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As filed with the Securities and Exchange Commission on June 4, 1998
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 4, 1998
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Commission File Number: 001-11656
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GENERAL GROWTH PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 42-1283895
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
110 NORTH WACKER, CHICAGO, ILLINOIS 60606
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(Address of principal executive offices) (Zip Code)
(312) 960-5000
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
On June 4, 1998, General Growth Properties, Inc., a real estate investment
trust organized under the laws of the State of Delaware (the "Company"), entered
into an Underwriting Agreement with Lehman Brothers Inc., Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, PaineWebber Incorporated, Prudential
Securities Incorporated and SBC Warburg Dillon Read Inc. relating to the
issuance and sale by the Company of 12,000,000 depositary shares (the
"Depositary Shares"), each representing 1/40 of a share of 7.25% Preferred
Income Equity Redeemable Stock, Series A, par value $100 per share, (the "Series
A Preferred Stock"), of the Company (the "Firm Offered Securities"), plus an
additional 1,800,000 such Depositary Shares, the issuance and sale of which is
subject to the exercise of an overallotment option (the "Additional Offered
Securities" and, together with the Firm Offered Securities, the "Offered
Securities"). The Offered Securities were registered under the Securities Act of
1933, as amended, pursuant to the Company's Registration Statement on Form S-3
(File No. 333-37247).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits - See Exhibit Index
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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.
GENERAL GROWTH PROPERTIES, INC.
By: /s/ Bernard Freibaum
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Name: Bernard Freibaum
Title: Executive Vice President and
Chief Financial Officer
DATE: June 4, 1998
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EXHIBIT INDEX
1.1 Underwriting Agreement, dated June 4, 1998, between the Company and Lehman
Brothers Inc., as representative of Goldman, Sachs & Co., Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Prudential Securities
Incorporated and SBC Warburg Dillon Read Inc.
4.1 Form of Certificate of Designations relating to the Series A Preferred
Stock
4.2 Form of Series A Preferred Stock Certificate
4.3 Form of Depositary Receipt for the Company's Depositary Shares (included in
Exhibit 4.4)
4.4 Form of Deposit Agreement among the Company, Norwest Bank Minnesota,
N.A., as depositary, and the holders of the Depositary Receipts
5.1 Validity Opinion of Sullivan & Cromwell, dated June 4, 1998
8.1 Tax Opinion of Neal, Gerber & Eisenberg, dated June 4, 1998
23.1 Consent, dated June 4, 1998, of Sullivan & Cromwell (included in
Exhibit 5.1)
23.2 Consent, dated June 4, 1998, of Neal, Gerber & Eisenberg (included in
Exhibit 8.1)
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EXHIBIT 1.1
GENERAL GROWTH PROPERTIES, INC.
DEPOSITARY SHARES
EACH REPRESENTING 1/40 OF A SHARE OF
7.25% PREFERRED INCOME EQUITY REDEEMABLE STOCK, SERIES A
(PAR VALUE $100 PER SHARE)
(LIQUIDATION PREFERENCE EQUIVALENT
TO $25.00 PER DEPOSITARY SHARE)
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UNDERWRITING AGREEMENT
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June 4, 1998
Lehman Brothers Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
As Representatives of the several
Underwriters named in Schedule I,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
General Growth Properties, Inc., a Delaware corporation (the "Company") and
the general partner of GGP Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), proposes to issue and sell up to an aggregate of
345,000 shares of its 7.25% Preferred Income Equity Redeemable Stock, Series A,
par value $100 per share ("PIERS"), more fully identified in Schedule II hereto.
The PIERS will, when issued, be deposited by the Company against delivery of
depositary receipts (the "Receipts") to be issued by Norwest Bank Minnesota,
N.A., as depositary (the "Depositary"), under a deposit agreement (the "Deposit
Agreement") to be dated as of June 10, 1998 among the Company, the Depositary
and the holders from time to time of the Receipts. The Receipts will evidence
depositary shares (each, a "Depositary Share"), and each Depositary Share will
represent 1/40 of a PIERS. The PIERS, together with the Depositary Shares, are
herein collectively called "Shares". Subject to the terms and conditions stated
herein, the Company hereby agrees to sell to the firms named in Schedule I
hereto (the "Underwriters"), and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters
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2
set forth in Schedule II hereto, the number of Depositary Shares specified in
Schedule I hereto (the "Firm Shares"). At the election of the Underwriters, the
Underwriters may purchase up to an additional number of Depositary Shares as set
forth in Schedule II hereto, as provided in Section 2 hereof (the "Optional
Shares"), each representing an interest in a PIERS as aforesaid. In the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares pursuant to Section 2 hereof, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agree, severally
and not jointly, to purchase from the Company at the purchase price to the
Underwriters set forth in Schedule II hereto that portion of the number of
Optional Shares as set forth in Section 2 hereof, as to which such election
shall have been exercised. If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives" shall each be deemed to refer to such firm
or firms.
The PIERS will be convertible at the option of the holders thereof into
shares of Common Stock, par value $.10 per share ("Common Stock"), of the
Company. The shares of Common Stock issuable upon conversion or redemption of
the PIERS are herein called the "Common Shares".
This is to confirm the agreement concerning the purchase of the Shares from
the Company by the Underwriters named in Schedule II hereto.
1. The Company and the Operating Partnership, jointly and severally,
represent and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-37247) in
respect of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to such
registration statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters have been declared effective by the
Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission
(other than documents incorporated by reference in such prospectus and
prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Securities Act of 1933, as amended (the "Act"),
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the
form in which it has most
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3
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in the form in which it is filed with the Commission pursuant
to Rule 424(b) under the Act in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an 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 not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Representatives expressly for use in the Prospectus
as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement or a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing
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4
to the Company by an Underwriter through the Representatives expressly for
use in the Prospectus as amended or supplemented;
(d) Neither the Company nor any of its subsidiaries ("subsidiaries",
as used in this Agreement, shall include the Operating Partnership and each
other partnership which is together wholly-owned by the Company and the
Operating Partnership (each, a "Property Partnership")), has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus
as amended or supplemented, there has not been any change in the capital
stock (other than issuances pursuant to stock option plans) of the Company
or the short-term or long-term debt of the Company (other than reductions
in short-term or long-term debt pursuant to scheduled reductions in the
applicable debt instruments and other than an increase in short-term and
long-term debt of the Company of approximately $304 million since March 31,
1998 (representing indebtedness assumed or incurred in connection with
property acquisitions by the Company and indebtedness incurred for working
capital purposes)) or the capital stock or equity capital of any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity (or, with respect to
partnership subsidiaries, partnership capital) or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each material
subsidiary of the Company has been duly organized and is validly existing
as a partnership or corporation, as the case may be, in good standing (to
the extent applicable) under the laws of its jurisdiction of organization
and has been duly qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction:
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable. Except as disclosed in the Prospectus, no shares of the
Company's Common Stock are reserved for
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5
any purpose and except for the equity interests in the Operating
Partnership ("Units") and for shares of capital stock of GGP/Homart, Inc.,
there are no outstanding securities convertible into or exchangeable for
any shares of Common Stock of the Company, and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or subscribe for
shares of Common Stock or any other securities of the Company (except, in
the case of options, any options granted on or after the date on which the
Company filed its definitive proxy statement on Schedule 14A).;
(g) The PIERS have been duly and validly authorized and, when the
Shares are issued and delivered pursuant to this Agreement, such PIERS will
be validly issued, fully paid and non-assessable; no holder thereof will be
subject to personal liability by reason of being such a holder; such PIERS
will not be subject to the preemptive rights or other similar rights of any
stockholder of the Company; and all corporate action required to be taken
for the authorization, issue and sale of the Shares has been validly and
sufficiently taken; and upon deposit by the Company of the PIERS with the
Depositary pursuant to the Deposit Agreement and the due execution by the
Depositary of the Deposit Agreement and the Receipts evidencing the
Depositary Shares in accordance with the Deposit Agreement, such Depositary
Shares shall represent legal and valid interests in the PIERS; the Shares
will conform to the description thereof contained in the Prospectus as
amended or supplemented; the PIERS are convertible into Common Stock in
accordance with their terms and the terms of the Certificate of
Designations relating to the PIERS (the "Certificate of Designations"); the
Common Shares have been duly and validly authorized and reserved for
issuance upon such conversion and, if and when issued upon such conversion
in accordance with the Certificate of Designations, will be duly
authorized, validly issued and fully paid, non-assessable and free of any
preemptive or other similar rights and will conform as to legal matters to
the description of the Common Stock contained in the Prospectus;
(h) The issue and sale of the Shares by the Company, the issuance of
the Common Shares upon conversion of the PIERS, the compliance by the
Company with all of the provisions of this Agreement and the Deposit
Agreement and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any subsidiary is a party or by which the Company or
any subsidiary is bound or to which any of the property or assets of the
Company or any subsidiary is subject, except for a conflict, breach,
violation, or default which would not have a material adverse effect on (i)
the Company's ability to perform its obligations hereunder or (ii) the
Company and its subsidiaries taken as a whole, nor will such action result
in any violation of the provisions of the certificate of incorporation or
bylaws of the Company or the constituent documents of any subsidiary or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Shares, the issuance
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6
of Common Shares upon conversion of the PIERS or the consummation by the
Company of the transactions contemplated by this Agreement, except (i) such
as have been, or will have been prior to each Time of Delivery (as defined
in Section 3 hereof), obtained under the Act, (ii) the filing of the
Certificate of Designations with the Secretary of State of the State of
Delaware, (iii) the registration of the Depositary Shares under the
Exchange Act, (iv) the listing of the Depositary Shares and the Common
Shares on the New York Stock Exchange (the "NYSE") and (v) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which might reasonably be expected to
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole;
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(j) Neither the Company nor any of its subsidiaries is in violation of
its certificate of incorporation or certificate of limited partnership, as
the case may be, or bylaws or partnership agreement, as the case may be, or
in breach of or default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument or under any applicable law, rule, order, administrative
regulation or administrative or court decree to which it is a party or by
which it or any of its properties may be bound, which breaches or defaults
do not, in the aggregate, have a material adverse effect;
(k) The statements set forth in the Prospectus (i) under the captions
"Capital Stock", "Description of Common Stock", "Description of Preferred
Stock", Description of Depositary Shares" and "Description of PIERS",
insofar as they purport to constitute a summary of the terms of the
securities of the Company and the provisions of the laws and documents
referred to therein, and (ii) under the caption "Certain Federal Income
Tax Considerations", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete;
(l) Neither the Company, nor any of its subsidiaries, is, or will be,
after giving effect to the issue and sale of the Shares by the Company, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Coopers & Lybrand L.L.P., who have certified certain financial
statements of the Company and its subsidiaries or affiliates, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
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7
(n) The Company and its subsidiaries have good and marketable title in
fee simple to, or good and marketable leasehold estates in, all real
property described in the Prospectus as being owned by them, and good and
marketable title to all personal property owned by them which is material
to the business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the value of such
property, and do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid and subsisting leases, in each case except as
set forth or contemplated in the Prospectus;
(o) The partnership agreement or shareholder agreement of each
subsidiary of the Company has been duly authorized, executed and delivered
by each party thereto and is valid, legally binding and enforceable in
accordance with its terms; all of the partnership interests in each
partnership subsidiary of the Company have been duly and validly authorized
and issued and (except as described in the Prospectus and for a 50.0%
interest in Dayjay Associates) are owned directly or indirectly by the
Company or the Operating Partnership free and clear of all liens,
encumbrances, equities and claims; all of the stock of each corporate
subsidiary of the Company has been duly and validly authorized and issued
and (except as described in the Prospectus) is owned directly by the
Company free and clear of all liens, encumbrances, equities and claims;
(p) Application will be made to list the Depositary Shares and the
Common Shares on the NYSE;
(q) This Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Operating Partnership and is a
valid and legally binding agreement of each of the Company and the
Operating Partnership in accordance with its terms; and the Deposit
Agreement has been duly and validly authorized, executed and delivered by
the Company and is a valid and legally binding agreement of the Company in
accordance with its terms;
(r) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference in,
the Registration Statement and the Prospectus present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. Pro forma financial
information included in or incorporated by reference in the Registration
Statement and the Prospectus has been prepared in accordance with
applicable requirements of the Securities Act, the Rules and Regulations
and AICPA guidelines with respect to pro forma financial information and
includes all adjustments necessary to present fairly the pro forma
financial position of the Company at the respective dates indicated and the
results of operations for the respective periods specified;
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8
(s) Each of the Company and the Operating Partnership and their
subsidiaries, and each property carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of such property and as is customary for companies
engaged in similar businesses in similar industries;
(t) At all times commencing with the Company's taxable year ending
December 31, 1994, the Company and the Operating Partnership have been and
upon the sale of the Shares will continue to be, organized and operated in
conformity with the requirements for qualification of the Company as a real
estate investment trust under the Code and the proposed method of operation
of the Company and the Operating Partnership will enable the Company to
continue to meet the requirements for qualification and taxation as a real
estate investment trust under the Code;
2. Upon the authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company hereby grants to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in Schedule II hereto on the terms referred to herein
for the sole purpose of covering over-allotments in the sale of the Firm Shares.
Any such election to purchase Optional Shares may be exercised by written notice
from the Representatives to the Company given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Representatives, but in no event earlier
than the First Time of Delivery or, unless the Representatives and the Company
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I hereto shall be,
in each case, the number of Optional Shares which the Company has been advised
by the Representatives have been attributed to such Underwriter; provided that,
if the Company has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under this Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Shares to be
purchased by all the Underwriters pursuant to this Agreement shall be the
aggregate number of Firm Shares set forth in Schedule I to this Agreement plus
the aggregate number of Optional Shares which the Underwriters elect to
purchase.
3. Depositary receipts in definitive form for the Firm Shares and the
Optional Shares to be purchased by each Underwriter pursuant to this Agreement,
in the form specified in Schedule II hereto and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
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9
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks or by
transfer to an account designated by the Company, payable to the order of the
Company in funds specified in Schedule II, (i) with respect to the Firm Shares,
all in the manner and at the place and time and date specified in Schedule II or
at such other place and time and date as the Representatives and the Company may
agree upon in writing, such time and date being herein called the "First Time of
Delivery" and (ii) with respect to the Optional Shares, if any, in the manner
and at the time and date specified by the Representatives in the written notice
given by the Representatives of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery". Receipts will be made
available for checking and packaging at least twenty-four hours prior to each
Time of Delivery at the office of the Depositary, located in New York City.
4. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended and supplemented in a form
approved by the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement or,
if applicable, such earlier time as may be required by Rule 424(b); to make no
further amendment or any supplement to the Registration Statement or Prospectus
as amended or supplemented after the date of this Agreement and prior to any
Time of Delivery which shall be disapproved by the Representatives promptly
after reasonable notice thereof; to advise the Representatives promptly of any
such amendment or supplement after any Time of Delivery for such Shares and
furnish the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares, and during such same period
to advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed with the Commission, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any prospectus relating to
the Shares, of the suspension of the qualification of such Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus relating to the
Shares or suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Shares for offering and sale under the
securities laws of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the
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10
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of such Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended or
supplemented in such quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus is required at any time
in connection with the offering or sale of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus 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 Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the date hereof, upon the request of the
Representatives but at the expense of such Underwriter, as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) To use its best efforts to list, subject to notice of issuance, the
Depositary Shares and the Common Shares on the NYSE;
(f) For a period of 90 days from the date of the Prospectus, the Company
will not, directly or indirectly, offer for sale, contract to sell, sell or
otherwise dispose of any Common Stock or securities convertible, exercisable or
exchangeable for Common Stock in an underwritten offering to the public (other
than the Shares and any Units or Common Stock that have been or may be issued in
connection with any acquisition of a property or business and any Common Stock
offered on behalf of selling security-holders pursuant to existing registration
rights agreements or similar contractual arrangements), or sell or grant
options, rights or warrants with respect to any Common Stock (except pursuant to
customary compensation arrangements and employee benefit plans or as permitted
by the preceding parenthetical), without the prior written consent of Lehman
Brothers Inc.; and
<PAGE>
11
(g) Except as stated in this Agreement and in the Prospectus, neither the
Company nor the Operating Partnership has taken, nor will take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Shares or the
Common Stock to facilitate the sale or resale of the Shares.
5. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Certificate of
Designations, the Deposit Agreement, any Blue Sky Memorandum, closing documents
(including compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares and the Common Shares for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey(s); (iv) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares and the Common Shares; (v) the cost of preparing
certificates for the Shares and Receipts; (vi) the cost and charges of the
Depositary and any transfer agent or registrar or conversion agent or dividend
disbursing agent; (vii) listing fees of the NYSE; (viii) fees payable to credit
rating agencies; and (ix) 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 7 and 10 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
6. The obligations of the Underwriters shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company and the Operating Partnership in
this Agreement are, at and as of each Time of Delivery, true and correct, the
condition that the Company and the Operating Partnership shall have performed
all of their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
<PAGE>
12
(b) The resolutions contained in the Certificate of Designations shall have
been duly adopted by the board of directors of the Company and the Certificate
of Designations shall have been duly filed with the Secretary of State of the
State of Delaware in compliance with the applicable provisions of the Delaware
General Corporation Law; and the Deposit Agreement shall have been executed and
delivered by the respective parties thereto;
(c) The Underwriters shall have received from Simpson Thacher & Bartlett,
counsel for the Underwriters, such opinion or opinions, dated such Time of
Delivery, with respect to the issuance and sale of the Shares, the Registration
Statement, the Prospectus and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters;
(d) Sullivan & Cromwell, special counsel for the Company, shall have
furnished to the Representatives their written opinion or opinions, dated each
Time of Delivery, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the General Corporation Law of the
State of Delaware;
(ii) The authorized capital stock of the Company is as follows: (x)
210,000,000 shares of Common Stock, par value $.10 per share; and (y)
5,000,000 shares of Preferred Stock, par value $100 per share;
(iii) The PIERS have been duly authorized and, upon payment and
delivery for the Depositary Shares as provided in this Agreement will be,
validly issued and fully paid and non-assessable;
(iv) The PIERS are convertible into and redeemable for Common Shares
in accordance with the Company's certificate of incorporation, and the
Common Shares initially issuable upon conversion or redemption of the PIERS
have been duly authorized and reserved for issuance upon such conversion or
redemption and, when issued upon such conversion or redemption, will be
validly issued, fully paid and non-assessable;
(v) The Deposit Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, provided that, such
-------------
counsel need not express an opinion as to Section 5.3 or Section 5.6 of the
Deposit Agreement;
(vi) The persons in whose names the Depositary Receipts are registered
will be entitled to the rights specified therein and in the Deposit
Agreement;
<PAGE>
13
(vii) This Agreement has been duly authorized, executed and delivered
by the Company;
(viii) The issuance of the PIERS and the sale of the Shares to you
pursuant to this Agreement and the Deposit Agreement, and the issuance of
the Common Shares upon conversion of the PIERS, will not, (i) violate the
certificate of incorporation or by-laws of the Company, in each case as in
effect as of the date hereof, or (ii) violate any existing Federal law of
the United States or existing law of the State of New York or the existing
General Corporation Law of the State of Delaware; provided that such
counsel need not express any opinion with respect to Federal or state
securities laws;
(ix) The Company is not an "investment company" as that term is
defined in the Investment Company Act of 1940; and
(x) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of
the United States and the laws of the State of New York for the issuance,
sale and delivery of the Shares by the Company to you have been obtained or
made.
In addition, you shall have received from Sullivan & Cromwell a letter
stating that as special counsel to the Company, they reviewed the Registration
Statement, the prospectus contained therein (the "Basic Prospectus") and the
prospectus supplement, dated June 4, 1998 (the "Prospectus Supplement"),
participated in discussions with your representatives and those of the Company
and its accountants, and advised the Company as to the requirements of the Act
and the applicable rules and regulations thereunder; on the basis of the
information that such counsel gained in the course of the performance of such
services, considered in the light of their understanding of the applicable law
(including the requirements of Form S-3 and the character of the prospectus
contemplated thereby) and the experience they have gained through their practice
under the Act, they confirm to you that, in their opinion, the Registration
Statement and the Basic Prospectus, as supplemented by the Prospectus
Supplement, as of the date of the Prospectus Supplement and as of the date of
such letter, appeared on their face to be appropriately responsive, in all
material respects relevant to the offering of the Shares, to the requirements of
the Act and the applicable rules and regulations of the Commission thereunder;
nothing that came to such counsel's attention in the course of such review has
caused such counsel to believe, insofar as relevant to the offering of the
Shares, that the Registration Statement, as of the date of the Prospectus
Supplement and as of the date of such letter, contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
insofar as relevant to the offering of the Shares, the Basic Prospectus, as
supplemented by the Prospectus Supplement, as of the date of the Prospectus
Supplement and as of the date of such letter, contained any untrue statement of
a material fact or omitted to state any 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. Such counsel may
state that the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such that they do not assume any responsibility for the accuracy,
completeness or fairness of the
<PAGE>
14
statements contained in the Registration Statement, the Basic Prospectus or the
Prospectus Supplement except for those made under the captions "Description of
Capital Stock," "Description of Common Stock," "Description of Preferred Stock,"
"Description of Depositary Shares" and "Plan of Distribution" in the Basic
Prospectus, as supplemented by the statements made under the captions
"Description of PIERS," "Description of Depositary Shares" and "Underwriting" in
the Prospectus as amended or supplemented, respectively, insofar as they relate
to provisions of documents therein described; and that such counsel do not
express any opinion or belief as to the financial statements or other financial
data contained in the Registration Statement, the Basic Prospectus or the
Prospectus Supplement.
(e) Neal, Gerber & Eisenberg, counsel for the Company, shall have furnished
to the Representatives its written opinion or opinions, dated each Time of
Delivery, in form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of its failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates;
(ii) Each subsidiary of the Company has been duly organized and is
validly existing as a partnership, limited liability company or
corporation, as the case may be, in good standing (to the extent
applicable) under the laws of its jurisdiction of incorporation or
organization; the partnership agreement or shareholder agreement of each
subsidiary of the Company has been duly authorized, executed and delivered
by each party thereto and is valid, legally binding and enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and the effect of
general principles of equity; all of the partnership interests in each
partnership subsidiary of the Company have been duly and validly authorized
and issued and (except as described in the Prospectus) are owned directly
or indirectly by the Company or the Operating Partnership, free and clear
of all liens, encumbrances, equities and claims (except with respect to the
pledge of the Pledged Partnership Interests); all of the membership
interests in each limited liability company subsidiary of the Company have
been duly and validly authorized and issued and (except as described in the
Prospectus) are owned directly or indirectly by the Company or the
Operating Partnership, free and clear of all liens, encumbrances, equities
and claims; all of the stock of each corporate subsidiary of the Company
has been duly and validly authorized and issued and (except as described in
the Prospectus) is owned directly or indirectly by the Company or the
Operating Partnership, free and clear of all liens, encumbrances, equities
and claims (Such counsel being entitled to rely in respect of the opinion
in this clause (iii) upon opinions of local counsel and in
<PAGE>
15
respect of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they believe
both you and they are justified in relying upon such opinions and
certificates);
(iii) All of the issued shares of capital stock of the Company
(provided that no opinion is being delivered hereunder for Shares being
delivered at each Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole; and to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(v) The issue and sale of the Shares being delivered at such Time of
Delivery, the issuance of the Common Shares upon conversion of the PIERS
and the compliance by the Company and the Operating Partnership with all of
the provisions of this Agreement and the Deposit Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or the Operating Partnership is a party or by
which the Company or the Operating Partnership is bound or to which any of
the property or assets of the Company, the Operating Partnership or any
Property Partnership is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or bylaws
of the Company or the certificate of limited partnership or partnership
agreement of the Operating Partnership or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or the Operating Partnership or
any of their properties;
(vi) The PIERS and the Common Shares issuable upon conversion of the
PIERS are free of any preemptive or other similar rights created by the
Certificate of Designations and the Company's Second Amended and Restated
Certificate of Incorporation, as amended, and, to our knowledge, are free
of any preemptive or other similar rights created pursuant to any agreement
entered into by the Company;
(vii) Neither the Company nor, to our knowledge, any of its
subsidiaries, is in violation of its certificate of incorporation,
certificate of limited partnership or operating agreement, as the case may
be, or bylaws or partnership agreement, as the case may be, or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan
<PAGE>
16
agreement, lease or other agreement or instrument known to us to which it
is a party or by which it or any of its properties may be bound;
(viii) The partnership agreement of the Operating Partnership has
been duly authorized, executed and delivered by the Company and is the
valid and legally binding obligation of, and is enforceable against, the
Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and the effect of general
principles of equity; and the partnership agreement of each Property
Partnership has been duly authorized, executed and delivered by the Company
in its corporate capacity or by the Company or a subsidiary of the Company
in its capacity as general partner of the Operating Partnership or the
Property Partnerships;
(ix) Each partnership in which the Company owns an interest in excess
of 10 percent is properly treated (x) as a partnership for federal income
tax purposes and (y) not as a "publicly traded partnership" as defined in
the Code;
(x) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Considerations" insofar as they purport to
describe the provisions of the laws, legal conclusions with respect thereto
and documents referred to therein, are accurate and complete in all
material respects; and
(xi) In the opinion of such counsel, commencing with the Company's
taxable year ending December 31, 1993, the Company has been organized in
conformity with the requirements for qualification as a REIT, and its
historic and proposed methods of operation have enabled and will enable it
to meet the requirements for qualification and taxation as a REIT under the
Code and the right, in certain circumstances, of holders of interests in
the Operating Partnership to exchange those interests for shares of Common
Stock has not caused and will not cause the Company to fail the diversity
test of Section 856(a)(6) of the Code.
(f) On the date of this Agreement and at each Time of Delivery, Coopers &
Lybrand L.L.P., who have certified certain financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registration
Statement, shall have furnished to the Representatives a letter, dated the date
of this Agreement, and a letter dated such Time of Delivery, to the effect set
forth in Annex I hereto and as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(g) On the date of this Agreement, (i) KPMG Peat Marwick, L.L.P., who have
certified certain of the combined statements of revenues and certain expenses of
certain retail properties of MEPC American Holdings Inc., U.K.-American
Properties, Inc. and Caledonian Holdings Company, Inc. (collectively, the "MEPC
American Group"), included in the Registration Statement, and (ii) Deloitte &
Touche, L.L.P., who have certified certain of the combined statements of
revenues and certain expenses of Landmark Mall, Mayfair Complex,
<PAGE>
17
The Meadows, Northgate Mall, Oglethorpe Mall and Park City Center (collectively,
the "Malls"), included in the Registration Statement, shall in each case have
furnished to the Representatives a letter, dated the date of this Agreement, to
the effect set forth in Annex II hereto and as to such other matters as the
Representatives may reasonably request and in form and substance satisfactory to
the Representatives;
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended prior to the date of this
Agreement relating to the Shares any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended prior
to the date of this Agreement, and (ii) since the respective dates as of which
information is given in the Prospectus as amended prior to the date of this
Agreement there shall not have been any change in the capital stock (other than
issuances pursuant to stock option plans) or long-term or short-term debt of the
Company or any of its subsidiaries (other than reductions in short-term or long-
term debt pursuant to scheduled reductions in the applicable debt instrument and
other than an increase in short-term and long-term debt of the Company of
approximately $304 million since March 31, 1998 (representing indebtedness
assumed or incurred in connection with property acquisitions by the Company and
indebtedness incurred for working capital purposes)) or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended prior to the date of this Agreement, the effect of
which, in any such case described in Clauses (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Prospectus as first amended or
supplemented;
(i) On or after the date of this Agreement (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred stock
by any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(j) On or after the date of this Agreement there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the NYSE; (ii) a suspension or material limitation in
trading in the Company's securities on the NYSE; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; and (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives made it impracticable or inadvisable to proceed
with the public offering or the delivery of the Firm Shares or Optional Shares
or both on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented;
<PAGE>
18
(k) The Depositary Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the NYSE; and
(l) The Company shall have furnished or caused to be furnished to the
Representatives at such Time of Delivery certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the representations
and warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (g) of this Section and as to such other matters as
Representatives may reasonably request.
7. (a) The Company and the Operating Partnership jointly and severally,
shall indemnify and hold harmless each Underwriter, its officers and employees
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage, or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Shares), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto (with respect to the Prospectus, in light of the circumstances under
which they were made), (ii) the omission or alleged omission to state in the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading (with respect to the Prospectus, in light
of the circumstances under which they were made), or (iii) any act or failure to
act or any alleged act or failure to act by any Underwriter in connection with,
or relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above (provided that neither the Company nor the Operating Partnership
shall be liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that neither the Company nor the Operating Partnership shall
be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Underwriters by
or on behalf of any Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Company
and the
<PAGE>
19
Operating Partnership may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless each of the Company and the Operating Partnership, its officers and
employees, each of its directors, and each person, if any, who controls the
Company or the Operating Partnership within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which each of the Company or the Operating
Partnership or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Underwriters by or on behalf of
that Underwriter specifically for inclusion therein, and shall reimburse the
Company or the Operating Partnership and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or the Operating Partnership or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company, the Operating
Partnership or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 7. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ its own counsel, with such
counsel, in the case of the Underwriters, to represent jointly the Underwriters
and their respective officers, employees and controlling persons who may be
<PAGE>
20
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company or the Operating Partnership
under this Section 7 if, in the reasonable judgment of the Underwriters, it is
advisable for the Underwriters and those officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company and the
Operating Partnership. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(c) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Operating Partnership on the one hand and the Underwriters on the other
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Operating Partnership on the one
hand and the Underwriters on the other with respect to the statements or
omission which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Operating Partnership on the
one hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company or the Operating Partnership, on the one hand,
and the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Operating Partnership or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Operating
Partnership and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
<PAGE>
21
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 7(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company and the Operating
Partnership each acknowledge that the statements with respect to the public
offering of the Shares by the Underwriters set forth on the cover page of, the
legend concerning stabilization on the inside cover of, and the concession and
reallowance information and, pursuant to Item 508 of Regulation S-K of the Act,
the seventh, eighth and ninth paragraphs appearing in the section captioned
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
8. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under this
Agreement, the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Shares or Optional
Shares, as the case may be, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties reasonably satisfactory to the Representatives to purchase such Shares
on such terms. In the event that, within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the purchase
of such Shares, or the Company notifies the Representatives that it has so
arranged for the purchase of such Shares, the Representatives or the Company
shall have the right to postpone a Time of Delivery for such Shares for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the
<PAGE>
22
Representatives and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed one-
eleventh of the aggregate number of the Firm Shares or Optional Shares, as the
case may be, to be purchased at the respective Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may be, which
such Underwriter agreed to purchase under this Agreement and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the number of Firm Shares or Optional Shares, as the case may be, which such
Underwriter agreed to purchase under this Agreement) of the Firm Shares or
Optional Shares, as the case may be, of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 5 hereof and the
indemnity and contribution agreements in Section 7 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Operating Partnership and the several
Underwriters, 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 any Underwriter or any controlling person of any
Underwriter, or the Company or the Operating Partnership, or any officer or
director or controlling person of the Company or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
10. If this Agreement shall be terminated pursuant to Section 8 hereof, or
if any Shares are not delivered by the Company as provided herein because the
condition set forth in Section 6(j) hereof has not been met, the Company shall
not then be under any liability to any Underwriter except as provided in
Sections 5 and 7 hereof; but, if for any other reason, Shares are not delivered
by or on behalf of the Company as provided herein, the Company will reimburse
the Underwriters through the Representatives for all out-of-pocket expenses
approved in writing by the Representatives, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Shares, but neither the Company nor the
Operating Partnership shall then be under any further
<PAGE>
23
liability to any Underwriter with respect to such Shares except as provided in
Sections 5 and 7 hereof.
11. In all dealings hereunder, the Representatives of the Underwriters of
Shares shall act on behalf of each of such Underwriters, and the parties hereto
shall be entitled to act any rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by such Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in Schedule II hereto.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in
Schedule II hereto; and if to the Company or the Operating Partnership shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 7(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Operating Partnership and, to the extent
provided in Sections 7 and 9 hereof, the officers and directors of the Company
and the Operating Partnership and each person who controls the Company, the
Operating Partnership or any Underwriter, 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
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto and thereto 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.
If the foregoing is in accordance with your understanding, please sign and
return to us (one for the Company and one for each of the Representatives plus
one for each counsel) counterparts hereof.
<PAGE>
24
Very truly yours,
GENERAL GROWTH PROPERTIES, INC.
By: ____________________________
Name:
Title:
GGP LIMITED PARTNERSHIP
By: GENERAL GROWTH PROPERTIES, INC.
By: _________________________
Name:
Title:
Accepted as of the date hereof:
Lehman Brothers Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule I hereto
By: Lehman Brothers Inc.
By: ___________________________________
Authorized Representative
<PAGE>
SCHEDULE I
NUMBER OF
FIRM SHARES
TO BE PURCHASED
----------------
UNDERWRITERS
------------
Lehman Brothers Inc.......................................... 3,693,750
Goldman, Sachs & Co.......................................... 1,593,750
Morgan Stanley & Co. Incorporated............................ 1,312,500
PaineWebber Incorporated..................................... 1,312,500
Prudential Securities Incorporated........................... 1,312,500
SBC Warburg Dillon Read Inc.................................. 656,250
USB Securities LLC........................................... 656,250
BancAmerica Robertson Stephens............................... 112,500
A.G. Edwards & Sons, Inc..................................... 112,500
EVEREN Securities Inc........................................ 112,500
Advest, Inc.................................................. 75,000
Dain Rauscher Wessels........................................ 75,000
Fahnestock & Co. Inc......................................... 75,000
Janney Montgomery Scott Inc.................................. 75,000
Edward D. Jones & Co., L.P................................... 75,000
First of Michigan Corporation................................ 75,000
Legg Mason Wood Walker, Incorporated......................... 75,000
McDonald & Company Securities, Inc........................... 75,000
Piper Jaffray Inc............................................ 75,000
Raymond James & Associates, Inc.............................. 75,000
Stifel, Nicolaus & Company Incorporated...................... 75,000
The Robinson-Humphrey Company, LLC........................... 75,000
Sutro & Co. Incorporated..................................... 75,000
Tucker Anthony Incorporated.................................. 75,000
Wheat First Securities, Inc.................................. 75,000
----------
Total..................................................... 12,000,000
==========
<PAGE>
SCHEDULE II
DESIGNATION OF PREFERRED STOCK:
7.25% Preferred Income Equity Redeemable Stock, Series A ("PIERS")
LIQUIDATION PREFERENCE:
$1,000 per PIERS (equivalent to $25 per Depositary Share)
FRACTIONAL VALUE OF DEPOSITARY SHARES:
Each representing one-fortieth (1/40) of a PIERS
NUMBER OF DEPOSITARY SHARES:
Number of Firm Shares: 12,000,000
Maximum Number of Optional Shares: 1,800,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Depositary Share
PURCHASE PRICE BY UNDERWRITERS:
$24.00 per Depositary Share
COMMISSION PAYABLE TO UNDERWRITERS:
$1.00 per Depositary Share in immediately available funds
TIME OF PAYMENT OF DIVIDENDS:
January 15, April 15, July 15 and October 15 of each year, commencing
October 15, 1998
SINKING FUND PROVISIONS:
None
REDEMPTION PROVISIONS:
Except in certain circumstances, not redeemable at option of the Company prior
to July 15, 2003. Thereafter, redeemable at option of the Company pursuant
to, and in accordance with, the terms and conditions described in the
Prospectus
<PAGE>
2
Subject to mandatory redemption on July 15, 2008, at a price of $1,000.00 per
PIERS (equivalent to a price of $25.00 per Depositary Share)
REPAYMENT PROVISIONS:
None
LISTING:
New York Stock Exchange
FORM OF DEPOSITARY RECEIPTS:
Temporary form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Wire transfer of immediately available funds
TIME OF DELIVERY:
10 a.m. (New York City time), June 10, 1998
CLOSING LOCATION:
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Lehman Brothers Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Designated Representative: Lehman Brothers Inc.
Address for Notices, etc.: Three World Financial Center, New York, New York
10285,
Attention: Syndicate Department
(Fax: 212-528-8822)
<PAGE>
ANNEX I
Pursuant to Section 6(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made
a review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been furnished to
the representatives of the Underwriters (the "Representatives") and are
attached hereto;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which are attached hereto; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for financial
and accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (iv)(A)(i) below comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the unaudited
condensed consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
<PAGE>
2
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles:
(B) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(C) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified by the
Representatives, or any increases or decreases in inventories or other
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(D) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (C) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(v) In addition to the examination referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have
<PAGE>
3
carried out certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives or
in documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex I to the Prospectus shall be deemed to refer
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) for purposes of each letter delivered.
<PAGE>
ANNEX II
Pursuant to Section 6(g) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
prior owner of the properties within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the combined statement of revenues and certain
expenses audited by them and included in the registration statement complies
as to form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations adopted
thereunder;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange Act
and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations.
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
7.25% PREFERRED INCOME EQUITY REDEEMABLE STOCK, SERIES A
OF
GENERAL GROWTH PROPERTIES, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
General Growth Properties, Inc., a Delaware corporation (the "Company"),
-------
hereby certifies that pursuant to the authority contained in Article IV of its
Second Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and in accordance with Section 151 of the
- -----------------------------
General Corporation Law of the State of Delaware (the "DGCL"), its Board of
----
Directors (the "Board"), on June 4, 1998, adopted the following resolution
-----
creating a series of its preferred stock, par value $100 per share, liquidation
preference $1,000 per share, designated as the 7.25% Preferred Income Equity
Redeemable Stock, Series A:
WHEREAS, the Board of Directors of the Company is authorized, within the
limitations and restrictions stated in its Certificate of Incorporation, to
provide for the issuance of preferred stock in series and to establish the
number of shares to be included in such series and to fix the designation,
powers, preferences and rights of the shares of such series and the
qualifications, limitations and restrictions thereof; and
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of the preferred stock to
be designated the "7.25% Preferred Income Equity Redeemable Stock, Series A" and
the number of shares constituting such preferred stock;
<PAGE>
NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the 7.25%
Preferred Income Equity Redeemable Stock, Series A on the terms and with the
provisions herein set forth:
I. Certain Definitions
-------------------
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
"Act" shall mean the Securities Act of 1933, as amended.
---
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
------------
which state or federally chartered banking institutions in New York, New York
are not required to be open.
"Capital Stock" shall mean Common Stock or Preferred Stock. The term
-------------
"Capital Stock" shall not include convertible debt securities.
"Common Stock" shall mean the common stock, par value $.10 per share, of
------------
the Company.
"Company" shall mean General Growth Properties, Inc., a Delaware
-------
corporation.
"Conversion Agent" shall mean Norwest Bank Minnesota, N.A., the principal
----------------
corporate trust office of which currently is located at 161 North Concord
Exchange, South St. Paul, Minnesota 55075, or such other agent or agents of the
Company as may be designated by the Board or its designee as the conversion
agent for the Series A Preferred Stock.
"Current Market Price" of publicly traded Common Stock or any other class
--------------------
of shares of Capital Stock or other security of the Company or any other issuer
for any day shall mean the last reported sales price, regular way, on such day,
or, if no sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the
NYSE or, if such security is not listed or admitted for trading on the NYSE, on
the principal national securities exchange on which such security is listed or
admitted for trading, or, if such security is not listed or admitted for trading
on any national securities exchange, on the NASDAQ National Market, or, if such
security is not listed or admitted for trading on any national securities
exchange or quoted on the NASDAQ National Market, the average of the closing bid
and asked prices on such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices
-2-
<PAGE>
on such day as furnished by any NYSE member firm regularly making a market in
such security selected for such purpose by the Chief Executive Officer of the
Company or the Board of Directors.
"Dividend Period" shall mean quarterly dividend periods commencing on (and
---------------
including) the fifteenth day of each January, April, July and October of each
year and ending on (and including) the day preceding the first day of the next
succeeding Dividend Period (other than the initial Dividend Period, which shall
commence on the Issue Date and end on and include October 14, 1998).
"Fair Market Value" shall mean the average of the daily Current Market
-----------------
Prices per share of Common Stock during the five consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex" date with respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with respect to any issuance or
distribution, means the first day on which the Common Stock trades regular way,
without the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's Current Market
Price.
"Mandatory Redemption" shall mean the redemption by the Company for cash of
--------------------
all of the outstanding shares of Series A Preferred Stock on July 15, 2008 at a
price of $1,000 per share of Series A Preferred Stock, plus accumulated and
unpaid dividends to such Mandatory Redemption Date.
"Mandatory Redemption Date" shall mean July 15, 2008.
-------------------------
"NYSE" shall mean the New York Stock Exchange.
----
"Ownership Limitations" shall mean the restrictions on transferability and
---------------------
ownership described in Article IV of the Certificate of Incorporation,
specifically, that ownership of more than 7.5% of the value of the outstanding
shares of Capital Stock of the Company, including the Series A Preferred Stock,
is restricted.
"Redemption Date" shall mean any date fixed for redemption of the shares of
---------------
Series A Preferred Stock by the Company, including the Mandatory Redemption Date
(as the context requires).
"Series A Preferred Stock" shall mean the 7.25% Preferred Income Equity
------------------------
Redeemable Stock, Series A of the Company.
"Trading Day" shall mean any day on which the securities in question are
-----------
traded on the NYSE or, if such securities are not listed or admitted for trading
on the NYSE, on the
-3-
<PAGE>
principal national securities exchange on which such securities are listed or
admitted or, if such securities are not listed or admitted for trading on any
national securities exchange, on the NASDAQ National Market or, if such
securities are not listed or admitted for trading on any national securities
exchange or quoted on the NASDAQ National Market, in the applicable securities
market in which the securities are traded.
"Transfer Agent" shall mean Norwest Bank Minnesota, N.A., the principal
--------------
corporate trust office of which currently is located at 161 North Concord
Exchange, South St. Paul, Minnesota 55075, or such other agent or agents of the
Company as may be designated by the Board or its designee as the transfer agent
for the Series A Preferred Stock.
II. Designation and Number of Shares
--------------------------------
A series of preferred stock, designated the "7.25% Preferred Income Equity
Redeemable Stock, Series A" (the "Series A Preferred Stock"), is hereby
------------------------
established. The par value of the Series A Preferred Stock is $100 per share,
which is not a change in the par value of the Preferred Shares as set forth in
the Certificate of Incorporation. The liquidation preference of the Series A
Preferred Stock is $1,000. The authorized number of shares of Series A
Preferred Stock shall be 345,000.
III. Rank
----
The Series A Preferred Stock, with respect to payment of dividends and
amounts upon voluntary or involuntary liquidation, dissolution or winding-up of
the Company, shall be deemed to rank:
(a) senior to all classes or series of Common Stock and to all Capital
Stock of the Company the terms of which provide that such Capital Stock shall
rank junior to such Series A Preferred Stock;
(b) on a parity with each series of Preferred Stock issued by the Company
which does not provide by its express terms that it ranks junior in right of
payment to the Series A Preferred Stock with respect to payment of dividends or
amounts upon liquidation, winding-up or otherwise; and
(c) junior to any class or series of Capital Stock issued by the Company
that ranks senior to the Series A Preferred Stock in accordance with Section
VII(d).
IV. Dividends.
---------
(a) The holders of shares of the Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board, out of assets legally
available for the payment
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<PAGE>
of dividends, quarterly cumulative cash dividends in an amount per share of
Series A Preferred Stock equal to the greater of (i) 7.25% of the $1,000
liquidation preference thereof per annum and (ii) the quarterly cash dividends
paid or payable (determined on each of the quarterly Dividend Payment Dates
referred to below) on that number of shares of Common Stock equal to the number
of shares of Common Stock (or portion thereof), into which a share of Series A
Preferred Stock is convertible. Such dividends shall be cumulative beginning on
June 10, 1998, whether or not in any Dividend Period or Periods there shall be
funds of the Company legally available for the payment of such dividends, and
shall be payable in arrears quarterly when, as and if declared by the Board, on
the fifteenth day of each January, April, July and October or, if not a Business
Day, the next succeeding Business Day, beginning October 15, 1998 (each, a
"Dividend Payment Date"). Each such dividend shall be payable in arrears to
holders of record of shares of the Series A Preferred Stock, as such holders
appear in the stock records of the Company at the close of business on the
applicable record date, which shall be the first day of the calendar month in
which the applicable Dividend Payment Date falls or such other date designated
by the Board for the payment of dividends that is not more than 30 nor less than
10 days prior to such Dividend Payment Date (each, a "Dividend Record Date").
Accrued and unpaid dividends for any past Dividend Periods may be declared and
paid at any time, without reference to any Dividend Payment Date, to holders of
record on such date, not exceeding 45 days preceding the payment date thereof,
as may be fixed by the Board.
(b) The amount of dividends payable per share of Series A Preferred Stock
for each full Dividend Period shall be computed by taking the greater of (a)
7.25% of the $1,000 liquidation preference thereof divided by four (or $18.125)
and (ii) the quarterly cash dividends paid or payable (determined as of the
applicable Dividend Payment Date) on that number of shares of Common Stock equal
to the number of shares of Common Stock (or portion thereof), into which a share
of Series A Preferred Stock is convertible. The amount of dividends payable for
the initial Dividend Period, or any other period shorter or longer than a full
Dividend Period, on the Series A Preferred Stock, shall be prorated and computed
on the basis of twelve 30-day months and a 360-day year. Holders of shares of
Series A Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Series A Preferred Stock. Any dividend payment made on the
Series A Preferred Stock shall first be credited against the earliest
accumulated but unpaid dividend due with respect to such shares which remains
payable. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series A Preferred Stock that
may be in arrears.
(c) No dividend on the Series A Preferred Stock shall be declared by the
Board or paid or set apart for payment by the Company at such time as the terms
and provisions of any agreement of the Company, including any agreement relating
to its indebtedness, prohibits such declaration, payment or setting apart for
payment or provides that such declaration, payment or setting apart for payment
would constitute a breach thereof, or a
-5-
<PAGE>
default thereunder, or if such declaration or payment shall be restricted or
prohibited by law.
Notwithstanding the foregoing, dividends on the Series A Preferred Stock
shall accumulate whether or not any of the foregoing restrictions exist, whether
or not there are funds legally available for the payment thereof and whether or
not such distributions are authorized. Accumulated but unpaid dividends on the
Series A Preferred Stock shall not bear interest and holders of the shares of
Series A Preferred Stock shall not be entitled to any dividends in excess of
full cumulative dividends as described in IV(b) above.
(d) Except as provided in subsection IV(e) herein, so long as any shares of
Series A Preferred Stock are outstanding, no dividends (other than in Common
Stock or other Capital Stock of the Company ranking junior to the Series A
Preferred Stock as to payment of dividends and amounts upon liquidation,
dissolution or winding-up of the Company) shall be declared or paid or set apart
for payment upon the Common Stock or any other class or series of Capital Stock
of the Company ranking, as to payment of dividends or amounts distributable upon
liquidation, dissolution or winding-up of the Company, on a parity with or
junior to the Series A Preferred Stock, for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on the Series
A Preferred Stock for all past Dividend Periods and the then current Dividend
Period, nor shall any Common Stock or other Capital Stock of the Company ranking
junior to or on a parity with the Series A Preferred Stock as to payment of
dividends or amounts upon liquidation, dissolution or winding-up of the Company,
be redeemed, purchased or otherwise acquired for any consideration (or any
monies be paid to or made available for a sinking fund for the redemption of any
such Capital Stock) by the Company (except by conversion into or exchange for
other Capital Stock of the Company ranking junior to the Series A Preferred
Stock as to payment of dividends and amounts upon liquidation, dissolution or
winding-up of the Company or by redemptions for the purpose of maintaining the
Company's qualification as a real estate investment trust ("REIT") for U.S.
----
federal income tax purposes).
(e) When dividends are not paid in full (or a sum sufficient for such full
payment is not set apart for such payment) upon the Series A Preferred Stock and
any other Capital Stock ranking on a parity as to payment of dividends with the
Series A Preferred Stock, all dividends declared upon the Series A Preferred
Stock and any other Capital Stock ranking on a parity as to payment of dividends
with the Series A Preferred Stock shall be declared pro rata so that the amount
of dividends declared per share of Series A Preferred Stock and such other
Capital Stock shall in all cases bear to each other the same ratio that
accumulated dividends per share on the Series A Preferred Stock and such other
Capital Stock (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Capital Stock does not have a
cumulative dividend) bear to each other.
V. Liquidation Preference.
----------------------
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<PAGE>
(a) In the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Company, before any payment or distribution of the assets
of the Company (whether capital or surplus) shall be made to or set apart for
the holders of Common Stock or any other Capital Stock ranking junior to the
Series A Preferred Stock as to the distribution of assets upon the liquidation,
dissolution or winding-up of the Company, the holders of shares of the Series A
Preferred Stock shall be entitled to receive out of the assets of the Company
available for distribution to stockholders remaining after payment or provisions
for payment of all debts and other liabilities of the Company a liquidation
preference of $1,000 per share, plus an amount equal to all dividends (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. If, upon any such voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the assets of the Company, or proceeds
thereof, distributable among the holders of the shares of Series A Preferred
Stock, are insufficient to pay in full the preferential amount aforesaid on the
shares of Series A Preferred Stock and liquidating payments on any other shares
of any class or series of Capital Stock ranking, as to payment of dividends and
amounts upon the liquidation, dissolution or winding-up of the Company, on a
parity with the Series A Preferred Stock, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of Series A Preferred
Stock and any such other parity stock ratably in accordance with the respective
amounts that would be payable on such shares of Series A Preferred Stock and
such other stock if all amounts payable thereon were paid in full. For the
purposes of this Section V, none of (i) a consolidation or merger of the Company
with or into another entity, (ii) a merger of another entity with or into the
Company, (iii) a statutory share exchange by the Company or (iv) a sale, lease
or conveyance of all or substantially all of the Company's assets, properties or
business shall be deemed to be a liquidation, dissolution or winding-up of the
Company.
(b) Written notice of such liquidation, dissolution or winding-up of the
Company, stating the payment date or dates when, and the place or places where,
the amounts distributable in such circumstances shall be payable, shall be given
by first class mail, postage pre-paid, not less than 30 nor more than 60 days
prior to the payment date stated therein, to each record holder of the Series A
Preferred Stock at the respective addresses of such holders as the same shall
appear on the stock transfer records of the Company.
(c) After payment of the full amount of liquidating distributions to which
they are entitled, the holders of Series A Preferred Stock shall have no right
or claim to any of the remaining assets of the Company.
VI. Redemption.
----------
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<PAGE>
(a) The shares of Series A Preferred Stock are not redeemable prior to June
15, 2003. To ensure that the Company remains a qualified REIT for U.S. federal
income tax purposes, however, the Series A Preferred Stock shall be subject to
the provisions of Article IV of the Certificate of Incorporation pursuant to
which Series A Preferred Stock owned by a shareholder (i) in excess of the
Ownership Limit or the Existing Holder Limit or (ii) that would cause the
Company to become "closely held" within the meaning of Section 856(h) of the
Internal Revenue Code of 1986, as amended (the "Code") shall automatically by
----
transferred to a Trust (as defined in Article IV of the Certificate of
Incorporation) and the Company shall have the right to purchase such shares, as
provided in Article IV of the Certificate of Incorporation.
(b) Cash Redemption Right. On and after June 15, 2003, the Company, at its
option, upon giving notice as provided below, may redeem the Series A Preferred
Stock, in whole or from time to time in part, at the following redemption prices
per share of Series A Preferred Stock if redeemed during the twelve-month period
beginning June 15 of the year indicated below, plus, in each case, all dividends
accumulated and unpaid on such Series A Preferred Stock to the date of such
redemption (the "Cash Redemption Right"):
---------------------
Redemption Price Per Share of
Year Series A Preferred Stock
---- ----------------------------------
2003......................... $1,032.22
2004......................... $1,024.16
2005......................... $1,016.11
2006......................... $1,008.05
2007 and thereafter.......... $1,000.00
(c) Stock Redemption Right. In addition to the Cash Redemption Right set
forth in (b) above, on and after June 15, 2003, the Series A Preferred Stock
shall be redeemable by the Company, in whole or from time to time in part, at
the option of the Company, for such number of shares of Common Stock as equals
the liquidation preference of the Series A Preferred Stock to be redeemed
divided by the Conversion Price (defined in subsection VIII(a) herein) as of the
opening of business on the date set for such redemption (equivalent initially to
a conversion rate of 25.188 shares of Common Stock per share of Series A
Preferred Stock (the "Stock Redemption Right")). The Company may exercise the
----------------------
Stock Redemption Right, at its option, only if for 20 Trading Days within any
period of 30 consecutive Trading Days, including the last Trading Day of such
period, the Current Market Price of the Common Stock on each of such Trading
Days exceeds $45.65 per share, subject to adjustment under the
circumstances described in Section VIII herein, with respect
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<PAGE>
to the Conversion Price. To exercise the Stock Redemption Right, the Company
shall issue a press release announcing the redemption prior to the opening of
business on the second Trading Day after the conditions described in the
preceding sentences have, from time to time, been met (the "Press Release"). The
-------------
Company shall not issue a Press Release prior to May 15, 2003. The Press
Release shall announce the redemption and set forth the number of shares of
Series A Preferred Stock that the Company intends to redeem. The redemption date
(which may not be before July 15, 2003) shall be selected by the Company, shall
be specified in the notice of redemption and shall be not less than 30 days or
more than 60 days after the date on which the Company issues the Press Release.
(d) Limitations on Redemption.
(i) The Company may exercise the Cash Redemption Right provided that
the redemption price (other than the portion thereof consisting of accumulated
and unpaid dividends) is payable solely out of the sale proceeds of other shares
of Capital Stock of the Company, and from no other source. For purposes of the
preceding sentence, "Capital Stock" means any Capital Stock or other securities
of the Company which, by their terms, are subject to mandatory conversion into,
or exchange for, or which require the purchase of, Capital Stock.
(ii) If fewer than all of the outstanding shares of Series A Preferred
Stock are to be redeemed pursuant to the Cash Redemption Right or the Stock
Redemption Right, the shares to be redeemed shall be determined pro rata or by
lot or in such other manner as prescribed by the Board. If such redemption is
to be by lot and, as a result of such redemption, (i) any holder of Series A
Preferred Stock would become a holder of a number of shares of Series A
Preferred Stock in excess of the Ownership Limit or the Existing Holder Limit or
(ii) the Company would become "closely held" within the meaning of Section
856(h) of the Code because such holder's Series A Preferred Stock were not
redeemed, or were only redeemed in part, then, except as otherwise provided in
the Certificate of Incorporation, the Company will redeem the requisite number
of shares of Series A Preferred Stock of such holder such that or the Existing
Holder Limit the holder of such shares (i) will not hold in excess of the
Ownership Limit subsequent to such redemption or (ii) will not cause the Company
to become "closely held" within the meaning of Section 856(h) of the Code.
(iii) Notwithstanding anything to the contrary contained herein,
unless full cumulative dividends on all outstanding shares of Series A Preferred
Stock shall have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the current Dividend Period, no shares of Series A
Preferred Stock shall be redeemed unless all outstanding shares of Series A
Preferred Stock are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Series A Preferred
Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding shares of
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<PAGE>
Series A Preferred Stock. In addition, unless full cumulative dividends on all
outstanding shares of Series A Preferred Stock shall have been or
contemporaneously are declared and paid or declared and a sum sufficient for
payment thereof set apart for payment for all past Dividend Periods and the
current Dividend Period, the Company shall not purchase or otherwise acquire
directly or indirectly any Series A Preferred Stock, or any shares of any class
or series of Capital Stock of the Company ranking, as to payment of dividends or
amounts distributable upon liquidation, dissolution or winding-up of the
Company, junior to or on a parity with the Series A Preferred Stock (except by
conversion into or exchange for Common Stock or other Capital Stock of the
Company ranking junior to or on a parity with the Series A Preferred Stock as to
payment of dividends or amounts upon liquidation, dissolution or winding-up of
the Company or by redemptions for the purposes of maintaining the Company's
qualification as a REIT).
(iv) The foregoing provisions of subsections VI(d)(i)-(iii) shall not
prevent the purchase by the Company of Series A Preferred Stock pursuant to
Article IV of the Certificate of Incorporation or otherwise in order to ensure
that the Company remains qualified as a REIT for U.S. federal income tax
purposes.
(v) Immediately prior to any redemption of Series A Preferred Stock,
the Company shall pay, in cash, any accumulated and unpaid dividends through the
Redemption Date, unless a Redemption Date falls after a Dividend Record Date and
on or prior to the corresponding Dividend Payment Date, in which case each
holder of shares of Series A Preferred Stock at the close of business on such
Dividend Record Date shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date notwithstanding the redemption of such
shares on or prior to such Dividend Payment Date. Except as provided above, the
Company will make no payment, or allowance for unpaid dividends, whether or not
in arrears, on Series A Preferred Stock for which a notice of redemption has
been given.
(e) Mandatory Redemption. The Company shall redeem for cash all
outstanding shares of Series A Preferred Stock on the Mandatory Redemption Date
at a price of $1,000 per share of Series A Preferred Stock, plus accumulated
and unpaid dividends to the redemption date.
(f) Procedures for Redemption.
(i) Notice of redemption pursuant to the Cash Redemption Right shall
be mailed, not less than 20 nor more than 60 days prior to the Redemption Date,
to each holder of record of shares of Series A Preferred Stock to be redeemed,
notifying such holder of the Company's election to redeem such shares. Notice
of redemption pursuant to the Stock Redemption Right shall be given not more
than four Business Days after the date on which the Company issues the Press
Release to each holder of shares of the Series A Preferred
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<PAGE>
Stock to be redeemed. Such notice shall be provided by first class mail, postage
prepaid, at such holder's address as the same appears on the stock records of
the Company, or by publication in The Wall Street Journal or The New York Times,
----------------------- -------------------
or, if neither such newspaper is then being published, any other daily newspaper
of national circulation. If the Company elects to provide such notice by
publication, it shall also promptly mail notice of such redemption to holders of
the shares of Series A Preferred Stock to be redeemed. Notice of any Mandatory
Redemption shall be mailed, not less than 20 nor more than 60 days prior to the
Mandatory Redemption Date, to each holder of record of shares of Series A
Preferred Stock to be redeemed. No failure to give such notice or any defect
thereto or in the mailing thereof, to any particular holder, shall affect the
sufficiency of notice or the validity of the proceedings for the redemption of
any shares of Series A Preferred Stock with respect to any other holder.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which the Series A Preferred Stock may be
listed or admitted to trading, such notice shall state, as appropriate: (i) the
Redemption Date, (ii) with respect to the Cash Redemption Right or the Mandatory
Redemption, the cash redemption price per share of Series A Preferred Stock and,
with respect to the Stock Redemption Right, the number of shares of Common Stock
to be issued with respect to each share of Series A Preferred Stock, (iii) the
number of shares of Series A Preferred Stock to be redeemed from such holder
(and, if fewer than all the shares of Series A Preferred Stock are to be
redeemed from such holder, the number of shares to be redeemed from such
holder), (iv) the place or places where certificates for shares of such Series A
Preferred Stock are to be surrendered for payment of the redemption price in
cash, with respect to the Cash Redemption Right or the Mandatory Redemption, and
in certificates representing shares of Common Stock with respect to the Stock
Redemption Right, (v) that dividends on the shares to be redeemed will cease to
accumulate on such Redemption Date, and (vi) the date upon which the holder's
conversion rights, if any, as to such shares of Series A Preferred Stock shall
terminate.
(iii) On or after the Redemption Date, each holder of shares of
Series A Preferred Stock to be redeemed shall present and surrender the
certificates representing his Series A Preferred Stock to the Company at the
place designated in the notice of redemption and thereupon the redemption price
(in cash and/or shares of Common Stock, as applicable) of such shares shall be
paid to or on the order of the person whose name appears on such certificate
representing shares of Series A Preferred Stock as the owner thereof and each
surrendered certificate shall be canceled. If fewer than all the shares
represented by any such certificate representing shares of Series A Preferred
Stock are to be redeemed, a new certificate shall be issued representing the
unredeemed shares.
(iv) From and after the Redemption Date (unless the Company fails to
make available a number of shares of Common Stock or amount in cash necessary to
effect such redemption), all dividends on the Series A Preferred Stock
designated for redemption
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<PAGE>
in such notice shall cease to accumulate and all rights of the holders thereof,
except the right to receive the redemption price thereof (including all
accumulated and unpaid dividends up to the Redemption Date), shall cease and
terminate and such shares shall not thereafter be transferred (except with the
consent of the Company) on the Company's books, all rights of the holders of
shares of the Series A Preferred Stock shall cease (except the right to receive
the shares of Common Stock and/or cash payable upon such redemption) and such
shares shall not be deemed to be outstanding for any purpose whatsoever.
The Company's obligation to provide shares of Common Stock and/or cash
in accordance with this Section VI shall be deemed fulfilled if, on or before
the Redemption Date, the Company elects to deposit the shares of Common Stock
and/or cash necessary for redemption of the shares of Series A Preferred Stock
so called with a bank or trust company that has, or is an affiliate of a bank or
trust company that has, a capital and surplus of at least $50,000,000, in trust,
with irrevocable instructions that such shares of Common Stock and/or cash be
applied to the redemption of the shares of Series A Preferred Stock so called
for redemption. At the close of business on the Redemption Date relating to the
Company's Stock Redemption Right, each holder of shares of Series A Preferred
Stock to be redeemed (unless the Company defaults in the delivery of the shares
of Common Stock and/or cash payable on such Redemption Date) shall be deemed to
be the record holder of the number of shares of Common Stock into which such
shares of Series A Preferred Stock is to be redeemed, regardless of whether such
holder has surrendered the certificates representing the Series A Preferred
Stock. No interest shall accrue for the benefit of the holders of Series A
Preferred Stock to be redeemed on any cash so set aside by the Company. Any
such cash unclaimed at the end of two years from the Redemption Date shall
revert to the general funds of the Company. If the Company elects to deposit
the cash and/or shares of Common Stock necessary for redemption with a bank or
trust company, in accordance with this subsection (f)(iv), the redemption notice
to holders of the shares of Series A Preferred Stock to be redeemed shall (i)
state the date of such deposit, (ii) specify the office of such bank or trust
company as the place of redemption and (iii) require such holders to surrender
the certificates representing such shares at such place on or about the date
fixed in such redemption notice (which may not be later than the Redemption Date
or Mandatory Redemption Date) against payment of the redemption price (including
all accumulated and unpaid dividends to the Redemption Date or Mandatory
Redemption Date) or delivery of the shares of Common Stock (as applicable).
(g) Status of Redeemed Shares of Series A Preferred Stock. Any shares of
Series A Preferred Stock that shall at any time have been redeemed shall, after
such redemption, have the status of authorized but unissued Preferred Stock,
without designation as to series until such shares are once more designated as
part of a particular series by the Board.
(h) No Fractional Shares. No fractional shares or scrip representing
fractions of shares of Common Stock shall be issued upon redemption of the
Series A Preferred Stock
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<PAGE>
pursuant to the Company's Stock Redemption Right. Instead of any fractional
interest in a share of Common Stock that would otherwise be deliverable upon the
redemption of a share of Series A Preferred Stock, the Company shall pay to the
holder of such share of Series A Preferred Stock an amount in cash in respect of
such interest (computed to the nearest cent) based upon the Current Market Price
of the Common Stock on the Trading Day immediately preceding the Redemption
Date. If more than one share of Series A Preferred Stock shall be surrendered
for redemption at one time by the same holder, the number of full shares of
Common Stock issuable upon redemption thereof shall be computed on the aggregate
number of shares of Series A Preferred Stock so surrendered.
(i) Common Stock Issuable Upon Redemption. The Company covenants that any
Common Stock issued upon redemption of shares of the Series A Preferred Stock
shall be validly issued, fully paid and nonassessable.
VII. Voting.
------
(a) Holders of shares of the Series A Preferred Stock shall not have any
voting rights, except as provided by applicable law and as described below in
this Section VII.
(b) If and whenever six quarterly dividends on the Series A Preferred
Stock, whether or not earned or declared, shall be in arrears (which shall, with
respect to any such quarterly dividend, mean that any such dividend has not been
paid in full) (a "Preferred Dividend Default"), the number of directors then
constituting the Board shall be increased by two and the holders of shares of
such Series A Preferred Stock (voting separately as a single class (regardless
of series) with all other Capital Stock of the Company upon which like voting
rights have been conferred and are exercisable ("Parity Preferred Stock")) shall
----------------------
be entitled to elect two additional directors (the "Preferred Stock Directors")
-------------------------
to serve on the Board at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Series A
Preferred Stock and the Parity Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Series A Preferred Stock and the Parity
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current Dividend Period shall have been paid or declared and set apart for
payment, then the right of the holders of the Series A Preferred Stock and the
Parity Preferred Stock to elect such additional two directors shall cease (but
subject always to the same provisions for the vesting of such voting rights in
the case of any similar future arrearages in six quarterly dividends), and the
terms of office of all persons elected as directors by the holder of the Series
A Preferred Stock and the Parity Preferred Stock shall forthwith terminate and
the number of the Board shall be reduced accordingly. At any time after such
voting power shall have been so vested in the holders of shares of Series A
Preferred Stock and Parity Preferred Stock, the secretary of the Corporation
may, and upon the written request of any holder of Series A Preferred Stock
(addressed to the secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the
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<PAGE>
Series A Preferred Stock and of the Parity Preferred Stock for the election of
the two directors to be elected by them as herein provided, such call to be made
by notice similar to that provided in the By-Laws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
secretary within 20 days after receipt of any such request, then any holder of
shares of Series A Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold office
until the next annual meeting of the stockholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided.
(c) So long as a Preferred Dividend Default shall continue, any vacancy in
the office of a Preferred Stock Director may be filled by written consent of the
Preferred Stock Director remaining in office, or if there is no such remaining
director, by vote of holders of a majority of the outstanding shares of Series A
Preferred Stock and any other such series of Parity Preferred Stock voting as a
single class. Any Preferred Stock Director may be removed only for cause and
only by the vote of the holders of record of seventy-five percent (75%) of the
outstanding shares of Series A Preferred Stock voting separately as a class with
all other series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable). The Preferred Stock Directors shall each
be entitled to one vote per director on any matter
(d) So long as any shares of Series A Preferred Stock remain outstanding,
the Company shall not, without the affirmative vote or consent of the holders of
at least two-thirds of the shares of Series A Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of Capital Stock
ranking prior to the Series A Preferred Stock with respect to the payment of
dividends or the distribution of assets upon voluntary or involuntary
liquidation, dissolution or winding-up of the Company or reclassify any
authorized shares of Capital Stock of the Company into such Capital Stock, or
create, authorize or issue any obligation or security convertible or
exchangeable into or evidencing the right to purchase any such Capital Stock; or
(ii) amend, alter or repeal the provisions of the Certificate of Incorporation
or this Certificate of Designations, whether by merger or consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
-----
preference, privilege or voting power of the Series A Preferred Stock or the
holders thereof; provided, however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as shares of Series A Preferred Stock
remain outstanding with the terms thereof materially unchanged, taking into
account that, upon the occurrence of an Event, the Company may not be the
surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
power of holders of the Series A Preferred Stock; and provided further that (x)
any increase in the amount of the authorized Preferred Stock or the
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<PAGE>
creation or issuance of any other series of Preferred Shares or (y) any increase
in the amount of authorized Series A Preferred Stock or any other series of
Preferred Shares, in each case ranking on a parity with or junior to the Series
A Preferred Stock with respect to payment of dividends and the distribution of
assets upon voluntary or involuntary liquidation, dissolution or winding-up of
the Company, shall not be deemed to materially and adversely affect such rights,
preferences, privilege or voting powers.
(e) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series A Preferred Stock shall have been
converted, redeemed or called for redemption upon proper notice and sufficient
funds or shares of Common Stock, as applicable, shall have been deposited in
trust to effect such redemption.
(f) For purposes of the foregoing provisions of this Section VII, each
share of Series A Preferred Stock shall have one (1) vote per share, except that
when any other series of preferred stock shall have the right to vote with the
Series A Preferred Stock as a single class on any matter, then the Series A
Preferred Stock and such other series shall have with respect to such matters
one (1) vote per $25.00 of stated liquidation preference. Except as otherwise
required by applicable law or as set forth herein, the shares of Series A
Preferred Stock shall not have any relative, participating, optional or other
special voting rights and powers and the consent of the holders thereof shall
not be required for the taking of any corporate action.
VIII. Conversion.
----------
Holders of shares of Series A Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as follows:
(a) Subject to the restrictions on transfer and ownership referenced in
Article IV of the Certificate of Incorporation, a holder of shares of Series A
Preferred Stock shall have the right, at such holder's option, at any time, to
convert any number of shares of Series A Preferred Stock, in whole or in part,
into fully paid and nonassessable shares of Common Stock at a conversion price
of $39.70 per share of Common Stock (equivalent to a conversion rate of
25.188 shares of Common Stock for each share of Series A Preferred Stock),
subject to adjustment as described in Section VIII(d) herein (the "Conversion
----------
Price"); provided, however, that the right to convert shares of Series A
- -----
Preferred Stock called for redemption pursuant to Section VI shall terminate at
the close of business on the second Business Day prior to the Redemption Date
fixed for such redemption, unless the Company shall default in making payment of
the redemption price. If part of a share of Series A Preferred Stock is
converted, then the Company will convert such share into the requested shares of
Common Stock (subject to Paragraph (c) of this Section VIII) and issue a
fractional share of Series A Preferred Stock evidencing the remaining interest
of such holder.
-15-
<PAGE>
(b) To exercise the conversion right, the holder of each share of Series A
Preferred Stock to be converted shall surrender the certificate representing
such share, duly endorsed or assigned to the Company or in blank, at the
principal office of the Conversion Agent accompanied by written notice to the
Company that the holder thereof elects to convert such share of Series A
Preferred Stock or a specified portion thereof. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
Series A Preferred Stock is registered, each share surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory to the
Company, duly executed by the holder or such holder's duly authorized attorney
and an amount sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Company demonstrating that such taxes have been
paid).
Holders of shares of Series A Preferred Stock at the close of business on a
Dividend Record Date shall be entitled to receive the dividend payable on such
shares on the corresponding Dividend Payment Date notwithstanding the conversion
of such shares following such Dividend Record Date and prior to such Dividend
Payment Date. However, certificates representing shares of Series A Preferred
Stock surrendered for conversion during the period between the close of business
on any Dividend Record Date and ending with the opening of business on the
corresponding Dividend Payment Date (except shares of Series A Preferred Stock
converted after the issuance of a notice of redemption with respect to a
Redemption Date during such period or coinciding with such Dividend Payment
Date, which shares will be entitled to such dividend) shall be accompanied by
payment of an amount equal to the dividend payable on such shares on such
Dividend Payment Date. A holder of shares of Series A Preferred Stock on a
Dividend Record Date who (or whose transferee) tenders any such shares for
conversion into shares of Common Stock on such Dividend Payment Date shall
receive the dividend payable by the Company on such shares of Series A Preferred
Stock on such date, and the converting holder need not include payment of the
amount of such dividend upon surrender of certificates representing such shares
of Series A Preferred Stock for conversion. Except as provided above, the
Company shall make no payment or allowance for unpaid dividends, whether or not
in arrears, on converted shares or for dividends on the shares of Common Stock
that are issued upon such conversion.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for shares of Series
A Preferred Stock shall have been surrendered and such notice (and if
applicable, payment of an amount equal to the dividend payable on such shares)
received by the Company as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
and such conversion shall be at the Conversion Price in effect at such time and
on such date unless the stock transfer books of the Company shall be closed on
that date, in which event such person or
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<PAGE>
persons shall be deemed to have become such holder or holders of record at the
close of business on the next succeeding day on which such stock transfer books
are open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares have been surrendered and such notice received by the
Company.
As promptly as practicable after the surrender of certificates for shares
of Series A Preferred Stock as aforesaid, the Company shall issue and shall
deliver at such office to such holder, or on the holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this Section VIII, and any fractional interest with respect to a share of Common
Stock arising upon such conversion shall be settled as provided in subsection
(c) of this Section VIII.
(c) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the shares of Series A Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of Series A Preferred
Stock, the Company shall pay to the holder of such share an amount in cash in
respect of such fractional interest based upon the Current Market Price of
Common Stock on the Trading Day immediately preceding the date of conversion.
If more than one share of Series A Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Series A Preferred Stock so surrendered.
(d) Conversion Price Adjustments.
The Conversion Price shall be adjusted from time to time as follows:
(i) If the Company shall, after the date on which the Series A
Preferred Stock is first issued and sold (the "Issue Date"), (A) pay or make a
----------
dividend to holders of its Capital Stock in shares of Common Stock, (B)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (C) combine its outstanding shares of Common Stock into a smaller number
of shares or (D) issue any shares of Capital Stock by reclassification of its
Common Stock, the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or at the opening of business on the day next following
the day on which such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the holder of any share
of Series A Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder would
have owned or have been entitled to receive after the happening of any of the
events described above had such share of Series A Preferred Stock been converted
immediately prior to the record date in the case of a dividend or the effective
date in the case
-17-
<PAGE>
of a subdivision, combination or reclassification. An adjustment made pursuant
to this subsection (i) shall become effective immediately after the opening of
business on the day next following the record date (except as provided in
subsection (h) below) in the case of a dividend and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or reclassification.
(ii) If the Company shall issue after the Issue Date rights, options
or warrants to all holders of shares of Common Stock entitling them to subscribe
for or purchase shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) at a price per share less than the Fair
Market Value per share of Common Stock on the record date for the determination
of stockholders entitled to receive such rights, options or warrants, then the
Conversion Price in effect at the opening of business on the day next following
such record date shall be adjusted to equal the price determined by multiplying
(I) the Conversion Price in effect immediately prior to the opening of business
on the day following the date fixed for such determination by (II) a fraction,
the numerator of which shall be the sum of (A) the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and (B) the number of shares that the aggregate proceeds to the
Company from the exercise of such rights, options or warrants for shares of
Common Stock would purchase at such Fair Market Value, and the denominator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and (B) the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights, options or warrants. Such adjustment shall become
effective immediately after the opening of business on the day next following
such record date (except as provided in subsection (h) below). In determining
whether any rights, options or warrants entitle the holders of shares of Common
Stock to subscribe for or purchase shares of Common Stock at less than the Fair
Market Value, there shall be taken into account any consideration received by
the Company upon issuance and upon exercise of such rights, options or warrants,
the value of such consideration, if other than cash, to be determined by the
Company's Chief Executive Officer or the Board.
(iii) If the Company shall distribute to all holders of shares of
its Common Stock any other Capital Stock or evidences of its indebtedness or
assets (including securities but excluding those rights, options and warrants
issued to all holders of shares of Common Stock entitling them to subscribe for
or purchase shares of Common Stock, which rights, options and warrants are
referred to in and treated under subsection (ii) above, and dividends and
distributions paid exclusively in cash out of equity, including revaluation
equity, applicable to Common Stock) (any of the foregoing being hereinafter in
this subsection (iii) called the "Securities"), then in each case the Conversion
Price shall be adjusted so that it shall equal the price determined by
multiplying (I) the Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to
receive such dividend by (II) a fraction, the numerator of which shall
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<PAGE>
be the Fair Market Value per share of Common Stock on the record date mentioned
below less the then fair market value (as determined by the Chief Executive
Officer or the Board, whose determination shall be conclusive) of the portion of
the Capital Stock or assets or evidences of indebtedness so distributed
applicable to one share of Common Stock, and the denominator of which shall be
the Fair Market Value per share of Common Stock on the record date mentioned
below. Such adjustment shall become effective immediately at the opening of
business on the business day next following (except as provided in subsection
(h) below) the record date for the determination of stockholders entitled to
receive such dividend. For the purposes of this subsection (iii), a dividend in
the form of a Security, which is distributed not only to the holders of the
shares of Common Stock on the date fixed for the determination of stockholders
entitled to such dividend of such Security, but also is distributed with each
share of Common Stock delivered to a person converting a share of Series A
Preferred Stock after such determination date, shall not require an adjustment
of the Conversion Price pursuant to this subsection (iii); provided that on the
date, if any, on which a person converting a share of Series A Preferred Stock
would no longer be entitled to receive such Security with a share of Common
Stock (other than as a result of the termination of all such Securities), a
dividend of such Securities shall be deemed to have occurred, and the Conversion
Price shall be adjusted as provided in this subsection (iii) (and such day shall
be deemed to be "the date fixed for the determination of the stockholders
entitled to receive such dividend" and "the record date" within the meaning of
the two preceding sentences).
(iv) If (I) the Company shall make cash dividends to all holders of
shares of its Common Stock (excluding any cash portion of dividends referred to
in subsection (iii) above) which, when combined with (A) all such cash dividends
made within the preceding 12 months in respect of which no adjustment has been
made, plus (B) the amount by which any cash and the fair market value, as of the
relevant expiration date, of other consideration payable in respect of any
tender offers by the Company for Common Stock, which tender offers expired
within the preceding 12 months in respect of which no adjustment has been made
exceeds the Current Market Price of the Common Stock acquired in such tender
offers, exceeds 15% of the Company's market capitalization (being the product of
the then Current Market Price of the Common Stock times the number of shares of
Common Stock then outstanding) on the record date for such dividend (the amount
by which such cash dividends, when combined with (A) plus (B) above, exceeds
such 15% of such market capitalization being referred to herein as the "Excess
------
Cash Amount"), or (II) a tender offer made by the Company or any subsidiary for
- -----------
all or any portion of the Common Stock shall expire and such tender offer shall
require payment to stockholders of aggregate consideration having a fair market
value which, when combined with (C) the aggregate of the amount by which the
cash plus the fair market value, as of the expiration of such tender offer, of
other consideration payable in respect of any other tender offer by the Company
or any subsidiary for all or any portion of the Common Stock expiring within 12
months preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this subsection (d)(iv) has
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<PAGE>
been made exceeds the Current Market Price of the shares of Common Stock
acquired in such tender offer, plus (D) the aggregate amount of any dividends to
all holders of shares of Common Stock made exclusively in cash within the 12
months preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to clause (I) above has been made, exceeds 15% of the
product of the Current Market Price per share of the Common Stock as of the last
time tenders could have been made pursuant to such tender offer times the number
of shares of Common Stock outstanding (including tendered shares) (the amount by
which such aggregate consideration, when combined with (C) plus (D) above,
exceeds such 15% of such product being referred to herein as the "Excess Tender
-------------
Amount"), then in each case the Conversion Price shall be adjusted so that it
- ------
shall equal the price determined by multiplying (Y) the Conversion Price in
effect immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such dividend by (Z) a
fraction, the numerator of which shall be the Fair Market Value per share of
Common Stock on the record date mentioned below less the Excess Cash Amount, if
any, and the Excess Tender Amount, if any, and the denominator of which shall be
the Fair Market Value per share of Common Stock on the record date mentioned
below. Such adjustment shall become effective immediately at the opening of
business on the business day next following (except as provided in subsection
(h) below) the record date for the determination of stockholders entitled to
receive such dividend, or the expiration date of such tender offer, as the case
may be.
(v) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
subsection (v) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Section VIII (other than this subsection (v)) not later than such time
as may be required in order to preserve the tax-free nature of a dividend to the
holders of shares of Common Stock. Notwithstanding any other provisions of this
Section VIII, the Company shall not be required to make any adjustment to the
Conversion Price for the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
Common Stock under such plan. All calculations under this Section VIII shall be
made to the nearest cent (with $.005 being rounded upward) or to the nearest
one-tenth of a share (with .05 of a share being rounded upward), as the case may
be. Anything in this subsection (d) to the contrary notwithstanding, the
Company shall be entitled, to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to those required by this
subsection (d), as it in its discretion shall determine to be advisable in order
that any share distributions, subdivision of shares, reclassification or
combination of shares, distribution of rights, options or warrants to purchase
shares or securities, or a dividend consisting of other assets (other than cash
dividends) hereafter made by the Company to its stockholders shall not be
taxable.
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<PAGE>
(e) If the Company shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, self tender offer
for all or substantially all of the shares of Common Stock, sale of all or
substantially all of the Company's assets or recapitalization of the Common
Stock and excluding any transaction as to which subsection (d)(i) of this
Section VIII applies) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which shares of Common Stock shall
- ------------
be converted into the right to receive shares, stock, securities or other
property (including cash or any combination thereof), each share of Series A
Preferred Stock which is not converted into the right to receive shares, stock,
securities or other property in connection with such Transaction shall
thereafter be convertible into the kind and amount of shares, stock, securities
and other property (including cash or any combination thereof) receivable upon
the consummation of such Transaction by a holder of that number of shares of
Common Stock into which one share of Series A Preferred Stock was convertible
immediately prior to such Transaction, assuming such holder of shares of Common
Stock (i) is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (a "Constituent Person"), or an affiliate
------------------
of a Constituent Person and (ii) failed to exercise his rights of the election,
if any, as to the kind or amount of shares, stock, securities and other property
(including cash) receivable upon such Transaction (each a "Non-Electing Share")
(provided that if the kind and amount of shares, stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each Non-Electing Share, the kind and amount receivable by each Non-Electing
Share shall be deemed to be the kind and amount receivable per share by a
plurality of the Non-Electing Shares). The Company shall not be a party to any
Transaction unless the terms of such Transaction are consistent with the
provisions of this subsection (e), and it shall not consent or agree to the
occurrence of any Transaction until the Company has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of
the holders of the shares of Series A Preferred Stock that will contain
provisions enabling the holders of shares of the Series A Preferred Stock that
remain outstanding after such Transaction to convert into the consideration
received by holders of shares of Common Stock at the Conversion Price in effect
immediately prior to such Transaction. The provisions of this subsection (e)
shall similarly apply to successive Transactions.
(f) If:
(i) the Company shall declare a dividend on the Common Stock (other
than a cash dividend excluded from the operation of subsection (d) above) or
there shall be a reclassification, subdivision or combination of shares of
Common Stock; or
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<PAGE>
(ii) the Company shall authorize the granting to the holders of the
shares of Common Stock of rights, options or warrants to subscribe for or
purchase any shares of any class or any other rights, options or warrants; or
(iii) the Company shall authorize the payment of any Excess Cash
Amount or Excess Tender Amount; or
(iv) there shall be any reclassifications of the shares of Common
Stock (other than an event to which subsection (f)(i) of this Section VIII
applies) or any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or a statutory
share exchange involving the conversion or exchange of shares of Common Stock
into securities or other property, or a self tender offer by the Company for all
or substantially all of the shares of its outstanding Common Stock, or the sale
or transfer of all or substantially all of the assets of the Company as an
entirety and for which approval of any stockholder of the Company is required;
or
(v) there shall occur the voluntary or involuntary liquidation,
dissolution or winding-up of the Company,
then the Company shall cause to be filed with the Transfer Agent and shall cause
to be mailed to the holders of the shares of Series A Preferred Stock at their
addresses as shown on the stock records of the Company, as promptly as possible,
but at least 15 days prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend or distribution of rights, options or warrants, or, if a record is
not to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend or distribution of rights, options or
warrants are to be determined or (B) the date on which such reclassification,
subdivision, combination, consolidation, merger, sale, transfer, liquidation,
dissolution or winding-up is expected to become effective, and the date as of
which it is expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property, if any, deliverable upon such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding-up. Failure to give or
receive such notice or any defect therein shall not affect the legality or
validity of the proceedings described in this Section VIII.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Transfer Agent an officer's certificate
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment, which certificate shall
be conclusive evidence of the correctness of such adjustment absent manifest
error. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date such adjustment becomes effective and
shall
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<PAGE>
mail such notice of such adjustment of the Conversion Price to the holder of
each share of Series A Preferred Stock at such holder's last address as shown on
the stock records of the Company.
(h) In any case in which subsection (d) of this Section VIII provides that
an adjustment shall become effective on the date next following the record date
for an event, the Company may defer until the occurrence of such event (A)
issuing to the holder of any share of Series A Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock issuable upon
such conversion before giving effect to such adjustment and (B) paying to such
holder any amount of cash in lieu of any fraction pursuant to subsection (c) of
this Section VIII.
(i) For purposes of this Section VIII, the number of shares of Common Stock
at any time outstanding shall not include any shares of Common Stock then owned
or held by or for the account of the Company. The Company shall not pay a
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(j) There shall be no adjustment of the Conversion Price in case of the
issuance of any shares of Capital Stock of the Company in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this Section VIII. If any action or transaction would require adjustment of the
Conversion Price pursuant to more than one subsection of this Section VIII, only
one adjustment shall be made, and such adjustment shall be the amount of
adjustment that has the highest absolute value.
(k) If the Company shall take any action affecting the shares of Common
Stock, other than action described in this Section VIII, that in the opinion of
the Board would materially adversely affect the conversion rights of the holders
of the shares of Series A Preferred Stock, the Conversion Price for the shares
of Series A Preferred Stock may be adjusted, to the extent permitted by law, in
such manner, if any, and at such time, as the Board, in its sole discretion, may
determine to be equitable in the circumstances.
(l) The Company covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock or its issued shares of Common Stock held in its
treasury, or both, for the purpose of effecting conversion of the Series A
Preferred Stock, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series A Preferred Stock not theretofore
converted. For purposes of this subsection (l), the number of shares of Common
Stock that shall be deliverable upon the conversion of all outstanding shares of
Series A Preferred Stock shall be computed as if at the time of computation all
such outstanding shares were held by a single holder.
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<PAGE>
The Company covenants that any shares of Common Stock issued upon
conversion of the Series A Preferred Stock shall be validly issued, fully paid
and nonassessable. Before taking any action that would cause an adjustment
reducing the Conversion Price below the then par value of the Common Stock
deliverable upon conversion of the shares of Series A Preferred Stock, the
Company will take any corporate action that, in the opinion of its counsel, may
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Common Shares at such adjusted Conversion Price.
Prior to the delivery of any securities that the Company shall be obligated
to deliver upon conversion of the shares of Series A Preferred Stock, the
Company shall endeavor to comply with all federal and state laws and regulations
thereunder requiring the registration of such securities with, or any approval
of or consent to the delivery thereof by any governmental authority.
(m) The Company will pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock or other securities or property on conversion or redemption of the Series
A Preferred Stock pursuant hereto; provided, however, that the Company shall not
be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the shares of Series A
Preferred Stock to be converted, and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Company the amount of any such tax or established, to the reasonable
satisfaction of the Company, that such tax has been paid.
IX. Ownership Limitations.
---------------------
The shares of Series A Preferred Stock are subject to the restrictions on
transferability and ownership provisions described in Article IV of the
Certificate of Incorporation. The ownership limit as described in Article IV of
the Certificate of Incorporation (the "Ownership Limit") shall mean that
---------------
ownership of more than 7.5% of the value of the outstanding shares of Capital
Stock of the Company, including the Series A Preferred Stock, is restricted in
order to preserve the Company's status as a REIT for U.S. federal income tax
purposes. Subject to certain limitations described in Article IV of the
Certificate of Incorporation, the Board may modify the Ownership Limit, though
the Ownership Limit may not be increased by the Board to more than 9.8%. In
addition, Article IV of the Certificate of Incorporation limits the ownership of
"Existing Holders" (the "Existing Holder Limit") and also limits transfers that
---------------------
would cause the Company to become "closely held" within the meaning of Section
856(h) of the Code.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate of Designations
to be executed in its name and on its behalf by its __________ and attested to
by its Secretary on this ___ day of June, 1998.
GENERAL GROWTH PROPERTIES, INC.
By:_______________________________
Name:
Title:
ATTEST:
___________________________
Name:
Title: Secretary
-25-
<PAGE>
EXHIBIT 4.2
NO. *0* _____________________ SHARES
PREFERRED STOCK PAR VALUE $100 PER SHARE
THIS CERTIFICATE IS TRANSFERABLE CUSIP 370021 305
IN THE CITIES OF MINNEAPOLIS, MN SEE REVERSE FOR CERTAIN
AND NEW YORK, NY DEFINITIONS AND TRANSFER
RESTRICTIONS AND
OTHER INFORMATION
GENERAL GROWTH PROPERTIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
<TABLE>
<S> <C> <C>
THIS CERTIFIES that ** SPECIMEN **
----------------------------------------------- is the owner of
** Zero (0) **
----------------------------------------------------------------------------------
</TABLE>
fully paid and non-assessable Shares of ___% Preferred Income Equity
Redeemable Stock, Series A, par value $100 per share (liquidation
preference $1,000 per share) of General Growth Properties, Inc.
transferable on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrender of this Certificate properly
endorsed. This certificate is not valid unless countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of the duly authorized officers.
Dated:
COUNTERSIGNED AND REGISTERED:
NORWEST BANK MINNESOTA, N.A.
_______________________________________
TRANSFER AGENT AND REGISTRAR, PRESIDENT AND CHIEF OPERATING OFFICER
BY
______________________________ ______________________________
AUTHORIZED SIGNATURE SECRETARY
<PAGE>
GENERAL GROWTH PROPERTIES, INC.
The shares of Preferred Stock 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 (the "Code"). No person may (1) Beneficially Own or
Constructively Own shares of Equity Stock in excess of 7.5% (or such greater
percentage as may be determined by the Board of Directors of the Corporation) of
the value of the outstanding Equity Stock of the Corporation unless such Person
is an Existing Holder (in which case the Existing Holder Limit shall be
applicable); or (2) Beneficially Own Equity Stock which would result in the
Corporation being "closely held" under Section 856(h) of the Code. Any Person
who attempts to Beneficially Own or Constructively Own shares of Equity Stock 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
Second Amended and Restated Certificate of Incorporation, as the same may be
further amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder who so requests.
The Corporation will furnish to any stockholder upon request and without charge
a statement of the designations, preferences, limitations and relative rights of
the shares of each class or series authorized to be issued, so far as they have
been determined, and the authority of the Board of Directors to determine the
relative rights and preference of subsequent classes or series. Such requests
may be made to the Secretary of the Corporation.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF TRAN MIN ACT - .............Custodian..........
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Transfers to Minors
JT TET - as joint tenants with right Act...........................
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above list
For value received, _________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------
- -----------------------------------------
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
_____________________________________________________________________shares of
PreferredStock represented by the within Certificate and do hereby irrevocably
constitute and appoint
____________________________________________________________________Attorney to
transfer the said stock on the books of the within named Company with full power
of substitution in the
premises.
Dated Signature____________________________
Signature____________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the certificate in every particular, without alteration
or enlargement, or any change whatever.
<PAGE>
EXHIBIT 4.4
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of June ___, 1998, among GENERAL GROWTH
PROPERTIES, INC., a Delaware corporation (the "Company"), and NORWEST BANK
-------
MINNESOTA, N.A., a national banking association, as Depositary (the
"Depositary"), and all holders from time to time of Receipts (as hereinafter
----------
defined) issued hereunder.
WITNESSETH:
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit
Agreement, for the deposit of up to 345,000 shares of 7.25% Preferred Income
Equity Redeemable Stock, Series A, a series of preferred stock, par value $100
per share (the "PIERS"), of the Company, with the Depositary for the purposes
-----
set forth in this Deposit Agreement and for the issuance hereunder of the
Receipts evidencing Depositary Shares representing a fractional interest in the
PIERS so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
---------
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, and such
other good and valuable consideration, receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Certificate of Designations" shall mean the Certificate of Designations,
---------------------------
Preferences and Rights of the PIERS, filed with the Secretary of State of the
State of Delaware establishing the PIERS as a series of Preferred Stock of the
Company, as such Certificate of Designations, Preferences and Rights may be
amended from time to time.
"Certificate of Incorporation" shall mean the Certificate of
----------------------------
Incorporation, as amended from time to time, of the Company.
"Common Stock" shall mean the shares of common stock, par value $.10 per
------------
share, of the Company.
<PAGE>
"Company" shall mean General Growth Properties, Inc., a Delaware
-------
corporation, and its successors.
"Corporate Office" shall mean the corporate office of the Depositary at
----------------
which at any particular time its business in respect of matters governed by this
Deposit Agreement shall be administered, which at the date of this Deposit
Agreement is located at 161 North Concord Exchange, South St. Paul, Minnesota
55075.
"Deposit Agreement" shall mean this Agreement, as the same may be amended,
-----------------
modified or supplemented from time to time.
"Depositary" shall mean Norwest Bank Minnesota, N.A., a national banking
----------
association having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000, and any successor as
depositary hereunder.
"Depositary Share" shall mean a fractional interest of 1/40 of a PIERS
----------------
deposited with the Depositary hereunder and the same proportionate interest in
any and all other property received by the Depositary in respect of such PIERS
and held under this Deposit Agreement, all as evidenced by the Receipts issued
hereunder. Subject to the terms of this Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the PIERS represented by such Depositary Share, including the
dividend, voting, redemption, conversion and liquidation rights contained in the
Certificate of Designations.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
------------------
provided, and for the purposes specified, in Section 7.5.
"Excess PIERS" shall mean any PIERS held by any Person that (i) become or
------------
have become "Equity Stock" "Beneficially Owned" or "Constructively Owned" in
excess of the applicable "Ownership Limit" or "Existing Holder Limit " (as such
terms are defined in the Certificate of Incorporation) or (ii) would cause the
Company to become "closely held" within the meaning of Section 856(h) of the
Internal Revenue Code of 1986, as amended.
"Person" shall mean any individual, partnership, corporation, limited
------
liability company, trust or other legal entity.
"PIERS" shall have meaning set forth in the recitals to this Agreement.
-----
"Receipt" shall mean a Depositary Receipt issued hereunder to evidence one
-------
or more Depositary Shares, whether in definitive or temporary form,
substantially in the form set forth as Exhibit A hereto.
---------
-2-
<PAGE>
"record date" shall mean the date fixed pursuant to Section 4.4.
-----------
"record holder" or "holder" as applied to a Receipt shall mean the Person
-------------------------
in whose name a Receipt is registered on the books maintained by the Depositary
for such purpose.
"Registrar" shall mean Norwest Bank Minnesota, N.A. or any bank or trust
---------
company appointed to register ownership and transfers of Receipts, the deposited
PIERS or Excess PIERS, as the case may be, as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Transfer Agent" shall mean Norwest Bank Minnesota, N.A. or any bank or
--------------
trust company appointed to transfer the Receipts, the deposited PIERS or Excess
PIERS, as the case may be, as herein provided.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PIERS,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.1 Form and Transferability of Receipts. Definitive Receipts
------------------------------------
shall be engraved or printed or lithographed with steel-engraved borders and
underlying tint and shall be substantially in the form set forth in Exhibit A
---------
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Company, delivered in
compliance with Section 2.2, shall execute and deliver temporary Receipts which
may be printed, lithographed, typewritten, mimeographed or otherwise
substantially of the tenor of the definitive Receipts in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the persons executing such Receipts may determine, as evidenced by
their execution of such Receipts. If temporary Receipts are issued, the Company
and the Depositary will cause definitive Receipts to be prepared without
unreasonable delay. After the preparation of definitive Receipts, the temporary
Receipts shall be exchangeable for definitive Receipts upon surrender of the
temporary Receipts at the Corporate Office or such other offices, if any, as the
Depositary may designate, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Receipts, the Depositary shall execute
and deliver in exchange therefor definitive Receipts representing the same
number of Depositary Shares as represented by the surrendered temporary Receipt
or Receipts registered in the name (and only the name) of the holder of the
temporary Receipt. Such exchange shall be made at the Company's expense and
without any charge therefor to the holder. Until so exchanged, the
-3-
<PAGE>
temporary Receipts shall in all respects be entitled to the same benefits under
this Deposit Agreement, and with respect to the PIERS deposited, as definitive
Receipts.
Receipts shall be executed by the Depositary by the manual or facsimile
signature of a duly authorized signatory of the Depositary, provided that if a
Registrar (other than the Depositary) shall have been appointed then such
Receipts shall also be countersigned by manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding sentence. The Depositary shall
record on its books each Receipt executed as provided above and delivered as
hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary
Shares. All Receipts shall be dated the date of their issuance.
Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary and approved by the
Company or required to comply with any applicable law or regulation or with the
rules and regulations of any securities exchange upon which the PIERS, the
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement shall be transferable by delivery of such
Receipt with the same effect as if such Receipt were a negotiable instrument;
provided, however, that until a Receipt shall be transferred on the books of the
Depositary as provided in Section 2.4, the Depositary may, notwithstanding any
notice to the contrary, treat the record holder thereof at such time as the
absolute owner thereof for the purpose of determining the person entitled to
distribution of dividends or other distributions with respect to the PIERS, the
exercise of any conversion rights or to any notice provided for in this Deposit
Agreement and for all other purposes. The Depositary shall not lend any PIERS
deposited hereunder.
SECTION 2.2 Deposit of PIERS; Execution and Delivery of Receipts in
-------------------------------------------------------
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
- ---------------
the Company or any other Person authorized under the Underwriting Agreement,
dated June __, 1998, between the Company and the Underwriters named therein,
with respect to the PIERS (the "Authorized Persons"), may from time to time
------------------
deposit PIERS with the Depositary under this Deposit Agreement by delivery to
the Depositary of a certificate or certificates representing the PIERS to be
deposited; provided, however, that other than in the case of splits,
combinations or other reclassifications affecting the PIERS, or in the case of
dividends
-4-
<PAGE>
or distributions of PIERS, if any, there shall be deposited with the Depositary
hereunder not more than 460,000 PIERS. Such certificate or certificates shall
be properly endorsed or accompanied, if required by the Depositary, by a duly
executed instrument of transfer or endorsement, in form satisfactory to the
Depositary, together with (i) all such certifications as may be required by the
Depositary in accordance with the provisions of this Deposit Agreement and (ii)
a written order of the Company directing the Depositary to execute and deliver
to, or upon the written order of, the person or persons stated in such order a
Receipt or Receipts for the Depositary Shares representing such deposited PIERS.
All PIERS deposited by the Company or the Authorized Persons, as the case may
be, with the Depositary shall be held by the Depositary at the Corporate Office
or at such other office as the Depositary shall determine. The Company hereby
appoints the Depositary as the Registrar and Transfer Agent for the PIERS
deposited hereunder and any Excess PIERS issued pursuant to Section 2.10 and the
Depositary hereby accepts such appointment and, as such, will reflect changes in
the number of shares (including any fractional shares) of deposited PIERS held
by it by notation, book-entry or other appropriate method.
If required by the Depositary, PIERS presented for deposit at any time
(except for the initial deposit of PIERS by the Company or the Authorized
Persons and any subsequent deposit by the Company or the Authorized Persons of
PIERS acquired pursuant to the over-allotment option under the Underwriting
Agreement referred to above) whether or not the register of stockholders of the
Company is closed, shall also be accompanied by an agreement or assignment, or
other instrument satisfactory to the Depositary, that will provide for the
prompt transfer to the Depositary or its nominee of any dividend or right to
subscribe for additional PIERS or to receive other property that any person in
whose name the PIERS is or has been registered may thereafter receive upon or in
respect of such deposited PIERS, or in lieu thereof such agreement of indemnity
or other agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates
representing PIERS deposited with the Depositary by the Company or the
Authorized Persons, as the case may be, in accordance with the provisions of
this Section 2.2, together with the other documents specified above, and upon
registering such PIERS in the name of the Depositary, the Depositary, subject to
the terms and conditions of this Deposit Agreement, shall execute and deliver
to, or upon the order of, the Person or Persons named in the written order
delivered to the Depositary referred to in the first paragraph of this Section
2.2, a Receipt or Receipts for the number of whole Depositary Shares
representing the PIERS so deposited and registered in such name or names as may
be requested by such Person or Persons. The Depositary shall execute and
deliver such Receipt or Receipts at the Corporate Office, except that, at the
request, risk and expense of any Person requesting such delivery, such delivery
may be made at such other place as may be designated by such Person.
-5-
<PAGE>
The Company shall deliver to the Depositary from time to time such
quantities of blank Receipts as the Depositary may request to enable the
Depositary to perform its obligations under this Deposit Agreement.
SECTION 2.3 Redemption of PIERS. Whenever the Company shall elect to
-------------------
redeem PIERS in accordance with the provisions of the Certificate of
Designations, it shall (unless otherwise agreed in writing with the Depositary)
mail notice to the Depositary of such redemption, by first class mail, postage
prepaid, on the same date on which the Company first publicly announces such
redemption which date shall not be less than 30 days prior to the date of such
redemption (in the case of a redemption for Common Stock) or 20 days prior to
the date of such redemption (in the case of a redemption for cash). On the date
of such redemption, provided that the Company shall then have deposited with the
Depositary a number of shares of Common Stock and/or an amount in cash required
pursuant to the Certificate of Designations in order to effect a redemption of
the number of PIERS specified in the notice of redemption and any other amounts
payable with respect to the PIERS, the Depositary shall redeem the Depositary
Shares relating to such PIERS. Notice of such redemption and the simultaneous
redemption of the number of Depositary Shares relating to the PIERS to be
redeemed to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed shall be provided on the record date fixed pursuant to Section
4.4 hereof by the Depositary by first-class mail, postage prepaid, at the
addresses of such holders as they appear on the records of the Depositary, or
(if permitted by the Certificate of Designations) by the Company by publication
in The Wall Street Journal or The New York Times, or if neither such newspaper
----------------------- ------------------
is then being published, any other daily newspaper of national circulation, not
less than 30 days (in the case of a redemption for Common Stock) or 20 days (in
the case of a redemption for cash) and not more than 60 days prior to the date
fixed for redemption of such PIERS and Depositary Shares (the "Redemption
----------
Date"), and in no case later than four business days after the Company first
publicly announces such redemption. If the Company elects to provide such
notice by publication, the Depositary shall also promptly mail notice of such
redemption to the holders of the Depositary Shares to be redeemed. Neither
failure to mail any such notice to one or more such holders nor any defect in
any notice or in the mailing thereof to one or more such holders shall affect
the validity or sufficiency of the proceedings for redemption of any Depositary
Shares as to other holders. Each such notice of redemption provided by the
Depositary to the holder shall state, as appropriate: (i) the Redemption Date;
(ii) the redemption price per Depositary Share (expressed as a number of shares
of Common Stock or an amount in cash) and any other amounts per share payable
with respect to the Depositary Shares; (iii) the number of Depositary Shares to
be redeemed (and, if fewer than all the Depositary Shares held by any such
holder are to be redeemed, the number of such Depositary Shares held by such
holder to be so redeemed); (iv) the place or places where Receipts evidencing
Depositary Shares are to be surrendered for certificates representing shares of
Common Stock or cash; (v) that dividends in respect of the PIERS to be redeemed,
which are represented by the Depositary Shares to be redeemed, will cease to
accrue at the
-6-
<PAGE>
close of business on such Redemption Date, except as otherwise provided in the
Certificate of Designations and (vi) the date upon which such holder's
conversion rights, if any, as to such PIERS (and Depositary Shares representing
such PIERS) will terminate. If fewer than all the outstanding Depositary Shares
are to be redeemed, the Depositary Shares to be so redeemed shall be selected by
lot or pro rata or other equitable method, in each case as may be determined by
the Board of Directors of the Company that will not result in the issuance of
Excess PIERS.
Notice having been mailed by the Depositary as aforesaid, from and after
the Redemption Date (unless the Company shall have failed to deliver to the
Depositary certificates representing a number of shares of Common Stock or cash
(as applicable) sufficient to redeem the PIERS to be redeemed to it or any other
amounts payable with respect to the PIERS as set forth in the Company's notice
provided for in the preceding paragraph), all dividends in respect of the PIERS
so called for redemption shall cease to accrue (except as otherwise provided in
the Certificate of Designations), the Depositary Shares being redeemed shall be
deemed no longer to be outstanding, all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the number of
shares of Common Stock or cash (as applicable) required to redeem such
Depositary Shares and any other amounts payable with respect to the PIERS)
shall, to the extent of such Depositary Shares, cease and terminate and, upon
surrender in accordance with such notice of the Receipts evidencing any such
Depositary Shares (properly endorsed or assigned for transfer, if the Depositary
shall so require), such Depositary Shares shall be redeemed by the Depositary
for a number of shares of Common Stock or an amount in cash (as applicable) per
Depositary Share equal to 1/40 of the number of shares of Common Stock or the
amount in cash (as applicable) required by the Certificate of Designations to be
delivered in respect of one PIERS plus all money and other property, if any,
underlying such Depositary Shares, including all amounts paid by the Company in
respect of dividends that, on the Redemption Date, have accrued on the PIERS to
be so redeemed and relate to dividend periods ending on or prior to the
Redemption Date or to the extent provided in the Certificate of Designations, to
the dividend period ending after the Redemption Date, and have not theretofore
been paid.
If fewer than all the Depositary Shares evidenced by a Receipt are called
for redemption, the Depositary will deliver to the holder of such Receipt upon
its surrender to the Depositary, together with the delivery of a number of
shares of Common Stock or the amount in cash (as applicable) sufficient to
redeem the PIERS to be redeemed and any other amounts per share payable with
respect to the PIERS, a new Receipt evidencing such number of Depositary Shares
as were evidenced by such prior receipt and not called for redemption.
The Depositary shall not be required (a) to issue, transfer or exchange any
Receipts for a period beginning at the close of business on the day the Company
first publicly announces the redemption of PIERS and ending at the close of
business on the day the
-7-
<PAGE>
Depositary mails the notices of redemption of Depositary Shares or (b) to
transfer or exchange for another Receipt any Receipt evidencing Depositary
Shares called or being called for redemption in whole or in part, except as
provided in the preceding paragraph of this Section 2.3.
Upon any redemption, the Company shall deliver to the Depositary
certificates representing a number of shares of Common Stock or a sufficient
amount of immediately available funds (as applicable) required by the
Certificate of Designations in order to effect the redemption of the number of
PIERS specified in the notice of redemption mailed by the Company to the
Depositary pursuant to this Section 2.3, and a sufficient amount of immediately
available funds to pay any other amounts per share payable with respect to the
PIERS. Any shares of Common Stock so delivered shall be duly executed by proper
officers of the Company and duly countersigned by the transfer agent and
registrar for the Common Stock and shall be registered in such names as the
Depositary shall request. The Depositary shall deliver to each holder of a
Receipt surrendered for redemption a number of shares of Common Stock equal to
the number required by the Certificate of Designations, or the amount of cash
required by the Certificate of Designations (as applicable), to effect a
redemption of the number of Depositary Shares evidenced by such Receipt to be
redeemed. The Company shall bear all costs and expenses associated with the
exchange of the Receipts for shares of Common Stock.
If the shares of Common Stock are to be delivered to a person or persons
other than the record holder of the Receipt or Receipts being surrendered for
redemption, such holder shall execute and deliver to the Depositary a written
order so directing the Depositary and the Depositary may require that the
Receipt or Receipts surrendered by such holder for redemption be accompanied by
a properly executed instrument of transfer or endorsement properly executed in
blank.
No fractional shares of Common Stock shall be issuable upon redemption of
PIERS underlying the Depositary Shares. If any holder of Receipts surrendered
for redemption would be entitled to a fractional share of Common Stock upon such
redemption, the Company shall cause to be delivered to such holder a cash amount
for such fractional shares as provided in the Certificate of Designations.
SECTION 2.4 Registration of Transfers of Receipts. The Company hereby
-------------------------------------
appoints the Depositary as the Registrar and Transfer Agent for the Receipts and
the Depositary hereby accepts such appointment and, as such, shall register on
its books from time to time transfers of Receipts upon, any surrender thereof by
the holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement,
together with evidence of the payment of any transfer taxes as may be required
by law. Upon such surrender, the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto
-8-
<PAGE>
evidencing the same aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered.
SECTION 2.5 Combinations and Split-ups of Receipts. Upon surrender of a
--------------------------------------
Receipt or Receipts at the Corporate Office or such other office as the
Depositary may designate for the purpose of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary Share
evidenced by the Receipt or Receipts surrendered.
SECTION 2.6 Surrender of Receipts and Withdrawal of PIERS. Any holder of
---------------------------------------------
a Receipt of Receipts evidencing not less than 40 Depositary Shares (or integral
multiples of 40 Depositary Shares) may withdraw the deposited PIERS represented
by such Depositary Shares and all money and other property, if any, represented
by such Depositary Shares by surrendering such Receipt or Receipts at the
Corporate Office or at such other office as the Depositary may designate for
such withdrawals, provided that a holder of a Receipt or Receipts may not
--------
withdraw such PIERS (or money and other property, if any, represented thereby)
which have previously been called for redemption or which have been converted to
Excess PIERS in accordance with Section 2.10. After such surrender, without
unreasonable delay, the Depositary shall deliver to such holder, or to the
person or persons designated by such holder as hereinafter provided, the number
of whole PIERS and all such money and other property, if any, represented by the
Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal, but holders of such whole PIERS will not thereafter be entitled to
deposit such PIERS hereunder or to receive Depositary Shares therefor. If the
Receipt or Receipts delivered by the holder to the Depositary in connection with
such withdrawal shall evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole deposited PIERS to
be withdrawn, the Depositary shall at the same time, in addition to such number
of whole PIERS and such money and other property, if any, to be withdrawn,
deliver to such holder, or (subject to Sections 2.4 and 3.2) upon his order, a
new Receipt or Receipts evidencing such excess number of Depositary Shares.
Delivery of such PIERS and such money and other property being withdrawn may be
made by the delivery of such certificates, documents of title and other
instruments as the Depositary may deem appropriate, which, if required by the
Depositary, shall be properly endorsed or accompanied by proper instruments of
transfer.
If the deposited PIERS and the money and other property being withdrawn are
to be delivered to a person or persons other than the record holder of the
Receipt or Receipts being surrendered for withdrawal of PIERS, such holder shall
execute and deliver to the Depositary a written order so directing the
Depositary and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such PIERS be properly endorsed in
blank or accompanied by a properly executed instrument of transfer or
endorsement in blank.
-9-
<PAGE>
The Depositary shall deliver the deposited PIERS and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal at the Corporate Office, except that, at the request,
risk and expense of the holder surrendering such Receipt or Receipts and for the
account of the holder thereof, such delivery may be made at such other place as
may be designated by such holder.
SECTION 2.7 Limitations on Execution and Delivery, Transfer, Split-up,
----------------------------------------------------------
Combination, Surrender and Exchange of Receipts. As a condition precedent to
- -----------------------------------------------
the execution and delivery, transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary's Agents or the
Company may require any or all of the following: (i) payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any taxes, charges or
expenses payable by the holder of a Receipt pursuant to Sections 3.2 and 5.7;
(ii) the production of evidence satisfactory to it as to the identity and
genuineness of any signature, and (iii) compliance with the rules and
regulations of any governmental body, any stock exchange or any applicable self-
regulatory body, including, without limitation, the National Association of
Securities Dealers Inc. (the "NASD") or such procedures, if any, as the
----
Depositary or the Company may establish consistent with the provisions of this
Deposit Agreement.
The deposit of PIERS may be refused, the delivery of Receipts against PIERS
may be suspended, the transfer of Receipts may be refused, and the transfer,
split-up, combination, surrender, exchange or redemption of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed or (ii) if any such action is deemed reasonably necessary or
advisable by the Depositary, any of the Depositary's Agents or the Company at
any time or from time to time because of any requirement of law or of any
government, governmental body or commission, stock exchange or the NASD or under
any provision of this Deposit Agreement.
SECTION 2.8 Lost Receipts, etc. If any mutilated Receipt is surrendered
-------------------
to the Depositary, the Depositary shall execute and deliver in exchange therefor
a new Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt. In case any Receipt shall be destroyed, lost or stolen, the
Depositary shall execute and deliver a Receipt to the holder thereof of like
form and tenor in exchange and substitution for such destroyed, lost or stolen
Receipt, upon (i) the filing by the holder thereof with the Depositary of
evidence satisfactory to the Depositary of such destruction or loss or theft of
such Receipt, of the authenticity thereof and of such holder's ownership thereof
and (ii) the holder's furnishing the Depositary with reasonable indemnification
satisfactory to the Depositary and the Company and (iii) payment of any expenses
including fees, charges and expenses of the Depositary in connection with such
execution and delivery. Every new Receipt issued pursuant to this Section 2.8 in
lieu of any mutilated, destroyed, lost or stolen receipt shall constitute an
original additional contractual obligation under this Deposit Agreement,
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<PAGE>
whether or not the mutilated, destroyed, lost or stolen Receipt shall be at any
time enforceable by anyone.
SECTION 2.9 Cancellation of Surrendered Receipts. All Receipts
------------------------------------
surrendered to the Depositary or any Depositary's Agent shall be cancelled by
the Depositary. The Depositary shall retain all Receipts so canceled for a
period of one (1) year, after which the Depositary shall return all canceled
Receipts to the Company which shall hold the canceled Receipts for such
additional period as may be required by applicable law or NYSE regulation.
SECTION 2.10 Conversion of PIERS into Excess PIERS. In the event that
-------------------------------------
deposited PIERS become or have become Excess PIERS, the Receipt or Receipts
representing the deposited PIERS so converted shall no longer represent, to the
extent of the shares so converted, such deposited PIERS. Promptly upon its
knowledge of the conversion of such deposited PIERS into Excess PIERS, the
Company shall notify the Depositary of such conversion, the number of deposited
PIERS so converted, and the identity of the holder of the Receipt or Receipts so
affected, whereupon the Depositary shall promptly notify the holder of such
Receipt or Receipts as to the foregoing information and the requirement for the
holder to surrender such Receipt or Receipts to the Depositary for cancellation
of the number of Depositary Shares evidenced thereby equal to the converted
deposited PIERS represented thereby. Further, where PIERS deposited under this
Agreement become or have become Excess PIERS, the Depositary Shares related to
such PIERS (which shall be those Depositary Shares the direct, indirect or
constructive ownership of which by a Prohibited Owner (as defined in the
Certificate of Incorporation) caused such PIERS to be treated as Excess PIERS;
provided that the number of Depositary Shares so related and owned directly,
indirectly or constructively by such Prohibited Owner shall be rounded up to the
nearest 40 Depositary Shares), shall be entitled to receive dividends and
exercise voting rights only to the extent that a Prohibited Owner with respect
to the PIERS associated with such Depositary Shares would be entitled to receive
dividends and exercise voting rights under the Certificate of Incorporation.
Any Prohibited Owner of Depositary Shares that represent Excess PIERS shall
repay to the Trustee (as defined in the Certificate of Incorporation) the amount
of any dividends or distributions received by it that (a) are attributable to
such Excess PIERS and (b) have a record date on or after the date that such
PIERS became Excess PIERS. In addition, any vote by a Prohibited Owner as a
holder of Depositary Shares prior to the discovery by the Company that the
Depositary Shares represent Excess PIERS shall be rescinded and shall be void ab
initio with respect to such Excess PIERS.
Each holder of Receipts shall, upon demand, be required to disclose to the
Company such information with respect to the direct, indirect and constructive
ownership of Depositary Shares and PIERS as the Board of Directors deems
necessary to comply with
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<PAGE>
the provisions of the Internal Revenue Code of 1986, as amended, applicable to a
real estate investment trust or to comply with the requirements of any taxing
authority or governmental agency. The Depositary hereby agrees to transmit
written statements from the Company requesting information with respect to the
direct, indirect and constructive ownership of Depositary Shares and PIERS
through to holders of Receipts, and to provide the Company with the responses
received in connection with such requests. The Depositary also hereby agrees to
provide the Company with a list of the record holders of Depositary Shares and
such other information concerning the direct, indirect and constructive
ownership of Depositary Shares as the Company may reasonably request.
If fewer than all of the Depositary Shares evidenced by a Receipt are
required to be surrendered for cancellation, the Depositary will deliver to the
holder of such Receipt upon its surrender to the Depositary a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not
required to be surrendered for cancellation. Upon the conversion of the
deposited PIERS and cancellation of the Depositary Shares represented thereby,
the Depositary will make appropriate adjustments in its records (as contemplated
in Section 2.2) to reflect such conversion and cancellation (including the
reduction of any fractional share of deposited PIERS and the creation of any
Excess PIERS).
SECTION 2.11 Conversion of PIERS into Common Stock. Receipts may be
-------------------------------------
surrendered with written instructions to the Depositary to instruct the Company
to cause the conversion of any specified number of whole or fractional PIERS
represented by the Depositary Shares evidenced thereby into whole shares of
Common Stock at the conversion price then in effect for the PIERS (and,
therefore, for the Depositary Shares) specified in the Certificate of
Designations, as such conversion price may be adjusted by the Company from time
to time as provided in the Certificate of Designations. Subject to the terms
and conditions of this Deposit Agreement and the Certificate of Designations, a
holder of a Receipt or Receipts evidencing Depositary Shares representing whole
or fractional PIERS may surrender such Receipt or Receipts at the Corporate
Office or to such office or to such Depositary's Agents as the Depositary may
designate for such purpose, together with a notice of conversion duly completed
and executed, thereby directing the Depositary to instruct the Company to cause
the conversion of the number of shares or fractions thereof of underlying PIERS
specified in such notice of conversion into shares of Common Stock, and an
assignment of such Receipt or Receipts to the Company or in blank, duly
completed and executed. To the extent that a holder delivers to the Depositary
for conversion a Receipt or Receipts which in the aggregate are convertible into
less than one whole share of Common Stock, the holder shall receive payment in
cash in lieu of such fractional shares of Common Stock otherwise issuable. If
more than one Receipt shall be delivered for conversion at one time by the same
holder, the number of whole shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of Receipts so
delivered.
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<PAGE>
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares or
fractions thereof of PIERS and an assignment of such Receipt or Receipts to the
Company or in blank, duly completed and executed, the Depositary shall instruct
the Company (i) to cause the conversion of the Depositary Shares evidenced by
the Receipts so surrendered for conversion as specified in the written notice to
the Depositary and (ii) to cause the delivery to the holders of such Receipts of
a certificate or certificates evidencing the number of whole shares of Common
Stock and the amount of money, if any, to be delivered to the holders of
Receipts surrendered for conversion in payment of any accrued and unpaid
dividends and in lieu of fractional shares of Common Stock otherwise issuable.
The Company shall as promptly as practicable after receipt thereof cause the
delivery of (i) a certificate or certificates evidencing the number of whole
shares of Common Stock into which the PIERS represented by the Depositary Shares
evidenced by such Receipt or Receipts has been converted and (ii) any money or
other property to which the holder is entitled. Upon such conversion, the
Depositary (i) shall deliver to the holder a Receipt evidencing the number of
Depositary Shares, if any, which such holder has elected not to convert and
evidencing the number of Depositary Shares, if any, in excess of the number of
Depositary Shares representing PIERS which has been so converted, (ii) shall
cancel the Depositary Shares evidenced by the Receipts surrendered for
conversion and (iii) shall deliver to the Company or its transfer agent for the
PIERS for cancellation the PIERS represented by the Depositary Shares evidenced
by the Receipts so surrendered and so converted.
If any PIERS shall be called by the Company for redemption, the Depositary
Shares representing such PIERS may be converted into Common Stock as provided in
this Deposit Agreement until and including, but not after, the close of business
on the second business day preceding the Redemption Date unless the Company
shall default in making payment of the shares of Common Stock and other amounts
payable upon such redemption, in which case the Depositary Shares representing
such PIERS may continue to be converted into Common Stock until and including,
but not after, the close of business on the date on which the Company makes full
payment of the shares of Common Stock and other amounts payable on such
redemption. Upon receipt by the Depositary of a Receipt or Receipts, together
with a properly completed and executed notice of conversion, representing any
PIERS called for redemption, the PIERS held by the Depositary represented by
such Depositary Shares for which conversion is requested shall be deemed to have
been received by the Company for conversion as of the close of business on the
date of such receipt.
The record holder of Depositary Shares on any dividend payment record date
established by the Depositary pursuant to Section 4.4 shall be entitled to
receive the dividend payable with respect to such Depositary Shares on the
corresponding dividend payment date notwithstanding the subsequent conversion of
the PIERS to which such Depositary Shares relate. If a PIERS is converted
between the record date with respect to any dividend payment
-13-
<PAGE>
on the PIERS and the opening of business on the next succeeding dividend payment
date, any holder of Receipts surrendered with instructions to the Depositary for
conversion of the underlying PIERS (except for Depositary Shares converted after
the issuance of a notice of redemption with respect to a Redemption Date during
such period or coinciding with such Dividend Payment Date which shall be
entitled to such dividend on the dividend payment date) shall pay to the
Depositary an amount equal to the dividend payable on such dividend payment date
on the Depositary Shares represented by the Receipt being surrendered for
conversion. Any holder of Receipts on a dividend payment record date who (or
whose transferee) surrenders the Receipts with instructions to the Depositary
for conversion of the underlying PIERS on the corresponding dividend payment
date will receive the dividend payable with respect to the Depositary Shares
underlying such Receipts and will not be required to include payment of the
amount of such dividend upon surrender of the Receipts for conversion.
Upon the conversion of any PIERS for which a request for conversion has
been made by the holder of Depositary Shares representing such shares, all
dividends in respect of such Depositary Shares shall cease to accrue (except as
provided in the preceding paragraph), such Depositary Shares shall be deemed no
longer outstanding, all rights of the holder of the Receipt with respect to such
Depositary Shares (except the right to receive the Common Stock, any cash
payable with respect to any fractional shares of Common Stock as provided herein
and any cash payable on account of accrued dividends and any Receipts evidencing
Depositary Shares not so converted) shall terminate, and the Receipt evidencing
such Depositary Shares shall be cancelled in accordance with Section 2.9 hereof.
No fractional shares of Common Stock shall be issuable upon conversion of
PIERS underlying the Depositary Shares. If any holder of Receipts surrendered
with instructions to the Depositary for conversion of the underlying PIERS would
be entitled to a fractional share of Common Stock upon such conversion, the
Company shall cause to be delivered to such holder an amount in cash for such
fractional share as provided in the Certificate of Designations.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.1 Filing Proofs, Certificates and Other Information. Except
-------------------------------------------------
for the initial deposit of PIERS by the Company or the Authorized Persons and
any subsequent deposit by the Company or the Authorized Persons of PIERS
acquired by such Authorized Persons pursuant to the overallotment option
referred to in Section 2.2, any Person presenting PIERS for deposit or any
holder of a Receipt may be required from time to time to file such proof of
residence or other information, to execute such certificates and to make such
representations and warranties as the Depositary or the Company may reasonably
deem
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<PAGE>
necessary or proper. The Depositary or the Company may withhold or delay the
delivery of any Receipt, the transfer, conversion, redemption or exchange of any
Receipt, the withdrawal of the deposited PIERS represented by the Depositary
Shares evidenced by any Receipt, the distribution of any dividend or other
distribution or the sale of any rights or of the proceeds thereof, until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
SECTION 3.2 Payment of Fees and Expenses. Holders of Receipts shall be
----------------------------
obligated to make payments to the Depositary of certain fees and expenses, as
provided in Section 5.7, or provide evidence reasonably satisfactory to the
Depositary that such fees and expenses have been paid. Until such payment is
made, transfer of any Receipt or any withdrawal of the PIERS or money or other
property, if any, represented by the Depositary Shares evidenced by such Receipt
may be refused, any dividend or other distribution may be withheld, and any part
or all of the PIERS or other property represented by the Depositary Shares
evidenced by such Receipt may be sold for the account of the holder thereof
(after attempting by reasonable means to notify such holder a reasonable number
of days prior to such sale). Any dividend or other distribution so withheld and
the proceeds of any such sale may be applied to any payment of such fees or
expenses, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.3 Representations, Warranties and Covenants as to PIERS and
---------------------------------------------------------
Common Stock. The Company hereby represents and warrants to the Depositary that
- ------------
the PIERS, when issued, will be validly issued, fully paid and nonassessable.
Such representation and warranty shall survive the deposit of the PIERS and the
issuance of Receipts. The Company covenants that it will keep reserved or
otherwise available a sufficient number of authorized and unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or both,
to meet conversion requirements in respect of the PIERS and that it will give
written notice to the Depositary of any adjustments in the conversion price as
set forth in the Certificate of Designations. The Company represents and
warrants that the Common Stock issued upon conversion or redemption of PIERS,
when issued, will be validly issued, fully paid and non-assessable. Such
representation and warranty shall survive the conversion or redemption of the
PIERS into such Common Stock.
SECTION 3.4 Representations and Warranty as to Receipts and Depositary
----------------------------------------------------------
Shares. The Company hereby represents and warrants that the Receipts, when
- ------
issued, will evidence legal and valid interests in the Depositary Shares and
each Depositary Share will represent a legal and valid 1/40 fractional interest
in a deposited PIERS. Such representation and warranty shall survive the
deposit of the PIERS and the issuance of Receipts evidencing the Depositary
Shares.
-15-
<PAGE>
ARTICLE IV
PIERS; NOTICES
SECTION 4.1 Cash Distributions. Whenever the Depositary shall
------------------
receive any cash dividend or other cash distribution on the deposited PIERS,
including any cash received upon redemption of any PIERS pursuant to Section
2.3, the Depositary shall, subject to Section 3.2, distribute to record holders
of Receipts on the record date fixed pursuant to Section 4.4 such amounts of
such sum as are, as nearly as practicable, in proportion to the respective
numbers of Depositary Shares evidenced by the Receipts held by such holders;
provided, however, that (i) in case the Company or the Depositary shall be
required to and shall withhold from any cash dividend or other cash distribution
in respect of the PIERS represented by the Receipts held by any holder an amount
on account of taxes, or as otherwise required by law, regulation or court order,
the amount made available for distribution or distributed in respect of
Depositary Shares represented by such Receipts subject to such withholding shall
be reduced accordingly and (ii) no cash dividends will be paid in respect of any
Depositary Share to the extent that it represents any PIERS converted into
Excess PIERS. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any holder of Receipts a fraction of one
cent, and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated as
part of the next sum received by the Depositary for distribution to record
holders of Receipts then outstanding.
SECTION 4.2 Distributions Other Than Cash. Whenever the Depositary
-------------------------------
shall receive any distribution other than cash on the deposited PIERS, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such amounts of the
securities or property received by it as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders, in any manner, that the Depositary and the
Company may deem equitable and practicable for accomplishing such distribution,
except that no distribution will be made in respect of any Depositary Share to
the extent that it represents any PIERS converted into Excess PIERS. If, in the
opinion of the Depositary after consultation with the Company, such distribution
cannot be made proportionately among such record holders or, if for any other
reason (including any requirement that the Company or the Depositary withhold an
amount on account of taxes or as otherwise required by law, regulation or court
order), the Depositary deems, after consultation with the Company, such
distribution not to be feasible, the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the purpose
of effecting such distribution, including the sale (at public or private sale)
of the securities or property thus received or any part thereof, at such place
or places and upon such terms as it may deem proper. The net proceeds of any
such sale shall, subject to Section 3.2, be distributed or
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<PAGE>
made available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.1 in the case of a distribution
received in cash.
SECTION 4.3 Subscription Rights, Preferences or Privileges. If the
----------------------------------------------
Company shall at any time offer or cause to be offered to the persons in whose
names deposited PIERS are registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Company shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (a) if at the time
of issue or offer of any such rights, preferences or privileges the Company
determines upon advice of its legal counsel that it is not lawful or feasible to
make such rights, preferences or privileges available to the holders of Receipts
(by the issue of warrants or otherwise) or (b) if and to the extent instructed
by holders of Receipts who do not desire to exercise such rights, preferences or
privileges, the Depositary shall then, if so instructed to the Company, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Section 3.1 and Section 3.2,
be distributed by the Depositary to the record holders of Receipts entitled
thereto as provided by Section 4.1 in the case of a distribution received in
cash.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees to use its best efforts to take such action or
obtain such authorization, consent or permit sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges.
SECTION 4.4 Notice of Dividends; Fixing of Record Date for Holders of
---------------------------------------------------------
Receipts. Whenever any cash dividend or other cash distribution shall become
- --------
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
deposited PIERS, or whenever the Depositary shall receive notice of (i) any
meeting at which holders of such PIERS are entitled to vote or of which holders
of such PIERS are entitled to notice or (ii) any election on the part of the
Company to redeem any such PIERS, the Depositary shall in each such instance fix
a record date (which shall be the same date as the record date fixed by the
Company with respect to the PIERS) for the determination of the holders of
Receipts who shall be entitled to receive such dividend, distribution, rights,
preferences or privileges or the net proceeds of the sale thereof, to give
instructions for the exercise of voting rights at any such meeting or to receive
notice of such meeting or whose Depositary Shares are to be so redeemed.
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<PAGE>
SECTION 4.5 Voting Rights. Upon receipt of notice of any meeting at
-------------
which the holders of deposited PIERS are entitled to vote, the Depositary shall,
as soon as practicable thereafter, mail to the record holders of Receipts a
notice, which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.4 will be entitled, subject to any applicable provision of
law, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of PIERS represented by their respective Depositary
Shares and (iii) a brief statement as to the manner in which such instructions
may be given. Upon the written request of a holder of a Receipt on such record
date, the Depositary shall vote or cause to be voted the amount of PIERS
represented by the Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. To the extent such
instructions request the voting of a fractional interest of a share of deposited
PIERS, the Depositary shall aggregate such interest with all other fractional
interests resulting from requests with the same voting instructions and shall
vote the number of whole votes resulting from such aggregation in accordance
with the instructions received in such requests. The Company hereby agrees to
take all reasonable action that may be deemed necessary by the Depositary in
order to enable the Depositary to vote such PIERS (or portion thereof) or cause
such PIERS (or portion thereof) to be voted. In the absence of specific
instructions from the holder of a Receipt, the Depositary will abstain from
voting (but, at its discretion, not from appearing at any meeting with respect
to such PIERS unless directed to the contrary by the holders of all the
Receipts) to the extent of the PIERS (or portion thereof) represented by the
Depositary Shares evidenced by such Receipt.
SECTION 4.6 Changes Affecting PIERS and Reclassifications,
----------------------------------------------
Recapitalization, etc. Upon any change in par or stated value, split-up,
- ----------------------
combination or any other reclassification of PIERS, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party or sale of all or substantially
all of the Company's assets, the Depositary shall, upon the instructions of the
Company, (i) make such adjustments in (a) the fraction of an interest
represented by one Depositary Share in one PIERS, (b) the ratio of the
redemption price per Depositary Share to the redemption price of a PIERS and (c)
the ratio of the conversion price per Depositary Share to the conversion price
of a PIERS, in each case as may be required by or as is consistent with the
provisions of the Certificate of Designations to fully reflect the effects of
such change in par or stated value, split-up, combination or other
reclassification of PIERS, or of such recapitalization, reorganization, merger,
consolidation or sale and (ii) treat any shares or other securities or property
(including cash) that shall be received by the Depositary in exchange for or
upon conversion of or in respect of the PIERS as new deposited property under
this Deposit Agreement, and Receipts then outstanding shall thenceforth
represent the proportionate interests of holders thereof or the new deposited
property so received in exchange for or upon conversion or in respect of such
PIERS. In any such case the Depositary may, in its discretion, with the
approval of the Company, execute
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<PAGE>
and deliver additional Receipts, or may call for the surrender of all
outstanding Receipts to be exchanged for new Receipts specifically describing
such new deposited property. Anything to the contrary herein notwithstanding,
holders of Receipts shall have the right from and after the effective date of
any such change in par or stated value, split-up, combination or other
reclassification of the PIERS or any such recapitalization, reorganization,
merger, amalgamation or consolidation or sale of substantially all the assets of
the Company to surrender such Receipts to the Depositary with instructions to
convert, exchange or surrender the PIERS represented thereby only into or for,
as the case may be, the kind and amount of shares and other securities and
property and cash into which the deposited PIERS evidenced by such Receipts
might have been converted or for which such PIERS might have been exchanged or
surrendered immediately prior to the effective date of such transaction.
SECTION 4.7 Inspection of Reports. The Depositary shall make
---------------------
available for inspection by holders of Receipts at the Corporate Office and at
such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that are
both received by the Depositary as the holder of deposited PIERS and made
generally available to the holders of the PIERS. In addition, the Depositary
shall transmit certain notices and reports to the holders of Receipts as
provided in Section 5.05.
SECTION 4.8 Lists of Receipt Holders. Promptly upon request from
------------------------
time to time by the Company, the Depositary shall furnish to the Company a list,
as of a recent date specified by the Company, of the names, addresses and
holdings of Depositary Shares of all persons in whose names Receipts are
registered on the books of the Depositary.
SECTION 4.9 Tax and Regulatory Compliance. The Depositary shall be
-----------------------------
responsible for (i) preparation and mailing of form 1099s for all open and
closed accounts, (ii) foreign tax withholding, (iii) withholding 31% (or any
withholding as may be required at the then applicable rate) of dividends from
eligible holders of Receipts if directed to do so by the Company or required to
do so by applicable law, (iv) mailing W-9 forms to new holders of Receipts
without a certified taxpayer identification number, (v) processing certified W-9
forms, (vi) preparation and filing of state information returns and (vii)
escheatment services.
SECTION 4.10 Withholding. Notwithstanding any other provision of
-----------
this Deposit Agreement, in the event that the Depositary determines that any
distribution in property is subject to any tax that the Depositary is obligated
by law to withhold, the Depositary may dispose of all or a portion of such
property in such amounts and in such manner as the Depositary deems necessary
and practicable to pay such taxes, by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the
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<PAGE>
balance of any such property after deduction of such taxes to the holders of
Receipts entitled thereto in proportion to the number of Depositary Shares held
by them respectively.
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies and Transfer Books by
------------------------------------------------------
the Depositary and the Registrar. The Depositary shall maintain at the
- --------------------------------
Corporate Office facilities for the execution and delivery, transfer, surrender
and exchange, split-up, combination and redemption of Receipts and deposit and
withdrawal of PIERS and at the offices of the Depositary's Agents, if any,
facilities for the delivery, transfer, surrender and exchange, split-up,
combination and redemption of Receipts and deposit and withdrawal of PIERS, all
in accordance with the provisions of this Deposit Agreement.
If the Receipts or the Depositary Shares evidenced thereby or the
PIERS represented by such Depositary Shares shall be listed in the New York
Stock Exchange, Inc. or any other stock exchange, the Depositary may, with the
approval of the Company, appoint a Registrar (acceptable to the Company) for
registration of such Receipts or Depositary Shares in accordance with the
requirements of such Exchange. Such Registrar (which may be the Depositary if
so permitted by the requirements of such Exchange) may be removed and a
substitute registrar appointed by the Depositary upon the request or with the
approval of the Company. If the Receipts, such Depositary Shares or such PIERS
are listed on one or more other stock exchanges, the Depositary will, at the
request and expense of the Company, arrange such facilities for the delivery,
transfer, surrender, redemption and exchange of such Receipts, such Depositary
Shares or such PIERS as may be required by law or applicable stock exchange
regulations.
The Registrar shall maintain books at the Depositary's Office for the
registration and registration of transfer of Receipts or at such other place as
shall be approved by the Company and of which the holders of Receipts shall have
reasonable notice, which books at all reasonable times during normal business
hours shall be open for inspection by the record holders of Receipts; provided,
--------
that any such holder requesting to exercise such right shall certify in writing
to the Registrar that such inspection shall be for a proper purpose reasonably
related to such Person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may cause the Registrar to close the books with respect
to the Receipts, at any time or from time to time, when the register of
stockholders of the Company is closed with respect to the PIERS or when such
action is deemed necessary or advisable by the Depositary, any Depositary's
Agent or the Company because of any requirement of law
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<PAGE>
or of any government, governmental body or commission, stock exchange or any
applicable self-regulatory body, including, without limitation, the NASD.
SECTION 5.2 Prevention or Delay in Performance by the Depositary, the
---------------------------------------------------------
Depositary's Agents, the Registrar or the Company. Neither the Depositary nor
- -------------------------------------------------
any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or by reason of any provision, present or
future, of the Certificate of Incorporation or the Certificate of Designations
or by reason of any act of God or war or other circumstance beyond the control
of the relevant party, the Depositary, any Depositary's Agent, the Registrar or
the Company shall be prevented or forbidden from doing or performing any act or
thing that the terms of this Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent, any Registrar or
the Company incur any liability or be subject to any obligation (i) by reason of
any nonperformance or delay, caused as aforesaid, in the performance of any act
or thing that the terms of this Deposit Agreement provide shall or may be done
or performed or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement, except in the event of the
gross negligence or willful misconduct of the party charged with such exercise
or failure to exercise.
SECTION 5.3 Obligations of the Depositary, the Depositary's Agents,
-------------------------------------------------------
the Registrar and the Company. Neither the Depositary nor any Depositary's
- -----------------------------
Agent nor any Registrar nor the Company shall be under any obligation to appear
in, prosecute or defend any action, suit or other proceeding with respect to the
deposited PIERS, Depositary Shares or Receipts that in its opinion may involve
it in expense or liability unless indemnity satisfactory to such party against
all expense and liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be under any liability under this Deposit
Agreement to holders of Receipts other than to use its best judgment and good
faith in the performance of such duties as are specifically set forth in this
Deposit Agreement. Neither the Depositary nor any Depositary's Agent nor any
Registrar nor the Company shall be liable to any party hereto for any action or
any failure to act by it with respect to this Deposit Agreement in reliance upon
the written advice of legal counsel or accountants, or information provided by
any person presenting PIERS for deposit, any holder of a Receipt or any other
person believed by it in good faith to be competent to give such information.
The Depositary, any Depositary's Agent, any Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
-21-
<PAGE>
In the event the Depositary shall receive conflicting claims, requests
or instructions from any holders of Receipts, on the one hand, and the Company,
on the other hand, the Depositary shall be entitled to act on such claims,
requests or instructions received from the Company, and shall be entitled to the
full indemnification set forth in Section 5.6 hereof in connection with any
action so taken.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the deposited PIERS or for the manner or effect
of any such vote made, as long as any such action or non-action is in good faith
and does not result from negligence or willful misconduct of the Depositary.
The Depositary undertakes, and shall cause any Registrar to undertake, to
perform such duties and only such duties as are specifically set forth in this
Deposit Agreement using its best efforts and in good faith. The parties hereto
acknowledge that no implied covenants or obligations shall be read into this
Deposit Agreement against the Depositary or any Registrar or against the Company
with respect to the Depositary and any Registrar. The Depositary will indemnify
the Company against any liability that may arise out of acts performed or
omitted by the Depositary or any Depositary's Agent due to its or their
negligence or bad faith.
The Depositary, its parent, affiliates, or subsidiaries, any
Depositary's Agent, the Company (to the extent permitted by law) and any
Registrar may own, buy, sell or deal in any class of securities of the Company
and its affiliates and in Receipts or Depositary Shares. The Depositary, its
parent, affiliates or subsidiaries, and any Depositary's Agent may become
pecuniarily interested in any transaction in which the Company or its affiliates
may be interested or contract with or lend money to the Company or its
affiliates or otherwise act as fully or as freely as if it were not the
Depositary or the Depositary's Agent hereunder. The Depositary may also act as
transfer agent or registrar of any of the securities of the Company and its
affiliates or act in any other capacity for the Company or its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of the securities under the federal securities
laws or applicable state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the deposited PIERS; provided, however,
that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement in
its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity of the registration statement pursuant to
which the Depositary Shares are registered under the Securities Act, the
deposited PIERS, the Depositary Shares, the Receipts (except its
countersignature thereon) or any instruments referred to therein or herein, or
as to the correctness of any statement made therein or herein; provided,
however, that the Depositary
-22-
<PAGE>
is responsible for its representations in this Deposit Agreement and for the
validity of any action taken or required to be taken by the Depositary in
connection with this Deposit Agreement.
The Company agrees that it will register the deposited PIERS and the
Depositary Shares in accordance with the applicable securities laws.
SECTION 5.4. Resignation and Removal of the Depositary; Appointment
------------------------------------------------------
of Successor Depositary. The Depositary may at any time resign as Depositary
- -----------------------
hereunder by written notice of its election to do so delivered to the Company,
such resignation to take effect upon the appointment of a successor depositary
and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If a successor depositary shall not have been appointed in 60
days, the resigning Depositary may petition a court of competent jurisdiction to
appoint a successor depositary. Every successor depositary shall execute and
deliver to its predecessor and to the Company an instrument in writing accepting
its appointment hereunder and agreeing to become a party to this Deposit
Agreement, and thereupon such successor depositary, without any further act or
deed, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be the Depositary
under this Deposit Agreement, and such predecessor, upon payment of all sums due
it and on the written request of the Company, shall promptly execute and deliver
an instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all right, title
and interest in the deposited PIERS and any moneys or property held hereunder to
such successor and shall deliver to such successor a list of the record holders
of all outstanding Receipts. Any successor depositary shall promptly mail
notice of its appointment to the record holders of Receipts.
Any corporation or other entity into or with which the Depositary may
be merged, consolidated or converted, or to which the Depositary may sell all or
substantially all its assets, shall be the successor of such Depositary without
the execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
-23-
<PAGE>
SECTION 5.5 Notices, Reports and Documents. The Company agrees that
------------------------------
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
address recorded in the Depositary's books, copies of all notices and reports
(including financial statements) required by law, by the rules of any national
securities exchange upon which the PIERS, the Depositary Shares or the Receipts
are included for quotation or listed or by the Certificate of Incorporation and
the Certificate of Designations to be furnished by the Company to holders of the
deposited PIERS and, if requested by the holder of any Receipt, a copy of this
Deposit Agreement, the form of Receipt, the Certificate of Designations and the
form of PIERS. Such transmission will be at the Company's expense and the
Company will provide the Depositary with such number of copies of such documents
as the Depositary may reasonably request. In addition, the Depositary will
transmit to the record holders of Receipts at the Company's expense such other
documents as may be requested by the Company.
SECTION 5.6 Indemnification by the Company. The Company agrees to
------------------------------
indemnify the Depositary, and Depositary's Agent and any Registrar against, and
hold each of them harmless from, any liability, costs and expenses (including
reasonable attorneys' fees) that may arise out of, or in connection with, its
acting as Depositary, Depositary's Agent or Registrar, respectively, under this
Deposit Agreement and the Receipts, except for any liability, costs or expenses
arising out of the willful misconduct, gross negligence, negligence (in the case
of any action or inaction with respect to the voting of the deposited PIERS) or
bad faith on the part of any such person or persons. The obligations of the
Company set forth in this Section 5.6 shall survive any succession of any
Depositary, Registrar or Depositary's Agent or termination of this Deposit
Agreement. This indemnification does not extend in favor of holders of
Receipts.
SECTION 5.7 Fees, Charges and Expenses. No charges and expenses of
--------------------------
the Depositary or any Depositary's Agent hereunder shall be payable by any
person, except as provided in this Section 5.7. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of this Deposit Agreement. The Company shall also pay all fees and
expenses of the Depositary in connection with the initial deposit of the PIERS
and the initial issuance of the Depositary Shares evidenced by the Receipts, any
redemption of the PIERS at the option of the Company and the issuance of Common
Stock upon the surrender of Receipts upon redemption or for conversion. All
other transfer and other taxes and governmental charges shall be at the expense
of the holders of Depositary Shares. If a holder of Receipts requests the
Depositary to perform duties not required under this Deposit Agreement, the
Depositary shall notify the holder of the cost of the performance of such duties
prior to the holder of the cost of the performance of such duties prior to the
performance thereof. Such holder will be liable for the charges and expenses
related to such performance. All other fees and expenses of the Depositary and
any Depositary's Agent hereunder and of any Registrar (including, in each case,
reasonable fees
-24-
<PAGE>
and expenses of counsel) incident to the performance of their respective
obligations hereunder will be payable by the Company only after prior
consultation and agreement between the Depositary and the Company and consent by
the Company to the incurrence of such expenses. The Depositary shall present
its statement for fees and expenses to the Company every month or at such other
intervals as the Company and the Depositary may agree.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment. The form of the Receipts and any provision of
---------
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable; provided, however, that no such amendment (other
-------- -------
than any change in the fees of any Depositary, Registrar or Transfer Agent) that
shall materially and adversely alter the rights of the holders of Receipts shall
be effective unless such amendment shall have been approved by the holders of at
least a majority of the Depositary Shares then outstanding. In no event shall
any amendment impair the right, subject to the provisions of Section 2.6 and
Section 2.7 and Article III, of any holder of any Depositary Shares to surrender
the Receipt evidencing such Depositary Shares to the Depositary with
instructions to cause the conversion of such Receipt into Common Stock or to
deliver to the holder the deposited PIERS and all money and other property, if
any, represented thereby, except in order to comply with mandatory provisions of
applicable law or the rules and regulations of any governmental body, agency or
commission, the NASD or any applicable stock exchange. Every holder of an
outstanding Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby.
SECTION 6.2 Termination. This Deposit Agreement may be terminated
-----------
by the Company upon not less than 30 days' prior written notice to the
Depositary if (i) such termination is necessary to preserve the Company's status
as a real estate investment trust under the Internal Revenue Code of 1986, as
amended (or any successor provisions) or (ii) the holders of a majority of the
outstanding PIERS consent to such termination, whereupon the Depositary shall
deliver or make available to each holder of a Receipt, upon surrender of the
Receipt held by such holder, such number of whole or fractional shares of
deposited PIERS as are represented by the Depositary Shares evidenced by such
Depositary Receipt, together with any other property held by the Depositary in
respect of such Receipt. In the event that this Deposit Agreement is terminated
pursuant to clause (i) of the immediately preceding sentence, then if the
Depositary Shares are listed on a national securities exchange the Company
hereby agrees to use its best efforts to list the PIERS issued upon surrender of
the Receipt evidencing the Depositary Shares represented thereby on a national
securities
-25-
<PAGE>
exchange. This Deposit Agreement will automatically terminate if (i) all
outstanding Depositary Shares shall have been redeemed pursuant to Section 2.3,
(ii) each PIERS shall have been converted into shares of Common Stock or (iii)
there shall have been made a final distribution in respect of the deposited
PIERS in connection with any liquidation, dissolution or winding-up of the
Company and such distribution shall have been distributed to the holders of
Receipts entitled thereto.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Section 5.6 and Section 5.7.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed in
------------
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Deposit Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Corporate Office and
the respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.2 Exclusive Benefits of Parties. This Deposit Agreement is
-----------------------------
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.3 Invalidity of Provisions. If any one or more of the
------------------------
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 Notices. Any and all notices to be given to the Company
-------
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to the Company at:
-26-
<PAGE>
GENERAL GROWTH PROPERTIES, INC.
110 North Wacker
Chicago, Illinois 60606
Attention: Chief Financial Officer
General Counsel
Telephone No.: (312) 960-5000
or at any other address of which the Company shall have notified the Depositary
in writing.
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.
Any notices given to any record holder of a Receipt hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary or, if such holder
shall have filed with the Depositary in a timely manner a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a telegram
or telex or telecopier message) is deposited, postage prepared, in a post office
letter box. The Depositary or the Company may, however, act upon any telegram
or telex or telecopier message received by it from the other or from any holder
of a Receipt, notwithstanding that such telegram or telex or telecopier message
shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.5 Depositary's Agents. The Depositary may from time to
-------------------
time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Company of any such action.
SECTION 7.6 Holders of Receipts Are Parties. The holders of Receipts
-------------------------------
from time to time shall be deemed to be parties to this Deposit Agreement and
shall be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.
SECTION 7.7 Governing Law. This Deposit Agreement and the Receipts
-------------
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed
-27-
<PAGE>
by, and construed in accordance with, the law of the State of New York
applicable to agreements made and to be performed in said State.
SECTION 7.8 Inspection of Deposit Agreement and Certificate of
--------------------------------------------------
Designations. Copies of this Deposit Agreement and the Certificate of
- ------------
Designations shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Corporate Office and
the respective offices of the Depositary's Agents, if any, by any holder of any
Receipt.
SECTION 7.9 Headings. The headings of articles and sections in this
--------
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
---------
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
-28-
<PAGE>
IN WITNESS WHEREOF, General Growth Properties, Inc. and Norwest Bank
Minnesota, N.A. have duly executed this Deposit Agreement as of the day and year
first above set forth and all holders of Receipts shall become parties hereto by
and upon acceptance by them of delivery of Receipts issued in accordance with
the terms hereof.
GENERAL GROWTH PROPERTIES, INC.
By:
-----------------------------------
Attest: Authorized Officer
NORWEST BANK MINNESOTA, N.A.
By:
___________________________________
Attest: Authorized Signatory
-29-
<PAGE>
Exhibit A
The Depositary Shares evidenced by this Depositary Receipt are subject to
restrictions on ownership and transfer for the purpose of the Company's
maintenance of its status as a real estate investment trust ("REIT") under the
----
Internal Revenue Code of 1986, as amended (the "Code"). No person may
----
Beneficially Own or Constructively Own (as such capitalized terms are defined in
the Certificate of Incorporation) Capital Stock (including Depositary Shares
representing shares of 7.25% Preferred Income Equity Redeemable Stock, Series A,
a series of preferred stock, par value $100 per share ("Series A Preferred
------------------
Stock") of the Company) in excess of 7.5% of the outstanding Capital Stock of
the Company with certain further restrictions and exceptions set forth in the
Company's Certificate of Incorporation, the Certificate of Designations for the
Series A Preferred Stock and the Deposit Agreement. Any Person who attempts to
own, Beneficially Own or Constructively Own Depositary Shares representing
Series A Preferred Stock in excess of the above limitations must immediately
notify the Company. All capitalized terms in this legend have the meanings
defined in the Company's Certificate of Designations for the Series A Preferred
Stock. Transfers in violation of the restrictions described above shall be void
ab initio.
- -- ------
Where shares of Series A Preferred Stock deposited under the Deposit
Agreement become or have become Excess PIERS (as defined in the Deposit
Agreement), the Depositary Shares related to such share of Series A Preferred
Stock (which shall be those Depositary Shares the direct, indirect or
constructive ownership of which by a Prohibited Owner (as defined in the
Certificate of Incorporation) caused such shares of Series A Preferred Stock to
be treated as Excess PIERS; provided that the number of Depositary Shares so
related and owned directly, indirectly or constructively by such Prohibited
Owner shall be rounded up to the nearest 40 Depositary Shares), shall be
entitled to receive dividends and exercise voting rights only to the extent that
a Prohibited Owner with respect to the shares of Series A Preferred Stock
associated with such Depositary Shares would be entitled to received dividends
and exercise voting rights under the Certificate of Incorporation.
Any Prohibited Owner of Depositary Shares that represent Excess PIERS shall
repay to the Trustee (as defined in the Certificate of Incorporation) the amount
of any dividends or distributions received by it that (a) are attributable to
such Excess PIERS and (b) have a record date on or after the date that such
Series A Preferred Stock became Excess PIERS. In addition, any vote by a
Prohibited Owner as a holder of Depositary Shares prior to the discovery by the
Company that the Depositary Shares represent Excess PIERS shall be rescinded and
shall be void ab initio with respect to such Excess PIERS.
Each holder of Receipts shall, upon demand, be required to disclose to the
Company such information with respect to the direct, indirect and constructive
ownership of Depositary Shares and Series A Preferred Stock as the Board of
Directors deems necessary to comply with the provisions of the Code applicable
to a REIT or to comply with the requirements of any taxing authority or
governmental agency. The Depositary has agreed in the Deposit Agreement to
provide the Company with a list of the record holders of Depositary Shares and
such other information concerning the direct, indirect and constructive
ownership of Depositary Shares as the Company may reasonably request.
In addition, if the restrictions on ownership are violated, the shares of
Series A Preferred Stock represented by the Depositary Shares evidenced by this
Depositary Receipt will be automatically exchanged for Excess PIERS which will
be held in trust by the Company. As specified in the Certificate of
Designations for the Series A Preferred Stock, the Company has an option to
acquire Excess PIERS under certain circumstances and an obligation to acquire
Excess PIERS in certain other circumstances. The Company will furnish to the
holder hereof upon request and without
-30-
<PAGE>
charge a complete written statement of the terms and conditions of the Series A
Preferred Stock and the Excess PIERS. Requests for such statement may be
directed to the Secretary of the Company.
-31-
<PAGE>
[FORM OF FACE OF RECEIPT]
DR.
CERTIFICATE FOR NOT MORE THAN _______ DEPOSITARY SHARES
CUSIP No. 370021 206
RECEIPT FOR DEPOSITARY SHARES,
EACH REPRESENTING 1/40 OF A SHARE OF 7.25% PREFERRED INCOME EQUITY
REDEEMABLE STOCK, SERIES A OF
GENERAL GROWTH PROPERTIES, INC.
(a Delaware corporation)
Norwest Bank Minnesota, N.A., as Depositary (the "Depositary"), hereby
----------
certifies that _____________________ is the registered owner of __________
DEPOSITARY SHARES ("Depositary Shares"), each Depositary Share representing 1/40
-----------------
of share of 7.25% Preferred Income Equity Redeemable Stock, Series A, par value
$100 per share (the "Series A Preferred Stock"), of General Growth Properties,
------------------------
Inc., a Delaware corporation (the "Company"), on deposit with the Depositary,
-------
subject to the terms and entitled to the benefits of the Deposit Agreement dated
as of June __, 1998 (the "Deposit Agreement"), among the Company, the Depositary
-----------------
and the holders from time to time of Receipts for Depositary Shares. By
accepting this Receipt, the holder hereof becomes a party to and agrees to be
bound by all the terms and conditions of the Deposit Agreement. This Receipt
shall not be valid or obligatory for any purpose or entitled to any benefits
under the Deposit Agreement unless it shall have been executed by the Depositary
by the manual or facsimile signature of a duly authorized officer or, if a
Registrar in respect of the Receipts (other than the Depositary) shall have been
appointed, by the manual signature of a duly authorized officer of such
Registrar.
Dated:
[Countersigned:
__________________________________
By: ___________________] By:
______________________________
Authorized Signatory
-32-
<PAGE>
[FORM OF REVERSE RECEIPT]
GENERAL GROWTH PROPERTIES, INC.
GENERAL GROWTH PROPERTIES, INC. WILL FURNISH WITHOUT CHARGE TO EACH
REGISTERED HOLDER OF RECEIPTS WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT
AND A COPY OF THE CERTIFICATE OF DESIGNATIONS WITH RESPECT TO THE 7.25%
PREFERRED INCOME EQUITY REDEEMABLE STOCK, SERIES A OF GENERAL GROWTH
PROPERTIES, INC. ANY SUCH REQUEST SHALL BE ADDRESSED TO THE DEPOSITARY NAMED ON
THE FACE OF THIS RECEIPT.
------------------
The following abbreviations when used in the instructions on the face
of this receipt shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<S> <C> <C>
TEN COM- As Tenant In Common UNIF GIFT MIN ACT - Custodian
--------------------------
(Cust) (Minor)
TEN ENT- as tenants by the entireties Under Uniform Gifts to Minors Act
JT TEN as joint tenants with right of
survivorship and not as tenants -------------------------------------
in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
For value received, ____________________________ hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
________________________________ Depositary Shares represented by the
within Receipt, and do hereby irrevocably constitute and appoint _______________
Attorney to transfer the said Depositary Shares on the books of the within name
Depositary with full power of substitution in the premises.
Dated: __________________________ __________________________________________
NOTICE: The signature to the assignment
must correspond with the name as
written upon the face of this
Receipt in every particular,
without alteration or enlargement
or any change whatever.
-33-
<PAGE>
Exhibit 5.1
June 4, 1998
General Growth Properties, Inc.,
110 North Wacker,
Chicago, Illinois 60606.
Dear Sirs:
In connection with the issuance by General Growth Properties, Inc., a
Delaware corporation (the "Company"), of up to 13,800,000 depositary shares (the
"Depositary Shares"), each representing 1/40 of a share of 7.25% Preferred
Income Equity Redeemable Stock, Series A, par value $100 per share (the "Series
A Preferred Stock"), and the shares of Common Stock, par value $.10 per share,
of the Company initially issuable upon conversion or redemption of the
Depositary Shares (the "Common Stock"), we, as your special counsel, have
examined such corporate records, certificates and other documents, and such
questions of law as we have considered necessary or appropriate for the purposes
of this opinion. Capitalized terms used herein and not otherwise defined have
the meanings assigned to those terms in the Company's
<PAGE>
-2-
General Growth Properties, Inc.
June 4, 1998
Prospectus Supplement. Upon the basis of such examination, we advise you that,
in our opinion, when the Prospectus Supplement relating to the Company's
Registration Statement on Form S-3 (File No. 333-37247) has been filed with the
Securities and Exchange Commission, a certificate of designations with respect
to the Series A Preferred Stock has been duly filed with the Secretary of State
of the State of Delaware, the Deposit Agreement among the Company, Norwest Bank
Minnesota, N.A. and the holders from time to time of the Depositary Receipts
issued thereunder (the "Deposit Agreement") has been duly executed and delivered
and the terms of the Series A Preferred Stock and the Depositary Shares and of
their issue and sale have been duly established in conformity with the Company's
certificate of incorporation and certificate of designations and the Deposit
Agreement,
(1) The Series A Preferred Stock and the Depositary Shares will be duly
authorized and, upon payment and delivery, duly issued and sold as
contemplated by the Deposit Agreement and the Underwriting Agreement (the
Series A Preferred Stock having been deposited with the Depositary pursuant
to the Deposit Agreement), the Series A Preferred Stock and the Depositary
Shares will be validly issued, fully paid and nonassessable;
<PAGE>
-3-
General Growth Properties, Inc.
June 4, 1998
(2) The Series A Preferred Stock will be convertible into and redeemable
for shares of Common Stock, and the shares of Common Stock initially
issuable upon conversion or redemption of the Series A Preferred Stock will
be duly authorized and reserved for issuance upon such conversion or
redemption, and when issued upon such conversion or redemption, the Common
Stock will be validly issued, fully paid and nonassessable; and
(3) the persons in whose names the Depositary Receipts are registered will
be entitled to the rights specified therein and in the Deposit Agreement.
The foregoing opinion is limited to the Federal laws of the United States
and the General Corporation Law of the State of Delaware, and we are expressing
no opinion as to the effect of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Depositary Shares, PIERS and Common Stock" in the Prospectus
<PAGE>
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General Growth Properties, Inc.
June 4, 1998
Supplement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE>
EXHIBIT 8.1
June 4, 1998
General Growth Properties, Inc.
110 North Wacker
Chicago, Illinois 60606
Ladies and Gentlemen:
We are rendering the opinion contained herein with respect to General
Growth Properties, Inc., a Delaware corporation (the "Company"). In so acting
and in rendering the opinion expressed below, we have examined and relied upon
the originals, or copies certified or otherwise identified to our satisfaction
of such records, documents, agreements and instruments as we have deemed
necessary to the rendering of these opinions including, without limitation, the
representations (the "Representations") made by the Company and by certain
entities all in which the Company holds direct or indirect interests in, dated
June 4, 1998.
Based upon and subject to the Representations and the assumptions noted
below, we are of the opinion that as of the date hereof, (i) each partnership in
which the Company owns an interest in excess of 10 percent is properly treated
(x) as a partnership for federal income tax purposes and (y) not as a "publicly
traded partnership" as defined in the Internal Revenue Code of 1986, as amended
(the "Code"); (ii) the statements set forth in the Prospectus Supplement under
the caption "Certain Federal Income Tax Considerations" insofar as they purport
to describe the provisions of federal tax laws, legal conclusions with respect
thereto and documents referred to therein, are accurate and complete in all
material respects; and (iii)
<PAGE>
-2-
General Growth Properties, Inc.
June 4, 1998
commencing with the Company's taxable year ending December 31, 1993, the Company
has been organized in conformity with the requirements for qualification as a
REIT, and its historic and proposed methods of operation have enabled and will
enable it to meet the requirements for qualification and taxation as a REIT
under the Code and the right, in certain circumstances, of holders of interests
in the Operating Partnership to exchange those interests for shares of Common
Stock has not caused and will not cause the Company to fail the diversity test
of Section 856(a)(6) of the Code.
The opinion expressed herein is subject to the qualification and
assumption that all documents submitted to us as originals and the originals of
all documents submitted to us as certified or photostatic copies are authentic,
all documents submitted to us as certified or photostatic copies conform to the
original documents and all signatures are genuine.
The opinion herein is given as of the date hereof, is based upon the Code,
regulations of the Department of the Treasury (the "Treasury Regulations"),
published rulings and procedures of the Internal Revenue Service and judicial
decisions, all as in effect on the date hereof. The opinion is limited to the
matters expressly set forth herein and no opinions are to be implied or may be
inferred beyond the matters expressly so stated. We disclaim any obligation to
update this letter so stated. We disclaim any obligation to update this letter
for events, whether legal or factual, occurring after the date hereof.
We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Company's Current Report on Form 8-K dated June 4, 1998 and to the reference to
our firm under the captions "Certain Federal Income Tax Considerations" and
"Validity of Depositary Shares, PIERS and Common Stock" in the Prospectus
Supplement.
This opinion may not, without our prior written consent, be used or relied
upon by any other person other than the addressee.
<PAGE>
-3-
General Growth Properties, Inc.
June 4, 1998
We note that Marshall Eisenberg, a partner of our firm, is the Secretary
of the Company and that certain partners of, and lawyers associated with, our
firm and members of their families, currently own shares of the Company's common
stock. No knowledge is to be imputed to this firm by virtue of Mr. Eisenberg's
position as Secretary of the Company.
Very truly yours,
/s/ NEAL, GERBER & EISENBERG
