (iv) Woodfield Village Green,
Schaumburg, Illinois; (v) Shoppers World, Framingham, Massachusetts; (vi)
Independence Commons, Independence, Missouri, and (vii) Carmel Mountain Plaza,
San Diego, California, which are unimproved and non-revenue producing and which
are more particularly described on Schedules F-1 to F-7 attached hereto and made
a part hereof.
Borrowers shall cause all Alterations (as defined in the
Security Instruments) required to be performed in connection with any Out-Parcel
Release pursuant to Section 7 to be performed and completed in accordance with
Section 4.5 of the related Security Instrument and all such Alterations shall be
subject to Section 4.5 thereof.
8. EVENTS OF DEFAULT. The term "Event of Default" as
used in this Agreement shall have the meaning ascribed to such term in the
Notes and the Security Instruments.
Upon and during the occurrence of an Event of Default or a
default beyond applicable notice and grace periods, if any, under this Agreement
and, if Lender shall not have exercised its option under clause (i) below,
during the continuance thereof,
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Lender (i) may, at its option and in its sole discretion, declare the Debt
immediately due and payable, and (ii) may pursue any and all remedies provided
for in the Loan Documents, or otherwise available.
9. ANCHOR LEASES. The term "Anchor Leases" as used in the
Security Instruments shall mean, with respect to each Property, the Leases
listed on Schedule E attached hereto, as such Schedules may be amended from time
to time by Lender to reflect the replacement of such Leases with other Leases
for the same space to replacement anchor tenants.
10. INCORPORATION OF PROVISIONS. The Notes, the Security
Instruments and the Loan Documents are subject to the conditions, stipulations,
agreements and covenants contained herein to the same extent and effect as if
fully set forth therein until this Agreement is terminated by the payment in
full of the Debt.
11. FURTHER ASSURANCES. Borrowers shall on demand of Lender do
any act or execute any additional documents reasonably required by Lender to
confirm the lien of the Security instruments.
12. REPRESENTATIONS AND WARRANTIES. Each Borrower, as to
itself, represents and warrants to Lender as follows:
(a) Borrower is duly qualified to do business in
the States in which its Properties are located.
(b) Borrower (and the undersigned representative, if
any, of Borrower) has the full power and authority to execute and
deliver this Agreement and the Loan Documents, and the same constitute
the legal, valid and binding obligations of Borrower.
13. CONSTRUCTION OF AGREEMENT. The titles and headings of the
paragraphs of this Agreement have been inserted for convenience of reference
only and are not intended to summarize or otherwise describe the subject matter
of such paragraphs and shall not be given any consideration in the construction
of this Agreement.
14. PARTIES BOUND, ETC. The provisions of this Agreement shall
be binding upon and inure to the benefit of Borrowers, Lender and their
respective heirs, executors, legal representatives, successors and assigns
(except as otherwise prohibited by this Agreement).
15. WAIVERS. Lender may at any time and from time to time
waive any one or more of the conditions contained herein, but any such waiver
shall be deemed to be made in pursuance hereof and not in modification thereof,
and any such waiver in
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any instance or under any particular circumstance shall not be considered a
waiver of such condition in any other instance or any other circumstance.
16. GOVERNING LAW. (i) This Agreement shall be deemed to be a
contract entered into pursuant to the laws of the State of New York and shall in
all respects be governed, construed, applied and enforced in accordance with the
laws of the State of New York, provided however, that with respect to the
creation, perfection, priority and enforcement of the lien of the Security
Instruments, and the determination of deficiency judgments, the laws of the
State where the related Property is located shall apply and with respect to the
creation, perfection, priority and enforcement of the security interest in the
Operating Account and the monies deposited therein, the laws of the State in
which the Operating Account is located shall apply.
(ii) Any legal action or proceeding with respect to this Agreement
or any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, Borrowers hereby accept, each for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. Each Borrower irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such
Borrower at its address set forth in Article 16 of the Note. Each
Borrower-hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or any other Loan Document
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of Lender, to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Borrower in any other jurisdiction.
17. SEVERABILITY. If any term, covenant or provision of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such term, covenant or provision.
18. NOTICES. All notices required to be given under the terms
of this Agreement shall be given in accordance with and to the addresses set
forth in Article 16 of the Note.
19. FEES AND EXPENSES. Borrowers shall pay to Lender, upon
demand, all expenses incurred by Lender in connection with
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<PAGE> 23
the collection of the Debt, the enforcement of the Loan Documents, and in curing
any defaults under the Loan Documents (including, without limitations reasonable
attorneys' fees), with interest thereon at a rate per annum equal to the rate of
interest payable pursuant to the Notes, provided that such interest rate shall
in no event exceed the maximum interest rate which Borrowers may by law pay,
from the date of payment by Lender to the date of payment to Lender, which sums
and interest shall be secured by the Security Instruments.
20. MODIFICATION. This Agreement may not be modified, amended
or terminated, except by an agreement in writing executed by the parties hereto.
21. NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
22. SECURITY INSTRUMENTS SCHEDULES. The Schedules 5.6 and 5.10
referred to in the Security Instruments are attached hereto as Schedules 5.6 and
5.10.
[NO FURTHER TEXT ON THIS PAGE]
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<PAGE> 24
IN WITNESS WHEREOF, Borrowers and Lender have duly executed
this Agreement the day and year first above written.
COMMUNITY CENTERS ONE LLC., a Delaware
limited liability company
By: DD Community Centers One, Inc., an
Ohio corporation, its managing
member
By:________________________________
Name:
Title:
By: DRA Opportunity Fund, a Delaware
corporation, a member
By:________________________________
David Luski
Executive Vice President
By: DD Retail Partners II, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
By: DD Retail Partners III, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
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<PAGE> 25
By: DD Retail Partners IV, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
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<PAGE> 26
COMMUNITY CENTERS TWO L.L.C., a Delaware
limited liability company
By: DD Community Centers Two, Inc., an
Ohio corporation, its managing
member
By:________________________________
Name:
Title:
By: DRA Opportunity Fund, a Delaware
corporation, a member
By:________________________________
David Luski
Executive Vice President
By: DD Retail Partners II, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
By: DD Retail Partners III, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
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<PAGE> 27
By: DD Retail Partners IV, L.P., a
Delaware limited partnership,
a member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:______________________
David Luski
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<PAGE> 28
SHOPPERS WORLD COMMUNITY CENTER, L.P., a
Delaware limited partnership
By: DD Community Centers Three, Inc.,
an Ohio corporation, its general
partner
By:________________________________
Name:
Title:
By: SW OPP SUB, INC., a Delaware
corporation, its general partner
By:________________________________
Name:
Title:
By: Developers Diversified Realty
Corporation, an Ohio corporation, a
limited partner
By:________________________________
Name:
Title:
By: DRA Opportunity Fund, a Delaware
corporation, a limited partner
By:________________________________
David Luski
Executive Vice President
By: DD Retail Partners II, L.P., a
Delaware limited partnership, a
limited partner
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
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<PAGE> 29
By: DD Retail Partners III, L.P.,
a Delaware limited
partnership, a limited partner
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:______________________
David Luski
Vice President
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<PAGE> 30
LEHMAN BROTHERS HOLDINGS INC., D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware
corporation
By:_____________________________________
Name:
Title:
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<PAGE> 1
EXHIBIT 4.2
AMENDED AND RESTATED PROMISSORY NOTE
This AMENDED AND RESTATED NOTE is made as of the 15th day of May, 1997,
by and between COMMUNITY CENTERS TWO L.L.C., a Delaware limited liability
company ("CC Two") and SHOPPERS WORLD COMMUNITY CENTER, L.P., a Delaware limited
partnership ("Shoppers World"; CC Two and Shoppers World being hereafter
collectively referred to as "Borrower"), each having its principal place of
business at The Heritage, 34555 Chagrin Boulevard, Moreland Hills, Ohio 44022,
and LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware corporation ("Lender") having an address at
Three World Financial Center, 200 Vesey Street, New York, New York 10285.
RECITALS
A. Under is the current owner and holder of those certain notes
described on Schedule I attached hereto and made a part hereto (collectively,
the "Initial Notes").
B. Borrower and Lender have agreed to modify and restate the terms and
extend the term of the Initial Notes in accordance with the terms set forth
below.
C. The Initial Notes and the debt evidenced thereby are hereby combined
and coordinated to constitute one joint indebtedness in the principal sum of
$126,750,000.00, together with interest thereon as hereinafter provided (the
Initial Notes, as so combined and coordinated and as modified and amended
pursuant to the provisions of this Amended and Restated Promissory Note being
hereinafter collectively referred to as the "Note").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and in and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby covenant and agree as follows:
A. Neither this Note, any other notes entered into pursuant to the Loan
Agreement (defined below) nor anything contained herein or therein shall be
construed as a substitution or novation of the indebtedness evidenced hereby or
of the Initial Notes, which shall remain in full force and effect. as
supplemented, amended and restated, as provided herein.
B. All of the terms, provisions and obligations contained in the
initial Notes are hereby supplemented, amended and restated in their entirety to
read as follows:
<PAGE> 2
PROMISSORY NOTE
$126,750,000.00 New York, New York
As of May 15, 1997
FOR VALUE RECEIVED COMMUNITY CENTERS TWO L.L.C., a Delaware
limited liability company ("CC Two") and SHOPPERS WORLD COMMUNITY CENTER, L.P.,
a Delaware limited partnership, as makers ("Shoppers World"; CC Two and Shoppers
World being hereafter collectively referred to as "Borrower"), each having its
principal place of business at The Heritage, 34555 Chagrin Boulevard, Moreland
Hills, Ohio 44022, as maker ("Borrower"), hereby unconditionally promises to pay
to the order of LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION
OF LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, having an address at
Three World Financial Center, 200 Vesey Street, New York, New York 10285, as
payee ("Lender"), or at such other place as the holder hereof may from time to
time designate in writing, the principal sum of ONE HUNDRED TWENTY-SIX MILLION
SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($126,750,000.00) in lawful
money of the United States of America with interest thereon to be computed from
the date of this Note at the Applicable Interest Rate (defined below), and to be
paid in installments as follows:
ARTICLE 1: PAYMENT TERMS
A payment of interest only on the tenth (10th) day of June,
1997, for interest accruing for the period commencing on and including the date
of this Note, through and including the ninth (9th) day of June, 1997, and on
the tenth (10th) day of each calendar month thereafter, or if such date is not a
Business Day (defined below), then on the next succeeding Business Day (each, a
"Scheduled Payment Date") up to and including the tenth (10th) day of May, 2002,
or if such date is not a Business Day, then on the next succeeding Business Day,
for interest accruing from and including each Scheduled Payment Date through,
but excluding, the next succeeding Scheduled Payment Date; each of such payments
to be applied to the payment of interest computed at the Applicable Interest
Rate; and the balance of the principal sum and all interest thereon shall be due
and payable on the tenth (10th) day of June, 2002, or if such date is not a
Business Day, then on the next succeeding Business Day (the "Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis of a
three hundred sixty (360) day year based on the actual number of days elapsed.
All payments to be made under this Note shall be made by wire
transfer of immediately available federal funds.
The term "Business Day" as used herein shall mean any day
excluding Saturday, Sunday and any day which shall be in New
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<PAGE> 3
York City a legal holiday or a day on which Lender or banking institutions are
authorized or required by law or other government actions to close.
ARTICLE 2: INTEREST
The term "Applicable Interest Rate" as used in this Note shall
mean an interest rate equal to seven and three hundred seventy-eight thousandths
percent (7.378%) per annum.
ARTICLE 3: DEFAULT AND ACCELERATION
(a) The whole of the principal sum of this Note, (b) interest,
default interest at the Default Rate, late charges and other sums, as provided
in this Note, the Security Instruments (defined below) or the Other Security
Documents (defined below), (c) all other monies agreed or provided to be paid by
Borrower in this Note, the Security Instruments or the Other Security Documents,
(d) all sums advanced pursuant to any of the Security Instruments to protect and
preserve any of the Properties (defined below) and the lien and the security
interest created thereby, and (e) all sums advanced and costs and expenses
incurred by Lender in connection with the Debt (defined below) or any part
thereof, any renewal, extension, or change of or substitution for the Debt or
any part thereof, or the acquisition or perfection of the security therefor,
whether made or incurred at the request of Borrower or Lender (all the sums
referred to in (a) through (e) above shall collectively be referred to as the
"Debt") shall without notice become immediately due and payable at the option of
Lender if any payment required in this Note is not paid when due or on the
Maturity Date or on the happening of any other default, after the expiration of
any applicable notice and grace periods, if any, herein or under the terms of
the Security Instruments or any of the Other Security Documents (collectively,
an "Event of Default").
ARTICLE 4: DEFAULT INTEREST
Borrower does hereby agree that upon the occurrence of an
Event of Default, Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal sum at a rate (the "Default Rate") equal
to (i) the greater of a per annum rate equal to (x) the Applicable Interest Rate
plus four percent (4%) or (y) the Prime Rate (defined below) plus four percent
(4%) or (ii) the maximum interest rate that Borrower may by law pay, whichever
is lower. In the event that, and for so long as, any Event of Default shall have
occurred and be continuing, the outstanding principal sum and, to the extent
permitted by law, overdue interest in respect thereof, shall bear interest at
the Default Rate, calculated from the date the
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<PAGE> 4
default giving rise to such Event of Default without regard to any grace or cure
periods contained herein. Interest calculated at the Default Rate shall be added
to the Debt, and shall be deemed secured by the Security Instruments. This
clause, however, shall not be construed as an agreement or privilege to extend
the date of the payment of the Debt, nor as a waiver of any other right or
remedy accruing to Lender by reason of the occurrence of any Event of Default.
The "Prime Rate" shall mean at any particular date, a rate per
annum equal to the rate of interest published in The Wall Street Journal as the
"prime rate", as in effect on such day, with any change in the prime rate
resulting from a change in said prime rate to be effective as of the date of the
relevant change in said prime rate; provided, however, that if more than one
prime rate is published in The Wall Street Journal for a day, the average of the
Prime Rates shall be used; provided, further, however, that the Prime Rate (or
the average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Prime Rate shall mean the daily
average prime rate published in another business newspaper, or business section
of a newspaper, of national standing chosen by Lender. If The Wall Street
Journal resumes publication, the substitute index will immediately be replaced
by the prime rate published in The Wall Street Journal.
In the event that a prime rate is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index which is readily available to Borrower and verifiable by Borrower but is
beyond the control of Lender. Lender shall give Borrower prompt written notice
of its choice of a substitute index and when the change became effective.
Such substitute index will also be rounded to the nearest 1/16
of 1% or, if there is no nearest 1/1 6 of 1%, to the next higher 1/16 of 1%.
The determination of the Prime Rate by Lender shall be
conclusive absent manifest error.
ARTICLE 5: PREPAYMENT
The principal sum of this Note shall not be prepayable at any
time, in whole or in part, prior to the period commencing six (6) months prior
to the Maturity Date (the "Permitted Prepayment Period"). Provided no Event of
Default exists from
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<PAGE> 5
and after the commencement of the Permitted Prepayment Period, the entire
outstanding principal sum of this Note may be prepaid in whole, but not in part,
on any Scheduled Payment Date upon: (i) not less than thirty (30) days and not
more than forty-five (45) days prior written notice (the "Prepayment Notice") to
Lender specifying the Scheduled Payment Date on which prepayment is to be made
(the "Prepayment Date"); (ii) payment of all accrued and unpaid interest on the
outstanding principal balance of this Note to and including the Prepayment Date;
and (iii) payment of all other sums then due under this Note, the Security
Instruments and the Other Security Documents including, without limitation,
payment in full of all principal, interest and all other sums due under the
Related Note (defined below). If a Prepayment Notice is given by Borrower to
Lender pursuant to this Article, the principal balance of this Note and each of
the Related Notes and the other sums required under this Article shall be due
and payable on the Prepayment Date.
Lender shall not be obligated to accept any prepayment of the
principal balance of this Note unless it is (i) made during the Permitted
Prepayment Period, (ii) made in accordance with the terms of this Article, (iii)
accompanied by all sums due in connection therewith and with all sums due under
the Related Notes, and (iv) made on a Scheduled Payment Date. Notwithstanding
anything contained herein to the contrary, provided no Event of Default exists,
no Prepayment Consideration (defined below) shall be due in connection with a
complete or partial prepayment resulting from the application of insurance
proceeds or condemnation awards pursuant to Section 4.4 of the Security
Instruments.
If a Default Prepayment (defined herein) occurs, Borrower
shall pay to Lender the entire Debt, including, without limitation, the
Prepayment Consideration.
For purposes of this Note, the term "Default Prepayment" shall
mean a prepayment of the principal amount of this Note made during the
continuance of any Event of Default or after an acceleration of the Maturity
Date under any circumstances, including, without limitation, a prepayment
occurring in connection with reinstatement of any Security Instrument provided
by statute under foreclosure proceedings or exercise of a power of sale, any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure, any sale in foreclosure or
under exercise of a power of sale or otherwise.
For purposes of this Note, the term "Prepayment Consideration"
shall mean an amount equal to the present value of a series of payments each
equal to the Payment Differential (defined below) and payable on each Scheduled
Payment Date through and including the Maturity Date discounted at the
Reinvestment Yield (defined below) for the number of months
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<PAGE> 6
remaining-from the date of such prepayment (the "Prepayment Date") to each such
Scheduled Payment Date through and including the Maturity Date. The term
"Reinvestment Yield" as used herein shall be equal to the yield on the U.S.
Treasury issue (primary issue) with a maturity date closest to the Maturity
Date, with such yield being based on the bid price for such issue as published
in The Wall Street Journal on the date that is fourteen (14) days prior to the
date of the Prepayment Date (or, if such bid price is not published on that
date, the next preceding date on which such bid price is so published) and
converted to a monthly compounded nominal yield. The term "Payment Differential"
as used herein shall be equal to (x) the Applicable Interest Rate minus the
Reinvestment Yield, divided by (y) twelve (12), and multiplied by (z) the
principal sum due on such Prepayment Date, provided that the Payment
Differential shall in no event be less than zero. In no event, however, shall
Lender be required to reinvest any prepayment proceeds in U.S. Treasury
obligations or otherwise. Lender shall notify Borrower of the amount, and the
basis of determination, of the required Prepayment Consideration.
ARTICLE 6: SECURITY
This Note is secured by the Security Instruments and the Other
Security Documents. The term "Security Instruments" as used in this Note shall
mean that certain Amended and Restated Deed of Trust and Security Agreement
dated as of the date hereof given by CC Two to (or for the benefit of) Lender
covering the fee estate of CC Two in certain premises located in Jackson County,
Missouri, that certain Amended and Restated Deed to Secure Debt and Security
Agreement dated as of the date hereof given by CC Two and Community Centers One
L.L.C., a Delaware limited liability company, to Lender covering the fee estate
in certain premises located in Fulton County, Georgia and Cobb County, Georgia,
that certain Amended and Restated Mortgage and Security Agreement dated as of
the date hereof given by Shoppers World to Lender covering the fee estate of
Shoppers World in certain premises located in Middlesex County, Massachusetts,
and each of the Related Security Instruments covering the fee estate in certain
premises as described on Schedule 2 attached hereto and made a part hereof and
other property, as more particularly described therein (collectively, the
"Properties") and intended to be duly recorded in said Counties, and each in the
original principal sum of $322,500,000.00 (other than such mortgage to be
recorded in Collier County, Florida, which is in an amount of $153,000,000.00).
The term "Related Notes" shall mean those certain notes described on Schedule 3
attached hereto, and which, together with the Note, are secured by the Security
Instruments. The term "Related Security Instruments" shall mean those certain
mortgages, deeds of trust and deeds to secure debt described on Schedule 2
attached hereto and made a part hereof. The term "Related Borrower" shall mean
Community Centers One L.L.C., a
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<PAGE> 7
Delaware limited liability company. The term "Other Security Documents" as used
in this Note shall mean all and any of the documents other than this Note or the
Security Instruments now or hereafter executed by Borrower and/or any Related
Borrower and/or others and by or in favor of Lender, which wholly or partially
secure or guarantee payment of this Note or any of the Related Notes, including,
but not limited to, that certain Loan Agreement dated the date hereof between
Borrower, the Related Borrower, and Lender and the Related Notes. Whenever used,
the singular number shall include the plural, the plural number shall include
the singular, and the words "Lender" and "Borrower" shall include their
respective successors, assigns, heirs, executors and administrators.
All of the terms, covenants and conditions contained in the
Security Instruments and the Other Security Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein.
ARTICLE 7: SAVINGS CLAUSE
This Note is subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance
due hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.
ARTICLE 8: LATE CHARGE
If any sum payable under this Note is not paid on or prior to
the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of the unpaid sum or the maximum amount
permitted by applicable law to defray the expenses incurred by Lender in
handling and processing the delinquent payment and to compensate
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<PAGE> 8
Lender for the loss of the use of the delinquent payment and the amount shall be
secured by the Security Instruments and the Other Security Documents.
ARTICLE 9: NO ORAL CHANGE
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
ARTICLE 10: JOINT AND SEVERAL LIABILITY
If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.
ARTICLE 11: WAIVERS
Borrower and all others who may become liable for the payment
of all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, protest and notice of protest and non-payment
and all other notices of any kind. No release of any security for the Debt or
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Security
Instruments or the Other Security Documents made by agreement between Lender or
any other person or party shall release, modify, amend, waive, extend, change,
discharge, terminate or affect the liability of Borrower, and any other person
or entity who may become liable for the payment of all or any part of the Debt,
under this Note, the Security Instruments or the Other Security Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take further action without further
notice or demand as provided for in this Note, the Security Instruments or the
Other Security Documents. If Borrower is a partnership, the agreements herein
contained shall remain in force and applicable, notwithstanding any changes in
the individuals comprising the partnership, and the term "Borrower," as used
herein, shall include any alternate or successor partnership, but any
predecessor partnership and their partners shall not thereby be released from
any liability. If Borrower is a corporation, the agreements contained herein
shall.remain in full force and applicable notwithstanding any changes in the
shareholders comprising, or the officers and directors relating to, the
corporation, and the term "Borrower" as used herein, shall include any
alternative or successor
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<PAGE> 9
corporation, but any predecessor corporation shall not be relieved of liability
hereunder. If Borrower is a limited liability company, the agreements contained
herein shall remain in full force and applicable, notwithstanding any changes in
the members comprising the limited liability company, and the term "Borrower" as
used herein shall include any alternative or successor limited liability
company, but any predecessor limited liability company or its members shall not
be relieved of liability hereunder. (Nothing in the foregoing sentence shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such partnership, corporation or limited liability
company, as applicable, which may be expressly permitted by the Security
Instruments or any Other Security Documents.)
ARTICLE 12: TRANSFER
Lender shall have the right in its sole discretion at any time
during the term of this Note to sell, assign, syndicate, participate, pledge,
hypothecate or otherwise transfer and/or dispose of all or any portion of its
interest in this Note, including by issuance of mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement. Upon the transfer of this Note,
Borrower hereby waiving notice of any such transfer, Lender may deliver all the
collateral mortgaged, granted, pledged or assigned pursuant to the Security
Instruments and the Other Security Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under
applicable law given to Lender with respect thereto, and Lender shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter; but Lender shall retain all rights hereby given to it with respect
to any liabilities and the collateral not so transferred.
ARTICLE 13: WAIVER OF TRIAL BY JURY
BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE
LOAN EVIDENCED BY THIS NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THIS
NOTE, THIS NOTE, THE SECURITY INSTRUMENTS OR THE OTHER SECURITY DOCUMENTS OR ANY
ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN
CONNECTION THEREWITH.
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ARTICLE 14: EXCULPATION
(a) Except as otherwise provided herein, in the Security
Instruments or in the Other Security Documents, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained in this Note or the Security Instruments by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon
this Note, the Security Instruments, the Other Security Documents, and the
interest in the Properties, the Rents (as defined in the Security Instruments)
and any other collateral given to Under created by this Note, the Security
Instruments and the Other Security Documents; provided, however, that any
judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of Borrower's interest in the Properties, in the Rents and in
any other collateral given to Lender. Lender, by accepting this Note and the
Security Instruments, agrees that it shall not, except as otherwise provided in
Section I 1. 10 of the Security Instruments, sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding, under or
by reason of or under or in connection with this Note, the Other Security
Documents or the Security Instruments. The provisions of this Article shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents or the Security
Instruments; (ii) impair the right of Lender to obtain a deficiency judgment in
any action or proceeding in order to preserve its rights and remedies, including
without limitation, foreclosure, non-judicial foreclosure, or the exercise of a
power of sale, under any of the Security Instruments; however, Lender agrees
that it shall not enforce such deficiency judgment against any assets of
Borrower other than the Properties, including the Rents and any other collateral
given to Lender created by this Note, the Security Instruments and the Other
Security Documents or in the exercise of its rights and remedies under the
Security Instruments; (iii) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
the Security Instruments; (iv) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
this Note, the Security Instruments, or the Other Security Documents; (v) impair
the right of Lender to obtain the appointment of a receiver; (vi) impair the
enforcement of the Assignments of Leases and Rents executed in connection
herewith and in connection with each of the Security Instruments; (vii) impair
the right of Lender to obtain a deficiency judgment or judgment on the Note
against Borrower if necessary to obtain any insurance proceeds or condemnation
awards to which Lender would otherwise be entitled under the Security
Instruments; provided however, Lender shall only enforce such judgment against
the insurance proceeds and/or
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<PAGE> 11
condemnation awards; or (viii) impair the right of Lender to enforce the
provisions of Sections 11.10, 12.3, and 12.4 of the Security Instruments.
(b) Notwithstanding the provisions of this Article 4 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instruments) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, or any affiliate of Borrower or any general
partner, member, officer, director, employee or agent of any of the foregoing in
connection with the execution and the delivery of this Note, the Security
Instruments or the Other Security Documents or any certificate, document or
other instrument delivered or to be delivered to Under from time to time under,
or in connection with this Note, the Security Instruments and/or any Other
Security Documents; (ii) Borrower's misapplication or misappropriation of Rents
received by Borrower; (iii) Borrower's misapplication or misappropriation of
tenant security deposits or Rents collected in advance; (iv) the misapplication
or the misappropriation of insurance proceeds or condemnation awards; (v)
Borrower's failure to pay Taxes, Insurance Premiums, Other Charges (as such
terms are defined in the Security Instruments), charges for labor or materials
or other charges that can create liens on the Properties; (vi) any Lease (as
defined in the Security Instruments) or any of the provisions thereof being
superior to the lien or the Security Instruments or any of the provisions
thereof, or (vii) Borrower's failure to Comply with the provisions of Section
4.2 of the Security Instruments.
(c) Notwithstanding the foregoing, the agreement of Lender not
to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME
NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Section 4.3 (unless Borrower is a "Permitted
Transferee" as defined in, and that meets the requirements of Subsection
8.4(a)(iii)(B) of each of the Security Instruments) or Article 8 of the Security
Instruments, or if any of the Properties or any part thereof shall become an
asset in (i) a voluntary bankruptcy or insolvency proceeding, or (ii) an
involuntary bankruptcy or insolvency proceeding which is not dismissed within
ninety (90) days of filing.
(d) Nothing herein shall be deemed to be a waiver of any right
which Lender may have under Sections 506(a), 506(b), 1111 (b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Security Instruments or to require that all
collateral shall continue to secure all of the indebtedness owing to Lender in
accordance with this Note, the Security Instruments and the Other Security
Documents.
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<PAGE> 12
ARTICLE 15: AUTHORITY
Borrower (and the undersigned representative of Borrower, if
any) represents that Borrower has full power, authority and legal right to
execute and deliver this Note, the Security Instruments and the Other Security
Documents and that this Note, the Security Instruments and the Other Security
Documents constitute valid and binding obligations of Borrower.
ARTICLE 16: APPLICABLE LAW
This Note shall be governed, construed, applied and enforced
in accordance with the laws of the state of New York and the applicable laws of
the United States of America.
ARTICLE 17: SERVICE OF PROCESS
(a) (i) Borrower will maintain a place of business or an agent
for service of process in New York, New York and give prompt notice to Lender of
the address of such place of business and of the name and address of any new
agent appointed by it, as appropriate. Borrower further agrees that the failure
of its agent for service of process to give it notice of any service of process
will not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.
(ii) Borrower initially and irrevocably
designates Dewey Ballantine, with offices on the date hereof at 1301 Avenue of
the Americas, New York, New York, 10019-6092, to receive for and on behalf of
Borrower service of process in New York, New York with respect to this Note.
(b) With respect to any claim or action arising hereunder or
under the Security Instruments or the Other Security Documents, Borrower (a)
irrevocably submits to the nonexclusive jurisdiction of the courts of the States
in which the respective Properties are located and the court of the State of New
York and the United States District Court located in the Borough of Manhattan in
New York, New York, and appellate courts from any thereof, and (b) irrevocably
waives any objection which it may have at any time to the laying on venue of any
suit, action or proceeding arising out of or relating to this Note brought in
any such court, irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
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<PAGE> 13
(c) Nothing in this Note will be deemed to preclude Lender
from bringing an action or proceeding with respect hereto in any other
jurisdiction.
ARTICLE 18: COUNSEL FEES
In the event that it should become necessary to employ counsel
to collect the Debt or to protect or foreclose the security therefor, Borrower
also agrees to pay all reasonable fees and expenses of Lender, including,
without limitation, reasonable attorney's fees for the services of such counsel
whether or not suit be brought.
ARTICLE 19: NOTICES
All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day after having been deposited for overnight delivery
with any reputable overnight courier service, or (iii) three (3) Business Days
after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Borrower: Shoppers World Community Center, L.P.
Community Centers Two L.L.C.
The Heritage
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Attention: Joan V. Allgood, Esq.
Facsimile No.: (216) 247-6113
With a copy to: Shoppers World Community Center, L.P.
Community Centers Two L.L.C.
c/o DRA Advisors, Inc.
1180 Avenue of the Americas
New York, New York 10036
Attention: David Luski
Facsimile No.: (212) 764-3571
Baker & Hostetler
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
Attention: Albert T. Adams, Esq.
Facsimile No.: (216) 696-0740
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<PAGE> 14
Dewey Ballantine
1301 Avenue of the Americas
New York, New York
Attention: Sanford W. Morehouse, Esq.
Facsimile No.: (212) 259-6333
If to Lender: Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Shereen Jones
Facsimile No.: (212) 526-3746
and to: Lehman Brothers Holdings Inc., d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Scott Kimmel and Annette
Nazareth
Facsimile No.: (212) 526-3721
With a copy to: Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
Attention: Mitchell G. Williams, Esq.
Facsimile No.: (212) 912-7751
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
ARTICLE 20: MISCELLANEOUS
(a) Wherever pursuant to this Note (i) Lender exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.
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<PAGE> 15
(b) Wherever pursuant to this Note it is provided that
Borrower pay any costs and expenses, such costs and expenses shall include, but
not be limited to, legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff, or otherwise.
ARTICLE 21: NO NOVATION
Borrower and Under hereby confirm the legal operation and
effect of the Initial Notes so that the Initial Notes, as amended and restated
in this Note, shall be binding upon and inure to the benefit of the respective
parties hereto, their successors and assigns and all holders hereof. Nothing
contained in this Note shall be construed as a substitution or novation of
Borrower's indebtedness or of the Initial Notes, which shall remain in full
force and effect, as amended and restated hereby.
IN WITNESS WHEREOF, Borrower and Lender have executed this instrument as of the
day and year first above written.
COMMUNITY CENTERS TWO L.L.C., a Delaware
limited liability company
By: DD Community Centers Two, Inc., an
Ohio corporation, its managing
member
By:________________________________
Name:
Title:
By: DRA Opportunity Fund, a Delaware
corporation, a member
By:________________________________
David Luski
Executive Vice President
By: DD Retail Partners II, L.P., a
Delaware limited partnership, a
member
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<PAGE> 16
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
By: DD Retail Partners III, L.P.,
a Delaware limited
partnership, a member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:______________________
David Luski
Vice President
By: DD Retail Partners IV, L.P., a
Delaware limited partnership,
a member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:______________________
David Luski
Vice President
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<PAGE> 17
SHOPPERS WORLD COMMUNITY CENTER, L.P., a
Delaware limited partnership
By: DD Community Centers Three, Inc.,
an Ohio corporation, its general
partner
By:________________________________
Name:
Title:
By: SW OPP SUB, INC., a Delaware
corporation, its general partner
By:________________________________
Name:
Title:
By: Developers Diversified Realty
Corporation, an Ohio corporation, a
limited partner
By:________________________________
Name:
Title:
By: DRA Opportunity Fund, a Delaware
corporation, a limited partner
By:________________________________
David Luski
Executive Vice President
By: DD Retail Partners, II, L.P., a
Delaware limited partnership, a
limited partner
By:________________________________
David Luski
Vice President
By: DD Retail Partners III, L.P., a
Delaware limited partnership, a
limited partner
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<PAGE> 18
By: Master Realty Inc., a Delaware
corporation, its sole general
partner
By:___________________________
David Luski
Vice President
By: DD Retail Partners IV, L.P., a
Delaware limited partnership,
a limited partner
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:______________________
David Luski
Vice President
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<PAGE> 19
LEHMAN BROTHERS HOLDINGS INC., D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS, INC., a Delaware
corporation
By:_____________________________________
Name:
Title:
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<PAGE> 20
SCHEDULE 1
(Description of Initial Notes)
Promissory Notes dated as of March 22, 1996 made by Community Centers
Two L.L.C., and Shoppers World Community Center, L.P.:
(a) made payable to PNC Bank, National Association in the
original principal amount of $20,500,000.00;
(b) made payable to Sumitomo Bank, Ltd., Chicago Branch, in
the original principal amount of $14,000,000.00;
(c) made payable to Dresdner Bank Aktiengesellschaft, New
York Branch, in the original principal amount of
$18,500,000.00;
(d) made payable to Mellon Bank, N.A. in the original
principal amount of $18,500,000.00;
(e) made payable to Commerzbank Aktiengesellschaft, New
York Branch, in the original principal amount of
$18,500,000.00;
(f) made payable to Union Bank of Switzerland in the
original principal amount of $50,000,000.00.
(The above referenced Promissory Notes replaced that certain Promissory Note
dated November 17, 1995 made by Community Centers Two L.L.C. and Shoppers World
Community Center, L.P., made payable to Union Bank of Switzerland, New York
Branch, in the original principal amount of $140,000,000.00.)
<PAGE> 21
SCHEDULE 2
(Description of Related Security Instruments)
1. Amended and Restated Deed of Trust, Security Agreement, Fixture
Filing and Assignment of Rents dated the date hereof by Community Centers One
L.L.C., as grantor, to Chicago Title Company, as trustee, and Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., as beneficiary, in the principal amount of $322,500,000.00, encumbering
the property known as Carmel Mountain Plaza, San Diego, California, to be
recorded in the Recorder's File of San Diego County, California;
2. Amended and Restated Deed of Trust and Security Agreement dated the
date hereof by Community Centers One L.L.C., to Public Trustee of the City and
County of Denver, State of Colorado, for the benefit of Lehman Brothers Holdings
Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc., in the
principal amount of $322,500,000.00, encumbering the property known as Broadway
Marketplace, Denver, Colorado, to be recorded in the office of the public
records of Denver County, Colorado;
3. Amended and Restated Mortgage and Security Agreement dated the date
hereof by Community Centers One L.L.C., as mortgagor, to Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., as mortgagee, in the principal amount of $322,500,000.00, encumbering the
property known as Carillon Place, Naples, Florida, to be recorded in the
Official Records of Collier County, Florida;
4. Amended and Restated Mortgage and Security Agreement dated the date
hereof by Community Centers One L.L.C., as mortgagor, to Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., as mortgagee, in the principal amount of $322,500,000.00, encumbering the
property known as Woodfield Village Green, Schaumburg, Illinois, to be recorded
in the office of the Recorder of Cook County, Illinois;
5. Amended and Restated Deed of Trust and Security Agreement dated the
date hereof by Community Centers One L.L.C., as grantor, to Chicago Title
Insurance Company, as trustee, and Lehman Brothers Holdings Inc., D/B/A Lehman
Capital, a Division of Lehman Brothers Holdings Inc., as beneficiary, in the
principal amount of $322,500,000.00, encumbering the property known as New Hope
Commons, Durham, North Carolina, to be recorded in the office of the Register of
Deeds of Durham County, North Carolina; and
6. Amended and Restated Deed of Trust and Security Agreement dated the
date hereof by Community Centers One L.L.C., as grantor, to Alexander Title
Agency Incorporated, as trustee, and Lehman Brothers Holdings Inc., D/B/A Lehman
Capital, a
<PAGE> 22
Division of Lehman Brothers Holdings Inc., as beneficiary, in the principal
amount of $322,500,000.00, encumbering the property known as Fairfax Towne
Center, Fairfax, Virginia, to be recorded in the office of the Clerk of the
Circuit Court of Fairfax County, Virginia.
<PAGE> 23
SCHEDULE 3
(Description of Related Notes)
1. Amended and Restated Promissory Note dated the date
hereof, by and between Community Centers One L.L.C. and Lehman Brothers Holdings
Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc., in the
principal amount of $153,000,000.00.
2. Amended and Restated Promissory Note dated the date hereof,
by and between Community Centers One L.L.C. and Lehman Brothers Holdings Inc.,
D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc., in the
principal amount of $42,750,000.00.
<PAGE> 1
EXHIBIT 4.3
AMENDED AND RESTATED PROMISSORY NOTE
This AMENDED AND RESTATED NOTE is made as of the 15th day of
May, 1997 by and between COMMUNITY CENTERS ONE L.L.C., a Delaware limited
liability company ("Borrower") having its principal place of business at The
Heritage, 34555 Chagrin Boulevard, Moreland Hills, Ohio 44022, and LEHMAN
BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation ("Lender") having an address at Three
World Financial Center, 200 Vesey Street, New York, New York 10285.
RECITALS
A. lender is the current owner and holder of that certain note
described on Schedule 1 attached hereto and made a part hereto (the "Initial
Note").
B. Borrower and Lender have agreed to modify and restate the terms and
extend the term of the Initial Note in accordance with the terms set forth
below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and in and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby covenant and agree as follows:
A. Neither this Amended and Restated Note (hereinafter referred to as
the "Note"), any other notes entered into pursuant to the Loan Agreement
(defined below) nor anything contained herein or therein shall be construed as a
substitution or novation of the indebtedness evidenced hereby or of the Initial
Note, which shall remain in full force and effect, as supplemented, amended and
restated, as provided herein.
B. All of the terms, provisions and obligations contained in the
Initial Note are hereby supplemented, amended and restated in their entirety to
read as follows:
PROMISSORY NOTE
$153,000,000.00 New York, New York
As of May 15, 1997
FOR VALUE RECEIVED COMMUNITY CENTERS ONE L.L.C., a Delaware
limited liability company having its principal place of business at ne Heritage,
34555 Chagrin Boulevard, Moreland Hills, Ohio 44022, as maker ("Borrower"),
hereby unconditionally promises to pay to the order of LEHMAN BROTHERS HOLDINGS
INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a
Delaware corporation, having an address at Three World Financial Center, 200
Vesey Street, New York, New York 10285, as payee ("Lender"), or at such other
place as the holder hereof may from time to time designate in writing, the
principal sum of ONE
<PAGE> 2
HUNDRED FIFTY-THREE MILLION AND 00/100 DOLLARS ($153,000,000.00) in lawful money
of the United States of America with interest thereon to be computed from the
date of this Note at the Applicable Interest Rate (defined below), and to be
paid in installments as follows:
ARTICLE 1: PAYMENT TERMS
A payment of interest only on the tenth (10th) day of June, 1997, for
interest accruing for the period commencing on and including the date of this
Note, through and including the ninth (9th) day of June, 1997, and on the tenth
(10th) day of each calendar month thereafter, or if such date is not a Business
Day (defined below), then on the next succeeding Business Day (each, a
"Scheduled Payment Date") up to and including the tenth (10th) day of May, 2002,
or if such date is not a Business Day, then on the next succeeding Business Day,
for interest accruing from and including each Scheduled Payment Date through,
but excluding, the next succeeding Scheduled Payment Date; each of such payments
to be applied to the payment of interest computed at the Applicable Interest
Rate; and the balance of the principal sum and all interest thereon shall be due
and payable on the tenth (10th) day of June, 2002, or if such date is not a
Business Day, then on the next succeeding Business Day (the "Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis of a
three hundred sixty (360) day year based on the actual number of days elapsed.
All payments to be made under this Note shall be made by wire
transfer of immediately available federal funds.
The term "Business Day" as used herein shall mean any day
excluding Saturday, Sunday and any day which shall be in New York City a legal
holiday or a day on which Lender or banking institutions are authorized or
required by law or other government actions to close.
ARTICLE 2: INTEREST
The term "Applicable Interest Rate" as used in this Note shall
mean an interest rate equal to seven and three hundred seventy-eight thousandths
percent (7.378%) per annum.
ARTICLE 3: DEFAULT AND ACCELERATION
(a) The whole of the principal sum of this Note, (b) interest,
default interest at the Default Rate, late charges and other sums, as provided
in this Note, the Security Instruments (defined below) or the Other Security
Documents (defined below), (c) all other monies agreed or provided to be paid by
Borrower in this Note, the Security Instruments or the Other Security Documents,
(d) all sums advanced pursuant to any of the Security Instruments to protect and
preserve any of the Properties (defined below) and the lien and the security
interest created thereby, and (e) all sums advanced and costs and expenses
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<PAGE> 3
incurred by Under in connection with the Debt (defined below) or any part
thereof, any renewal, extension, or change of or substitution for the Debt or
any part thereof, or the acquisition or perfection of the security therefor,
whether made or incurred at the request of Borrower or Lender (all the sums
referred to in (a) through (e) above shall collectively be referred to as the
"Debt") shall without notice become immediately due and payable at the option of
Lender if any payment required in this Note is not paid when due or on the
Maturity Date or on the happening of any other default, after the expiration of
any applicable notice and grace periods, if any, herein or under the terms of
the Security Instruments or any of the Other Security Documents (collectively,
an "Event of Default ").
ARTICLE 4: DEFAULT INTEREST
Borrower does hereby agree that upon the occurrence of an
Event of Default, Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal sum at a rate (the "Default Rate") equal
to (i) the greater of a per annum rate equal to (x) the Applicable Interest Rate
plus four percent (4%) or (y) the Prime Rate (defined below) plus four percent
(4%) or (ii) the maximum interest rate that Borrower may by law pay, whichever
is lower. In the event that, and for so long as, any Event of Default shall have
occurred and be continuing, the outstanding principal sum and, to the extent
permitted by law, overdue interest in respect thereof, shall bear interest at
the Default Rate, calculated from the date the default giving rise to such Event
of Default without regard to any grace or cure periods contained herein.
Interest calculated at the Default Rate shall be added to the Debt, and shall be
deemed secured by the Security Instruments. This clause, however, shall not be
construed as an agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy accruing to Lender by reason
of the occurrence of any Event of Default.
The "Prime Rate" shall mean at any particular date, a rate per
annum equal to the rate of interest published in The Wall Street Journal as the
"prime rate", as in effect on such day, with any change in the prime rate
resulting from a change in said prime rate to be effective as of the date of the
relevant change in said prime rate; provided, however, that if more than one
prime rate is published in The Wall Street Journal for a day, the average of the
Prime Rates shall be used; provided, further, however, that the Prime Rate (or
the average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Prime Rate shall mean the daily
average prime rate published in another business newspaper, or business section
of a newspaper, of national standing chosen by Lender. If The Wall Street
Journal resumes
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publication, the substitute index will immediately be replaced by the prime rate
published in The Wall Street Journal.
In the event that a prime rate is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index which is readily available to Borrower and verifiable by Borrower but is
beyond the control of Lender. Lender shall give Borrower prompt written notice
of its choice of a substitute index and when the change became effective.
Such substitute index will also be rounded to the nearest 1/16
of 1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
The determination of the Prime Rate by Lender shall be
conclusive absent manifest error.
ARTICLE 5: PREPAYMENT
The principal sum of this Note shall not be prepayable at any
time, in whole or in part, prior to the period commencing six (6) months prior
to the Maturity Date (the "Permitted Prepayment Period"). Provided no Event of
Default exists from and after the commencement of the Permitted Prepayment
Period, the entire outstanding principal sum of this Note may be prepaid in
whole, but not in part, on any Scheduled Payment Date upon: (i) not less than
thirty (30) days and not more than forty-five (45) days prior written notice
(the "Prepayment Notice") to Lender specifying the Scheduled Payment Date on
which prepayment is to be made (the "Prepayment Date"); (ii) payment of all
accrued and unpaid interest on the outstanding principal balance of this Note to
and including the Prepayment Date; and (iii) payment of all other sums then due
under this Note, the Security Instruments and the Other Security Documents
including, without limitation, payment in full of all principal, interest and
all other sums due under the Related Note (defined below). If a Prepayment
Notice is given by Borrower to Lender pursuant to this Article, the principal
balance of this Note and each of the Related Notes and the other sums required
under this Article shall be due and payable on the Prepayment Date.
Lender shall not be obligated to accept any prepayment of the
principal balance of this Note unless it is (i) made during the Permitted
Prepayment Period, (ii) made in accordance with the terms of this Article, (iii)
accompanied by all sums due in connection therewith and with all sums due under
the Related Notes, and (iv) made on a Scheduled Payment Date. Notwithstanding
anything contained herein to the contrary, provided no Event of Default exists,
no Prepayment Consideration (defined below) shall be due in connection with a
complete or partial prepayment resulting from the application of insurance
proceeds or condemnation awards pursuant to Section 4.4 of the Security
Instruments.
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<PAGE> 5
If a Default Prepayment (defined herein) occurs, Borrower
shall pay to Lender the entire Debt, including, without limitation, the
Prepayment Consideration.
For purposes of this Note, the term "Default Prepayment" shall
mean a prepayment of the principal amount of this Note made during the
continuance of any Event of Default or after an acceleration of the Maturity
Date under any circumstances, including, without limitation, a prepayment
occurring in connection with reinstatement of any Security Instrument provided
by statute under foreclosure proceedings or exercise of a power of sale, any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure, any sale in foreclosure or
under exercise of a power of sale or otherwise.
For purposes of this Note, the term "Prepayment Consideration"
shall mean an amount equal to the present value of a series of payments each
equal to the Payment Differential (defined below) and payable on each Scheduled
Payment Date through and including the Maturity Date discounted at the
Reinvestment Yield (defined below) for the number of months remaining from the
date of such prepayment (the "Prepayment Date") to each such Scheduled Payment
Date through and including the Maturity Date. The term "Reinvestment Yield" as
used herein shall be equal to the yield on the U.S. Treasury issue (primary
issue) with a maturity date closest to the Maturity Date, with such yield being
based on the bid price for such issue as published in The Wall Street Journal on
the date that is fourteen (14) days prior to the date of the Prepayment Date
(or, if such bid price is not published on that date, the next preceding date on
which such bid price is so published) and converted to a monthly compounded
nominal yield. The term "Payment Differential" as used herein shall be equal to
(x) the Applicable Interest Rate minus the Reinvestment Yield, divided by (y)
twelve (12), and multiplied by (z) the principal sum due on such Prepayment
Date, provided that the Payment Differential shall in no event be less than
zero. In no event, however, shall Under be required to reinvest any prepayment
proceeds in U.S. Treasury obligations or otherwise. Lender shall notify Borrower
of the amount, and the basis of determination, of the required Prepayment
Consideration.
ARTICLE 6: SECURITY
This Note is secured by the Security Instruments and the Other
Security Documents. The term "Security Instruments" as used in this Note shall
mean those Amended and Restated Mortgage and Security Agreements each dated as
of the date hereof given by Borrower to (or for the benefit of) Lender covering
the fee estate of Borrower in certain premises located in Cook County, Illinois,
and Collier County, Florida, the Amended and Restated Deed of Trust and Security
Agreements each dated as of the date hereof given by Borrower to (or for the
benefit of) Lender covering the fee estate of Borrower in certain premises
located
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<PAGE> 6
in Fairfax County, Virginia, Denver County, Colorado and Durham County, North
Carolina, that certain Amended and Restated Deed to Secure Debt and Security
Agreement dated as of the date hereof given by Borrower and Community Centers
Two L.L.C., a Delaware limited liability company, to Lender covering the fee
estate in certain premises located in Fulton County, Georgia and Cobb County,
Georgia, and each of the Related Security Instruments covering the fee estate in
certain premises as described on Schedule 2 attached hereto and made a part
hereof and other property, as more particularly described therein (collectively,
the "Properties") and intended to be duly recorded in said Counties, and each in
the original principal sum of $322,500,000.00, (other than such mortgage to be
recorded in Collier County, Florida, which is in an amount of $153,000,000.00).
The term "Related Notes" shall mean those certain notes described on Schedule 3
attached hereto, and which, together with the Note, are secured by the Security
Instruments. The term 'Related Security Instruments" shall mean those certain
mortgages, deeds of trust and deeds to secure debt described on Schedule 2
attached hereto and made a part hereof. The term 'Related Borrowers" shall mean
Community Centers Two L.L.C., a Delaware limited liability company, and Shoppers
World Community Center, L.P., a Delaware limited partnership. The term 'Other
Security Documents" as used in this Note shall mean all and any of the documents
other than this Note or the Security Instruments now or hereafter executed by
Borrower and/or any Related Borrower and/or others and by or in favor of Lender,
which wholly or partially secure or guarantee payment of this Note or any of the
Related Notes, including, but not limited to, that certain Loan Agreement dated
the date hereof between Borrowers, the Related Borrowers, and Lender and the
Related Notes. Whenever used, the singular number shall include the plural, the
plural number shall include the singular, and the words "Lender' and "Borrower"
shall include their respective successors, assigns, heirs, executors and
administrators.]
All of the terms, covenants and conditions contained in the
Security Instruments and the Other Security Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein.
ARTICLE 7: SAVINGS CLAUSE
This Note is subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance
due hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have
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<PAGE> 7
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.
ARTICLE 8: LATE CHARGE
If any sum payable under this Note is not paid on or prior to
the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5 %) of the unpaid sum or the maximum
amount permitted by applicable law to defray the expenses incurred by Under in
handling and processing the delinquent payment and to compensate Lender for the
loss of the use of the delinquent payment and the amount shall be secured by the
Security Instruments and the Other Security Documents.
ARTICLE 9: NO ORAL CHANGE
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
ARTICLE 10: JOINT AND SEVERAL LIABILITY
If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.
ARTICLE 11: WAIVERS
Borrower and all others who may become liable for the payment
of all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, protest and notice of protest and non-payment
and all other notices of any kind. No release of any security for the Debt or
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Security
Instruments or the Other Security Documents made by agreement between Lender or
any other person or party shall release, modify, amend, waive, extend, change,
discharge, terminate or affect the liability of Borrower, and any other person
or entity who may become liable for the payment of all or any part of the Debt,
under this Note, the Security Instruments or the Other Security Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take further action without
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<PAGE> 8
further notice or demand as provided for in this Note, the Security Instruments
or the Other Security Documents. If Borrower is a partnership, the agreements
herein contained shall remain in force and applicable, notwithstanding any
changes in the individuals comprising the partnership, and the term "Borrower,"
as used herein, shall include any alternate or successor partnership, but any
predecessor partnership and their partners shall not thereby be released from
any liability. If Borrower is a corporation, the agreements contained herein
shall remain in full force and applicable notwithstanding any changes in the
shareholders comprising, or the officers and directors relating to, the
corporation, and the term "Borrower" as used herein, shall include any
alternative or successor corporation, but any predecessor corporation shall not
be relieved of liability hereunder. If Borrower is a limited liability company,
the agreements contained herein shall remain in full force and applicable,
notwithstanding any changes in the members comprising the limited liability
company, and the term "Borrower' as used herein shall include any alternative or
successor limited liability company, but any predecessor limited liability
company or its members shall not be relieved of liability hereunder. (Nothing in
the foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such partnership,
corporation or limited liability company, as applicable, which may be expressly
permitted by the Security Instruments or any Other Security Documents.)
ARTICLE 12: TRANSFER
Lender shall have the right in its sole discretion at any time
during the term of this Note to sell, assign, syndicate, participate, pledge,
hypothecate or otherwise transfer and/or dispose of all or any portion of its
interest in this Note, including by issuance of mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement. Upon the transfer of this Note,
Borrower hereby waiving notice of any such transfer, Lender may deliver all the
collateral mortgaged, granted, pledged or assigned pursuant to the Security
Instruments and the Other Security Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under
applicable law given to Lender with respect thereto, and Lender shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter; but Lender shall retain all rights hereby given to it with respect
to any liabilities and the collateral not so transferred.
ARTICLE 13: WAIVER OF TRIAL BY JURY
BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE
LOAN EVIDENCED BY THIS NOTE, THE
-8-
<PAGE> 9
APPLICATION FOR THE LOAN EVIDENCED BY THIS NOTE, THIS NOTE, THE SECURITY
INSTRUMENTS OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER,
ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
ARTICLE 14: EXCULPATION
(a) Except as otherwise provided herein, in the Security
Instruments or in the Other Security Documents, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained in this Note or the Security Instruments by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon
this Note, the Security Instruments, the Other Security Documents, and the
interest in the Properties, the Rents (as defined in the Security Instruments)
and any other collateral given to Lender created by this Note, the Security
Instruments and the Other Security Documents; provided, however, that any
judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of Borrower's interest in the Properties, in the Rents and in
any other collateral given to Lender. Lender, by accepting this Note and the
Security Instruments, agrees that it shall not, except as otherwise provided in
Section 11.10 of the Security Instruments, sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding, under or
by reason of or under or in connection with this Note, the Other Security
Documents or the Security Instruments. The provisions of this Article shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents or the Security
Instruments; (ii) impair the right of Lender to obtain a deficiency judgment in
any action or proceeding in order to preserve its rights and remedies, including
without limitation, foreclosure, non-judicial foreclosure, or the exercise of a
power of sale, under any of the Security Instruments; however, Lender agrees
that it shall not enforce such deficiency judgment against any assets of
Borrower other than the Properties, including the Rents and any other collateral
given to Lender created by this Note, the Security Instruments and the Other
Security Documents or in the exercise of its rights and remedies under the
Security Instruments; (iii) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
the Security Instruments; (iv) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
this Note, the Security Instruments, or the Other Security Documents; (v) impair
the right of Lender to obtain the appointment of a receiver; (vi) impair the
enforcement of the Assignments of Leases and Rents executed in connection
herewith and in connection with each of the Security Instruments; (vii) impair
the right of Lender to obtain a deficiency judgment or judgment on the Note
against Borrower if necessary to obtain any insurance proceeds or condemnation
awards to which Lender
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<PAGE> 10
would otherwise be entitled under the Security Instruments; provided however,
Lender shall only enforce such judgment against the insurance proceeds and/or
condemnation awards; or (viii) impair the right of Lender to enforce the
provisions of Sections 11.10, 12.3, and 12.4 of the Security Instruments.
(b) Notwithstanding the provisions of this Article 14 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instruments) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, or any affiliate of Borrower or any general
partner, member, officer, director, employee or agent of any of the foregoing in
connection with the execution and the delivery of this Note, the Security
Instruments or the Other Security Documents or any certificate, document or
other instrument delivered or to be delivered to Lender from time to time under,
or in connection with this Note, the Security Instruments and/or any Other
Security Documents; (ii) Borrower's misapplication or misappropriation of Rents
received by Borrower; (iii) Borrower's misapplication or misappropriation of
tenant security deposits or Rents collected in advance; (iv) the misapplication
or the misappropriation of insurance proceeds or condemnation awards; (v)
Borrower's failure to pay Taxes, Insurance Premiums, Other Charges (as such
terms are defined in the Security Instruments), charges for labor or materials
or other charges that can create liens on the Properties; (vi) any Lease (as
defined in the Security Instruments) or any of the provisions t hereof being
superior to the lien or the Security Instruments or any of the provisions
thereof; or (vii) Borrower's failure to comply with the provisions of Section
4.2 of the Security Instruments.
(c) Notwithstanding the foregoing, the agreement of Lender not
to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME
NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Section 4.3 (unless Borrower is a "Permitted
Transferee" as defined in, and that meets the requirements of Subsection
8.4(a)(iii)(B) of each of the Security Instruments) or Article 8 of the Security
Instruments, or if any of the Properties or any part thereof shall become an
asset in (i) a voluntary bankruptcy or insolvency proceeding, or (ii) an
involuntary bankruptcy or insolvency proceeding which is not dismissed within
ninety (90) days of filing.
(d) Nothing herein shall be deemed to be a waiver of any right
which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Security Instruments or to require that all
collateral shall continue to secure all of the indebtedness owing to Lender in
accordance with this Note, the Security Instruments and the Other Security
Documents.
ARTICLE 15: AUTHORITY
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<PAGE> 11
Borrower (and the undersigned representative of Borrower, if
any) represents that Borrower has full power, authority and legal right to
execute and deliver this Note, the Security Instruments and the Other Security
Documents and that this Note, the Security Instruments and the Other Security
Documents constitute valid and binding obligations of Borrower.
ARTICLE 16: APPLICABLE LAW
This Note shall be governed, construed, applied and enforced
in accordance with the laws of the state of New York and the applicable laws of
the United States of America.
ARTICLE 17: SERVICE OF PROCESS
(a) (i) Borrower will maintain a place of business or an agent
for service of process in New York, New York and give prompt notice to Lender of
the address of such place of business and of the name and address of any new
agent appointed by it, as appropriate. Borrower further agrees that the failure
of its agent for service of process to give it notice of any service of process
will not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.
(ii) Borrower initially and irrevocably designates
Dewey Ballantine, with offices on the date hereof at 1301 Avenue of the
Americas, New York, New York 10019-6092, to receive for and on behalf of
Borrower service of process in New York, New York with respect to this Note.
(b) With respect to any claim or action arising hereunder or
under the Security Instruments or the Other Security Documents, Borrower (a)
irrevocably submits to the nonexclusive jurisdiction of the courts of the States
in which the respective Properties are located and the court of the State of New
York and the United States District Court located in the Borough of Manhattan in
New York, New York, and appellate courts from any thereof, and (b) irrevocably
waives any objection which it may have at any time to the laying on venue of any
suit, action or proceeding arising out of or relating to this Note brought in
any such court, irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient form.
(c) Nothing in this Note will be deemed to preclude Lender
from bringing an action or proceeding with respect hereto in any other
jurisdiction.
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ARTICLE 18: COUNSEL FEES
In the event that it should become necessary to employ counsel
to collect the Debt or to protect or foreclose the security therefor, Borrower
also agrees to pay all reasonable fees and expenses of Lender, including,
without limitation, reasonable attorney's fees for the services of such counsel
whether or not suit be brought.
ARTICLE 19: NOTICES
All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day after having been deposited for overnight delivery
with any reputable overnight courier service, or (iii) three (3) Business Days
after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Borrower: Community Centers One L.L.C.
The Heritage
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Attention: Joan U. Allgood, Esq.
Facsimile No.: (216) 247-6113
With a copy to: Community Centers One L.L.C.
c/o DRA Advisors, Inc.
1180 Avenue of the Americas
New York, New York 10036
Attention: David Luski
Facsimile No.: (212) 764-3571
Baker & Hostetler
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
Attention: Albert T. Adams, Esq.
Facsimile No.: (216) 696-0740
Dewey Ballantine
1301 Avenue of the Americas
New York, New York
Attention: Sanford W. Morhouse, Esq.
Facsimile No.: (212) 259-6333
If to Lender: Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
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<PAGE> 13
Attention: Shereen Jones
Facsimile No.: (212) 526-3746
and to: Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Scott Kimmel and Annette Nazareth
Facsimile No.: (212) 526-3721
With a copy to: Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
Attention: Mitchell G. Williams, Esq.
Facsimile No.: (212) 912-7751
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
ARTICLE 20: MISCELLANEOUS
(a) Wherever pursuant to this Note (i) Lender exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Note it is provided that
Borrower pay any costs and expenses, such costs and expenses shall include, but
not be limited to, legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff, or otherwise.
ARTICLE 21: NO NOVATION
Borrower and Lender hereby confirm the legal operation and
effect of the Initial Note so that the Initial Note, as amended and restated in
this Note, shall be binding upon and inure to the benefit of the respective
parties hereto, their successors and assigns and all holders hereof. Nothing
contained in this Note shall be construed as a substitution or novation of
Borrower's indebtedness or of the Initial Note, which shall remain in full force
and effect, as amended and restated hereby.
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<PAGE> 14
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<PAGE> 15
IN WITNESS WHEREOF, Borrower and Lender have executed this
instrument as of the day and year first above written.
COMMUNITY CENTERS ONE L.L.C., a
Delaware limited liability company
By: DD Community Centers One,
Inc., an Ohio corporation, its
managing member
By:
----------------------------
Name:
Title:
By: DRA Opportunity Fund, a
Delaware corporation, a member
By:
---------------------------
David Luski
Executive Vice President
By: DD Retail Partners 11, L.P., a
Delaware limited partnership,
a member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:
------------------------
David Luski
Vice President
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<PAGE> 16
By: DD Retail Partners III, L.P.,
a Delaware limited
partnership, a member
By: Master Realty Inc., a
Delaware, corporation,
its sole general partner
By:
------------------------
David Luski
Vice President
By: DD Retail Partners IV, L.P., a
Delaware limited partnership,
a member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:
------------------------
David Luski
Vice President
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<PAGE> 17
LEHMAN BROTHERS HOLDINGS INC.,
D/B/A LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC., a
Delaware
By:
----------------------------------
Name:
Title:
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<PAGE> 18
SCHEDULE 1
(Description of Initial Note)
1. Promissory Note dated as of November 17, 1995 made by
Community Centers One L.L.C. ("Borrower") to Lehman Brothers Holdings Inc.,
D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc. ("Lender") in
the original principal amount of $153,000,000.00.
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<PAGE> 19
SCHEDULE 2
(Description of Related Security Instruments)
1. Amended and Restated Deed of Trust, Security Agreement, Fixture
Filing and Assignment of Rents dated the date hereof by Community Centers One
L.L.C., as grantor, to Chicago Title Company, as trustee, and Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., as beneficiary, in the principal amount of $322,500,000.00, encumbering
the property known as Cannel Mountain Plaza, San Diego, California, to be
recorded in the Recorder's File of San Diego County, California;
2. Amended and Restated Mortgage and Security Agreement dated the date
hereof by Shoppers World Community Center, L.P., as grantor, to Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., as beneficiary, in the principal amount of $322,500,000.00, encumbering
the property known as Shoppers World, Framingham, Massachusetts, to be recorded
in the Middlesex South District Registry of Deeds; and
3. Amended and Restated Deed of Trust, Security Agreement and Fixture
Filing dated the date hereof by Community Centers Two L.L.C., as grantor to
Chicago Title Insurance Company, as Trustee and to Lehman Brothers Holdings
Inc., D/B/A Lehman Capital, a Division of Ulman Brothers Holdings Inc., as
beneficiary, in the principal amount of $322,500,000.00, encumbering the
property known as Independence Commons, Independence, Missouri, to be recorded
in the public records of Jackson County, Missouri.
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SCHEDULE 3
(Description of Related Notes)
1. Amended and Restated Promissory Note dated the date hereof, by and
between Community Centers Two L.L.C. and Shoppers World Community Center, L.P.
("Borrower") and Lehman Brothers Holdings Inc., D/B/A Lehman Capital, a Division
of Lehman Brothers Holdings Inc., in the principal amount of $126,750,000.00.
2. Amended and Restated Promissory Note dated the date hereof, by and
between Community Centers One L.L.C. and Lehman Brothers Holdings Inc., D/B/A
Lehman Capital, a Division of Lehman Brothers Holdings Inc., in the principal
amount of $42,750,000.00.
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EXHIBIT 4.4
AMENDED AND RESTATED PROMISSORY NOTE
This AMENDED AND RESTATED NOTE is made as of the 15th day of
May, 1997 by and between COMMUNITY CENTERS ONE L.L.C., a Delaware limited
liability company ("Borrower") having its principal place of business at The
Heritage, 34555 Chagrin Boulevard, Moreland Hills, Ohio 44022, and LEHMAN
BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation ("Lender") having an address at Three
World Financial Center, 200 Vesey Street, New York, New York 10285.
RECITALS
A. Lender is the current owner and holder of that certain note
described on Schedule I attached hereto and made a part hereto (the "Initial
Note").
B. Borrower and Lender have agreed to modify and restate the terms and
extend the term of the Initial Note in accordance with the terms set forth
below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and in and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby covenant and agree as follows:
A. Neither this Amended and Restated Note (hereinafter referred to as
the "Note"), any other notes entered into pursuant to the Loan Agreement
(defined below) nor anything contained herein or therein shall be construed as a
substitution or novation of the indebtedness evidenced hereby or of the Initial
Note, which shall remain in full force and effect, as supplemented, amended and
restated as provided herein.
B. All of the terms, provisions and obligations contained in the
Initial Note are hereby supplemented, amended, restated and increased in their
entirety to read as follows:
PROMISSORY NOTE
$42,750,000.00 New York, New York
As of May 15, 1997
FOR VALUE RECEIVED COMMUNITY CENTERS ONE L.L.C., a Delaware
limited liability company having its principal place of business at 'Me
Heritage, 34555 Chagrin Boulevard, Moreland Hills, Ohio 44022, as maker
("Borrower"), hereby unconditionally promises to pay to the order of LEHMAN
BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation, having an address at Three World
Financial Center, 200
<PAGE> 2
Vesey Street, New York, New York 10285, as payee ("Under"), or at such other
place as the holder hereof may from time to time designate in writing, the
principal sum of FORTY-TWO MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100
DOLLARS ($42,750,000.00) in lawful money of the United States of America with
interest thereon to be computed from the date of this Note at the Applicable
Interest Rate (defined below), and to be paid in installments as follows:
ARTICLE 1: PAYMENT TERMS
A payment of interest only on the tenth (10th) day of June,
1997, for interest accruing for the period commencing on and including the date
of this Note, through and including the ninth (9th) day of June, 1997, and on
the tenth (10th) day of each calendar month thereafter, or if such date is not a
Business Day (defined below), then on the next succeeding Business Day (each, a
"Scheduled Payment Date") up to and including the tenth (10th) day of May, 2002,
or if such date is not a Business Day, then on the next succeeding Business Day,
for interest accruing from and including each Scheduled Payment Date through,
but excluding, the next succeeding Scheduled Payment Date; each of such payments
to be applied to the payment of interest computed at the Applicable Interest
Rate; and the balance of the principal sum and all interest thereon shall be due
and payable on the tenth (10th) day of June, 2002, or if such date is not a
Business Day, then on the next succeeding Business Day (the "Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis of a
three hundred sixty (360) day year based on the actual number of days elapsed.
All payments to be made under this Note shall be made by wire
transfer of immediately available federal funds.
The term "Business Day" as used herein shall mean any day
excluding Saturday, Sunday and any day which shall be in New York City a legal
holiday or a day on which Lender or banking institutions are authorized or
required by law or other government actions to close.
ARTICLE 2: INTEREST
The term "Applicable Interest Rate" as used in this Note shall
mean an interest rate equal to seven and three hundred seventy-eight thousandths
percent (7.378%) per annum.
ARTICLE 3: DEFAULT AND ACCELERATION
(a) The whole of the principal sum of this Note, (b) interest,
default interest at the Default Rate, late charges and other sums, as provided
in this Note, the Security Instruments (defined below) or the Other Security
Documents (defined below),
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(c) all other monies agreed or provided to be paid by Borrower in this Note, the
Security Instruments or the Other Security Documents, (d) all sums advanced
pursuant to any of the Security Instruments to protect and preserve any of the
Properties (defined below) and the lien and the security interest created
thereby, and (e) all sums advanced and costs and expenses incurred by Lender in
connection with the Debt (defined below) or any part thereof, any renewal,
extension, or change of or substitution for the Debt or any part thereof, or the
acquisition or perfection of the security therefor, whether made or incurred at
the request of Borrower or Lender (all the sums referred to in (a) through (e)
above shall collectively be referred to as the "Debt") shall without notice
become immediately due and payable at the option of Lender if any payment
required in this Note is not paid when due or on the Maturity Date or on the
happening of any other default, after the expiration of any applicable notice
and grace periods, if any, herein or under the terms of the Security Instruments
or any of the Other Security Documents (collectively, an "Event of Default").
ARTICLE 4: DEFAULT INTEREST
Borrower does hereby. agree that upon the occurrence of an
Event of Default, Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal sum at a rate (the "Default Rate") equal
to (i) the greater of a per annum rate equal to (x) the Applicable Interest Rate
plus four percent (4%) or (y) the Prime Rate (defined below) plus four percent
(4%) or (ii) the maximum interest rate that Borrower may by law pay, whichever
is lower. In the event that, and for so long as, any Event of Default shall have
occurred and be continuing, the outstanding principal sum and, to the extent
permitted by law, overdue interest in respect thereof, shall bear interest at
the Default Rate, calculated from the date the default giving rise to such Event
of Default without regard to any grace or cure periods contained herein.
Interest calculated at the Default Rate shall be added to the Debt, and shall be
deemed secured by the Security Instruments. This clause, however, shall not be
construed as an agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy accruing to Under by reason
of the occurrence of any Event of Default.
The "Prime Rate" shall mean at any particular date, a rate per
annum equal to the rate of interest published in The Wall Street Journal as the
"prime rate", as in effect on such day, with any change in the prime rate
resulting from a change in said prime rate to be effective as of the date of the
relevant change in said prime rate; provided, however, that if more than one
prime rate is published in The Wall Street Journal for a day, the average of the
Prime Rates shall be used; provided, further, however, that the Prime Rate (or
the average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
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<PAGE> 4
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Prime Rate shall mean the daily
average prime rate published in another business newspaper, or business section
of a newspaper, of national standing chosen by Lender. If The Wall Street
Journal resumes publication, the substitute index will immediately be replaced
by the prime rate published in The Wall Street Journal.
In the event that a prime rate is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index which is readily available to Borrower and verifiable by Borrower but is
beyond the control of Lender. Lender shall give Borrower prompt written notice
of its choice of a substitute index and when the change became effective. Such
substitute index will also be rounded to the nearest 1/16 of 1% or, if there is
no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
The determination of the Prime Rate by Lender shall be
conclusive absent manifest error.
ARTICLE 5: PREPAYMENT
The principal sum of this Note shall not be prepayable at any
time, in whole or in part, prior to the period commencing six (6) months prior
to the Maturity Date (the "Permitted Prepayment Period"). Provided no Event of
Default exists from and after the commencement of the Permitted Prepayment
Period, the entire outstanding principal sum of this Note may be prepaid in
whole, but not in part, on any Scheduled Payment Date upon: (i) not less than
thirty (30) days and not more than forty-five (45) days prior written notice
(the "Prepayment Notice") to Lender specifying the Scheduled Payment Date on
which prepayment is to be made (the "Prepayment Date"); (ii) payment of all
accrued and unpaid interest on the outstanding principal balance of this Note to
and including the Prepayment Date; and (iii) payment of all other sums then due
under this Note, the Security Instruments and the Other Security Documents
including, without limitation, payment in full of all principal, interest and
all other sums due under the Related Note (defined below). If a Prepayment
Notice is given by Borrower to Lender pursuant to this Article, the principal
balance of this Note and each of the Related Notes and the other sums required
under this Article shall be due and payable on the Prepayment Date.
Lender shall not be obligated to accept any prepayment of the
principal balance of this Note unless it is (i) made during the Permitted
Prepayment Period, (ii) made in accordance with the terms of this Article, (iii)
accompanied by all sums due in connection therewith and with all sums due under
the Related Notes, and (iv) made on a Scheduled Payment Date. Notwithstanding
anything contained herein to the contrary, provided no Event of Default
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exists, no Prepayment Consideration (defined below) shall be due in connection
with a complete or partial prepayment resulting from the application of
insurance proceeds or condemnation awards pursuant to Section 4.4 of the
Security Instruments.
If a Default Prepayment (defined herein) occurs, Borrower
shall pay to Lender the entire Debt, including, without limitation, the
Prepayment Consideration.
For purposes of this Note, the term "Default Prepayment" shall
mean a prepayment of the principal amount of this Note made during the
continuance of any Event of Default or after an acceleration of the Maturity
Date under any circumstances, including, without limitation, a prepayment
occurring in connection with reinstatement of any Security Instrument provided
by statute under foreclosure proceedings or exercise of a power of sale, any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure, any sale in foreclosure or
under exercise of a power of sale or otherwise.
For purposes of this Note, the term "Prepayment Consideration"
shall mean an amount equal to the present value of a series of payments each
equal to the Payment Differential (defined below) and payable on each Scheduled
Payment Date through and including the Maturity Date discounted at the
Reinvestment Yield (defined below) for the number of months remaining from the
date of such prepayment (the "Prepayment Date") to each such Scheduled Payment
Date through and including the Maturity Date. The term "Reinvestment Yield" as
used herein shall be equal to the yield on the U.S. Treasury issue (primary
issue) with a maturity date closest to the Maturity Date, with such yield being
based on the bid price for such issue as published in THE WALL STREET JOURNAL on
the date that is fourteen (14) days prior to the date of the Prepayment Date
(or, if such bid price is not published on that date, the next preceding date on
which such bid price is so published) and converted to a monthly compounded
nominal yield. The term "Payment Differential" as used herein shall be equal to
(x) the Applicable Interest Rate minus the Reinvestment Yield, divided by (y)
twelve (12), and multiplied by (z) the principal sum due on such Prepayment
Date, provided that the Payment Differential shall in no event be less than
zero. In no event, however, shall Lender be required to reinvest any prepayment
proceeds in U.S. Treasury obligations or otherwise. Lender shall notify Borrower
of the amount, and the basis of determination, of the required Prepayment
Consideration.
ARTICLE 6: SECURITY
This Note is secured by the Security Instruments and the
Other Security Documents. The term "Security Instruments" as used in this Note
shall mean the Amended and Restated Deed of Trust and
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Security Agreement dated as of the date hereof given by Borrower to (or for the
benefit of) Lender covering the fee estate of Borrower in certain premises
located in San Diego County, California, and each of the Related Security
Instruments covering the fee estate in certain premises as described on Schedule
2 attached hereto and made a part hereof and other property, as more
particularly described therein (collectively, the "Properties") and intended to
be duly recorded in said Counties, and each in the original principal sum of
$322,500,000.00 (other than such mortgage to be recorded in Collier County,
Florida, which is in an amount of $153,000,000.00). The term "Related Notes"
shall mean those certain notes described on Schedule 3 attached hereto, and
which, together with the Note, are secured by the Security Instruments. The term
"Related Security Instruments' shall mean those certain mortgages, deeds of
trust and deeds to secure debt described on Schedule 2 attached hereto and made
a part hereof. The term "Related Borrowers" shall mean Community Centers Two
L.L.C., a Delaware limited liability company, and Shoppers World Community
Center, L.P., a Delaware limited partnership. The term "Other Security
Documents" as used in this Note shall mean all and any of the documents other
than this Note or the Security Instruments now or hereafter executed by Borrower
and/or any Related Borrower and/or others and by or in favor of Lender, which
wholly or partially secure or guarantee payment of this Note or any of the
Related Notes, including, but not limited to, that certain Loan Agreement dated
the date hereof between Borrowers, the Related Borrowers, and Lender and the
Related Notes. Whenever used, the singular number shall include the plural, the
plural number shall include the singular, and the words "Lender" and "Borrower"
shall include their respective successors, assigns, heirs, executors and
administrators.
All of the terms, covenants and conditions contained in the
Security Instruments and the Other Security Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein.
ARTICLE 7: SAVINGS CLAUSE
This Note is subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance
due hereunder at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to contract or agree to pay. If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the Applicable Interest Rate or the Default Rate, as the case may
be, shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All
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sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Note
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.
ARTICLE 8: LATE CHARGE
If any sum payable under this Note is not paid on or prior to
the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of the unpaid sum or the maximum amount
permitted by applicable law to defray the expenses incurred by Lender in
handling and processing the delinquent payment and to compensate Lender for the
loss of the use of the delinquent payment and the amount shall be secured by the
Security Instruments and the Other Security Documents.
ARTICLE 9: NO ORAL CHANGE
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Under, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
ARTICLE 10: JOINT AND SEVERAL LIABILITY
If Borrower consists of more than one person or party, the
obligations and liabilities of each person or party shall be joint and several.
ARTICLE 11: WAIVERS
Borrower and all others who may become liable for the payment
of all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, protest and notice of protest and non-payment
and all other notices of any kind. No release of any security for the Debt or
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Security
Instruments or the Other Security Documents made by agreement between Lender or
any other person or party shall release, modify, amend, waive, extend, change,
discharge, terminate or affect the liability of Borrower, and any other person
or entity who may become liable for the payment of all or any part of the Debt,
under this Note, the Security Instruments or the Other Security Documents. No
notice to or demand on Borrower shall be
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<PAGE> 8
deemed to be a waiver of the obligation of Borrower or of the right of Lender to
take further action without further notice or demand as provided for in this
Note, the Security Instruments or the Other Security Documents. If Borrower is a
partnership, the agreements herein contained shall remain in force and
applicable, notwithstanding any changes in the individuals comprising the
partnership, and the term "Borrower," as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and their
partners shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and
applicable notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term "Borrower" as
used herein, shall include any alternative or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. If
Borrower is a limited liability company, the agreements contained herein shall
remain in full force and applicable, notwithstanding any changes in the members
comprising the limited liability company, and the term "Borrower" as used herein
shall include any alternative or successor limited liability company, but any
predecessor limited liability company or its members shall not be relieved of
liability hereunder. (Nothing in the foregoing sentence shall be construed as a
consent to, or a waiver of, any prohibition or restriction on transfers of
interests in such partnership, corporation or limited liability company, as
applicable, which may be expressly permitted by the Security Instruments or any
Other Security Documents.)
ARTICLE 12: TRANSFER
Lender shall have the right in its sole discretion at any time
during the term of this Note to sell, assign, syndicate, participate, pledge,
hypothecate or otherwise transfer and/or dispose of all or any portion of its
interest in this Note, including by issuance of mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement. Upon the transfer of this Note,
Borrower hereby waiving notice of any such transfer, Lender may deliver all the
collateral mortgaged, granted, pledged or assigned pursuant to the Security
Instruments and the Other Security Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under
applicable law given to Lender with respect thereto, and Under shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter; but Lender shall retain all rights hereby given to it with respect
to any liabilities and the collateral not so transferred.
ARTICLE 13: WAIVER OF TRIAL BY JURY
BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
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COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THIS NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THIS NOTE, THIS NOTE, THE SECURITY INSTRUMENTS OR THE OTHER
SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
ARTICLE 14: EXCULPATION
(a) Except as otherwise provided herein, in the Security
Instruments or in the Other Security Documents, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained in this Note or the Security Instruments by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon
this Note, the Security Instruments, the Other Security Documents, and the
interest in the Properties, the Rents (as defined in the Security Instruments)
and any other collateral given to Lender created by this Note, the Security
Instruments and the Other Security Documents; provided, however, that a:ny
judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of Borrower's interest in the Properties, in the Rents and in
any other collateral given to Lender. Lender, by accepting this Note and the
Security Instruments, agrees that it shall not, except as otherwise provided in
Section 11-10 of the Security Instruments, sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding, under or
by reason of or under or in connection with this Note, the Other Security
Documents or the Security Instruments. The provisions of this Article shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Note, the Other Security Documents or the Security
Instruments; (ii) impair the right of Lender to obtain a deficiency judgment in
any action or proceeding in order to preserve its rights and remedies, including
without limitation, foreclosure, non-judicial foreclosure, or the exercise of a
power of sale, under any of the Security Instruments; however, Lender agrees
that it shall not enforce such deficiency judgment against any assets of
Borrower other than the Properties, including the Rents and any other collateral
given to Lender created by this Note, the Security Instruments and the Other
Security Documents or in the exercise of its rights and remedies under the
Security Instruments; (iii) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
the Security Instruments; (iv) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
this Note, the Security Instruments, or the Other Security Documents; (v) impair
the right of Lender to obtain the appointment of a receiver; (vi) impair the
enforcement of the Assignments of Leases and Rents executed in
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connection herewith and in connection with each of the Security Instruments;
(vii) impair the right of Lender to obtain a deficiency judgment or judgment on
the Note against Borrower if necessary to obtain any insurance proceeds or
condemnation awards to which Lender would otherwise be entitled under the
Security Instruments; provided however, Lender shall only enforce such judgment
against the insurance proceeds and/or condemnation awards; or (viii) impair the
right of Lender to enforce the provisions of Sections 11.10, 12.3, and 12.4 of
the Security Instruments.
(b) Notwithstanding the provisions of this Article 14 to the
contrary, Borrower shall be personally liable to Lender for the Losses (as
defined in the Security Instruments) it incurs due to: (i) fraud or intentional
misrepresentation by Borrower, or any affiliate of Borrower or any general
partner, member, officer, director, employee or agent of any of the foregoing in
connection with the execution and the delivery of this Note, the Security
Instruments or the Other Security Documents or any certificate, document or
other instrument delivered or to be delivered to Lender from time to time under,
or in connection with this Note, the Security Instruments and/or any Other
Security Documents; (ii) Borrower's misapplication or misappropriation of Rents
received by Borrower; (iii) Borrower's misapplication or misappropriation of
tenant security deposits or Rents collected in advance; (iv) the misapplication
or the misappropriation of insurance proceeds or condemnation awards; (v)
Borrower's failure to pay Taxes, Insurance Premiums, Other Charges (as such
terms are defined in the Security Instruments), charges for labor or materials
or other charges that can create liens on the Properties; (vi) any Lease (as
defined in the Security Instruments) or any of the provisions thereof being
superior to the lien or the Security Instruments or any of the provisions
thereof, or (vii) Borrower's failure to comply with the provisions of Section
4.2 of the Security Instruments.
(c) Notwithstanding the foregoing, the agreement of Lender not
to pursue recourse liability as set forth in Subsection (a) above SHALL BECOME
NULL AND VOID and shall be of no further force and effect in the event of
Borrower's default under Section 4.3 (unless Borrower is a "Permitted
Transferee" as defined in, and that meets the requirements of Subsection
8.4(a)(iii)(B) of each of the Security Instruments) or Article 8 of the Security
Instruments, or if any of the Properties or any part thereof shall become an
asset in (i) a voluntary bankruptcy or insolvency proceeding, or (ii) an
involuntary bankruptcy or insolvency proceeding which is not dismissed within
ninety (90) days of filing.
(d) Nothing herein shall be deemed to be a waiver of any right
which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the
indebtedness secured by the Security Instruments or to require that all
collateral shall continue to
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secure all of the indebtedness owing to Lender in accordance with this Note, the
Security Instruments and the Other Security Documents.
ARTICLE 15: AUTHORITY
Borrower (and the undersigned representative of Borrower, if
any) represents that Borrower has full power, authority and legal right to
execute and deliver this Note, the Security Instruments and the Other Security
Documents and that this Note, the Security Instruments and the Other Security
Documents constitute valid and binding obligations of Borrower.
ARTICLE 16: APPLICABLE LAW
This Note shall be governed, construed, applied and enforced
in accordance with the laws of the state of New York and the applicable laws of
the United States of America.
ARTICLE 17: SERVICE OF PROCESS
(a) (i) Borrower will maintain a place of business or an agent
for service of process in New York, New York and give prompt notice to Lender of
the address of such place of business and of the name and address of any new
agent appointed by it, as appropriate. Borrower further agrees that the failure
of its agent for service of process to give it notice of any service of process
will not impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for service
of process of Borrower available to be served, and if it at that time has no
place of business in New York, New York, then Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, to it at
its address given in or pursuant to the first paragraph hereof.
(ii) Borrower initially and irrevocably designates
Dewey Ballantine, with offices on the date hereof at 1301 Avenue of the
Americas, New York, New York 10019-6092, to receive for and on behalf of
Borrower service of process in New York, New York with respect to this Note.
(b) With respect to any claim or action arising hereunder or
under the Security Instruments or the Other Security Documents, Borrower (a)
irrevocably submits to the nonexclusive jurisdiction of the courts of the States
in which the respective Properties are located and the court of the State of New
York and the United States District Court located in the Borough of Manhattan in
New York, New York, and appellate courts from any thereof, and (b) irrevocably
waives any objection which it may have at any time to the laying on venue of any
suit, action or proceeding arising out of or relating to this Note brought in
any such court, irrevocably waives any claim that any such suit, action
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or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Nothing in this Note will be deemed to preclude Lender
from bringing an action or proceeding with respect hereto in any other
jurisdiction.
ARTICLE 18: COUNSEL FEES
In the event that it should become necessary to employ counsel
to collect the Debt or to protect or foreclose the security therefor, Borrower
also agrees to pay all reasonable fees and expenses of Lender, including,
without limitation, reasonable attorney's fees for the services of such counsel
whether or not suit be brought.
ARTICLE 19: NOTICES
All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day after having been deposited for overnight delivery
with any reputable overnight courier service, or (iii) three (3) Business Days
after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Borrower: Community Centers One L.L.C.
The Heritage
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Attention: Joan U. Allgood, Esq.
Facsimile No.: (216) 247-6113
With a copy to:
Community Centers One L.L.C.
c/o DRA Advisors, Inc.
1180 Avenue of the Americas
New York, New York 10036
Attention: David Luski
Facsimile No.: (212) 764-3571
Baker & Hostetler
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
Attention: Albert T. Adams, Esq.
Facsimile No.: (216) 696-0740
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Dewey Ballantine
1301 Avenue of the Americas
New York, New York
Attention: Sanford W. Morhouse, Esq.
Facsimile No.: (212) 259-6333
If to Lender: Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Shereen Jones
Facsimile No.: (212) 526-3746
and to: Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, a Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Scott Kimmel and Annette Nazareth
Facsimile No.: (212) 526-3721
With a copy to: Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
Attention: Mitchell G. Williams, Esq.
Facsimile No.: (212) 912-7751
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
ARTICLE 20: MISCELLANEOUS
(a) Wherever pursuant to this Note (i) Lender exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Note it is provided that
Borrower pay any costs and expenses, such costs and expenses shall
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<PAGE> 14
include, but not be limited to, legal fees and disbursements of Lender, whether
retained firms, the reimbursement for the expenses of in-house staff, or
otherwise.
ARTICLE 21: NO NOVATION
Borrower and Lender hereby confirm the legal operation and
effect of the Initial Note so that the Initial Note, as amended and restated in
this Note, shall be binding upon and inure to the benefit of the respective
parties hereto, their successors and assigns and all holders hereof. Nothing
contained in this Note shall be construed as a substitution or novation of
Borrower's indebtedness or of the Initial Note, which shall remain in full force
and effect, as amended and restated hereby.
IN WITNESS WHEREOF, Borrower and Lender have executed this
instrument as of the day and year first above written.
COMMUNITY CENTERS ONE L.L.C., a
Delaware limited liability company
By: DD Community Centers One, Inc.,
an Ohio corporation, its
managing member
By:
------------------------------
Name:
Title:
By: DRA Opportunity Fund, a
Delaware corporation, a member
By:
------------------------------
David Luski
Executive Vice President
By: DD Retail Partners 11, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:
--------------------------
David Luski
Vice President
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<PAGE> 15
By: DD Retail Partners III, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a
Delaware, corporation,
its sole general partner
By:
--------------------------
David Luski
Vice President
By: DD Retail Partners IV, L.P., a
Delaware limited partnership, a
member
By: Master Realty Inc., a
Delaware corporation, its
sole general partner
By:
--------------------------
David Luski
Vice President
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<PAGE> 16
LEHMAN BROTHERS HOLDINGS INC., D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware
By:
----------------------------------
Name:
Title:
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<PAGE> 17
SCHEDULE 1
(Description of Initial Note)
1. Promissory Note dated as of November 17, 1995 made by
Community Centers One L.L.C. ("Borrower") to Lehman Brothers Holdings Inc.,
D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc. ("Lender") in
the original principal amount of $37,000,000.00.
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<PAGE> 18
SCHEDULE 2
(Description of Related Security Instruments)
1. Amended and Restated Deed of Trust and Security Agreement
dated the date hereof by Community Centers One L.L.C., to Public Trustee of the
City and County of Denver, State of Colorado, for the benefit of Lehman Brothers
Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings
Inc., in the principal amount of $322,500,000.00, encumbering the property known
as Broadway Marketplace, Denver, Colorado, to be recorded in the office of the
public records of Denver County, Colorado;
2. Amended and Restated Mortgage and Security Agreement dated
the date hereof by Community Centers One L.L.C., as mortgagor, to Lehman
Brothers Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers
Holdings Inc., as mortgagee, in the principal amount of $322,500,000.00,
encumbering the property known as Carillon Place, Naples, Florida, to be
recorded in the Official Records of Collier County, Florida;
3. Amended and Restated Deed to Secure Debt and Security
Agreement dated the date hereof by Community Centers Two L.L.C., and Community
Centers One L.L.C., to Lehman Brothers Holdings Inc., D/B/A Lehman Capital, a
Division of Lehman Brothers Holdings Inc., in the principal amount of
$322,500,000.00, encumbering the properties known as Perimeter Pointe, Fulton,
Georgia and Town Center Prado, Marietta, Georgia, to be recorded in the office
of public records of Fulton and Cobb Counties, respectively;
4. Amended and Restated Mortgage and Security Agreement dated
the date hereof by Community Centers One L.L.C., as mortgagor, to Lehman
Brothers Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers
Holdings Inc., as mortgagee, in the principal amount of $322,500,000.00,
encumbering the property known as Woodfield Village Green, Schaumburg, Illinois,
to be recorded in the office of the Recorder of Cook County, Illinois;
5. Amended and Restated Mortgage and Security Agreement dated
the date hereof by Shoppers World Community Center, L.P., as grantor, to Lehman
Brothers Holdings Inc., D/B/A Lehman Capital, a Division of Lehman Brothers
Holdings Inc., as beneficiary, in the principal amount of $322,500,000.00,
encumbering the property known as Shoppers World, Framingham, Massachusetts, to
be recorded in the Middlesex South District Registry of Deeds;
6. Amended and Restated Deed of Trust, Security Agreement and
Fixture Filing dated the date hereof by Community Centers Two L.L.C., as grantor
to Chicago Title Insurance Company, as Trustee and to Lehman Brothers Holdings
Inc., D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc., as
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<PAGE> 19
beneficiary, in the principal amount of $322,500,000.00, encumbering the
property known as Independence Commons, Independence, Missouri, to be recorded
in the public records of Jackson County, Missouri;
7. Amended and Restated Deed of Trust and Security Agreement
dated the date hereof by Community Centers One L.L.C., as grantor, to Chicago
Title Insurance Company, as trustee, and Lehman Brothers Holdings Inc., D/B/A
Lehman Capital, a Division of Lehman Brothers Holdings Inc., as beneficiary, in
the principal amount of $322,500,000.00, encumbering the property known as New
Hope Commons, Durham, North Carolina, to be recorded in the office of the
Register of Deeds of Durham County, North Carolina; and
8. Amended and Restated Deed of Trust and Security Agreement
dated the date hereof by Community Centers One L.L.C., as grantor, to Alexander
Title Agency Incorporated, as trustee, and Lehman Brothers Holdings Inc., D/B/A
Lehman Capital, a Division of Lehman Brothers Holdings Inc., as beneficiary, in
the principal amount of $322,500,000.00, encumbering the property known as
Fairfax Towne Center, Fairfax, Virginia, to be recorded in the office of the
Clerk of the Circuit Court of Fairfax County, Virginia.
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SCHEDULE 3
(Description of Related Notes)
1. Amended and Restated Promissory Note dated the date hereof,
by and between Community Centers Two L.L.C. and Shoppers World Community Center,
L.P. ("Borrower") and Lehman Brothers Holdings Inc., D/B/A Lehman Capital, a
Division of Lehman Brothers Holdings Inc., in the principal amount of
$126,750,000.00.
2. Amended and Restated Promissory Note dated the date hereof,
by and between Community Centers One L.L.C. and Lehman Brothers Holdings Inc.,
D/B/A Lehman Capital, a Division of Lehman Brothers Holdings Inc., in the
principal amount of $153,000,000.00.
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<PAGE> 1
EXHIBIT 10.1
RESTRICTED SHARES AGREEMENT
---------------------------
Developers Diversified Realty Corporation, an Ohio corporation
(the "Company"), has granted to Scott A. Wolstein (the "Grantee"), 25,000 of the
Company's Common Shares, without par value (the "Restricted Shares"). The
Restricted Shares have been granted pursuant to the Developers Diversified
Realty Corporation Equity-Based Award Plan (the "Plan") and are subject to all
provisions of the Plan, which are hereby incorporated herein by reference, and
to the following provisions of this Agreement (capitalized terms not defined
herein are used as defined in the Plan):
Section 1. VESTING. The Restricted Shares will vest in
annual 20% increments with the first 5,000 Restricted Shares
vesting on July 17, 1996 (each such date, a "Vesting Date").
Section 2. PURCHASE PRICE. The purchase price of the
Restricted Shares is $-0-. The Restricted Shares will be issued in
uncertificated form. The Restricted Shares will be held by the Company in an
account for the benefit of the Grantee until such shares have vested in
accordance with Section 1 above. The Company will transfer the vested Restricted
Shares to the Grantee's account within a reasonable period of time after each
Vesting Date.
Section 3. TRANSFERABILITY. Prior to vesting, the Restricted
Shares will not be transferable by the Grantee other than by will or by the laws
of descent and distribution. Thereafter, the Restricted Shares will be
transferable by the Grantee subject to the relevant restrictions on transfer
included in this Agreement and the Plan.
Section 4. TERMINATION OF EMPLOYMENT. If the Grantee's
employment by the Company or any subsidiary or Affiliate terminates prior to all
of the Restricted Shares vesting, the Restricted Shares will vest or be
forfeited in accordance with Section 6(b) of the Plan.
Section 5. SHAREHOLDER RIGHTS AND RESTRICTIONS. Except with
regard to the disposition of Restricted Shares, the Grantee will generally have
all rights of a shareholder with respect to the Restricted Shares from the date
of grant, including, without limitation, the right to receive dividends with
respect to such Restricted Shares and the right to vote such Restricted Shares,
subject to any restrictions in this Agreement or in the Plan.
Section 6. DIVIDENDS. All dividends payable on the Restricted
Shares (whether or not vested) will be payable in additional Restricted Shares
that will be subject to the same restrictions and other terms and conditions
that apply to the Restricted Shares with respect to which such dividends are
issued.
<PAGE> 2
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
DATE OF GRANT:
July 17, 1996 By:________________________________
James A. Schoff, Executive
Vice President and Chief
Operating Officer
ACCEPTANCE OF AGREEMENT
-----------------------
The Grantee hereby: (a) acknowledges that he has received a
copy of the Plan and a copy of the Company's most recent Annual Report and other
communications routinely distributed to the Company's shareholders; (b) accepts
this Agreement and the Restricted Shares granted to him under this Agreement
subject to all provisions of the Plan and this Agreement; (c) represents and
warrants to the Company that he is acquiring the Restricted Shares for his own
account, for investment, and not with a view to or any present intention of
selling or distributing the Restricted Shares either now or at any specific or
determinable future time or period or upon the occurrence or nonoccurrence of
any predetermined or reasonably foreseeable event; and (d) agrees that no
transfer of the Restricted Shares will be made unless the Restricted Shares have
been duly registered under all applicable Federal and state securities laws
pursuant to a then-effective registration which contemplates the proposed
transfer or unless the Company has received the written opinion of, or
satisfactory to, its legal counsel that the proposed transfer is exempt from
such registration.
-----------------------------------
Grantee's Signature
-----------------------------------
Grantee's Social Security Number
<PAGE> 1
EXHIBIT 10.2
PERFORMANCE UNITS AGREEMENT
---------------------------
Developers Diversified Realty Corporation, an Ohio corporation
(the "Company"), has granted to Scott A. Wolstein (the "Grantee"), 15,000 units
(the "Performance Units") the value of which will be determined by the
performance of the Company's Common Shares, without par value (the "Common
Shares"). The Performance Units have been granted pursuant to the Developers
Diversified Realty Corporation Equity-Based Award Plan (the "Plan") and are
subject to all provisions of the Plan, which are hereby incorporated herein by
reference, and to the following provisions of this Agreement (capitalized terms
not defined herein are used as defined in the Plan):
Section 1. CONVERSION OF PERFORMANCE UNITS. The Performance
Units will be converted to a number of Common Shares based on Annualized Total
Shareholder Return (as defined below) from the period beginning January 1, 1996
and ending December 31, 2000 (the "Measurement Period") as indicated below:
<TABLE>
<CAPTION>
Annualized Total Common Shares
Shareholder Return Awarded
------------------ --------------
<S> <C> <C>
10% 15,000
11% 20,000
12% 25,000
13% 35,000
14% 45,000
15% 55,000
16% 75,000
18% 100,000
</TABLE>
Annualized Total Shareholder Return will be measured by
assuming a hypothetical investment of $100 in the Common Shares on the first day
of the Measurement Period (the "Initial Investment") and calculating the value
of that investment as of the last day of the Measurement Period, assuming
dividends paid on the Common Shares are reinvested into additional Common Shares
(the "Total Return"); the difference between the Total Return and the Initial
Investment will be divided by the Initial Investment and the resulting number
further divided by the number of years in the Measurement Period (five) to
determine the Annualized Total Shareholder Return. For example, if the Total
Return is $170 the Annualized Total Shareholder Return is:
(170-100)/100=70%
70/5=14%
Section 2. TRANSFERABILITY. Prior to the end of the
Measurement Period, the Performance Units will not be transferable by the
Grantee other than by will or by the laws of descent and distribution.
Thereafter, the Performance Units will be transferable by the Grantee subject to
the relevant restrictions on transfer included in this Agreement and the Plan.
<PAGE> 2
Section 3. TERMINATION OF EMPLOYMENT. If the Grantee's
employment by the Company or any subsidiary or Affiliate terminates prior to the
end of the Determination Period, Annualized Shareholder Return will be
calculated, as set forth above, for the period beginning January 1, 1996 and
ending the December 31 immediately preceding the date employment terminates (the
"Termination Date"). Grantee will be entitled to a pro rata portion of Common
Shares set forth in the table above (20% of the aggregate amount to be awarded
for each completed fiscal year prior to the Termination Date).
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
DATE OF GRANT:
__________, 1996 By:________________________________
James A. Schoff, Executive
Vice President and Chief
Operating Officer
ACCEPTANCE OF AGREEMENT
-----------------------
The Grantee hereby: (a) acknowledges that he has received a
copy of the Plan and a copy of the Company's most recent Annual Report and other
communications routinely distributed to the Company's shareholders; (b) accepts
this Agreement and the Performance Units granted to him under this Agreement
subject to all provisions of the Plan and this Agreement; (c) represents and
warrants to the Company that he is acquiring the Performance Units and the
underlying Common Shares for his own account, for investment, and not with a
view to or any present intention of selling or distributing the Performance
Units either now or at any specific or determinable future time or period or
upon the occurrence or nonoccurrence of any predetermined or reasonably
foreseeable event; and (d) agrees that no transfer of the Common Shares acquired
upon conversion of the Performance Units will be made unless the Common Shares
have been duly registered under all applicable Federal and state securities laws
pursuant to a then-effective registration which contemplates the proposed
transfer or unless the Company has received the written opinion of, or
satisfactory to, its legal counsel that the proposed transfer is exempt from
such registration:
-----------------------------------
Grantee's Signature
-----------------------------------
Grantee's Social Security Number
