<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 333-22731
WESTFIELD AMERICA, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 43-0758627
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11601 WILSHIRE BOULEVARD
12TH FLOOR 90025
LOS ANGELES, CALIFORNIA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 478-4456
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of August 13, 1997, 73,329,535 shares of common stock, par value $.01 per
share, were outstanding.
<PAGE>
WESTFIELD AMERICA, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1: Financial Statements
Consolidated Balance Sheets as of June 30, 1997
(unaudited) and December 31, 1996 3
Consolidated Statements of Income (unaudited) for the
three months ended June 30, 1997 and 1996 and for the
six months ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows (unaudited) for
the six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 17
PART II - OTHER INFORMATION
Items 1 through 6 26
Signatures 28
2
<PAGE>
WESTFIELD AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
June 30, December 31,
1997 1996
----------- ------------
(unaudited)
INVESTMENT IN REAL ESTATE:
Land $ 262,484 $ 196,810
Buildings, improvements and equipment 1,238,626 975,224
Less accumulated depreciation (189,016) (110,260)
----------- -----------
Net property and equipment 1,312,094 1,061,774
Construction in progress 50,049 49,821
Investments in unconsolidated real estate
partnerships 62,415 106,488
Participating loan to an affiliate 145,000 -
Direct financing leases receivable 91,360 92,351
----------- -----------
Net investment in real estate 1,660,918 1,310,434
CASH AND CASH EQUIVALENTS 43,468 6,729
ACCOUNTS AND NOTES RECEIVABLE (net of allowance
of $5,552 and $6,441 in 1997 and 1996,
respectively) 25,219 19,716
DEFERRED EXPENSES AND OTHER ASSETS, NET 25,684 7,691
----------- -----------
Total assets $1,755,289 $1,344,570
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Notes payable and line of credit $ 881,911 $ 770,625
Accounts payable and accrued expenses 33,787 33,380
Distribution payable 38,920 21,981
Minority interests 24,179 54
----------- -----------
Total liabilities 978,797 826,040
----------- -----------
SHAREHOLDERS' EQUITY (NOTE 7):
Common stock 733 529
Preferred stock 121,000 94,000
Additional paid-in capital 654,759 424,001
----------- -----------
Total shareholders' equity 776,492 518,530
----------- -----------
Total liabilities and shareholders' equity $1,755,289 $1,344,570
----------- -----------
----------- -----------
The accompanying notes are an integral part of the consolidated
financial statements
3
<PAGE>
WESTFIELD AMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED AND IN THOUSANDS EXCEPT PER SHARE AND SHARE AMOUNTS)
Three Months Ended Six Months Ended
------------------ ------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------- -------- -------- --------
REVENUES:
Minimum rents $ 33,184 $ 21,047 $ 64,068 $ 41,924
Tenant recoveries 14,294 11,086 28,349 20,073
Percentage rents 521 145 2,507 1,717
Service fee income from
unconsolidated real estate
partnerships 144 541 264 1,016
-------- -------- -------- --------
Total revenues 48,143 32,819 95,188 64,730
-------- -------- -------- --------
EXPENSES:
Operating 12,741 11,436 27,460 20,811
Management fees 1,143 646 2,071 1,374
General and administrative 13 80 294 247
Depreciation and amortization 12,195 8,046 23,734 16,259
-------- -------- -------- --------
Total expenses 26,092 20,208 53,559 38,691
-------- -------- -------- --------
OPERATING INCOME 22,051 12,611 41,629 26,039
INTEREST EXPENSE, NET (13,222) (7,845) (26,082) (15,190)
OTHER INCOME
Equity in income of unconsolidated
real estate partnerships 830 224 2,123 957
Interest and other income 1,683 124 1,854 246
-------- -------- -------- --------
INCOME BEFORE MINORITY INTEREST 11,342 5,114 19,524 12,052
MINORITY INTEREST IN EARNINGS OF
CONSOLIDATED REAL ESTATE
PARTNERSHIPS (534) (215) (752) (445)
-------- -------- -------- --------
NET INCOME $ 10,808 $ 4,899 $ 18,772 $ 11,607
-------- -------- -------- --------
-------- -------- -------- --------
Net income allocable to preferred
shares $ 3,822 $ 1 $ 6,060 $ 2
Net income allocable to common shares 6,986 4,898 12,712 11,605
-------- -------- -------- --------
$ 10,808 $ 4,899 $ 18,772 $ 11,607
-------- -------- -------- --------
-------- -------- -------- --------
EARNINGS PER COMMON SHARE $ 0.11 $ 0.11 $ 0.22 $ 0.26
-------- -------- -------- --------
-------- -------- -------- --------
DISTRIBUTIONS DECLARED PER
COMMON SHARE $ 0.88 $ 0.35 $ 0.89 $ 0.74
-------- -------- -------- --------
-------- -------- -------- --------
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 62,121 45,284 57,551 45,196
-------- -------- -------- --------
-------- -------- -------- --------
The accompanying notes are an integral part of the consolidated
financial statements.
4
<PAGE>
WESTFIELD AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
-------------------
June 30, June 30,
1997 1996
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 18,772 $ 11,607
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 23,873 16,524
Equity in income of unconsolidated real estate
partnerships (2,123) (957)
Minority interest in earnings of consolidated real
estate partnerships 752 445
Changes in assets and liabilities:
Accounts and notes receivable (4,980) (4,705)
Deferred expenses and other assets (1,815) (1,722)
Accounts payable and accrued expenses (1,030) (215)
--------- --------
Net cash flows provided by operating activities 33,449 20,977
--------- --------
INVESTING ACTIVITIES:
Capital expenditures (213,418) (16,667)
Participating loan to an affiliate (145,000) -
Purchase Westfield Holdings Limited Options (15,184) -
Cash distributions received from unconsolidated real
estate partnerships 6,782 6,314
Notes receivable repayments 554 53
Direct financing leases receivable payments 991 893
Cash and cash equivalents of consolidated real estate
partnerships 613 2,389
Decrease in restricted cash - 100
--------- --------
Net cash flows used in investing activities (364,662) (6,918)
--------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 306,000 -
Proceeds from issuance of preferred stock 27,000 -
Initial public offering stock issuance costs (31,327) -
Cash distributions paid to preferred shareholders (4,432) (2)
Cash distributions paid to common shareholders (39,957) (33,612)
Shareholder recontribution of distributions - 1,125
Decrease in minority interests in consolidated
real estate partnerships (568) (218)
Redemption of preferred shares (50) -
Proceeds from notes payable and line of credit 321,448 46,580
Principal payments on notes payable and line of credit (210,162) (27,718)
--------- --------
Net cash flows provided by (used in) financing activities 367,952 (13,845)
--------- --------
Net increase in cash and cash equivalents 36,739 214
CASH AND CASH EQUIVALENTS, beginning of period 6,729 -
--------- --------
CASH AND CASH EQUIVALENTS, end of period $ 43,468 $ 214
--------- --------
--------- --------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 26,683 $ 12,251
--------- --------
--------- --------
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
5
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
1. INTERIM FINANCIAL STATEMENTS
The accompanying Consolidated Financial Statements of Westfield America,
Inc. ("WEA" or the "Company") are unaudited; however, they have been
prepared in accordance with generally accepted accounting principles for
interim financial information and in conjunction with the rules and
regulations of the Securities and Exchange Commission. Accordingly,
they do not include all of the disclosures required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting solely of normal
recurring matters) necessary for a fair presentation of the Consolidated
Financial Statements for these interim periods have been included. The
results for the interim period ended June 30, 1997 are not necessarily
indicative of the results to be obtained for the full fiscal year.
These unaudited Consolidated Financial Statements should be read in
conjunction with the December 31, 1996 audited financial statements and
notes thereto included in the WEA registration statement on Form S-11
filed on May 15, 1997.
Certain amounts in the 1996 Consolidated Financial Statements have
been reclassified to conform to the 1997 presentation.
2. ORGANIZATION AND CHANGES IN OWNERSHIP
WEA is primarily in the business of owning, operating, leasing, developing,
redeveloping and acquiring super regional and regional retail shopping
centers in major metropolitan areas in the United States.
On May 21, 1997 the Company completed an initial public offering whereby
the Company issued 20.4 million common shares (including shares issued
upon exercise of an over allotment option) (the "Offering") and the sale
of 270,000 preferred shares resulting in proceeds totaling $300.5
million, net of underwriting discounts and expenses of the Offering. The
proceeds from the Offering, the sale of preferred stock and an increase
in borrowings under the Company's unsecured revolving credit facility
were used to make a $145 million participating loan to an affiliate,
purchase the 70% interest in Annapolis Mall Limited Partnership that the
Company did not already own for $133 million, purchase a 68% managing
interest in Wheaton Plaza Regional Shopping Center, LLP, for $51.5
million and purchase Options to acquire ordinary shares of Westfield
Holdings Limited ("WHL") for $15.2 million (as further described in note
4).
3. BASIS OF PRESENTATION
The Company conducts its business through its divisions,
wholly-owned subsidiaries and affiliates. The Consolidated Financial
Statements include the accounts of the Company and all subsidiaries
over which the Company is able to exercise significant control. The Company
does not consider itself to be in control when the other partners have
important approval rights over major actions. Investments as general and
limited partner in non-controlled partnerships are accounted for using the
equity method. All significant intercompany accounts and transactions have
been eliminated in consolidation.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, EARNINGS PER SHARE, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change
the method currently used to compute earnings per share and to restate
all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effects of stock options will be
excluded. The new standard will have no impact on the Company's
primary earnings per common share for the three and six months ended
June 30, 1997 and 1996.
6
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
4. ACQUISITIONS
Prior to June 3, 1997, the Company held a 30% general partnership
interest in Annapolis Mall Limited Partnership, the owner of Annapolis
Mall, located in Annapolis, Maryland. On June 4, 1997, the Company
purchased the interest in Annapolis Mall Limited Partnership that it did
not currently own (70%) and an adjoining 13.2 acre parcel of land for
$133,000.
On May 31, 1997, the Company paid $51.5 million to acquire a 68%
managing interest in Wheaton Plaza Regional Shopping Center,
LLP, the owner of Wheaton Plaza, which is located in Wheaton, Maryland.
In May 1997, the Company made participating loans totaling $145,000 to
two wholly-owned, indirect subsidiaries of WHL which have a combined 50%
partnership interest in Westland Garden State Plaza Limited Partnership,
the owner of Garden State Plaza, a super regional shopping center located
in Paramus, New Jersey. The nonrecourse loans provide for interest only
at a fixed annual rate of 8.5% and is secured by the borrowers' 50%
indirect interest in Garden State Plaza. The Company is entitled to
receive a participating interest based on 80% of the borrowers' share of
the adjusted cashflow (as defined) from Garden State Plaza subject to an
annual aggregate limit of fixed and participating interest in an amount
equal to 11%. The loan matures in May 2007.
In May 1997, the Company acquired 9.8 million non-transferable WHL
Options (the "WHL Options")for $15,184. Each WHL Option entitles the
Company to acquire one WHL ordinary share at a price equal to AUS $23.33
per share. The Company cannot exercise the WHL Options until May 2000
and the WHL Options expire in May 2002.
7
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
4. ACQUISITIONS, CONTINUED:
The operations of the Company include Connecticut Post Mall, South Shore
Mall and Trumbull Shopping Park (the "Acquired Properties") the indirect
ownership of which was acquired by the Company on July 1, 1996, Wheaton
Plaza and Annapolis Mall purchased on May 31, 1997 and June 4, 1997,
respectively, and interest earned from loans made to affiliates of WHL
on May 21, 1997. The proceeds for the purchase of the Acquired
Properties were obtained from the recapitalization of the Company in July
1996 (the "Recapitalization). The proceeds for the purchase of Annapolis
Mall and Wheaton Plaza, the purchase of WHL Options and the loans to WHL
affiliates were obtained from the Company's initial public offering of
20.4 million shares of common stock at $15.00 per share, the sale of
270,000 shares of Series B Preferred shares and an increase in the
borrowings under the Company's unsecured revolving credit facility. The
unaudited Pro Forma Condensed Consolidated Statements of Income, below,
are presented as if the Company's Recapitalization, initial public
offering, acquisitions of the Acquired Properties, Wheaton Plaza,
Annapolis Mall and WHL Options and loans made to affiliates of WHL
had occurred on January 1, 1996. The unaudited Pro Forma Condensed
Consolidated Statements of Income are not necessarily indicative of
what the actual results of the Company would have been had these
transactions been consummated as of the beginning of the year presented,
nor do they purport to present the future operations of the Company.
Pro Forma for the
Six Months Ended
------------------
June 30, June 30,
1997 1996
-------- --------
REVENUES:
Minimum rents and percentage rents $ 78,301 $ 76,396
Tenant recoveries and service fee income 32,107 35,294
-------- --------
Total revenues 110,408 111,690
EXPENSES:
Operating 30,988 36,154
Management fees 2,662 2,959
Advisory fee - -
General and administrative 294 247
Depreciation and amortization 27,644 25,923
-------- --------
OPERATING INCOME 48,820 46,407
Interest expense, net (26,082) (26,082)
Equity in income of unconsolidated real estate
partnerships 807 (365)
Interest and other income 6,820 6,598
-------- --------
INCOME BEFORE MINORITY INTEREST 30,365 26,558
Minority interest in earnings of consolidated
real estate partnerships (1,967) (2,037)
-------- --------
NET INCOME $ 28,398 $ 24,521
-------- --------
-------- --------
Income allocable to preferred shares $ 5,370 $ 5,143
Income allocable to common shares 23,028 19,378
-------- --------
$ 28,398 $ 24,521
-------- --------
-------- --------
EARNINGS PER SHARE $ 0.31 $ 0.26
-------- --------
-------- --------
8
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
5. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE PARTNERSHIPS
As of June 30, 1997, the Company is a general and managing partner in
four real estate partnerships, a limited partner in one real estate
partnership and both a general and limited partner in one real estate
partnership. On June 4, 1997, the Company completed the acquisition of
the 70% interest it did not own in Annapolis Mall Limited Partnership
(Note 4). The Company's interest in each partnership as of June 30,
1997, is as follows:
Percentage
Property Location Interest
-------- -------- --------
Meriden Square Meriden, CT 50.0%
Plaza Camino Real Carlsbad, CA 40.0
Topanga Plaza Canoga Park, CA 42.0
Vancouver Mall Vancouver, WA 50.0
West Valley Canoga Park, CA 42.5
North County Fair Escondido, CA 45.0
9
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
5. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE PARTNERSHIPS, CONTINUED:
A summary of the condensed balance sheets and statements of income
for all unconsolidated real estate partnerships on a combined basis is as
follows:
June 30, December 31,
1997 1996
--------- ------------
CONDENSED COMBINED BALANCE SHEETS
Investment in real estate:
Land, building and improvements, at cost $ 377,624 $ 551,145
Less accumulated depreciation (120,852) (167,020)
Construction in progress 1,250 1,115
--------- ------------
Net investment in real estate 258,022 385,240
Note payable to affiliate (725) (1,156)
Other notes payable (225,986) (226,619)
Other assets and liabilities, net, and interest
of other partners 31,104 (50,977)
--------- ------------
Investments in unconsolidated real estate
partnerships $ 62,415 $ 106,488
--------- ------------
--------- ------------
Three Months Ended Six Months Ended
------------------ ------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------- -------- -------- --------
CONDENSED COMBINED STATEMENTS
OF INCOME
Total revenues $ 19,261 $ 19,760 $ 41,527 $ 41,020
Costs and expenses:
Operating, general and
administrative expenses 5,532 6,871 12,254 13,929
Interest expense, net 5,755 5,628 11,291 11,198
Depreciation and amortization 5,360 5,991 11,557 12,254
-------- -------- -------- --------
Net income 2,614 1,270 6,425 3,639
Other partners' share of income (1,784) (1,046) (4,302) (2,682)
-------- -------- -------- --------
Equity in income of unconsolidated
real estate partnerships $ 830 $ 224 $ 2,123 $ 957
-------- -------- -------- --------
-------- -------- -------- --------
Significant accounting policies used by unconsolidated real estate
partnerships are similar to those used by the Company.
10
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
6. NOTES PAYABLE AND LINE OF CREDIT
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- -----------
<S> <C> <C>
Collateralized non-recourse notes to an insurance company, interest only payable
monthly at 6.15%, due in 1999. $ 172,000 $ 172,000
Collateralized recourse note to an insurance company, interest only payable
monthly at 8.09%, due in 1999. 15,000 15,000
Collateralized non-recourse notes to an insurance company, interest only payable
monthly at 6.51%, due in 2001. 167,000 167,000
Senior collateralized non-recourse notes, interest only payable quarterly at 6.39%
until 1997, thereafter principal and interest payable quarterly, due in 2004. 20,576 20,576
Senior collateralized non-recourse notes bearing interest at 7.33%, $1,620
principal and interest payable quarterly until 1997, interest only payable from
1997 until 2004, principal and interest payable thereafter, due in 2014. 55,228 56,429
Unsecured revolving credit facility with a group of banks with a maximum
commitment of $600 million, interest only at LIBOR + 1% (6.688% at June
30, 1997) payable monthly, due in 2000 with options to extend. 266,000 -
Unsecured line of credit/collateralized project loan from a bank with a maximum
commitment of $50,000, interest only at LIBOR + 1.5%. This line of credit was
repaid and retired on June 4, 1997. - 5,000
Collateralized recourse construction loan payable to a bank, interest only at
LIBOR + 1.5%. This loan was repaid and retired on June 4, 1997. - 4,885
Collateralized non-recourse note payable to an insurance company interest at an
effective rate of 7.07%, $1,182 principal and interest payable monthly, due in 2000. 142,946 144,959
Collateralized non-recourse note payable to a bank, interest only at LIBOR +
1%. This note was repaid and retired on June 4, 1997. - 73,350
Collateralized non-recourse note payable to a bank, interest only at LIBOR +
1%. This note was repaid and retired on June 4, 1997 . - 73,450
Collateralized non-recourse construction loan payable to a bank with a maximum
commitment of $48,000, interest only payable monthly at LIBOR + 1.45%
($21,088 at 7.14% at June 30, 1997) with borrowings totaling $22,073 fixed at
7.2% through maturity, due in August 1997, with an option to extend to 2000. 43,161 37,976
---------- ----------
$ 881,911 $ 770,625
---------- ----------
---------- ----------
</TABLE>
11
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
6. NOTES PAYABLE AND LINE OF CREDIT, CONTINUED:
Interest costs capitalized for the three months ended June 30, 1997 and
1996 and the six months ended June 30, 1997 and 1996, totaled $797, $189,
$1,148 and $440, respectively.
The Company's unsecured revolving credit facility will be used to
fund acquisition and redevelopment activities and as a revolving working
capital facility. The credit facility agreement provides for
restrictive covenants relating to the maintenance of specified financial
performance ratios such as minimum net worth, debt service coverage
ratio, loan to value, ownership percentages and restrictions on future
distributions. As of June 30, 1997, the Company was in compliance
with these covenants.
The annual maturities of notes payable and line of credit as of June 30,
1997 are as follows:
1997 $ 3,324
1998 7,022
1999 194,542
2000 443,818
2001 170,157
Thereafter 63,048
--------
$881,911
--------
--------
12
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
7. CAPITAL STOCK
At June 30, 1997 and December 31, 1996, the total number of shares
authorized, issued and outstanding were as follows:
<TABLE>
<CAPTION>
JUNE 30, 1997 DECEMBER 31, 1996
-------------------------- -------------------------
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
SHARES SHARES SHARES SHARES
AUTHORIZED OUTSTANDING AUTHORIZED OUTSTANDING
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Common stock, $.01 par value 200,000,000 73,329,535 225,006,300 52,929,535
Excess stock, $.01 par value 205,000,000 - - -
Non-voting senior preferred stock,
$1.00 par value 200 15 200 105
Preferred stock, $1.00 par value of
which 940,000 shares are
designated Series A cumulative
redeemable preferred stock and
270,000 shares are designated
Series B cumulative redeemable
preferred stock 5,000,000 1,210,000 5,000,000 940,000
Excess preferred stock, $1.00
par value - - 5,000,000 -
Excess Common Stock, $.01
par value - - 200,006,300 -
</TABLE>
The Company declared a special distribution to shareholders of record
immediately prior to the closing of the Offering in an amount of $13
million. Additionally, the Company declared a pro rata distribution to
shareholders of record immediately prior to the closing of the Offering
for the period April 1, 1997 through May 20, 1997 of $13.2 million or
$0.22 per share. A distribution was declared on June 23, 1997
to shareholders of record on July 3, 1997 for the period May 21, 1997
through June 30, 1997 of $12.7 million or $0.16 per share, which equates
to an annual per share amount of $1.40.
13
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
7. CAPITAL STOCK, CONTINUED:
In connection with the Offering, the Company received $2,528 from the
sale of warrants (the "1997 Warrants") to Westfield America Trust ("WAT")
which entitles WAT the right to acquire at any time, in whole, or in
part, 2,089,552 shares of the Company's common stock at an exercise price
of $15 per share. The 1997 Warrants expire in May 2017.
In conjunction with the Offering, 270,000 shares of Series B Preferred
Shares were sold. The holders of Series B Preferred Shares shall be
entitled to receive, when declared, cumulative cash distributions equal
to the greater of $8.50 per annum or an amount equal to 6.6667 times the
dollar amount declared on common shares, subject to adjustment. Series B
Preferred Shareholders are entitled to distributions before distributions
are distributed to common shareholders. The holders of Series B
Preferred Shares have no voting rights unless a distribution is not
declared for four quarters, at which time the holders of Series B
Preferred Shares (together with the holders of the Series A Preferred
Shares) may elect a Director to be added to the Board of Directors. The
Company has an option to redeem the Series B Preferred Shares anytime
after May 21, 2004 at a redemption price of $100 per share, which is
equal to the liquidation preference.
8. SUPPLEMENTAL CASH FLOW INFORMATION:
NON CASH INVESTING AND FINANCING INFORMATION:
Mission Valley Partnership ("Mission Valley") was accounted for under the
equity method in 1995 and has been consolidated beginning in 1996. The
condensed assets and liabilities of the partnership at December 31,1995 were
as follows:
Net investment in real estate $ 45,886
Cash and cash equivalents 2,389
Accounts and notes receivable 891
Deferred expenses and other assets, net 1,201
Notes payable (28,988)
Accounts payable (798)
Minority/other partners' interest 693
------------
WEA's investment in Mission Valley $ 21,274
------------
------------
14
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
8. SUPPLEMENTAL CASH FLOW INFORMATION, CONTINUED:
NON CASH INVESTING AND FINANCING INFORMATION, CONTINUED:
Annapolis Mall Limited Partnership ("Annapolis") was accounted for
under the equity method until June 4, 1997 when the Company purchased
the remaining 70% partnership interest that it did not already own.
Annapolis is now consolidated with the Company. The Company's 30%
interest in the condensed assets and liabilities of the partnership on
June 3, 1997, were as follows:
Net investment in real estate $ 38,676
Cash and cash equivalents 184
Accounts and notes receivable 323
Deferred expenses and other assets 322
Notes payable -
Accounts payable (91)
------------
WEA's investment in Annapolis $ 39,414
------------
------------
The Company's purchase of a 68% managing interest in Wheaton Plaza
Regional Shopping Center, LLP, resulted in an increase in minority
interest totaling $24,000.
For the six months ended June 30, 1997 and 1996, construction in process
totaling $25,886 and $4,004, respectively, was placed into service.
9. RELATED PARTIES
CenterMark Management Company ("CMC"), an entity wholly owned by
WHL, entered into an agreement with WEA to manage the properties in
WEA's portfolio beginning January 1, 1995. Property management fees
totaling $1,143 and $646, net of capitalized leasing fees of $510 and
$360, were expensed for the three months ended June 30, 1997 and 1996,
respectively. Property management fees totaling $2,071 and $1,374, net
of capitalized leasing fees of $1,027 and $666, were expensed for the six
months ended June 30, 1997 and 1996, respectively. Included in accounts
payable and accrued expenses at June 30, 1997 and December 31, 1996, are
management fees payable to CMC totaling $790 and $711, respectively.
In addition to the management fees, CMC is reimbursed for corporate
overhead and mall related payroll costs. Reimbursements to CMC of
recoverable property operating costs for the three months ended June 30,
1997 and 1996 and the six months ended June 30, 1997 and 1996 totaled
$3,006, $1,695, $6,578 and $3,941, respectively.
The Company entered into a Master Development Framework Agreement with
Westfield Corporation, Inc. ("WCI"), a wholly owned subsidiary of WHL,
whereby the Company granted WCI the exclusive right to carry out
expansion, redevelopment and related works on WEA wholly owned shopping
centers and to endeavor to have WCI be appointed, by the relevant
partner, to carry out similar activities for jointly owned real estate
partnerships. During the three months ended June 30, 1997 and 1996, and
the six months ended June 30, 1997 and 1996, the Company reimbursed WCI
$14,812, $8,137, $23,537 and $10,209, respectively, for expansion,
redevelopment and related work.
15
<PAGE>
WESTFIELD AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
________
9. RELATED PARTIES, CONTINUED:
In conjunction with the Company's Recapitalization on July 1, 1996, the
Company engaged Westfield U.S. Advisory, L.P. ("Advisor"), a wholly owned
subsidiary of WHL, to provide a variety of asset management and
investment services, subject to supervision of the Company. In
conjunction with the Offering, the Advisory Agreement was amended to
entitle the Advisor to an annual fee equal to 25% of the annual Funds
from Operations ("FFO") in excess of the Advisory FFO Amount ($114.7
million), but not to exceed 55 basis points of the Net Equity Value
(as defined) of the Company's assets. The Advisory FFO Amount shall
thereafter be increased whenever the Company issues additional Common
Stock. The Advisory Fee is not payable for periods through December 31,
1997.
16
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto for the three and six
months ended June 30, 1997 (unaudited) and the Consolidated Financial
Statements of the Company for the year ended December 31, 1996 included in
the Registration Statement on Form S-11.
GENERAL BACKGROUND
On May 21, 1997 the Company completed an initial public offering whereby the
Company issued 20.4 million common shares (including shares issued upon
exercise of an over allotment option) (the "Offering") and the sale of
270,000 preferred shares resulting in proceeds totaling $300.5 million, net
of underwriting discounts and expenses of the Offering. The proceeds from
the Offering, the sale of preferred stock and an increase in borrowings under
the Company's unsecured revolving credit facility were used to make a $145
million participating loan to an affiliate secured by a 50% indirect interest
in Garden State Plaza, purchase the 70% interest in Annapolis Mall Limited
Partnership that the Company did not already own for $133 million, purchase a
68% general partnership interest in Wheaton Plaza Regional Shopping Center,
LLP, for $51.5 million and purchase WHL Options for $15.2 million.
At June 30, 1997 and for the six months then ended, the Consolidated Financial
Statements and Notes thereto reflect the consolidated financial results of 12
centers, the equity in income of six unconsolidated real estate partnerships,
the Acquired Properties following their acquisition on July 1, 1996, Annapolis
Mall and Wheaton Plaza following their acquisition on or about June 1, 1997, 13
separate department store properties that are net leased to the May Company
under financing leases, and a 116-unit apartment complex. At June 30, 1996 and
for the six months then ended, the Consolidated Financial Statements and Notes
thereto reflect the Annapolis Mall Limited Partnership, the owner of Annapolis
Mall, as an unconsolidated real estate partnership. As a result of the above
described items and Westfield Holdings management of the Company's properties,
the Company's Funds from Operations have increased 42% to $48.3 million for the
six months ended June 30, 1997, and 61% to $25.8 million for three
months ended June 30, 1997.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1997 TO THE THREE MONTHS ENDED
JUNE 30, 1996
TOTAL REVENUES increased $15.3 million or 47% to $48.1 million for the three
months ended June 30, 1997 as compared to $32.8 million for the same period
in 1996. The increase is primarily the result of the acquisitions of the
Acquired Properties, an additional 70% interest in Annapolis Mall and a 68%
managing interest in Wheaton Plaza, which contributed $12.4 million, $1.6
million and $1.3 million of the increase in total revenues, respectively.
Additionally, total revenues for the three months ended June 30, 1997
increased $1.9 million reflecting higher rental rates throughout the
portfolio and increases in minimum rents and tenant recoveries generated by
the Mission Valley, Mid Rivers and Eastland redevelopments offset by lower
tenant recoveries due to lower recoverable operating expenses, totaling $1.5
million, and a reduction of service fee income, totaling $0.4 million, due to
an amendment to management agreements in conjunction with the Company's
Recapitalization in July 1996.
17
<PAGE>
TOTAL EXPENSES increased $5.9 million or 29% to $26.1 million for the three
months ended June 30, 1997 as compared to $20.2 million for the same period
in 1996. The increase was primarily the result of the acquisitions of the
Acquired Properties, an additional 70% interest in Annapolis Mall and a 68%
managing interest in Wheaton Plaza, which contributed $6.8 million, $1.1
million and $0.7 million of the increase in total expenses, respectively.
Excluding the total expenses incurred by the acquisitions, total expenses
decreased $2.7 million due to lower operating expenses, totaling $3.1
million, partially offset by increased depreciation, totaling $0.4 million,
due to the Mid Rivers and Mission Valley redevelopments placed in service in
1997.
INTEREST EXPENSE increased $5.4 million or 69% to $13.2 million for the three
months ended June 30, 1997 as compared to $7.8 million for the same period in
1996. The increase was primarily due to the acquisition of the Acquired
Properties which contributed $4.7 million or 87% of the increase. Excluding
interest expense attributable to the Acquired Properties, interest expense
increased $0.7 million due to additional borrowings on the Company's
corporate credit facility as a result of the purchase of Annapolis Mall and
Wheaton Plaza and lower interest capitalized due to the completion of the Mid
Rivers and Mission Valley redevelopments.
EQUITY IN INCOME of unconsolidated real estate partnerships increased
approximately $0.6 million to $0.8 million for the three months ended June 30,
1997 as compared to $0.2 million for the same period in 1996 due to improved
operating results at Meriden Square, Plaza Camino Real and North County Fair as
a result of increased specialty leasing, and increased occupancy and rental
rates at these centers.
INTEREST AND OTHER INCOME increased $1.6 million to $1.7 million for the
three months ended June 30, 1997 as compared to $0.1 million for the same
period in 1996. The increase was primarily due to interest earned of $1.4
million on the $145 million participating loan to an affiliate made in
conjunction with the Offering. Additionally, the increase in interest income
reflects interest earned on temporary investments of proceeds from the
Offering.
NET INCOME increased $5.9 million or 121% to $10.8 million for the three months
ended June 30, 1997 as compared to $4.9 million for the same period in 1996 for
the reasons discussed above.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1997 TO THE SIX MONTHS ENDED JUNE
30, 1996
TOTAL REVENUES increased $30.5 million or 47% to $95.2 million for the six
months ended June 30, 1997 as compared to $64.7 million for the same period
in 1996. The increase is primarily the result of the acquisitions of the
Acquired Properties, an additional 70% interest in Annapolis Mall and a 68%
managing interest in Wheaton Plaza, which contributed $25.7 million, $1.6
million and $1.3 million, respectively, or 94% of the increase in total
revenues. Excluding the total revenues generated by these acquisitions,
total revenues increased $1.9 million due to higher rental rates throughout
the portfolio and increases in minimum rents and tenant recoveries generated
by the Mission Valley, Mid Rivers and Eastland redevelopments, totaling $3.5
million, partially offset by lower tenant recoveries due to lower recoverable
operating expenses, totaling $0.8 million, and a reduction in service fee
income of $0.8 million due to an amendment to management agreements in
conjunction with the Company's Recapitalization in July of 1996.
18
<PAGE>
TOTAL EXPENSES increased $14.9 million or 38% to $53.6 million for the six
months ended June 30, 1997 as compared to $38.7 million for the same period
in 1996. The increase was primarily the result of the acquisitions of the
Acquired Properties, an additional 70% interest in Annapolis Mall and a 68%
managing interest in Wheaton Plaza, which contributed $14.5 million, $1.1
million and $0.7 million, respectively, of the increase in total expenses.
Excluding the total expenses incurred by these acquisitions, total expenses
decreased $1.4 million due to lower operating expenses, totaling $2.5
million, partially offset by increased depreciation of $1.1 million due to
the Mid Rivers and Mission Valley redevelopments placed in service in 1997.
INTEREST EXPENSE increased $10.9 million or 72% to $26.1 million for the six
months ended June 30, 1997 as compared to $15.2 million for the same period
in 1996. The increase was primarily due to the acquisition of the Acquired
Properties which contributed $9.6 million or 88% of the increase in interest
expense. Excluding the Acquired Properties, interest expense increased $1.3
million due to additional borrowings on the Company's corporate credit
facility as a result of the Offering and purchase of Annapolis Mall and
Wheaton Plaza and lower interest capitalized due to the completion of the Mid
Rivers and Mission Valley redevelopments.
EQUITY IN INCOME of unconsolidated real estate partnerships increased
approximately $1.1 million to $2.1 million for the six months ended June 30,
1997 as compared to $1.0 million for the same period in 1996 due to improved
operating results of Meriden Square, Plaza Camino Real and North County Fair as
a result of increased specialty leasing and increased occupancy and rental rates
at these centers and a recovery of earthquake repair costs totaling $0.3 million
which were received by the Topanga Plaza Partnership as a result of the 1994
Northridge earthquake.
INTEREST AND OTHER INCOME increased $1.7 million to $1.9 million for the six
months ended June 30, 1997 as compared to $0.2 million for the same period in
1996. The increase was primarily due to interest earned of $1.4 million on
the $145 million participating loan to an affiliate made in conjunction with
the Offering. Additionally, the increase in interest income reflects
interest earned on temporary investments of proceeds from the Offering.
NET INCOME increased $7.2 million or 62% to $18.8 million for the six months
ended June 30, 1997 as compared to $11.6 million for the same period in 1996 for
the reasons discussed above.
19
<PAGE>
EBITDA - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
The Company believes that there are several important factors that contribute
to the ability of the Company to increase rent and improve profitability of
its shopping centers, including aggregate tenant sales volume, sales per
square foot, occupancy levels and tenant costs. Each of these factors has a
significant effect on the Company's earnings before interest, taxes,
depreciation and amortization ("EBITDA"). The Company believes that EBITDA
is an effective measure of shopping center operating performance because
EBITDA is unaffected by the debt and equity structure of the property owner.
EBITDA: (i) does not represent cash flow from operations as defined by
generally accepted accounting principles ("GAAP"); (ii) should not be
considered as an alternative to net income (determined in accordance with
GAAP) as a measure of the Company's operating performance; (iii) is not
indicative of cash flows from operating, investing and financing activities
(determined in accordance with GAAP); and (iv) is not an alternative to cash
flows (determined in accordance with GAAP) as a measure of the Company's
liquidity.
The Company's total EBITDA before minority interest plus its pro rata share
of EBITDA of unconsolidated real estate partnerships ("Total EBITDA")
increased from $54.1 million to $79.2 million for the six months ended June
30, 1996 and 1997, respectively, representing an increase of 46%. The growth
in Total EBITDA reflects the addition of total gross leasable area ("GLA"),
increased rental rates, increased tenant sales, improved occupancy levels and
lower operating expenses.
The following is a summary of the unaudited EBITDA of the Company for the
periods presented:
<TABLE>
<CAPTION>
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ------------------
1997 1996 1997 1996
-------- --------- -------- --------
($ In Thousands)
<S> <C> <C> <C> <C>
EBITDA of wholly-owned and consolidated
real estate partnerships $ 36,453 $ 21,257 $ 68,249 $ 43,485
Pro rata share of EBITDA of unconsolidated
real estate partnerships 5,924 5,337 12,487 11,530
-------- --------- -------- --------
Total EBITDA $ 42,377 $ 26,594 $ 80,736 $ 55,015
-------- --------- -------- --------
-------- --------- -------- --------
EBITDA after minority interest (1) $ 41,454 $ 26,127 $ 79,204 $ 54,133
-------- --------- -------- --------
-------- --------- -------- --------
Increase in EBITDA after minority interest
from prior period 59% 46%
</TABLE>
(1) EBITDA after minority interest represents earnings before interest, taxes,
depreciation and amortization for all Properties excluding minority
partners' share of EBITDA in Mission Valley Partnership and Wheaton Plaza
Regional Shopping Center, LLP.
20
<PAGE>
FUNDS FROM OPERATIONS
The Company computes Funds from Operations in accordance with standards
established by the White Paper on Funds from Operations approved by the Board of
Governors of NAREIT in March 1995 which defines Funds from Operations as net
income (loss) (computed in accordance with GAAP), excluding gains (or losses)
from debt restructuring and sales of property, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. Funds from Operations should not be considered
as an alternative to net income (determined in accordance with GAAP) as a
measure of the Company's financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it indicative of funds available to fund the Company's cash
needs, including its ability to make distributions. In addition, Funds from
Operations as computed by the Company may not be comparable to similarly titled
figures reported by other REITs.
The following is a summary of the unaudited Funds from Operations of the Company
and a reconciliation of net income to Funds from Operations for the periods
presented:
<TABLE>
<CAPTION>
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1997 1996 1997 1996
-------- -------- -------- --------
($ In Thousands)
<S> <C> <C> <C> <C>
Funds from Operations $ 25,809 $ 16,039 $ 48,268 $ 33,896
-------- -------- -------- --------
-------- -------- -------- --------
Increase in Funds from Operations
from prior period 61% 42%
-------- --------
-------- --------
Reconciliation:
Net income $ 10,808 $ 4,899 $ 18,772 $ 11,607
Plus:
Amortization of deferred financing
leases 508 473 1,007 939
Depreciation and amortization from
consolidated properties 12,210 8,194 23,758 16,259
The Company's share of depreciation
and amortization from unconsolidated
real estate partnerships 2,490 2,583 5,160 5,285
Less:
Minority interest portion of
depreciation and amortization (207) (110) (429) (194)
-------- -------- -------- --------
Funds from Operations $ 25,809 $ 16,039 $ 48,268 $ 33,896
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
21
<PAGE>
PORTFOLIO DATA
SEASONALITY
The shopping center industry is seasonal in nature, particularly in the fourth
quarter during the holiday season, when tenant occupancy and retail sales are
typically at their highest levels. In addition, shopping malls achieve a
substantial portion of their specialty (temporary tenant) rents during the
holiday season. As a result of the above, earnings are generally highest in the
fourth quarter of each year.
The following table summarizes certain quarterly operating data for 1996 and the
first two quarters of 1997:
<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH 1ST 2ND
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
1996 1996 1996 1996 1997 1997
---------- ---------- ---------- ---------- ---------- ----------
($ In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mall store sales (1) $ 266,944 $ 290,183 $ 297,801 $ 454,838 $ 274,889 $ 300,845
Revenues $ 51,072 $ 49,964 $ 67,047 $ 70,617 $ 70,160 $ 69,683
Percentage Leased (2) 88% 89% 90% 92% 91% 92%
</TABLE>
(1) Excluding North County Fair and recently acquired Wheaton Plaza.
(2) Excluding redevelopment centers and the recently acquired Wheaton Plaza.
REPORTED TENANT SALES VOLUME AND SALES PER SQUARE FOOT
Total sales for mall stores affect revenue and profitability levels of the
Company because they determine the amount of minimum rent the Company can
charge, the percentage rent it realizes and the recoverable expenses (common
area maintenance, real estate taxes, etc.) the tenants can afford to pay.
Mall store sales for Centers under Westfield Holdings management for the six
months ended June 30, 1997, (excluding North County Fair) increased 4% on a
per square foot basis over the same period in 1996. The Company believes
these sales levels enhance the Company's ability to obtain higher rents from
tenants.
The table below sets forth mall store sales and per square foot percentage
increases over the same period in 1996 for Centers under Westfield Holdings
management (excluding North County Fair) in the East Coast, the Mid West and
the West Coast regions of the United States.
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1997 JUNE 30, 1997
-------------------- --------------------
MALL INCREASE MALL INCREASE
STORE PER STORE PER
SALES SQ. FT. SALES SQ. FT.
-------- -------- -------- --------
($000's) ($000's)
East Coast $160,313 3.4% $304,516 3.6%
Mid West 39,159 3.0% 75,463 3.1%
West Coast 116,706 5.9% 225,915 6.2%
-------- -------- -------- --------
Total Centers $316,178 4.0% $605,894 4.3%
-------- -------- -------- --------
-------- -------- -------- --------
22
<PAGE>
PORTFOLIO DATA, CONTINUED:
LEASING
The amount of leased mall store space at centers not under redevelopment for
the relevant period ("Stabilized Centers") managed by Westfield Holdings
(including the Acquired Properties as if they were owned by the Company as of
June 30, 1996 and excluding the recently acquired Wheaton Plaza) increased
from 89% at June 30, 1996 to 92% at June 30, 1997, excluding temporary leases
with durations of less than one year. The Company excludes temporary leasing
from the calculation of leased mall store space since such leases are on a
short-term basis (30 days to 11 months) and are subject to termination by the
Company on 30 days notice. The following table sets forth leased status for
the Stabilized Centers managed by Westfield Holdings in the East Coast, the
Mid West and the West Coast regions of the United States (including the
Acquired Properties as if they were owned by the Company as of June 30, 1996
and excluding the recently acquired Wheaton Plaza).
JUNE 30, JUNE 30,
1997 1996
-------- --------
East Coast 93% 90%
Mid West 92% 92%
West Coast 91% 87%
Total Centers 92% 89%
RENTAL RATES
As leases have expired, the Company has generally been able to rent the
available space, either to the existing tenant or a new tenant, at rental rates
that are higher than those of the expired leases. In a period of increasing
sales, rents on new leases will tend to rise as tenants' expectations of future
growth become more optimistic. In periods of slower growth or declining sales,
rents on new leases will grow more slowly or will decline for the opposite
reason. However, revenues nevertheless increase as older leases roll over or
are terminated early and replaced with new leases negotiated at current rental
rates that are usually higher than the average rates for existing leases. The
following table contains certain information regarding base rent per square foot
of the mall stores under Westfield Holdings management that have been executed
since January 1, 1996.
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, JUNE 30,
-------------- --------------
1997 1996 1997 1996
------ ------ ------ ------
Average base rent of all mall store
leases, end of the period $27.50 $26.41 $27.50 $26.41
Leases expired during the period 28.55 19.94 27.26 22.29
Leases executed during the period 27.61 26.26 28.72 27.19
23
<PAGE>
PORTFOLIO DATA, CONTINUED:
LIQUIDITY AND CAPITAL RESOURCES
On June 2, 1997, the Company obtained a $600 million unsecured revolving credit
facility from National Australia Bank, Australia and New Zealand Banking
Group, Commonwealth Bank of Australia and Union Bank of Switzerland. A
portion of the proceeds of the facility totaling $164.4 million was used to
repay existing mortgage loans. The unused portion of the loan will be utilized
by the Company to fund its acquisition and redevelopment activities and as a
revolving working capital facility. Borrowings under the loan facility are
limited to 60% of the value of the negative pledged properties. The loan
matures in May 2000 with options to extend.
At June 30, 1997, the Company's balance of cash and cash equivalents was $43.4
million not including its proportionate share of cash held by unconsolidated
real estate partnerships. In addition to its cash reserves, the Company had
unused capacity under its unsecured revolving credit facility totaling $334.0
million.
The Company's consolidated indebtedness at June 30, 1997 was $881.9 million, of
which $719.8 million is fixed-rate debt and $162.1 million is variable rate debt
after considering the interest rate protection agreement totaling $125 million
(see discussion below). Additionally, the Company entered into an interest rate
exchange agreement beginning July 1997 and expiring in January 1999 with a
notional principal amount totaling $100 million which provides that the Company
will pay 5.99% per annum. The interest rate on the fixed-rate debt ranges from
6.15% to 8.09%. The Company's pro-rata share of debt-to-total market
capitalization, based on the share price on June 30, 1997 was 41.8%.
At June 30, 1997, the Company had two swap agreements with respect to interest
currently payable by the Company. Interest rate swaps are contractual
agreements between the Company and third parties to exchange fixed and floating
interest payments periodically without the exchange of the underlying principal
amounts (notional amounts). In the unlikely event that a counterparty fails to
meet the terms of an interest rate swap contract, the Company's exposure is
limited to the interest rate differential on the notional amount. The Company
does not anticipate non-performance by any of the counterparties. Under one of
the swap agreements, which has a notional amount of $125.0 million, the Company
is credited interest at LIBOR and incurs interest at a fixed rate of 5.75%.
Under the second swap agreement, which has a notional amount of $9.8 million,
the Company incurs interest at LIBOR and is credited interest at a fixed rate of
6.23%. Both swap agreements expire at various dates in 2000.
The Company has also entered into interest rate exchange agreements to manage
future interest rates. These agreements consist of swaps and involve the
future receipt, corresponding with the expiration of existing fixed rate
mortgage debt, of a floating rate based on LIBOR and the payment of a fixed
rate. At June 30, 1997, the Company had interest rate exchange agreements
beginning February 11, 1999 and expiring after three years with notional
principal amounts totaling $90.0 million which provide that the Company will
pay 6.125% per annum and interest rate exchange agreements beginning in
February 1999 and April 2000 and expiring at various dates in 2002 with
notional principal amounts totaling $227.0 million which provide that the
Company will pay 6.25% per annum. These exchange rate agreements ensure
that, upon the expiration of certain of the Company's mortgage debt, if the
Company refinances such debt with new LIBOR based loans, the interest rate on
such loans will be no more than 6.125% or 6.25%, respectively, plus the
applicable spread of the loan at such time.
The historical sources of capital used to fund the Company's operating expenses,
interest expense, recurring capital expenditures and non-recurring capital
expenditures (such as major building renovations and expansions) have been: (i)
Funds from Operations, (ii) property financing and (iii) capital contributions.
The Company anticipates that all development projects, expansion projects and
potential acquisitions will be funded by external financing sources.
24
<PAGE>
PORTFOLIO DATA, CONTINUED:
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED:
Capital expenditures, excluding property acquisitions, were $30.6 million and
$17.4 million for the six months ended June 30, 1997 and 1996, respectively.
The following table shows the components of capital expenditures.
FOR THE SIX
MONTHS ENDED
JUNE 30,
------------------
1997 1996
-------- --------
(In Thousands)
Renovations and expansions $ 25,957 $ 15,013
Tenant allowances 2,898 1,540
Capital leasing costs 1,541 799
Other capital expenditures 239 80
-------- --------
Total $ 30,635 $ 17,432
-------- --------
-------- --------
The Company believes that redevelopment, repositioning and expansion are key
to maximizing the use and performance of its assets and increasing its income
growth and capital appreciation. The Company is continually evaluating the
redevelopment potential of its properties and anticipates that it will pursue
opportunities for substantial redevelopment and repositioning at the
properties. The Company believes that these projects will enable the existing
Centers both to compete better within their existing markets and to attract
new customers and therefore attain a stronger market position and an expanded
customer base. The Company believes that most of its Centers, even those
which have undergone redevelopment in the past five years, have continuing
redevelopment potential.
Redevelopment has recently been completed or substantially completed at the
following Centers:
- - Eastland Center in West Covina, California, which opened in 1955 and
was formerly anchored by an empty department store that had been occupied
by the May Company, has been substantially converted from an out-dated
enclosed mall into a power center through the renovation of the existing
Mervyn's and the addition of a new Target discount store and additional
Big Box Retailers and Category Killers retailers, including Old Navy,
Burlington Coat Factory, Loehmann's, Chick's Sporting Goods, Club Disney
and Babies R' Us in order to reposition the Center within its trade area
and to complement the Plaza at West Covina, a super regional shopping
center owned by the Company. The May Company store that occupied the
space was relocated to The Plaza at West Covina. The redevelopment is
scheduled to be completed in 1997.
- - Enfield Square in Enfield, Connecticut, which opened in 1971, was
redeveloped with the addition of a Sears store that opened in Spring 1997.
The Sears store replaces a small Steiger's store which the Company
purchased as an opportunity to upgrade and expand the Center. Enfield
Square will now have three Anchors: Filene's, JCPenney and Sears.
- - Mid Rivers Mall in St. Peters, Missouri, which opened in 1987, had
three Anchors before the recent redevelopment: Famous Barr, Dillard's and
Sears. In Fall 1996, a fourth Anchor, a 125,000 square-foot JCPenney
store and an additional 40,000 square feet of Mall GLA were added.
- - Mission Valley Center in San Diego, California, which opened in 1961,
was redeveloped in 1996 with the addition of Bed Bath & Beyond, Nordstrom
Rack, Michael's and Loehmann's. In addition, a 75,000 square foot, 4,500
seat, 20 screen AMC Theater and theme restaurants were added. The
redevelopment and renovation is substantially complete.
25
<PAGE>
PORTFOLIO DATA, CONTINUED:
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED:
The Company is currently redeveloping South Shore Mall in Bay Shore, New York.
The redevelopment involves the addition of a Sears store and 40,000 square feet
of Mall GLA. The addition of a Sears store will provide the Center with three
Anchors and expands the Center from a regional shopping center to a super
regional shopping center. Project completion is scheduled for Fall 1997.
Capital expenditures were financed by external funding and recovery of costs
from tenants where applicable. The Company is currently involved in several
development projects and had outstanding commitments with contractors totaling
approximately $37.7 million as of June 30, 1997, which will be funded through
existing mortgage debt and the unsecured revolving credit facility.
The Company anticipates that its Funds from Operations will provide the
necessary funds on a short and long term basis for its operating expenses,
interest expense on outstanding indebtedness and all distributions to the
shareholders in accordance with the REIT requirements. Sources of recurring and
non-recurring capital expenditures on a short term and long term basis, such as
major building renovations and expansion, as well as for scheduled principal
payments, including balloon payments on outstanding indebtedness are expected to
be obtained from: (i) additional debt financing, (ii) additional equity and
(iii) working capital reserves.
Although no assurance can be given, the Company believes that it will have
access to capital resources sufficient to satisfy the Company's cash
requirements and expand and develop its business in accordance with its strategy
for growth.
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company currently is neither subject to any material litigation nor, to
management's knowledge, is any material litigation currently threatened against
the Company other than routine litigation and administrative proceedings arising
in the ordinary course of business. Based on consultation with counsel,
management believes that these items will not have a material adverse impact on
the Company's consolidated financial position or results of operations.
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
By unanimous written consent, dated May 12, 1997, the Stockholders of the
Company voted to approve the amendment of, and the amendment and restatement
of, the Company's Articles of Incorporation and the amendment and restatement
of the Company's By-laws.
26
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ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
-----------------------------------------------------------------
3.1 Restated Articles of Incorporation
of the Company
3.2 Certificate of Designation for Series B
Preferred Stock
3.3 Second Amended and Restated By-Laws of
the Company
10.1 Unsecured revolving Credit Agreement
dated as of May 30, 1997
27.1 Financial data schedule
(b) Reports on Form 8-K
Form 8K was filed during the current period, on June 19,
1997. Under Item 2-Acquisitions or Disposition of Assets, the
Company reported that it acquired the additional 70% interest in
Annapolis Mall, in Annapolis Maryland, that it did not already own
for $133 million.
27
<PAGE>
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 thereunto duly authorized.
WESTFIELD AMERICA, INC.
Date: August 14, 1997 By: /s/ PETER S. LOWY
------------------------------ ------------------------------
Peter S. Lowy
Co-President
/s/ RICHARD E. GREEN
--------------------------------
Richard E. Green
Co-President
/s/ MARK A. STEFANEK
--------------------------------
Mark A. Stefanek
Chief Financial Officer and Treasurer
28
<PAGE>
EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
OF
WESTFIELD AMERICA, INC.
Westfield America, Inc., a Missouri corporation organized on September
24, 1924, does hereby restate its Articles of Incorporation and certifies that
the Restated Articles of Incorporation correctly sets forth, without change, the
corresponding provisions of the Articles of Incorporation as heretofore amended
and that the Restated Articles of Incorporation supersede the original Articles
of Incorporation and all amendments thereto.
The Restated Articles of Incorporation were adopted May 12, 1997 by
unanimous consent of the shareholders of the corporation and are attached hereto
as Exhibit A.
IN WITNESS WHEREOF, the undersigned, Co-President has executed this
instrument and its Assistant Secretary has attested to said instrument on the
16th day of May, 1997.
WESTFIELD AMERICA, INC.
ATTEST:
By: /s/ Peter S. Lowy
------------------------
/s/ Barry Mills
- ------------------------ ------------------------
Co-President
- ------------------------
Assistant Secretary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
I, Gail Shulman, a notary public, do hereby certify that on this 16th
day of May, 1997, personally appeared before me Peter S. Lowy and being first
duly sworn by me, declared that he is the Co-President of Westfield America,
Inc., that he signed the foregoing document as Co-President of the corporation,
and that the statements therein contained are true.
[SEAL] /s/ Gail Shulman
-----------------------------
Notary Public
My Commission Expires:
<PAGE>
EXHIBIT A
ARTICLE FIRST
The name of the corporation is: Westfield America, Inc.
ARTICLE SECOND
The Corporation's registered agent in the State of Missouri shall be
The Corporation Company, 7733 Forsyth Boulevard, Clayton, Missouri 631015-1817.
ARTICLE THIRD
The Corporation is formed for the following purposes:
(a) To take, purchase or otherwise acquire, and to hold, own, use,
manage, develop, control, improve, sell, exchange, convey, transfer, assign,
mortgage or otherwise encumber, and to let, lease as lessor or lessee, invest in
and otherwise deal in and with real property, or any estate or interest therein,
within and without the State of Missouri and in any part of the world; and
(b) To have and exercise all powers which are or may be conferred
upon corporations organized under and pursuant to The General and Business
Corporation Law of Missouri (the "GBCL").
ARTICLE FOURTH
SECTION 4.1 CLASSES AND NUMBER OF SHARES.
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is four hundred ten million, and two
hundred (410,000,200) shares, consisting of (I) two hundred (200) shares of non-
voting senior preferred stock, par value $1.00 per share (the "Senior Preferred
Shares"), (II) five million (5,000,000) shares of preferred stock, par value
$1.00 per share (the "Preferred Shares"), of which nine hundred forty thousand
(940,000) shares shall be designated Series A cumulative redeemable preferred
stock (the "Series A Preferred
2
<PAGE>
Shares"), (III) two-hundred million (200,000,000) shares of common stock, par
value $.0l per share (the "Common Shares"), and (IV) two hundred five million
(205,000,000) shares of excess stock, par value $.0l per share (the "Excess
Shares"). Excess Shares, if any, that are exchanged pursuant to Sections
4.5(c) and 4.7 hereof (I) for Common Shares, are sometimes referred to herein
as "Excess Common Shares", (II) for Preferred Shares, are sometimes referred
to herein as "Excess Preferred Shares", and together with the Preferred
Shares, as "Preferred Equity Shares", and (III) for Series A Preferred
Shares, are sometimes referred to herein as "Excess Series A Preferred
Shares", and together with the Series A Preferred Shares, as "Series A Equity
Shares". The Preferred Shares and Excess Preferred Shares may be issued, from
time to time, in one or more series as authorized by the Board of Directors
of the Corporation (the "Board of Directors"). Prior to issuance of a
series, the Board of Directors by resolution shall designate that series to
distinguish it from other series and classes of stock of the Corporation,
shall specify the number of shares to be included in the series, and shall
fix the terms, rights, restrictions and qualifications of the shares of the
series, including any preferences, voting powers, dividend rights and
redemption, sinking fund and conversion rights. Subject to the express terms
of any other series of Preferred Equity Shares outstanding at the time, the
Board of Directors may increase or decrease the number of shares or alter the
designation or classify or reclassify any unissued shares of a particular
series of Preferred Equity Shares by fixing or altering in any one or more
respects from time to time before issuing the shares any terms, rights,
restrictions and qualifications of the shares. The Senior Preferred Shares
and the Preferred Shares are sometimes referred to herein collectively as the
"Senior Shares". The Common Shares and the Excess Common Shares are
sometimes referred to herein collectively as the "Common Equity Shares".
SECTION 4.2 SENIOR PREFERRED SHARES.
(a) GENERAL TERMS. Each Senior Preferred Share shall be identical
in all respects with each other Senior Preferred Share. Senior Preferred Shares
that are redeemed or purchased by the Corporation may, at the election of the
Corporation either (I) be reissued by the Corporation or (II) be canceled and if
so canceled shall revert to authorized but unissued Senior Preferred Shares. No
other shares of the Corporation may be authorized that are senior to or PARI
PASSU with the Senior Preferred Shares with
3
<PAGE>
respect to rights to receive dividends and rights upon liquidation of the
Corporation.
(b) DIVIDEND RIGHTS. (i) The holders of Senior Preferred Shares
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available therefor, cash dividends at the annual
rate of $35.00 per share, and no more, payable quarterly on the first day of
January, April, July and October, respectively, in each year with respect to the
quarterly dividend period (or portion thereof) ending on the day preceding such
respective dividend payment date, to shareholders of record on the respective
date, not exceeding fifty days preceding such dividend payment date, fixed for
the purpose by the Board of Directors in advance of payment of each particular
dividend.
(ii) So long as any Senior Preferred Shares remain outstanding, no
dividend whatever shall be paid or declared and no distribution made on any
Preferred Shares or Common Equity Shares other than a dividend payable in
Preferred Shares or Common Equity Shares, and no shares of Preferred Shares or
Common Equity Shares shall be purchased, redeemed or otherwise acquired for
consideration by the Corporation, directly or indirectly (other than as a result
of a reclassification of Preferred Shares or Common Equity Shares, or the
exchange or conversion of one Preferred Share or Common Equity Share for or into
another Preferred Share or Common Equity Share or other than through the use of
the proceeds of a substantially contemporaneous sale of other Preferred Shares
or Common Shares), unless the full dividend payable with respect to the Senior
Preferred Shares for the then current quarterly-yearly dividend period shall
have been paid or declared and set apart for payment. Subject to the foregoing,
and not otherwise, dividends may be declared by the Board of Directors and paid
on any Series A Equity Shares or Common Equity Shares from time to time out of
any funds legally available therefor, and the Senior Preferred Shares shall not
be entitled to participate in any such dividends, whether payable in cash, stock
or otherwise.
(c) RIGHTS UPON LIQUIDATION. In the event of any voluntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Senior Preferred Shares shall be entitled, before any distribution or
payment is made to the holders of any Preferred Shares or Common Equity Shares,
to be paid in full an amount equal to $550.00 per share (which amount is
hereinafter referred to as the "senior voluntary liquidation amount"), together
with the
4
<PAGE>
full dividend thereon for the then current quarterly-yearly dividend period.
In the event of any involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any Preferred Shares or Common Equity Shares, the
holders of Senior Preferred Shares shall be entitled to be paid in full an
amount equal to $550.00 per share (which amount is hereinafter referred to as
the "senior involuntary liquidation amount"), together with the full dividend
thereon for the then current quarterly-yearly dividend period.
If payment shall have been made in full to all holders of Senior
Preferred Shares, the remaining assets of the Corporation shall be distributed
among the holders of Preferred Shares or Common Equity Shares, according to
their respective numbers of shares. For the purposes of this Section 4.2(c),
the consolidation or merger of the Corporation with any other corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Corporation.
(d) REDEMPTION. The Corporation, at the option of the Board of
Directors, may redeem in whole, but not in part, the Senior Preferred Shares at
the time outstanding at any time from and after February 20, 1999, upon notice
given as hereinafter specified, at a redemption price for each Senior Preferred
Share equal to $550.00, together with the full dividend thereon for the then
current quarterly-yearly dividend period.
Notice of redemption of the Senior Preferred Shares shall be mailed by
first class mail, postage prepaid, addressed to the holders of record of the
shares to be redeemed at their respective last addresses as they shall appear on
the books of the Corporation. Such mailing shall be at least 30 days and not
more than 60 days prior to the date fixed for redemption. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the shareholder receives such notice, and failure
duly to give such notice by mail, or any defect in such notice, to any holder of
Senior Preferred Shares designated for redemption shall not affect the validity
of the proceedings for the redemption of any other Senior Preferred Shares.
The Board of Directors shall have full power and authority, subject to
the provisions herein contained, to
5
<PAGE>
prescribe the terms and conditions upon which Senior Preferred Shares shall
be redeemed.
If notice of redemption shall have been duly given, and if, on or
before the redemption date specified therein, all funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
called for redemption, so as to be and continue to be available therefor, then,
notwithstanding that any certificate for shares so called for redemption shall
not have been surrendered for cancellation, all shares so called for redemption
shall no longer be deemed outstanding on and after such redemption date, and all
rights with respect to such shares shall forthwith on such redemption date cease
and terminate, except only the right of the holders thereof to receive the
amount payable on redemption thereof, without interest.
Any funds so set aside and unclaimed at the end of three years from
such redemption date shall, to the extent permitted by law, be released or
repaid to the Corporation, after which repayment the holders of the shares so
called for redemption shall look only to the Corporation for payment thereof.
(e) VOTING RIGHTS. Except as required by applicable law, the holders
of Senior Preferred Shares shall have no voting rights in the Corporation.
(f) NO OTHER RIGHTS. The Senior Preferred Shares shall not have any
relative, participating, optional or other special rights and powers other than
as set forth herein.
(g) LEGEND. Any certificate evidencing Senior Preferred Shares shall
be stamped or endorsed with a legend in substantially the following form:
THE SHARES OF SENIOR PREFERRED STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
ACCORDINGLY NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE
SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
ACT AND ANY
6
<PAGE>
SUCH LAWS APPLICABLE THERETO AND THE RULES AND REGULATIONS THEREUNDER.
SECTION 4.2A SERIES A PREFERRED SHARES.
(a) GENERAL TERMS. Each Series A Preferred Share shall be identical
in all respects to each other Series A Preferred Share. Each Excess Series A
Preferred Share shall be identical in all respects to each other Excess Series A
Preferred Share, and except as otherwise provided herein, shall be identical in
all respects to each Series A Preferred Share. Series A Preferred Shares that
are redeemed or purchased by the Corporation may, at the election of the
Corporation either (I) be reissued by the Corporation or (II) be canceled and if
so canceled shall revert to authorized but unissued Preferred Shares.
(b) DIVIDEND RIGHTS. (i) The holders of Series A Equity Shares
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available therefor, cumulative cash dividends
payable to shareholders of record on the respective date, not exceeding 50 days
preceding such dividend payment date, fixed for the purpose by the Board of
Directors in advance of payment of each particular dividend in an amount equal
to the greater of (A) $8.50 per share per annum and (B) an amount per share
equal to 6.2461 (subject to proportional adjustment in the case of any
subdivision, stock split, stock dividend, combination or reverse split of the
Common Equity Shares or the Preferred Equity Shares) (as so adjusted from time
to time, the "Common Equivalent Factor") times the dollar amount of dividends
declared with respect to each Common Equity Share (such product, the "Common
Equivalent Amount") for the same annual period; PROVIDED, HOWEVER, that if, as a
result of the quarterly dividends paid in accordance with the following
sentence, the holders of Series A Equity Shares shall have received for any
calendar year more dividends than such Shares shall be entitled under clauses
(A) and (B) above, the dividends payable in respect of Series A Preferred Shares
in subsequent calendar years shall be reduced to the extent of such overpayment.
Subject to the proviso of the preceding sentence of this Section 4.2A(b)(i), the
dividend paid in respect of each quarterly period in each calendar year shall be
determined as follows: (1) for the first quarter, the greater of $2.125 per
share and the Common Equivalent Amount for same quarter; (2) for the second
quarter, an amount such that the aggregate amount to be received per Series A
Equity Share in respect of the first two quarters of such calendar
7
<PAGE>
year shall be the greater of $4.25 per share and the Common Equivalent Amount
for the same two quarters; (3) for the third quarter, an amount such that the
aggregate amount to be received per Series A Equity Share in respect of the
first three quarters of such calendar year shall be the greater of $6.375 per
share and the Common Equivalent Amount for the same three quarters; and (4)
for the fourth quarter, an amount such that the aggregate amount to be
received per Series A Equity Share in respect of such calendar year shall be
the amount provided in the preceding sentence of this Section 4.2A(b)(i).
Dividends paid on shares of Series A Equity Shares in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all Series A
Equity Shares as are outstanding at the time. Accumulated but unpaid
dividends for any past quarterly dividend periods may be declared and paid at
any time, without reference to any regularly scheduled quarterly dividend
payment date, to holders of record on such date, not exceeding 50 days
preceding such dividend payment date, fixed for the purpose by the Board of
Directors in advance of payment of each particular dividend.
(ii) So long as any Series A Equity Shares remain outstanding, no
dividend whatever shall be paid or declared and no distribution made on any
Common Equity Shares other than a dividend payable in Common Equity Shares, and
no shares of Common Equity Shares shall be purchased, redeemed or otherwise
acquired for consideration by the Corporation, directly or indirectly (other
than as a result of a reclassification of Common Equity Shares, or the exchange
or conversion of one Common Equity Share for or into another Common Equity
Share, or other than through the use of the proceeds of a substantially
contemporaneous sale of other Common Shares), unless the full dividend thereon
for the then current quarterly dividend period and all prior dividend periods
shall have been paid or declared and set apart for payment. Subject to the
foregoing, and not otherwise, such dividends may be declared by the Board of
Directors and paid on any Common Equity Shares from time to time out of any
funds legally available therefor, and the Series A Equity Shares shall not be
entitled to participate in any such dividends, whether payable in cash, stock or
otherwise.
(c) RIGHTS UPON LIQUIDATION. In the event of any voluntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Series A Equity Shares shall be entitled, before any distribution or
payment
8
<PAGE>
is made to the holders of any Common Equity Shares, to be paid in full an
amount per share equal to $100.00 (which amount is hereinafter referred to as
the "Series A Preferred voluntary liquidation amount"), together with (X) all
accrued and unpaid dividends through the end date of the calender quarter
most recently completed prior to the date of liquidation, dissolution or
winding up of the affairs of the Corporation (any such date, a "Series A
Voluntary Liquidation Date") plus (Y) $2.125 times a fraction equal to the
actual number of days elapsed from the end date of the calendar quarter most
recently completed to the relevant Series A Voluntary Liquidation Date over
ninety days. In the event of any involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, then, before any distribution
or payment shall be made to the holders of any Common Equity Shares, the
holders of Series A Equity Shares shall be entitled to be paid in full an
amount per share equal to $100.00 (which amount is hereinafter referred to as
the "Series A Preferred involuntary liquidation amount"), together with (X)
all accrued and unpaid dividends through the end date of the calender quarter
most recently completed prior to the date of involuntary liquidation,
dissolution or winding up of the affairs of the Corporation (any such date, a
"Series A Involuntary Liquidation Date"); plus (Y) $2.125 times a fraction
equal to the actual number of days elapsed from the end date of the calendar
quarter most recently completed to the relevant Series A Involuntary
Liquidation Date over ninety days.
Payment shall be made in full to all holders of Series A Equity Shares
and other Shares ranking PARI PASSU on liquidation with the Series A Equity
Shares, before any remaining assets of the Corporation shall be distributed
among the holders of Common Equity Shares, according to their respective numbers
of shares. For the purposes of this Section 4.2A(c), the consolidation or
merger of the Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the Corporation, but
shall, to the extent appropriate, cause an adjustment to the Common Equivalent
Factor.
(d) REDEMPTION. The Corporation, at the option of the Board of
Directors, with approval of a majority of the Independent Directors (as defined
in Section 4.5 hereof), may redeem in whole, or in part, the Series A Equity
Shares at the time outstanding at any time and from time to time from and after
July 1, 2003, upon notice given as hereinafter specified, at a redemption price
for each Series A Equity Share equal to $100.00, together with (i)
9
<PAGE>
all accrued and unpaid dividends through the end date of the calender quarter
most recently completed prior to the date of redemption of the Series A
Equity Shares (each a "Series A Redemption Date"); plus (ii) $2.125 times a
fraction equal to the actual number of days elapsed from the end date of the
calendar quarter most recently completed to the relevant Series A Redemption
Date over ninety days (such fraction, the "Pro Rata Adjustment"); plus (iii)
a right to receive on the payment date for dividends declared on the Common
Equity Shares with respect to the calendar quarter during which the relevant
Series A Redemption Date occurs (the "Relevant Quarter"), the excess of (x)
the Common Equivalent Factor times (a) the dollar amount of the per share
dividends declared on the Common Equity Shares for the Relevant Quarter times
the Pro Rata Adjustment plus (b) the dollar amount of the per share dividends
declared on the Common Equity Shares from the beginning of the calendar year
in which such redemption occurs through the end date of the calendar quarter
prior to the Relevant Quarter over (y) the dollar amount calculated in the
preceding clause (ii) plus all other dividends paid on the Preferred Shares
from the beginning of the calendar year during which the relevant Series A
Redemption Date occurs.
If the Corporation shall determine to redeem less than all the Series
A Equity Shares then outstanding, the shares to be redeemed shall be selected
pro rata (as nearly as may be) so that the number of shares redeemed from each
holder shall be the same proportion of all the shares to be redeemed that the
total number of Series A Equity Shares then held by such holder bears to the
total number of Series A Equity Shares then outstanding.
Notice of redemption of the Series A Equity Shares shall be mailed by
first class mail, postage prepaid, addressed to the holders of record of the
shares to be redeemed at their respective last addresses as they shall appear on
the books of the Corporation. Such mailing shall be at least 30 days and not
more than 60 days prior to the date fixed for redemption. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the shareholder receives such notice, and failure
duly to give such notice by mail, or any defect in such notice, to any holder of
Series A Equity Shares designated for redemption shall not affect the validity
of the proceedings for the redemption of any other Series A Equity Shares.
10
<PAGE>
The Board of Directors shall have full power and authority, subject to
the provisions herein contained, to prescribe the terms and conditions upon
which Preferred Shares shall be redeemed.
If notice of redemption shall have been duly given, and if, on or
before the redemption date specified therein, the Corporation shall deposit all
funds necessary for such redemption with a bank or trust company in an account
that is separate and apart from its other accounts and shall hold such funds in
trust for the pro rata benefit of the holders of the shares called for
redemption, so as to be and continue to be available therefor, then,
notwithstanding that any certificate for shares so called for redemption shall
not have been surrendered for cancellation, all shares so called for redemption
shall no longer be deemed outstanding on and after such redemption date, and all
rights with respect to such shares shall forthwith on such redemption date cease
and terminate, except only the right of the holders thereof to receive the
amount payable on redemption thereof, without interest.
Any funds so deposited and unclaimed at the end of two years from such
redemption date shall, to the extent permitted by law, be released or repaid to
the Corporation, after which repayment the holders of the shares so called for
redemption shall look only to the Corporation for payment thereof.
(e) VOTING RIGHTS. The holders of Series A Equity Shares shall have
no voting rights in the Corporation except: (i) in the event that the Board of
Directors has not declared a dividend payable to holders of any series of
Preferred Shares that were authorized with the consent of the holders of a
majority of the Series A Equity Shares or were issued to the original holder of
the Series A Equity Shares (all such Preferred Shares, collectively the "Ranking
Preferred Shares") or the Series A Preferred Shares for four (4) quarterly
dividend periods, the number of directors constituting the Board of Directors
shall, without further action, be increased by one (1) and the holders of a
majority of the Series A Equity Shares shall have the exclusive right together
with holders of all other series of Ranking Preferred Shares, to elect one (1)
director to fill such newly created directorship until such time as all such
dividends in arrears are made current and paid in full, at which time the
director so elected shall cease to be a director, the number of directors
constituting the Board of Directors shall be reduced by one (1) and such
additional
11
<PAGE>
voting rights of the holders of the Series A Equity Shares shall terminate,
subject to revesting in the event of each and every subsequent event of the
character indicated above, (ii) the affirmative vote of the holders of a
majority of the Series A Equity Shares voting together as a class shall be
required to approve any amendment to these Articles of Incorporation that
materially and adversely affects the rights, preferences or powers of the
Series A Equity Shares, including, without limitation, the definition of
Ownership Limit with respect to the Series A Equity Shares, PROVIDED, that
(x) except as required by clause (y) where the amendment to these Articles of
Incorporation for which the vote is required pursuant to this clause (ii)
adversely affects the rights, powers and preferences of other series of
Ranking Preferred Shares, then such amendment shall be approved by a vote of
a majority of the Ranking Preferred Shares affected thereby, voting together
as a class and (y) the unanimous approval of the holders of Series A Equity
Shares shall be required for any amendment to these Articles of Incorporation
that would decrease the rate or change the time of payment of any dividend or
distribution on the Series A Equity Shares, decrease the amount payable upon
redemption of the Series A Equity Shares or upon the voluntary or involuntary
liquidation of the Corporation, or advance the date on which the Series A
Equity Shares may be redeemed by the Corporation, amend the number of shares
of Series A Equity Shares required to effect amendments to these Articles of
Incorporation or amend this Section 4.2A(e), (iii) the affirmative vote of
the holders of a majority of the Ranking Preferred Shares of each affected
series voting together as a class shall be required to approve any merger or
consolidation of the Corporation and another entity in which the Corporation
is not the surviving corporation and each holder of such series of Ranking
Preferred Shares does not receive shares of the surviving corporation with
substantially similar rights, preferences and powers in the surviving
corporation as the Ranking Preferred Shares have with respect to the
Corporation, (iv) the affirmative vote of the holders of a majority of the
Ranking Preferred Shares of each affected series voting together as a class
shall be required to approve any voluntary action by the Board of Directors
intended to cause the Corporation to cease to have the status as a REIT (as
defined in Section 4.5 hereof) and (v) as otherwise required by applicable
law.
(f) NO OTHER RIGHTS. The Series A Equity Shares shall not have any
relative, participating, optional or
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other special rights and powers other than as set forth herein.
SECTION 4.3 COMMON EQUITY SHARES.
(a) COMMON EQUITY SHARES SUBJECT TO TERMS OF SHARES. The Common
Equity Shares shall be subject to the express priorities and limitations of the
Senior Shares.
(b) DIVIDEND RIGHTS. (i) The holders of Common Equity Shares shall
be entitled to receive such dividends as may be declared by the Board of
Directors out of funds legally available therefor.
(ii) Each of the Common Shares, and the Excess Common Shares shall
rank in parity with one another with respect to the declaration and payment of
any dividend or the making of any distribution by, or out of the property and
assets of the Corporation, or the issuance of any rights or warrants to
subscribe for, or purchase securities convertible into, stock or other
securities of the Corporation. No dividend or distribution, whether payable in
cash, securities or other property or assets of the Corporation, shall be
declared or paid or made, and no such rights or warrants shall be issued, in
respect of any of the Common Shares unless an identical dividend or distribution
is concurrently declared and paid or made, or identical rights or warrants are
issued, in respect of each of the Excess Common Shares, nor shall any dividend
or distribution be declared or paid or made, nor any rights or warrants issued,
in respect of any of the Common Shares or any class thereof unless an identical
dividend or distribution is concurrently declared and paid or made, or identical
rights or warrants are issued, in respect of each of the Excess Common Shares,
nor any rights or warrants issued, in respect of any of the Excess Common Shares
unless an identical dividend or distribution is concurrently declared and paid
or made, or identical rights or warrants are issued, in respect of each of the
Common Shares; PROVIDED, HOWEVER, that in the case of any dividend or
distribution payable in, or rights or warrants to subscribe for, or purchase
securities convertible into Common Shares, such dividend or distribution shall
only be payable in, and such rights or warrants shall only provide subscription
or purchase rights relating to securities convertible into, Common Shares to
holders of Common Shares and Excess Common Shares to holders of Excess Common
Shares.
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(c) RIGHTS UPON LIQUIDATION. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of Common Equity Shares shall be
entitled to receive, ratably with each other holder of Common Equity Shares,
that portion of the assets of the Corporation available for distribution to the
holders of its Common Equity Shares, as the number of Common Equity Shares held
by such holder bears to the total number of Common Equity Shares then
outstanding.
(d) VOTING RIGHTS. Except as otherwise provided herein, the holders
of Common Shares shall vote together as a single class. At all meetings of the
shareholders of the Corporation each holder of Common Shares shall be entitled
to one vote for each Common Share entitled to vote at such meeting. The
affirmative vote of a majority of the holders of Common Shares voting together
as a class shall be required to approve: (1) an election to change the
Corporation's status as a REIT, and (2) other matters as required by applicable
law.
(e) ELECTION OF DIRECTORS. (i) The cumulative voting rights set
forth in Section 351.245(3) of the GBCL are hereby eliminated.
SECTION 4.4 PREEMPTIVE RIGHTS. No holder of Common Equity Shares or
of Senior Shares shall be entitled as a matter of right to subscribe for or
purchase, or have any preemptive right with respect to, any part of any new or
additional issue of stock of any class whatsoever, or of securities convertible
into any stock of any class whatsoever, whether now or hereafter authorized and
whether issued for cash or other consideration or by way of dividend.
SECTION 4.5 RESTRICTIONS ON OWNERSHIP AND TRANSFER; EXCHANGE FOR
EXCESS SHARES.
(a) DEFINITIONS. As used in these Articles of Incorporation, the
following terms shall have the following meanings:
"Affiliate" shall mean with respect to any person, any other person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such person and the term
"Affiliated" has a meaning correlative to the foregoing. As used herein the
term "control" shall mean either (i) having
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(directly or indirectly through one or more intermediaries) the exclusive
power to direct the management and policies of a person or (ii) having both
(A) at least fifty percent (50%) of the economic interest in a person and (B)
at least fifty percent (50%) of the voting rights with respect to such person
with the full right to exercise such vote, and the term "controlled" has a
meaning correlative to the foregoing. Notwithstanding the foregoing, (i) with
respect to Westfield American Investments Pty Limited ("Westfield") only, the
term "Affiliate" shall include any United States real estate investment trust
or foreign trust with shares publicly traded on an internationally recognized
national securities exchange, provided that Westfield and its Affiliates own
in the aggregate at least twenty-five percent (25%) of the economic and
voting interests in such real estate investment trust or foreign trust and
Westfield or one of its Affiliates is the manager of all or substantially
all of the properties in which such real estate investment trust or foreign
trust has a direct or indirect interest and for which such real estate
investment trust or foreign trust has the right to designate the manager
thereof or is a manager of such trust. As used herein the term "person"
shall mean an individual, corporation, partnership, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity that may be treated as a person under applicable law.
"Beneficial Ownership" shall mean ownership of Shares either directly
or constructively through the application of Section 544 of the Code, as
modified by Section 856(h) of the Code. The terms "Beneficial Owner",
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Beneficiary" shall mean the beneficiary or beneficiaries of the
Special Trust which shall be the United Jewish Appeal and, if necessary to avoid
the Corporation being "closely held" within the meaning of Section 856(h) of the
Code or to assure that the Corporation satisfies the requirement of
Section 856(a)(5) of the Code that it has at least 100 shareholders, one or more
additional persons exempt from tax under Section 501(c)(3) of the Code as shall
be designated by the Board of Directors or a duly authorized officer of the
Corporation.
"Closely Held" shall have the meaning prescribed in Section 856(h) of
the Code.
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"Closing Date" shall mean the date of the initial closing of the
offerings of Common Shares by the Corporation as described to the registration
statement on Form S-11 as filed with the Securities and Exchange Commission
(Registration No. 333-22731).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and references to sections thereof shall include any appropriate
successor provisions.
"Existing Holder" shall mean Mr. Frank P. Lowy and all of the members
of his family, as such term is defined for purposes of Section 544(a)(2) of the
Code.
"Existing Holder Limit" shall mean, (A) for the period prior to the
Closing Date 33% of the value of the total outstanding Shares of the
Corporation, and (B) for the period on and after the Closing Date, 26% of the
value of the total outstanding Shares of the Corporation.
"Independent Director" shall mean a director of the Company who (i) is
not, and has not for the last 12 months been, an officer, director or employee
of any of the Westfield Group or the WAT Trustee, (ii) is not an affiliate of
any of the Westfield Group or the WAT Trustee or an officer or employee of such
an affiliate, (iii) is not a member of the immediate family of any natural
person described in clauses (i) and (ii) above, and (iv) is free from any
relationship that would interfere with the exercise of independent judgment as a
Director. For purposes of this definition of Independent Director only, an
"Affiliate" shall mean any person directly or indirectly controlling, controlled
by, or under common control with, such other person; "Control" shall mean the
power to exercise a controlling influence over the management or policies of a
company, unless such power is solely the result of an official position with any
of the Westfield Group or the WAT Trustee; and "Member of the Immediate Family"
shall mean any parent, spouse of a parent, child, spouse of a child, spouse,
brother or sister and includes step and adoptive relationships.
"Individual" shall mean any Person that is treated as an individual
for purposes of Section 542(a)(2) of the Code as the application of such Section
may be modified by Section 856(h) of the Code.
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"Institutional Investor" shall mean any "qualified institutional
buyer" as defined in Section (a)(1)(i)(A), (a)(1)(i)(D), (a)(1)(i)(E),
(a)(1)(i)(F), (a)(1)(i)(H) (but limited to any organization exempt from tax
under Section 501(c)(3) of the Code), (a)(1)(iv) or (a)(1)(vi) of Rule 144A
under the Securities Act of 1933, as amended. The term Institutional Investor
shall be deemed to include any foreign entity that would otherwise qualify under
the foregoing definition, including, without limitation, a foreign insurance
company.
"Market Price" shall mean, with respect to Shares of the relevant
class or series on the relevant date, the closing sale price regular way on such
day, or, in case no such sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in each case on the New York
Stock Exchange, or, if such Shares are not listed or admitted to trading on such
exchange, on the principal national securities exchange or quotation system on
which such Shares are quoted or listed or admitted to trading, or, if not quoted
or listed on any national securities exchange or quotation system, the average
of the closing bid and asked prices of such Shares on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting service, or, if not so
available in such manner, the fair market value of such Shares as determined by
a nationally recognized investment banking firm selected by the Board of
Directors.
"Ownership Limit", shall mean, (A) with respect to Shares Beneficially
Owned by any Individual (other than an Existing Holder), (i) for the period
prior to the Closing Date, 4% of the total value of the outstanding Shares of
all classes and series, and (ii) for the period on and after the Closing Date,
5.5% of the total value of the outstanding Shares of all classes and series, and
(B) with respect to the Senior Preferred Shares during the period prior to the
Closing Date, one Senior Preferred Share, in each case subject to adjustment as
set forth in Sections 4.5(i) and 4.5(j).
"Ownership Limitation Termination Date" shall mean the first day, if
any, on which holders of Shares determine, in accordance with any class voting
procedures as provided in these Articles that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT.
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"Person" shall mean an individual, corporation, partnership, estate,
trust (including a trust qualified under section 401(a) or 501(c)(17) of the
Code), a portion of a trust permanently set aside for or to be used exclusively
for the purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity or any government or agency or political subdivision thereof and
also includes a group as that term is used for purposes of Section 13(d)(3) of
the Exchange Act.
"Purported Beneficial Holder" shall mean, with respect to any event
other than a purported Transfer which results in Shares being automatically
exchanged for Excess Shares, the person for whom the Purported Record Holder of
the Shares that were, pursuant to Section 4.5(c), automatically exchanged for
Excess Shares upon the occurrence of such event held such exchanged Shares.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Shares being automatically exchanged for
Excess Shares, the purported beneficial transferee for whom the Purported Record
Transferee would have acquired such exchanged Shares, if such Transfer had been
valid under Sections 4.5(b) and 4.5(c).
"Purported Record Holder" shall mean, with respect to any event other
than a purported Transfer which results in Shares being automatically exchanged
for Excess Shares, the record holder of the Shares that were, pursuant to
Section 4.5(c), automatically exchanged for Excess Shares upon the occurrence of
such event.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Shares being automatically exchanged for
Excess Shares, the record holder of such exchanged Shares if such Transfer had
been valid under Sections 4.5(b) and 4.5(c).
"REIT" shall mean a real estate investment trust under Section 856 of
the Code.
"Shares" shall mean Senior Shares or Common Shares (all as defined in
section 4.1).
"Special Trust" shall mean a trust created pursuant to Section 4.7(a).
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"Special Trust Transferee" shall mean the ultimate transferee or
transferees of New Shares that are to be transferred from a Special Trust upon
transfer of Excess Shares pursuant to Section 4.7(e) below.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of Shares (including the granting or transfer of any option or
entering into any agreement for the sale, transfer or other disposition of
Shares), whether voluntary or involuntary, whether of record or beneficially and
whether by operation of law or otherwise.
"Trustee" shall mean such person, as trustee of the Special Trust, as
shall be selected from time to time by the Board of Directors.
(b) RESTRICTIONS ON OWNERSHIP AND TRANSFER.
(1) Prior to the Ownership Limitation Termination Date, no Individual
(other than an Existing Holder) shall Beneficially Own Shares (and, with respect
to the Senior Preferred Shares, during the period prior to the Closing Date, no
Person shall beneficially own (without reference to any rules of attribution)
Senior Preferred Shares, in each case in excess of the applicable Ownership
Limit.) In addition, prior to the Ownership Limitation Termination Date, no
Existing Holder shall Beneficially Own Shares in excess of the Existing Holder
Limit.
(2) Prior to the Ownership Limitation Termination Date, to the extent
that any Transfer, if effective, would result in any Individual (other than an
Existing Holder) Beneficially Owning Shares in excess of the Ownership Limit,
the Transfer of such Shares which would be otherwise Beneficially Owned by such
Individual in excess of such Ownership Limit shall be void AB INITIO; and the
intended transferee shall acquire no rights to such Shares.
(3) Prior to the Ownership Limitation Termination Date, any Transfer
that, if effective, would result in any Existing Holder Beneficially Owning
Shares in excess of the Existing Holder Limit shall be void AB INITIO as to the
Transfer of such Shares which would be otherwise Beneficially Owned by such
Existing Holder in excess of such Existing Holder Limit; and such Existing
Holder shall acquire no rights to such Shares.
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(4) Prior to the earlier of the Closing Date and the Ownership
Limitation Termination Date, any Transfer of Senior Preferred Shares that, if
effective, would result in any Person (determined without reference to any rules
of attribution) beneficially owning Senior Preferred Shares in excess of the
Ownership Limit with respect to Senior Preferred Shares shall be void AB INITIO
as to the Transfer of such Preferred Shares which would be otherwise
beneficially owned by such Person (determined without reference to any rules of
attribution) in excess of such amount; and the intended transferee shall acquire
no rights in such Senior Preferred Shares.
(5) Prior to the Ownership Limitation Termination Date, any Transfer
that, if effective, would result in the Shares being beneficially owned by less
than 100 Persons (determined without reference to any rules of attribution) or
which would otherwise cause the Corporation to fail to satisfy the requirements
for qualification as a REIT, shall be void AB INITIO as to the Transfer of such
Shares which would be otherwise beneficially owned by the transferee (determined
without reference to any rules of attribution); and the intended transferee
shall acquire no rights in such Shares.
(6) Prior to the Ownership Limitation Termination Date, any Transfer
that, if effective, would result in the Corporation being "Closely Held" shall
be void AB INITIO as to the Transfer of the Shares which would cause the
Corporation to be "Closely Held" and the intended transferee shall acquire no
rights in such Shares.
(c) SHARES EXCHANGED FOR EXCESS SHARES.
(1) If at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer such that, notwithstanding the other
provisions contained in this Article Fourth, any Individual (other than an
Existing Holder) would Beneficially Own Shares in excess of the Ownership Limit,
such number of Shares in excess of such Ownership Limit (rounded up to the
nearest whole Share) shall be automatically exchanged for Excess Shares, and
shall be subject to the terms of Section 4.7 hereof.
(2) If at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer such that, notwithstanding the other
provisions contained in this Article Fourth, an Existing Holder would
Beneficially Own Shares in excess of the applicable Existing Holder
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Limit, then such number of Shares in excess of such Existing Holder Limit
(rounded up to the nearest whole Share) shall be automatically exchanged for
Excess Shares, and shall be subject to the terms of Section 4.7 hereof.
(3) If at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer of Shares which would, notwithstanding the
other provisions contained in this Article Fourth, cause the Corporation to
become Closely Held, then the Shares being Transferred which would cause the
Corporation to be Closely Held (rounded up to the nearest whole Share) shall be
automatically exchanged for Excess Shares, and shall be subject to the terms of
Section 4.7 hereof.
(4) If, at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer such that, notwithstanding the other
provisions contained in this Article Fourth, the total outstanding Shares would
be beneficially owned (without reference to any rules of attribution) by fewer
than 100 Persons, then such number of Shares as would otherwise cause the
Corporation to fail to satisfy the ownership requirements of Section 856(a)(5)
of the Code shall automatically be exchanged for Excess Shares and shall be
subject to the terms of Section 4.7 hereof.
(5) If, at any time prior to the Ownership Limitation Termination
Date, an event other than a purported Transfer (an "Event") occurs which would
(i) cause any Individual (other than an Existing Holder) to Beneficially Own
Shares in excess of the Ownership Limit, (ii) cause an Existing Holder to
Beneficially Own Shares in excess of the Existing Holder Limit, or (iii) cause
the Corporation to be Closely Held, or then outstanding Shares Beneficially
Owned by such Individual or Existing Holder, as the case may be, shall be
automatically exchanged for Excess Shares, and shall be subject to the terms of
Section 4.7 hereof to the extent necessary to eliminate such excess ownership.
In determining which outstanding Shares shall be exchanged for Excess Shares,
outstanding Shares, if any, directly held or Beneficially Owned by any
Individual who caused the Event to occur shall be exchanged for Excess Shares
before any outstanding Shares not so Beneficially Owned are exchanged for Excess
Shares, and to the extent not inconsistent therewith, in such manner as
minimizes the aggregate value of the Shares that are exchanged for Excess Shares
(except to the extent that the Board of Directors determines that the Shares to
be exchanged for Excess Shares are to be those held through a Person that caused
or contributed to the
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occurrence of such Event, rather than Shares held through a different chain
of ownership). Where several such Individuals or Persons exist, the
outstanding Shares shall be exchanged for Excess Shares in such manner as
minimizes the aggregate value of the Shares that are exchanged for Excess
Shares (except to the extent that the Board of Directors determines that the
Shares to be exchanged for Excess Shares are to be those held through Persons
that caused or contributed to the occurrence of such Event, rather than
Shares held through a different chain of ownership), and to the extent not
inconsistent therewith, on a pro rata basis. If no Persons or Individuals
caused the Event to occur, outstanding Shares shall be exchanged for Excess
Shares in such manner as minimizes the aggregate value of Shares that are
exchanged for Excess Shares.
(6) Any exchange of Shares for Excess Shares pursuant to this Section
4.5(c) and Section 4.7 hereof shall be effective as of the close of business on
the business day prior to the date of the Transfer or other Event that resulted
in such exchange.
(7) A Special Trust that, in accordance with Section 4.7(a) and these
Articles is the holder of any Excess Shares shall, except as otherwise
specifically provided herein, have the same rights hereunder, including without
limitation, voting rights and distribution rights, to which a permitted holder
of the Shares exchanged therefor would be entitled in respect of such Shares had
such Shares not been exchanged for Excess Shares. Such Excess Shares shall be
treated as Shares of the same class or series as the Shares exchanged therefor.
(d) REMEDIES FOR BREACH. If the Board of Directors or its designees
shall at any time determine in good faith that a Transfer has taken place in
violation of Section 4.5(b) or 4.5(c) or that a Person intends to acquire or has
attempted to acquire beneficial ownership (determined without reference to any
rules of attribution) or an Individual intends to acquire or has attempted to
acquire Beneficial Ownership of any Shares in violation of Sections 4.5(b) or
4.5(c), the Board of Directors or its designees shall take such action as it
deems advisable to refuse to give effect to or to prevent such Transfer (or any
Transfer related to such intent), including, but not limited to, refusing to
give effect to such Transfer on the books of the Corporation or instituting
proceedings to prevent such Transfers, provided, however, that nothing contained
in this Section 4.5(d) shall prevent the automatic application and
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operation of Section 4.5(b) (regarding certain attempted Transfers of Shares
being void ab initio) and, failing the operation and application of Section
4.5(b) for any reason, the automatic application and operation of Section
4.5(c) (regarding the exchange of Shares for Excess Shares), in each case
without the need for any further action by the Corporation or the Board of
Directors.
(e) NOTICE OF OWNERSHIP OR ATTEMPTED OWNERSHIP IN VIOLATION OF
SECTION 4.5(b). Any Individual or Person who acquires or attempts to acquire
Beneficial Ownership of Shares in violation of Sections 4.5(b) or 4.5(c), shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such acquisition or attempted
acquisition on the Corporation's status as a REIT.
(f) OWNERS REQUIRED TO PROVIDE INFORMATION. Prior to the Ownership
Limitation Termination Date,
each Person who is a Beneficial Owner of Shares and each Person
(including the shareholder of record) who is holding Shares for a Beneficial
Owner shall provide to the Corporation such information as the Corporation may
request, in good faith, in order to determine the Corporation's status as a REIT
or to comply with regulations promulgated under the REIT provisions of the Code
including, without limitation, Treasury Regulations Section 1.857-8 or any
successor regulation.
(g) REMEDIES NOT LIMITED. Nothing contained in this Article Fourth
shall (i) preclude the settlement of Shares on the New York Stock Exchange or
(ii) limit the authority of the Board of Directors to take such other action as
it deems necessary or advisable to protect the Corporation and the interests of
its shareholders by preservation of the Corporation's status as a REIT.
(h) AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of this Article Fourth, including any definition contained in
Section 4.5(a) and any ambiguity with respect to which Shares are to be
exchanged for Excess Shares in a given situation, the Board of Directors shall
have the power to determine in good faith the application of the provisions of
this Article Fourth with respect to any situation based on the facts known to
it.
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(i) MODIFICATIONS OF OWNERSHIP LIMIT. Subject to the limitations
provided in Section 4.5(j), the Board of Directors may from time to time
increase or decrease the Ownership Limit with respect to any Individual or
Person, or any Shares or class or series thereof.
(j) LIMITATIONS ON MODIFICATIONS.
(1) The Ownership Limit may not be increased if, after giving effect
to such increase, five Individuals could Beneficially Own, in the aggregate,
more than 49.9% of the value of the outstanding Shares.
(2) Prior to the modification of any Ownership Limit pursuant to
Section 4.5(i), the Board of Directors may require such opinions of counsel,
affidavits, undertakings or agreements as it may deem necessary or advisable in
order to determine or ensure the Corporation's status as a REIT.
(3) The Ownership Limit may not be increased to a percentage which is
greater than 9.8% of the value of the outstanding Shares of the Corporation of
all classes and series.
SECTION 4.6 LEGEND. (a) Each certificate issued on or after the
Closing Date in respect of Common Shares shall bear the following legend:
"The Common Shares represented by this certificate are subject to
restrictions on ownership and 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. No Individual may Beneficially
Own Shares in excess of the then applicable Ownership Limit, which may
decrease or increase from time to time, unless such Individual is an
Existing Holder. In general, any Individual who attempts to Beneficially
Own shares in excess of the Ownership Limit must immediately notify the
Corporation. All capitalized terms used in this legend have the meanings
set forth in the Articles of Incorporation, a copy of which, including the
restrictions on ownership and transfer, will be sent without charge to each
shareholder who so requests. If the restrictions on ownership and transfer
are violated, the Common Shares represented hereby may be automatically
exchanged for Excess Shares and deemed transferred to a Special Trust as
provided in the Articles of Incorporation."
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(b) Each certificate issued prior to the Closing Date in respect of
Senior Preferred Shares shall bear the following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on ownership and 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
beneficially own more than one share of the outstanding Preferred Shares.
Any Person who attempts to beneficially own Preferred Shares in excess of
the above limitations must immediately notify the Corporation and any
transfer which would result in ownership of Preferred Shares in excess of
the above limitation shall be void. All capitalized terms used in this
legend have the meanings set forth in the Articles of Incorporation, a copy
of which, including the restrictions on ownership and transfer, will be
sent without charge to each shareholder who so requests."
The stock certificates evidencing any Senior Preferred Shares issued on or after
the Closing Date shall bear a legend in the form as set forth in Section 4.6(c)
hereof, PROVIDED, HOWEVER, that the term "Senior Preferred Shares" shall be
substituted in place of the term "Preferred Shares" in every place in which the
term "Preferred Shares" appears in such legend.
(c) Each certificate issued on or after the Closing Date in respect
of Preferred Shares shall bear the following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on ownership and 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. No Individual may Beneficially
Own Shares in excess of the then applicable Ownership Limit, which may
decrease or increase from time to time, unless such Individual is an
Existing Holder. In general, any Individual who attempts to Beneficially
Own Shares in excess of the Ownership Limit must immediately notify the
Corporation. All capitalized terms used in this legend have the meanings
set forth in the Articles of Incorporation, a copy of which, including the
restrictions on ownership and transfer, will be sent
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without charge to each shareholder who so requests. If the restrictions on
ownership and transfer are violated, the Preferred Shares represented
hereby may be automatically exchanged for Excess Shares and deemed
transferred to a Special Trust as provided in the Articles of
Incorporation."
SECTION 4.7 EXCESS SHARES.
(a) OWNERSHIP IN TRUST. Upon any purported Transfer or other Event
that results in the exchange of Shares for Excess Shares pursuant to Section
4.5(c), such Excess Shares shall be deemed to have been transferred to a
Trustee, as trustee of a Special Trust for the exclusive benefit of a
Beneficiary. Excess Shares of any class or series that are held in trust as
provided in this Section 4.7 shall constitute issued and outstanding Common
Shares or Senior Shares of the Corporation, as the case may be. The Purported
Record Transferee or Purported Record Holder shall have no rights in such Excess
Shares, but shall have the rights provided in Sections 4.7(c) and 4.7(e). Where
a Transfer or other Event results in an automatic exchange of Shares of more
than one class or series for Excess Shares of more than one class or series,
separate Special Trusts shall be deemed to have been established for the Excess
Shares of each such class or series. Each exchange of Shares for Excess Shares
pursuant to Section 4.5(c)(5) hereof (relating to the requirement of Section
856(a)(5) of the Code that the Corporation have at least 100 shareholders)
shall, with respect to each such Transfer that caused such exchange, be effected
through a transfer of Excess Shares to a separate and distinct Special Trust for
the benefit of a separate and distinct Beneficiary.
(b) DIVIDEND RIGHTS. Dividends or other distributions that have been
declared on any Shares that have been exchanged for Excess Shares pursuant to
Section 4.5(c) shall be paid when due to the appropriate Trustee, as trustee of
the particular Special Trust for the exclusive benefit of the Beneficiary of
such Special Trust until such time as the Trustee shall transfer New Shares in
respect of such Excess Shares pursuant to Section 4.7(e). Any dividend or
distribution paid prior to the discovery by the Corporation that the Shares with
respect to which the dividend or distribution was made had been exchanged for
Excess Shares shall be returned to the Corporation and promptly thereafter paid
over to the Trustee, as trustee of the Special Trust for the exclusive benefit
of the Beneficiary.
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(c) RIGHTS UPON LIQUIDATION. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, the Trustee of each Special Trust that is the
holder of any Excess Shares shall be entitled to receive a portion of the assets
of the Corporation available for distribution to the holders of that class or
series of Shares for which such Excess Shares were exchanged originally pursuant
to Section 4.5(c) and this Section 4.7. The Trustee shall distribute to the
Purported Record Transferee or Purported Record Holder of the Excess Shares held
in the Special Trust an amount (the "Original Value Amount") not to exceed (A)
in the case of a Purported Record Holder or in the case of a Purported Record
Transferee that did not give value for the Shares for which such Excess Shares
were exchanged (through a gift, devise or other transaction), the Market Price
of the Shares for which such Excess Shares were exchanged as of the date of such
exchange or (B) in the case of a Purported Record Transferee that did give value
for the Shares for which such Excess Shares were exchanged, the price such
Purported Record Transferee paid for such Shares, out of the assets received by
the Trustee in respect of the Excess Shares held in such Special Trust in
connection with any liquidation, dissolution or winding up of, or any
distribution of the assets of, the Corporation, and the Trustee shall distribute
to the Beneficiary of the particular Special Trust any amounts in excess of the
Original Common Amount.
(d) VOTING RIGHTS. Each Trustee, as holder of any Excess Shares and
as trustee of a Special Trust for the exclusive benefit of a Beneficiary, shall
have the same right to vote any such Excess Shares as the Shares exchanged
therefore would have had if they had not been so exchanged in connection with
any matter on which the holders of Shares are entitled to vote until such time
as the Trustee shall transfer New Shares in respect of such Excess Shares
pursuant to Section 4.7(e).
(e) TRANSFER OF EXCESS SHARES.
(1) Any Excess Shares which were issued in exchange for Shares
pursuant to Section 4.5(c) and are held by a Trustee in a Special Trust for the
benefit of a Beneficiary pursuant to Section 4.7(a) shall be Transferred by the
Trustee only as provided in this Section 4.7(e). Such Trustee shall, within one
hundred eighty (180) days after the date of the purported Transfer or other
Event that resulted in such Excess Shares being issued in exchange for
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Shares, or, if later, one hundred eighty (180) days after the date on which
the Corporation first became aware of the issuance of Excess Shares (the
"Excess Shares Exchange Date"), Transfer the Excess Shares held in a Special
Trust to a Special Trust Transferee, provided that (i) simultaneously with
such Transfer such Excess Shares shall be automatically exchanged for an
equal number of Shares of the same class or series that had originally been
exchanged for such Excess Shares (the "New Shares"), (ii) such New Shares
would not as a result of such Transfer to such Special Trust Transferee be
automatically exchanged for Excess Shares pursuant to Section 4.5(c) and
(iii) such Special Trust Transferee is an Institutional Investor or, if
designated by the Corporation as provided below, an Affiliate of a
shareholder. The Corporation shall have the right to designate a Special
Trust Transferee within the first ninety (90) days after the Excess Shares
Exchange Date provided that (i) such Special Trust Transferee is either (A)
an Affiliate of a shareholder or (B) an Institutional Investor and (ii) the
New Shares would not as a result of a Transfer to such Special Trust
Transferee be automatically exchanged for Excess Shares pursuant to Section
4.5(c). Notwithstanding anything to the contrary in this Section 4.7(e),
each Trustee shall Transfer New Shares in respect of the Excess Shares held
in each Special Trust to a Special Trust Transferee designated by the
Corporation pursuant to the immediately preceding sentence and, during the
first ninety (90) days after the relevant Excess Shares Exchange Date, the
Trustee shall not Transfer New Shares in respect of the Excess Shares to a
Special Trust Transferee that has not been designated by the Corporation
pursuant to the immediately preceding sentence.
Each Trustee shall distribute to the particular Purported Record
Transferee or Purported Record Holder of the Excess Shares held in the Special
Trust out of the purchase price received by the Trustee from a Special Trust
Transferee for New Shares in respect of such Excess Shares an amount (the
"Original Transfer Amount") not to exceed (A) in the case of a Purported Record
Holder or in the case of a Purported Record Transferee that did not give value
for the Shares for which such Excess Shares were exchanged (through a gift,
devise or other transaction), the lesser of (w) the Market Price of such Shares
as of the date such Shares were exchanged for Excess Shares and (x) the purchase
price received by the Trustee from the Special Trust Transferee for the New
Shares or (B) in the case of a Purported Record Transferee that did give value
for the Shares for which such Excess Shares were exchanged, the lesser of (y)
the purchase
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price received by the Trustee from the Special Trust Transferee for
the New Shares and (Z) the price such Purported Record Transferee paid for such
Shares. The Trustee shall distribute to the particular Beneficiary of the
Special Trust any amounts in excess of the Original Transfer Amount.
(2) Notwithstanding the foregoing, if a Purported Record Transferee
or Purported Record Holder receives any amounts in respect of any Excess Shares
held in a Special Trust that exceeds the amounts allowable under
Section 4.7(e)(1), such Purported Record Transferee or Purported Record Holder
shall pay such excess to the Trustee for the benefit of the Beneficiary of such
Special Trust.
SECTION 4.8 SEVERABILITY. If any provision of this Article Fourth or
any application of any such provision is determined to be invalid by any federal
or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
ARTICLE FIFTH
The Corporation shall have perpetual existence.
ARTICLE SIXTH
(a) The Board of Directors shall have the power without the assent or
vote of the stockholders to adopt, amend, alter or repeal the By-Laws of the
Corporation, except to the extent that the By-Laws or these Articles of
Incorporation otherwise provide.
(b) The Corporation may in its By-Laws confer powers upon the Board
of Directors in addition to the powers and authorities expressly conferred upon
the Board of Directors by applicable law.
ARTICLE SEVENTH
(a) The number of directors of the Corporation shall be fixed by the
By-Laws of the Corporation but in no event shall be less than three (3) or more
than fourteen
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(14) and may be increased or decreased within such limitations
from time to time in such a manner as may be prescribed by the By-Laws and in
accordance with the terms hereof. In the event that the Board is increased by
such a resolution, the vacancy or vacancies so resulting shall be filled by a
vote of the majority of the directors then in office. No decrease in number in
the Board shall shorten the term of any incumbent directors. Any change shall
be reported to the Secretary of State within thirty (30) calendar days of such
change. The Board of Directors shall be divided into three (3) classes, as
nearly equal in number as possible, with the mode of such classification to be
provided for in the By-Laws. Except as otherwise provided in the By-Laws with
respect to the implementation of this Article 7, directors shall be elected to
hold office for a term of three (3) years, with the term of office of one class
expiring each year. Any director or the entire Board of Directors may be
removed, for cause only, by the holders of 66 2/3 of all shares then entitled to
vote at an election of directors. The provisions of this Section 7(a) shall not
be amended, altered, changed or repealed unless approved by the affirmative vote
of the holders of not less than seventy-five percent of the total voting power
of all outstanding shares of voting stock.
(b) Unless and except to the extent that the By-Laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
(c) Notwithstanding anything contained in these Articles of
Incorporation to the contrary (other than Section 4.3(d) above), the affirmative
vote of the holders of a majority in interest of the then outstanding Common
Shares shall be required to terminate the Corporation's status as a real estate
investment trust.
(d) Any action required or permitted to be taken by the holders of
any class or series of stock of the Corporation, including but not limited to
the election of directors, may be taken by written consent or consents but only
if such consent or consents are signed by all holders of the class or series of
stock entitled to vote on such action.
ARTICLE EIGHTH
(a) The Corporation shall, to the fullest extent permitted by the
GBCL, including the provisions of Section
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351.355.7 RSMo, indemnify and advance expenses to any person who was or is a
party or threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a Director or
Officer of the Corporation or is or was serving at the request of the
Corporation as a director or officer of any other corporation or enterprise.
Such right of indemnification shall inure to the benefit of the heirs,
executors, administrators and personal representatives of such a person. The
indemnification and advancement of expenses provided for herein shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any By-Law, agreement, vote
of shareholders or disinterested directors or otherwise.
(b) The Corporation may, to such extent as it deems appropriate and
as may be permitted by the GBCL, indemnify any other person acting in any of the
other capacities referred to in Section 351.355 of the GBCL against any such
claim by reason of the fact that he is or was serving the Corporation or at the
request of the Corporation in any of such capacities or arising out of his
status in any such capacity.
(c) The Corporation may, but shall not be required to, supplement the
right of indemnification under paragraph (a) above by (1) the purchase of
insurance on behalf of any one or more of such persons, whether or not the
Corporation would be obligated to indemnify such person under paragraph (a)
above, (2) individual or group indemnification agreements with any one or more
of such persons and (3) advances for related expenses of such a person.
ARTICLE NINTH
(a) In addition to any affirmative vote required by law, the Articles
of Incorporation, any agreement with any national securities exchange or
otherwise, any Business Combination (as hereinafter defined) involving the
Corporation shall be subject to approval in the manner set forth in this Article
9.
(b) No Business Combination shall be consummated or effected with an
Interested Shareholder (as hereinafter
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defined) during the five-year period after which a person or an entity
becomes an Interested Shareholder unless such Business Combination or the
transaction in which the person or entity becomes an Interested Shareholder
is approved by the Board of Directors on or before the date of the
Acquisition Transaction (as hereinafter defined).
(c) After the five-year period following the Acquisition Transaction,
Business Combinations may occur only if (i) prior to the Acquisition
Transaction, the board of directors approved the Acquisition Transaction or
approved the Business Combination in question; (ii) the holders of a majority of
the outstanding stock, other than stock owned by the Interested Shareholder,
approve the Business Combination or (iii) the Business Combination meets all of
the following conditions:
(A) The aggregate amount of the cash and the market value as of the
consummation date of consideration other than cash to be received per share by
holders of outstanding shares of Common Equity Shares is at least equal to the
higher of the following:
1. The highest per share price paid by such Interested Shareholder
at a time when he was the beneficial owner, directly or indirectly, of five
percent or more of the outstanding voting stock of the Corporation, for any
shares of common stock of the same class or series acquired by it within the
five-year period immediately prior to the announcement date with respect to such
Business Combination, or within the five-year period immediately prior to, or
in, the transaction in which such Interested Shareholder became an Interested
Shareholder, whichever is higher; plus, in either case, interest compounded
annually from the earliest date on which such highest per share acquisition
price was paid through the consummation date at an amount equal to the greater
of (i) the rate for one-year United States treasury obligations from time to
time in effect and (ii) 8 1/2%; less the aggregate amount of any cash dividends
paid, and the market value of any dividends paid other than in cash, per share
of common stock since such earliest date, up to the amount of such interest; and
2. The market value per share of common stock on the announcement
date with respect to such Business Combination or on such Interested
Shareholder's stock acquisition date, whichever is higher; plus interest
compounded annually from such date through the consummation date at an amount
equal to the greater of (i) the rate for
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one-year United States treasury obligations from time to time in effect and
(ii) 8 1/2%; less the aggregate amount of any cash dividend paid, and the
market value of any dividends paid other than in cash, per share of common
stock since such date, up to the amount of such interest;
(B) The aggregate amount of the cash and the market value as of the
consummation date of consideration other than cash to be received per share by
holders of outstanding shares of any class or series of stock other than the
Common Equity Shares is at least equal to the highest of the following, whether
or not such Interested Shareholder has previously acquired any shares of such
class or series of stock:
1. The highest per share price paid by such Interested Shareholder
at a time when he was the beneficial owner, directly or indirectly, of five
percent or more of the outstanding voting stock of the Corporation, for any
shares of such class or series of stock acquired by him within the five-year
period immediately prior to the announcement date with respect to such Business
Combination, or within the five-year period immediately prior to, or in, the
transaction in which such Interested Shareholder became an Interested
Shareholder, whichever is higher; plus, in either case, interest compounded
annually from the earliest date on which such highest per share acquisition
price was paid through the consummation date at an amount equal to the greater
of (i) the rate for one-year United States treasury obligations from time to
time in effect and (ii) 8 1/2%; less the aggregate amount of any cash dividends
paid, and the market value of any dividends paid other than in cash, per share
of such class or series of stock since such earliest date, up to the amount of
such interest;
2. The highest preferential amount per share to which the holders of
shares of such class or series of stock are entitled in the event of any
voluntary liquidation, dissolution or winding up of the Corporation, plus the
aggregate amount of any dividends declared or due as to which such holders are
entitled prior to payment of dividends on some other class or series of stock,
unless the aggregate amount of such dividends is included in such preferential
amount; and
3. The market value per share of such class or series of stock on
the announcement date with respect to such business combination or on such
Interested Shareholder's stock acquisition date, whichever is higher;
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plus interest compounded annually from such date through the consummation
date at an amount equal to the greater of (i) the rate for one-year United
States treasury obligations from time to time in effect and (ii) 8 1/2%; less
the aggregate amount of any cash dividends paid, and the market value of any
dividends paid other than in cash, per share of such class or series of stock
since such date, up to the amount of such interest;
(C) The consideration to be received by holders of a particular class
or series of outstanding stock, including the Common Equity Shares, of the
Corporation in such Business Combination is in cash or in the same form as the
Interested Shareholder has used to acquire the largest numbers of shares of such
class of series of stock previously acquired by it, and such consideration shall
be distributed promptly;
(D) The holders of all outstanding shares of stock of the Corporation
not beneficially owned by such Interested Shareholder immediately prior to the
consummation of such Business Combination are entitled to receive in such
Business Combination cash or other consideration for such shares in compliance
with paragraphs (A),(B) and (C) of this clause (iii) of this paragraph (c) of
this Article Ninth;
(E) After such Interested Shareholder's stock acquisition date and
prior to the consummation date with respect to such Business Combination, such
Interested Shareholder has not become the beneficial owner of any additional
shares of voting stock of the Corporation except:
1. As part of the transaction which resulted in such Interested
Shareholder becoming an Interested Shareholder;
2. Through a Business Combination meeting all of the conditions of
clause (ii) of this paragraph (c) of this Article Ninth and this clause (iii) of
this paragraph (c) of this Article Ninth;
3. Through purchase by such Interested Shareholder at any price
which, if such price had been paid in an otherwise permissible Business
Combination the announcement date and consummation date of which were the date
of such purchase, would have satisfied the requirements of paragraphs (A), (B)
and (C) of this clause (iii) of this paragraph (c) of this Article Ninth.
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(e) DEFINITIONS. As used in this Article Nine, the following terms
shall have the following meanings:
"Acquisition Transaction" shall mean any transaction in which any
Person becomes an Interested Shareholder.
"Business Combination" shall mean (i) any merger, consolidation or
exchange of shares of capital stock of the Corporation of any of its
subsidiaries with or into an interested Shareholder, in each case irrespective
of which corporation or company is to be the surviving entity; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition to or with an
Interested Shareholder (in a single transaction or a series of related
transactions), other than in the ordinary course of business, of all or a
substantial part of the assets of the Corporation (including without limitation
any securities or assets of a subsidiary of the Corporation) or all or a
substantial part of the assets of any of its subsidiaries; (iii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition to or with the
Corporation or to or with any of its subsidiaries (in a single transaction or a
series of related transactions) other than in the ordinary course of business,
of all or a substantial part of the assets of an Interested Shareholder; (iv)
the issuance or transfer by the Corporation or any of its subsidiaries of any
securities of the Corporation or any of its subsidiaries to an Interested
Shareholder (other than an issuance or transfer of securities which is effected
on a pro rata basis to all shareholders of the Corporation); (v) the acquisition
by the Corporation or any of its subsidiaries from an Interested Shareholder of
any securities issued by an Interested Shareholder (other than an issuance or
transfer of securities which is effected on a pro rata basis to all shareholders
of the Interested Shareholder); (vi) any recapitalization or reclassification of
shares of any class of capital stock of the Corporation or any merger or
consolidation of the Corporation with any of its subsidiaries which would have
the effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of capital stock of the Corporation (or any
securities convertible into any class of such capital stock) owned by any
Interested Shareholder; (vii) any merger or consolidation of the Corporation
with any of its subsidiaries after which the provisions of this Article 9 of the
Articles of Incorporation shall not appear in the Articles of Incorporation of
the surviving entity; (viii) a plan of partial or complete liquidation or
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dissolution of the Corporation or spin-off or sale of a substantial part of the
assets of the Corporation or any of its subsidiaries proposed by or on behalf of
an Interested Shareholder; and (ix) any agreement, contract, plan, proposal or
other arrangement providing for any of the foregoing.
"Interested Shareholder" shall mean a Person which beneficially owns
or controls 20% or more of the outstanding voting shares of the Corporation
PROVIDED that any Person who would be an Interested Shareholder as of April 15,
1997 shall be excluded from the definition of Interested Shareholder.
"Person" shall mean any individual, corporation, partnership or other
person or entity.
(f) The provisions of this Article 9 shall not be amended, altered,
changed or repealed nor may any provision inconsistent with any of such
provisions be added to the Articles of Incorporation unless approved by the
affirmative vote of the holders of not less than the greater of (i) seventy-five
percent of the total voting power of all outstanding shares of voting stock of
the Corporation, voting as a single class and (ii) a majority of shareholders
other than any Interested Shareholder.
ARTICLE TENTH
The Corporation reserves the right at any time and from time to time
to amend, alter, change or repeal any provision contained in these Articles of
Incorporation, and any other provisions authorized by the laws of the State of
Missouri at the time in force may be added or inserted in the manner now or
hereafter prescribed herein or by applicable law, and all rights, preferences
and privileges of whatsoever nature conferred upon shareholders, directors or
any other persons whomsoever by and pursuant to these Articles of Incorporation
in their present form or as hereafter amended are granted subject to the rights
reserved in this Article Ninth; PROVIDED, HOWEVER, that any amendment or repeal
of Article Eighth of these Articles of Incorporation shall not adversely affect
any right or protection existing hereunder immediately prior to such amendment
or repeal.
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ARTICLE ELEVENTH
The names of the original incorporators were Morton D. May, David May
and S.B. Butler, all of St. Louis, Missouri.
* * *
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EXHIBIT 3.2
--------------------------
CERTIFICATE OF DESIGNATION
SETTING FORTH "RESOLUTION DESIGNATING
SERIES B PREFERRED SHARES
AND FIXING PREFERENCES AND RIGHTS THEREOF"
ADOPTED BY THE BOARD OF DIRECTORS OF
WESTFIELD AMERICA, INC.
PURSUANT TO THE PROVISIONS OF SECTION 351.180(7) OF THE
GENERAL AND BUSINESS CORPORATION LAW OF THE STATE
OF MISSOURI, AS AMENDED
I, the undersigned, a Co-President of Westfield America, Inc., a
Missouri corporation (hereinafter sometimes referred to as the "Corporation"),
hereby certify as follows:
FIRST: That under the provisions of Article Fourth of the Restated
Articles of Incorporation, as amended, of the Corporation, the total number
of shares of all classes of capital stock which the Corporation may issue is
410,000,200 shares, of which (I) 200 shares shall be non-voting senior
preferred stock, par value $1.00 per share (the "Senior Preferred Shares"),
(II) 5,000,000 shares shall be Preferred Shares, with par value of $1.00 per
share (the "Preferred Shares"), 940,000 of which have been designated as
Series A Preferred Shares, with a liquidation value of $100 per share (the
"Series A Preferred Shares"), (III) 200,000,000 shall be shares of common
stock, par value $.01 per share (the "Common Shares"), (IV) 200,000,000 shall
be shares of excess common stock, par value $.01 per share (the "Excess
Common Shares", and together with the Common Shares, the "Common Equity
Shares") and (V) 5,000,000 shares shall be excess preferred stock, par value
$1.00 per share (the "Excess Preferred Shares", and together with the
Preferred Shares, the "Preferred Equity Shares"), and under said
<PAGE>
Article of Incorporation (as amended, the "Article of Incorporation"), the
shares of Preferred Stock are authorized to be issued by the Board of
Directors and the Board of Directors is expressly authorized to determine in
the Resolution, the designation, powers, rights, preferences and
qualifications, limitations or restrictions, not fixed and determined by the
Articles of Incorporation.
SECOND: That the Pricing Committee of the Board of Directors of
the Corporation pursuant to the authority so vested in it by the Board of
Directors and Article Fourth of the Certificate of Incorporation, and in
accordance with the provisions of Section 351.180(7) of the General and
Business Corporation Law of Missouri, as amended, adopted on May 15, 1997 the
following resolution creating a series of Preferred Stock designated as
"Series B Preferred Shares", which resolution has not been amended, modified,
rescinded or revoked and is in full force and effect on the date hereof.
"RESOLUTION OF THE BOARD OF DIRECTORS OF
WESTFIELD AMERICA, INC. DESIGNATING
'SERIES B PREFERRED SHARES'
AND FIXING PREFERENCES AND RIGHTS THEREOF"
BE IT RESOLVED, that, pursuant to authority expressly granted to
and vested in the Board of Directors of Westfield America, Inc., hereinafter
called the "Corporation", by the provisions of the Articles of Incorporation,
as amended, the Board of Directors of the Corporation hereby fixes the
designation, voting powers, rights on liquidation or dissolution, and other
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the designations,
preferences and relative rights, and the qualifications, limitations or
restrictions thereof, set forth in the Articles of Incorporation which are
applicable to the Series B Preferred Shares) as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. The number and
designation of the series of Preferred Stock
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authorized hereby shall be 400,000 shares of "Series B Preferred Shares", par
value $1.00 per share, and is hereinafter in this Resolution called the
"Series B Preferred Shares."
SECTION 2. RANK. The Series B Preferred Shares shall with respect
to dividend rights and rights on liquidation, dissolution and winding up of
the affairs of the Corporation, rank PARI PASSU to the Series A Preferred
Shares.
Each Series B Preferred Share shall be identical in all respects to
each other Series B Preferred Share. Each Excess Series B Preferred Share
shall be identical in all respects to each other Excess Series B Preferred
Share, and except as otherwise provided herein, shall be identical in all
respects to each Series B Preferred Share (the Series B Preferred Shares
together with the Excess Series B Preferred Shares being hereinafter referred
to as the "Series B Equity Shares"). Series B Preferred Shares that are
redeemed or purchased by the Corporation may, at the election of the
Corporation either (I) be reissued by the Corporation or (II) be canceled and
if so canceled shall revert to authorized but unissued Preferred Shares.
SECTION 3. DIVIDEND RIGHTS. (a) The holders of shares of Series
B Preferred Shares shall be entitled to receive, when and as declared by the
Board of Directors of the Corporation, but only out of funds legally
available therefor, cumulative cash dividends payable to shareholders of
record on the respective date, not exceeding 50 days preceding such dividend
payment date, fixed for the purpose by the Board of Directors in advance of
payment of each particular dividend in an amount equal to the greater of (A)
$8.50 per share per annum and (B) an amount per share equal to 6.6667
(subject to proportional adjustment in the case of any subdivision, stock
split, stock dividend, combination or reverse split of the Common Equity
Shares or the Preferred Equity Shares) (as so adjusted from time to time, the
"Common Equivalent Factor") times the dollar amount of
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dividends declared with respect to each Common Equity Share (such product,
the "Common Equivalent Amount") for the same annual period; PROVIDED,
HOWEVER, that if, as a result of the quarterly dividends paid in accordance
with the following sentence, the holders of Series B Equity Shares shall have
received for any calendar year more dividends than such Shares shall be
entitled under clauses (A) and (B) above, the dividends payable in respect of
Series B Equity Shares in subsequent calendar years shall be reduced to the
extent of such overpayment. Subject to the proviso of the preceding sentence
of this Section 3(a), the dividend paid in respect of each quarterly period
in each calendar year shall be determined as follows: (1) for the first
quarter, the greater of $2.125 per share and the Common Equivalent Amount for
same quarter; (2) for the second quarter, an amount such that the aggregate
amount to be received per Series B Equity Share in respect of the first two
quarters of such calendar year shall be the greater of $4.250 per share and
the Common Equivalent Amount for the same two quarters; (3) for the third
quarter, an amount such that the aggregate amount to be received per Series B
Equity Share in respect of the first three quarters of such calendar year
shall be the greater of $6.375 per share and the Common Equivalent Amount for
the same three quarters; and (4) for the fourth quarter, an amount such that
the aggregate amount to be received per Series B Equity Share in respect of
such calendar year shall be the amount provided in the preceding sentence of
this Section 3(a). Dividends paid on shares of Series B Equity Shares in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all Series B Equity Shares as are outstanding at the time. Accumulated
but unpaid dividends for any past quarterly dividend periods may be declared
and paid at any time, without reference to any regularly scheduled quarterly
dividend payment date, to holders of record on such date, not exceeding 50
days preceding such dividend payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend.
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(b) So long as any shares of the Series B Equity Shares are
outstanding, no dividend whatever shall be paid or declared and no
distribution made on any Common Equity Shares other than a dividend payable
in Common Equity Shares, and no shares of Common Equity shall be purchased,
redeemed, or otherwise acquired for consideration by the Corporation,
directly or indirectly (other than as a result of a reclassification of
Common Equity Shares, or the exchange or conversion of one Common Equity
Share for or into another Common Equity Share, or other than through the use
of proceeds of a substantially contemporaneous sale of other Common Shares),
UNLESS the full dividend thereon for the then current quarterly dividend
period and all prior dividend periods shall have been paid or declared and
set apart for payment. Subject to the foregoing, and not otherwise, such
dividends may be declared by the Board of Directors and paid on any Common
Equity Shares from time to time out of any funds legally available therefor,
and the Series B Equity Shares shall not be entitled to participate in any
such dividends, whether payable in cash, stock or otherwise.
SECTION 4. RIGHTS UPON LIQUIDATION. (a) In the event of any
voluntary liquidation, dissolution or winding up of affairs of the
Corporation, the holders of the Series B Equity Shares shall be entitled,
before any distribution or payment is made to the holders of any Common
Equity Shares, to be paid in full an amount per share equal to $100.00 (which
amount is hereinafter referred to as the "Series B Preferred Voluntary
Liquidation Amount"), together with (X) all accrued but unpaid dividends
through the end date of the calendar quarter most recently completed prior to
the date of liquidation, dissolution or winding up of the affairs of the
Corporation (any such date, a "Series B Voluntary Liquidation Date") plus (Y)
2.125 times a fraction equal to the actual number of days elapsed from the
end date of the calendar quarter most recently completed to the relevant
Series B Voluntary Liquidation Date over ninety days. In the event of any
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation,
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then, before any distribution or payment is made to the holders of any Common
Equity Shares, the holders of the Series B Equity Shares shall be entitled to
be paid in full an amount per share equal to $100.00 (which amount is
hereinafter referred to as the "Series B Preferred Involuntary Liquidation
Amount"), together with (X) all accrued and unpaid dividends through the end
date of the calendar quarter most recently completed prior to the involuntary
liquidation (any such date, a "Series B Involuntary Liquidation Date") plus
(Y) $2.125 times a fraction equal to the actual number of days elapsed from
the date of the calendar quarter most recently completed to the relevant
Series B Involuntary Liquidation Date over ninety days.
(b) Payment shall be made in full to all holders of the Series B
Equity Shares and other shares ranking PARI PASSU on liquidation with the
Series B Equity Shares, before any remaining assets of the Corporation shall
be distributed among the holders of Common Equity Shares, according to their
respective numbers of shares. For the purposes of this Section 4, the
consolidation or merger of the Corporation with any other corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Corporation but shall, to the extent appropriate, cause an adjustment to the
Common Equivalent Factor.
SECTION 5. (a) REDEMPTION. The Corporation, at the option of the
Board of Directors, with approval of a majority of the Independent Directors
(as defined in the Articles of Incorporation), may redeem in whole, or in
part, the Series B Equity Shares at the time outstanding at any time and from
time to time from and after May 21, 2004, upon notice given as hereinafter
specified, at a redemption price for each Series B Equity Share equal to
$100.00 together with (I) all accrued and unpaid dividends through the end
date of the calendar quarter most recently completed prior to the date of
redemption of the Series B Equity Shares (each a "Series B Redemption Date");
plus (II) $2.125 times a fraction equal to the actual number of days elapsed
from
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the end date of the calendar quarter most recently completed to the relevant
Series B Equity Date over ninety days (such fraction, the "Pro Rata
Adjustment"); plus (III) a right to receive on the payment date for dividends
declared on the Common Equity Shares with respect to the calendar quarter
during which the relevant Series B Redemption Date occurs (the "Relevant
Quarter"), the excess of (X) the Common Equivalent Factor times (A) the
dollar amount of the per share dividends declared on the Common Equity Shares
for the Relevant Quarter times the Pro Rata Adjustment plus (B) the dollar
amount of the per share dividends declared on the Common Equity Shares from
the beginning of the calendar year in which such redemption occurs through
the end date of the calendar quarter prior to the Relevant Quarter over (Y)
the dollar amount calculated in the preceding clause (ii) plus all other
dividends paid on the Preferred Shares from the beginning of the calendar
year during which the relevant Series B Redemption Date occurs.
(b) If the Corporation shall determine to redeem less than all the
Series B Equity Shares then outstanding, the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be
redeemed that the total number of Series B Equity Shares then held by such
holder bears to the total number of Series B Equity Shares then outstanding.
SECTION 6. MANNER AND EFFECT OF REDEMPTIONS. Notice of any
proposed redemption of shares of Series B Equity Shares shall be mailed by
first class mail, postage prepaid, addressed to the holders of record of the
shares to be redeemed, at their respective last addresses as they shall
appear on the books of the Corporation. Such mailing shall be at least 30
days and not more than 60 days prior to the date fixed for such redemption.
Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the shareholder
receives such notice, and failure duly to give such notice by mail, or any
defect in such notice, to any
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holder of Series B Equity Shares designated for redemption shall not affect
the validity of the proceedings for the redemption of any other Series B
Equity Shares.
The Board of Directors shall have full power and authority, subject
to the provisions herein contained, to prescribe the terms and conditions
upon which Series B Equity Shares shall be redeemed.
If notice of redemption shall have been duly given, and if, on or
before the redemption date specified therein, the Corporation shall deposit
all funds necessary for such redemption with a bank or trust company in an
account that is separate and apart from its other accounts and shall hold
such funds in trust for the pro rata benefit of the holders of the shares
called for redemption, so as to be and continue to be available therefor,
then, notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, all shares so
called for redemption shall no longer be deemed outstanding on and after such
redemption date, and all rights with respect to such shares shall forthwith
on such redemption date cease and terminate, except only the right of the
holders thereof to receive the amount payable on redemption thereof, without
interest.
Any funds so deposited and unclaimed at the end of two years from
such redemption date shall, to the extent permitted by law, be released or
repaid to the Corporation, after which repayment the holders of the shares so
called for redemption shall look only to the Corporation for payment thereof.
SECTION 7. VOTING RIGHTS. The holders of Series B Equity Shares
shall not be entitled to any voting rights except (I) in the event that the
Board of Directors has not declared a dividend payable to holders of any
Series of Preferred Shares ranking PARI PASSU with the Series B Equity Shares
that were authorized prior to the issuance of the Series B Preferred Shares
or with the consent of the holders
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of a majority of the Series B Equity Shares or were issued to the original
holder of the Series B Equity Shares (all such Preferred Shares,
collectively, the "Ranking Preferred Shares") for four (4) quarterly dividend
periods, the number of directors constituting the Board of Directors shall,
without further action, be increased by one (1) and the holders of a majority
of the Series B Equity Shares shall have the exclusive right, together with
holders of all other series of Ranking Preferred Shares, to elect one (1)
director to fill such newly created directorship until such time as all such
dividends in arrears are made current and paid in full, at which time the
director so elected shall cease to be a director, the number of directors
constituting the Board of Directors shall be reduced by one (1) and such
additional voting rights of the holders of the Series B Equity Shares shall
terminate, subject to revesting in the event of each and every subsequent
event of the character indicated above, (II) the affirmative vote of the
holders of a majority of the Series B Equity Shares voting together as a
class shall be required to approve any amendment to the Articles of
Incorporation that materially and adversely affects the rights, preferences
or powers of the Series B Equity Shares, including, without limitation, the
definition of Ownership Limit with respect to the Series B Equity Shares,
PROVIDED, that (X) except as required by clause (y) where the amendment to
these Articles of Incorporation for which the vote is required pursuant to
this clause (ii) adversely affects the rights, powers and preferences of
other series of Ranking Preferred Shares, then such amendment shall be
approved by a vote of a majority of the Ranking Preferred Shares affected
thereby, voting together as a class and (Y) the unanimous approval of the
holders of Series B Equity Shares shall be required for any amendment to
these Articles of Incorporation that would decease the rate or change the
time of payment of any dividend or distribution on the Series B Equity
Shares, decrease the amount payable upon redemption of the Series B Equity
Shares or upon the voluntary or involuntary liquidation of the Corporation,
or advance the date on which the Series B Equity Shares may be redeemed by
the Corporation, amend the
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number of shares of Series B Equity Shares required to effect amendments to
the Articles of Incorporation, (III) the affirmative vote of the holders of a
majority of the Ranking Preferred Shares of each affected series voting
together as a class shall be required to approve any merger or consolidation
of the Corporation and another entity in which the Corporation is not the
surviving corporation and each holder of such series of Ranking Preferred
Shares does not receive shares of the surviving corporation with
substantially similar rights, preferences and powers in the surviving
corporation as the Ranking Preferred Shares have with respect to the
Corporation, (IV) the affirmative vote of the holders of a majority of the
Preferred Shares voting together as a class shall be required to approve any
voluntary action by the Board of Directors intended to cause the Corporation
to cease to have the status as a REIT (as defined in Section 4.5 of the
Articles of Incorporation) and (V) as otherwise required by applicable law.
SECTION 8. TITLE. This resolution shall be known and may be
referred to as "A Resolution of the Board of Directors of Westfield America,
Inc. Designating Series B Preferred Shares and Fixing Preferences and Rights
Thereof".
FURTHER RESOLVED, that the appropriate officers of the Corporation
are hereby authorized and directed to execute and acknowledge a certificate
setting forth these resolutions and to cause such certificate to be filed and
recorded, all in accordance with the requirements of Section 351.046 of the
General and Business Corporation Law of the State of Missouri, as amended".
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IN WITNESS WHEREOF, the undersigned, Co-President has executed this
instrument and its Assistant Secretary has attested to said instrument on the
16th day of May, 1997.
WESTFIELD AMERICA, INC.
ATTEST:
By: /S/ BARRY MILLS
----------------------------------
/s/ Barry Mills
- ----------------------------------
Assistant Secretary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
I, Gail Shulman, a notary public, do hereby certify that on this 16th
day of May, 1997, personally appeared before me Peter S. Lowy and being first
duly sworn by me, declared that he is the Co-President of Westfield America,
Inc., that he signed the foregoing document as Co-President of the corporation,
and that the statements therein contained are true.
[SEAL] /s/ Gail Shulman
----------------------------------
Notary Public
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EXHIBIT 3.3
SECOND AMENDED AND RESTATED
BY-LAWS
OF
Westfield America, Inc.
(formerly, Centermark Properties, Inc.)
ARTICLE I
SHAREHOLDERS
Section 1.1 ANNUAL MEETINGS. An annual meeting of shareholders of
the Corporation for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be held on the
second Tuesday in May (or if such day is a legal holiday, then on the next
succeeding business day) at such time and place either within or without the
State of Missouri as may be designated by the Board of Directors from time to
time, or on such other date as may be fixed by the Board of Directors from
time to time, and as set forth in the notice or waiver of notice of the
meeting. Any previously scheduled annual meeting of the shareholders may be
postponed by resolution of the Board of Directors upon public announcement
made on or prior to the date previously scheduled for such annual meeting of
shareholders.
To be properly brought before an annual meeting, business must be
(A) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (B) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a shareholder of the
Corporation who was a shareholder of record at the time of giving of the
notice provided for in Section 1.3, who is entitled to vote at the meeting
and who complied with the notice procedures set forth in this Section 1.1.
For business to be properly brought before an annual meeting by a
shareholder, if such business is related to the election of directors of the
Corporation, the procedures in Section 1.4 must be complied with. If such
business relates to any other matter, the shareholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be timely,
a shareholder's notice must be delivered to or mailed to and received at the
principal executive offices of the corporation not less than 60 days nor
<PAGE>
more than 90 days prior to the meeting; PROVIDED, HOWEVER, that in the event
that less than 70 days notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be
timely must be so delivered not later than the 10th day after the first
public notice or disclosure of the date of such annual meeting. Such
shareholder's notice shall set forth in writing as to each matter the
shareholder proposes to bring before the annual meeting (I) a brief
description of the business desired to be brought before the annual meeting,
the reasons for conducting such business at the annual meeting, and any
material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (II) as to the
shareholder giving the notice and the beneficial owner, if any, on whose
behalf the proposal is made (A) the name and address of such shareholder, as
they appear on the corporation's books, and of such beneficial owner and (B)
the class and number of shares of the corporation which are owned
beneficially and of record by such shareholder and such beneficial owner.
Notwithstanding anything in these By-Laws to the contrary, no business shall
be conducted at any annual meeting except in accordance with the procedures
set forth in this Section 1.1. The chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 1.1, and if he should so determine, such chairman shall declare to
the meeting that any such business not properly brought before the meeting
shall not be transacted.
For the purposes of this Section 1.1 and Sections 1.2 and 1.4,
"public notice or disclosure" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
addition to the provisions of this Section 1.1, a shareholder shall also
comply with all applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth herein. Nothing
in these By-Laws shall be deemed to affect any rights of shareholders to
request inclusion of proposals in the corporation's proxy statement pursuant
to Rule 14a-8 under the Exchange Act.
Section 1.2. SPECIAL MEETINGS. Unless otherwise provided by law
or in the Articles of Incorporation, special meetings of shareholders may be
called only by the Chairman of
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the Board, the Vice Chairman of the Board, any President or the Board of
Directors, to be held at such date, time and place either within or without
the State of Missouri as may be stated in the notice of the meeting.
The purpose or purposes of any special meeting of the shareholders
shall be set forth in the notice of meeting, and, except as otherwise
required by law or by the Articles of Incorporation, no business shall be
transacted at any special meeting of the shareholders other than the items of
business stated in the notice of meeting. The chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that business was
not properly brought before the meeting in accordance with the provisions of
this Section 1.2, and if he should so determine, such chairman shall declare
to the meeting that any such business not properly brought before the meeting
shall not be transacted.
Section 1.3. NOTICE OF MEETINGS. Whenever shareholders are
required or permitted to take any action at a meeting, the Secretary or any
Assistant Secretary shall cause a written notice of the meeting to be given
which shall state the place, date and hour of the meeting, and, in the case
of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the written notice of any meeting
shall be given not less than ten nor more than sixty days before the date of
the meeting to each shareholder entitled to vote at such meeting. If mailed,
such notice shall be deemed to be given three (3) days after it is deposited
in the United States mail, postage prepaid, directed to the shareholder at
such shareholder's address as it appears on the records of the Corporation.
Section 1.4. NOMINATION OF DIRECTORS. (a) Only persons who are
nominated in accordance with the procedures set forth in this Section 1.4
shall be eligible for election as directors of the corporation. Nominations
of persons for election to the Board of Directors of the corporation may be
made at any annual meeting of stockholders by or at the direction of the
Board of Directors or by any shareholder of the corporation entitled to vote
for the election of directors at the meeting who was a shareholder of record
at the time of giving of the notice provided for in this Section 1.4 and who
complies with the notice procedures set forth in this Section 1.4. Any such
nomination by a shareholder shall be made pursuant to timely notice in
writing to the Secretary of the corporation. To give timely notice for an
annual meeting, a shareholder's notice shall be delivered to the Secretary of
the corporation at the principal executive offices of the
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corporation not less than 60 days nor more than 90 days prior to the meeting;
PROVIDED, however, that in the event that less than 70 days notice or prior
public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so delivered not
later than the 10th day after the first public notice or disclosure (as
defined in Section 1.1) of the date of such meeting. Such shareholder's
notice shall be set forth in writing and shall state (A) such shareholder's
name and business address and residence, (B) the name, age, business address
and residence address of the persons to be nominated, (C) the principal
occupation or employment of the persons to be nominated, (D) the class and
number of shares of stock of the corporation which are beneficially owned by
such shareholder and by each nominee, and (E) any other information relating
to such shareholder or nominee that is required to be disclosed in connection
with the solicitation of proxies for election of directors, or as otherwise
required, in each case pursuant to Regulation 14A under the Exchange Act
(including, without limitation, each such person's written consent to being
named in a proxy statement as a nominee and to serving as a director if
elected).
(b) Nominations of persons for election to the Board of Directors
of the corporation may be made at a special meeting of shareholders at which
directors are to be elected pursuant to the corporation's notice of meeting
(I) by or at the direction of the Board of Directors or (II) provided that
the Board of Directors has determined that directors shall be elected at such
special meeting, by any shareholder of the corporation who is a shareholder
of record at the time of giving of notice provided for in this Section 1.4,
who shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 1.4. In the event the corporation calls
a special meeting of shareholders for the purpose of electing one or more
directors to the Board of Directors, any such shareholder may nominate a
person or persons (as the case may be) for election to such position(s) as
specified in the corporation's notice of meeting, if the shareholder's notice
shall be delivered to the Secretary of the corporation at the principal
executive offices of the corporation not earlier than the 90th day prior to
such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the 10th day following the day
on which public announcement is first made of the date of the special meeting
and of the nominees proposed by the Board of Directors to be elected at such
meeting.
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(c) At the request of the Board of Directors, any person nominated
by the Board of Directors for election as a director shall furnish to the
Secretary of the corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless
nominated in accordance with the procedures set forth in this Section 1.4.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by these By-Laws and in that event the defective
nomination shall be disregarded. In addition to the provisions of this
Section 1.4, a shareholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to
the matters set forth herein.
Section 1.5. ADJOURNMENTS. Any meeting of shareholders, annual or
special, may be adjourned from time to time, to reconvene at the same or some
other place, provided that notice of any such adjourned meeting shall be
given to each shareholder of record entitled to vote at such adjourned
meeting. A determination of the shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, the Board of Directors may fix a new record date
for the adjourned meeting. At the adjourned meeting the Corporation may
transact any business which might have been transacted at the original
meeting.
Section 1.6. QUORUM. For purposes of these By-Laws the term
"Common Equity Stock" shall mean the Corporation's Common Shares, par value
$.01 per share, and the Corporation's Excess Shares, par value $.01 per
share. At each meeting of shareholders, except where otherwise provided by
law or the Articles of Incorporation or these By-Laws, the holders of a
majority in interest of the outstanding shares of Common Equity Stock
entitled to vote present in person or represented by proxy, shall constitute
a quorum to take action with respect to that vote on that matter. In the
absence of a quorum of the holders of stock entitled to vote on a matter, the
holders of Common Equity Stock so present or represented may, by majority
vote, adjourn the meeting of shareholders from time to time in the manner
provided by Section 1.5 of these By-Laws until a quorum of such holders of
stock shall be so present or represented. Shares of its own stock belonging
on the record date for the meeting to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is
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<PAGE>
held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes.
Section 1.7. ORGANIZATION. Meetings of shareholders shall be
presided over by the Chairman of the Board, if any, or in the absence of the
Chairman of the Board by the Vice Chairman of the Board, if any, or in the
absence of the Vice Chairman of the Board by any President, or in the absence
of the President by a Vice President, or in the absence of the foregoing
persons by a chairman designated by the Board of Directors, or in the absence
of such designation by a chairman chosen at the meeting. The Secretary, or
in the absence of the Secretary an Assistant Secretary, shall act as
secretary of the meeting, but in the absence of the Secretary and any
Assistant Secretary the chairman of the meeting may appoint any person to act
as secretary of the meeting.
Section 1.8. VOTING; PROXIES. Unless otherwise provided in these
By-Laws, the Articles of Incorporation or by law, each shareholder entitled
to vote at any meeting of shareholders shall be entitled to one vote for each
share of stock held by such shareholder which has voting power upon the
matter in question. Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
shareholder by proxy, but no such proxy shall be voted or acted upon after
eleven months from its date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power, regardless of whether the
interest with which it is coupled is an interest in the stock itself. A
shareholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking
the proxy or another duly executed proxy bearing a later date with the
Secretary of the Corporation. Proxies by telegram, cablegram or other
electronic transmission must either set forth or be submitted with
information from which it can be determined that the telegram, cablegram or
other electronic transmission was authorized by the shareholder. Any copy,
facsimile telecommunication or other reliable reproduction of a writing or
transmission created pursuant to this section may be substituted or used in
lieu of the original writing or transmission for any and all purposes for
which the original writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall
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<PAGE>
be a complete reproduction of the entire original writing or transmission.
Voting at meetings of shareholders need not be by written ballot unless the
holders of a majority in interest of the outstanding shares of all classes of
stock entitled to vote thereon present in person or represented by proxy at
such meeting shall so determine. At each meeting of the shareholders for the
election of directors, provided a quorum is present, the directors shall be
elected by a plurality of the votes validly cast in such election. In all
other matters, unless otherwise provided by law or by the Articles of
Incorporation or these By-Laws, the affirmative vote of the holders of a
majority of all shares of Common Equity Stock present in person or
represented by proxy at the meeting and entitled to vote on the subject
matter shall be the act of the shareholders.
Section 1.9. FIXING DATE FOR DETERMINATION OF SHAREHOLDERS OF
RECORD. In order that the Corporation may determine the shareholders entitled
to notice of or to vote at any meeting of shareholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than sixty nor less than ten days before the date of such meeting. If no
record date is fixed by the Board of Directors, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
In order that the Corporation may determine the shareholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which date shall not be more than ten days after the
date upon which the resolution fixing the record date is adopted by the Board
of Directors. If no record date has been fixed by the Board of Directors,
the record date for determining shareholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required by law, shall be the first date on which a signed
written consent setting forth the
7
<PAGE>
action taken or proposed to be taken is delivered to the Corporation by
delivery to its registered office in the State of Missouri, its principal
place of business, or an officer or agent of the Corporation having custody
of the book in which proceedings of meetings of shareholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining shareholders
entitled to consent to corporate action in writing without a meeting shall be
at the close of business on the day on which the Board of Directors adopts
the resolution taking such prior action.
In order that the Corporation may determine the shareholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights or the shareholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than
sixty days prior to such action. If no record date is fixed, the record date
for determining shareholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
Section 1.10. LIST OF SHAREHOLDERS ENTITLED TO VOTE. The
Secretary shall prepare and make, at least ten days before every meeting of
shareholders, a complete list of the shareholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each
shareholder. Such list shall be open to the examination of any shareholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in
the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof and may be inspected
by any shareholder who is present.
Section 1.11. CONSENT OF SHAREHOLDERS IN LIEU OF MEETING. Unless
otherwise provided in the Articles of Incorporation or by law, any action
required by law to be
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<PAGE>
taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken, shall be signed by all holders of each outstanding class of stock
entitled to vote on such action and shall be delivered to the Corporation by
delivery to (A) its registered office in the State of Missouri by hand or by
certified mail or registered mail, return receipt requested, (B) its
principal place of business, or (C) an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of shareholders
are recorded. Every written consent shall bear the date of signature of each
shareholder who signs the consent and no written consent shall be effective
to take the corporate action referred to therein unless, within sixty days of
the earliest dated consent delivered in the manner required by this By-Law to
the Corporation, written consents signed by a sufficient number of holders to
take action are delivered to the Corporation by delivery to (A) its
registered office in the State of Missouri by hand or by certified or
registered mail, return receipt requested, (B) its principal place of
business, or (C) an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1. POWERS; NUMBER; QUALIFICATIONS. The business and
affairs of the Corporation shall be managed by or under the direction of the
Board of Directors, except as may be otherwise provided by law or in the
Articles of Incorporation. The Board of Directors shall not be less than
three nor more than fourteen, the exact number thereof within such
limitations to be fixed from time to time by resolution adopted by a majority
of the entire Board of Directors, and the exact number shall be eleven unless
otherwise determined by resolution adopted by a majority of the entire Board
of Directors. As used in this Section, "entire Board" means the total number
of Directors which the Corporation would have if there were no vacancies as
such number is fixed by resolution of the Board of Directors. In the event
that the Board of Directors is increased by such a resolution, the vacancy or
vacancies so resulting shall be filled by a vote of the majority of the
Directors then in office. No decrease in
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number of the Board of Directors shall shorten the term of any incumbent
Directors. Directors need not be shareholders.
The Board of Directors shall be divided into three classes, as
nearly equal in number as possible, with the term of office of the first
class expiring at the Annual Meeting of Shareholders in 1998, the second
class expiring at the Annual Meeting of Shareholders in 1999, and the third
class expiring at the Annual Meeting of Stockholders in 2000. At each Annual
Meeting of Shareholders, commencing with the 1998 Annual Meeting, successors
to Directors of the Class whose terms then expire shall be elected to hold
office for a term expiring at the third succeeding Annual Meeting of
Shareholders. Any director (other than a director elected by the holders of
the Preferred Shares of the Corporation upon a failure to pay dividends) or
the entire Board of Directors may be removed, for cause only, by the holders
of 66 2/3 of all shares then entitled to vote at an election of directors.
The provisions of this Section 2.1 shall not be amended, altered, changed or
repealed unless approved by the affirmative vote of the holders of not less
than seventy five percent of the total voting power of all outstanding shares
of voting stock.
Section 2.2. ELECTION; TERM OF OFFICE; RESIGNATION; VACANCIES;
NEWLY CREATED DIRECTORSHIPS. (a) Each director shall hold office until his
or her successor is elected and qualified or until his or her earlier death,
resignation, removal or disqualification. Any director may resign at any
time upon written notice to the Board of Directors or to the Chairman, any
President or the Secretary of the Corporation. Such resignation shall take
effect at the time specified therein, and unless otherwise specified therein
no acceptance of such resignation shall be necessary to make it effective.
Should the office of any director become vacant through death, removal,
resignation, disqualification or otherwise, and where newly created
directorships result from any increase in the authorized number of directors,
the Board of Directors shall have the right to elect or appoint, as the case
may be, the replacement director or newly created directorship. Any director
elected or appointed to fill a vacancy or newly created directorship shall
hold office until the election of the class for which such director shall
have been chosen and his or her successor is elected and qualified or until
his or her earlier resignation or removal. Except as otherwise set forth in
these By-Laws or the Articles of Incorporation, at each meeting of the
shareholders for the election of directors, directors shall be elected by a
plurality of the votes cast in such election.
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Section 2.3. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Missouri
and at such times, but no less frequently than quarterly, as the Board may
from time to time determine, and if so determined notice thereof need not be
given. The Board of Directors from time to time may by resolution provide
for the holding of regular meetings and fix the place (which may be within or
without the State of Missouri) and the date and hour of such meetings.
Notice of regular meetings need not be given, provided, however, that if the
Board of Directors shall fix or change the time or place of any regular
meeting, notice of such action shall be mailed promptly, or sent by telegram,
radio or cable, to each director who shall not have been present at the
meeting at which such action was taken, addressed to him or her at his or her
usual place of business, or shall be delivered to him or her personally.
Notice of such action need not be given to any director who attends the first
regular meeting after such action is taken without protesting the lack of
notice to him or her, prior to or at the commencement of such meeting, or to
any director who submits a signed waiver of notice, whether before or after
such meeting.
Section 2.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held upon the request of the Chairman of the Board or any
President on three (3) days written notice to each director by mail or on one
days notice if delivered to him personally or communicated to him by
telephone, telegram or telecopier, and at a place in Los Angeles, California
or such other reasonable place as is specified in such notice; special
meeting shall be called by the Chairman, any President or the Secretary in
like manner and on like notice on the written consent of a majority of the
Board of Directors.
Section 2.5. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE
PERMITTED. Unless otherwise restricted by the Articles of Incorporation or
these By-Laws, members of the Board of Directors, or any committee designated
by the Board, may participate in a meeting of the Board or of such committee,
as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
By-Law shall constitute presence in person at such meeting.
Section 2.6. QUORUM; VOTE REQUIRED FOR ACTION. (a) At all
meetings of the Board a majority of the total
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authorized number of directors shall constitute a quorum for the transaction
of business.
(b) The vote of a majority of the directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
(c) In case at any meeting of the Board a quorum shall not be
present, the members of the Board present may adjourn the meeting from time
to time until a quorum shall be present.
Section 2.7. ORGANIZATION. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or in the
absence of the Chairman of the Board by the Vice Chairman of the Board, if
any, or in the absence of the Vice Chairman of the Board by any President, or
in their absence by a chairman chosen at the meeting. The Secretary, or in
the absence of the Secretary an Assistant Secretary, shall act as secretary
of the meeting, but in the absence of the Secretary and any Assistant
Secretary the chairman of the meeting may appoint any person to act as
secretary of the meeting. The duties of the Chairmen of the Board shall
include presiding over meetings of the Board and the shareholders and the
Chairman shall also be entitled to vote as part of the Board.
Section 2.8. ACTION BY DIRECTORS WITHOUT A MEETING. Unless
otherwise restricted by the Articles of Incorporation or these By-Laws, any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a meeting if all
members of the Board or of such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
Section 2.9. COMPENSATION OF DIRECTORS. The amount, if any, which
any member of the Board of Directors or any committee thereof shall be
entitled to receive as compensation for his or her services as such shall be
fixed from time to time by resolution of the Board of Directors.
ARTICLE III
COMMITTEES
Section 3.1. COMMITTEES. (a) The Board of Directors may, by
resolution passed by a majority of the whole
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Board, designate one or more committees with each such committee to consist
of such number of directors as from time to time may be fixed by the Board of
Directors.
(b) Should any vacancy occur in any committee of the Board due to
the removal, resignation, death or other absence from office of a committee
member, the Board of Directors shall designate a qualified person as a
replacement member of such committee. Any person designated to any committee
pursuant to this Section 3.1(b) shall hold office for the unexpired term of
the committee member whom he replaced. The Board of Directors shall have the
right, with or without cause, to remove such committee member from such
committee and to designate a replacement committee member as provided above.
(c) Any such committee, to the extent provided in the resolution
of the Board of Directors or in these By-Laws, shall have and may exercise
all the powers and authority of the Board of Directors in the management of
the business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Articles of Incorporation, adopting an agreement of merger or consolidation,
recommending to the shareholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to
the shareholders a dissolution of the Corporation or a revocation of a
dissolution or amending these By-Laws; and, unless the resolution, these
By-Laws or the Articles of Incorporation expressly so provides, no such
committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, to adopt a certificate of merger or to
remove or indemnify directors.
Section 3.2. QUORUM; VOTE REQUIRED FOR ACTION. (a) Subject to
Section 3.2(b) below, at all meetings of any committee of the Board, a
majority of the total authorized membership for such committee shall
constitute a quorum for the transaction of business.
(b) When action is to be taken by vote of any committee of the
Board each member of such committee shall be accorded one vote. Each and
every corporate action taken by vote of any committee of the Board shall be
authorized by affirmative vote of a majority of the committee members present
at a duly constituted meeting at which a quorum is present and acting
throughout.
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Section 3.3. OTHER COMMITTEE RULES. Except as provided in Section
3.2 above and unless the Board of Directors otherwise provides, each
committee designated by the Board may adopt, amend and repeal rules for the
conduct of its business. Each committee shall otherwise conduct its business
in the same manner as the Board conducts its business pursuant to Article II
of these By-Laws.
Section 3.4. NOMINATING COMMITTEE. In addition to any other
committees which the Board of Directors may designate pursuant to Section 3.1
above, the Corporation shall establish a Nominating Committee. The
Nominating Committee shall be comprised of the Chairman and two Independent
Directors and shall make recommendations as to the organization, size and
composition of the Board and committees thereof, propose nominees for
election to the Board and the committees thereof, and consider the
qualifications, compensation and retirement of Directors.
ARTICLE IV
OFFICERS
Section 4.1. OFFICERS; ELECTION. As soon as practicable after the
annual meeting of shareholders in each year, the Board of Directors shall
elect one or more Presidents, a Secretary and a Treasurer, and from among its
members a Chairman of the Board. The Board may also elect one or more Vice
Presidents, one or more Assistant Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers and such other officers as
the Board may deem desirable or appropriate and may give any of them such
further designations or alternate titles as it considers desirable. Any
number of offices may be held by the same person.
Section 4.2. TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES.
Unless otherwise provided in the resolution of the Board of Directors
electing any officer, each officer shall hold office until his or her
successor is elected and qualified or until his or her earlier resignation or
removal. Any officer may resign at any time upon written notice to the Board
or to a President or the Secretary of the Corporation. Such resignation
shall take effect at the time specified therein, and unless otherwise
specified therein no acceptance of such resignation shall be necessary to
make it effective. The Board may remove any officer with or without cause at
any time. Any such removal shall be without prejudice to the contractual
rights of such officer, if any, with the Corpora-
14
<PAGE>
tion, but the election of an officer shall not of itself create contractual
rights. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise may be filled by the Board at any regular
or special meeting.
Section 4.3. AUTHORITY AND DUTIES OF OFFICERS. The officers of the
Corporation shall have such authority and shall exercise such powers and
perform such duties as may be specified in these By-Laws under the direction
of the Board of Directors, except that in any event each officer shall
exercise such powers and perform such duties as may be required by law. The
Board shall set a policy as to which actions taken by officers shall be
considered material and shall require board authorization.
Section 4.4. THE PRESIDENTS. Each President shall be the chief
executive officer and chief operating officer of the Corporation, shall have
general control and supervision of the policies and operations of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall manage and administer the
Corporation's business and affairs under the direction of the Board of
Directors and shall also perform all duties and exercise all powers usually
pertaining to the office of a chief executive officer and chief operating
officer of a corporation. He or she shall have the authority to sign, in the
name and on behalf of the Corporation, checks, orders, contracts, leases,
notes, drafts and other documents and instruments in connection with the
business of the Corporation, and together with the Secretary or an Assistant
Secretary, conveyances of real estate and other documents and instruments to
which the seal of the Corporation is affixed. He or she shall have the
authority to cause the employment or appointment of such employees and agents
of the Corporation as the conduct of the business of the Corporation may
require, to fix their compensation, and to remove or suspend any employee or
agent elected or appointed by the President or the Board of Directors. The
President shall perform such other duties and have such other powers as the
Board of Directors or the Chairman may from time to time prescribe.
If there are two Co-Presidents, the Co-Presidents shall be co-chief
executive officers and co-chief operating officers of the Corporation. The
Co-Presidents shall have general control and supervision of the policies and
operations of the Corporation and shall see that all orders and resolutions
of the Board of Directors are carried into effect. Each Co-President shall
manage and administer the
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Corporation's business and affairs under the direction of the Board of
Directors and shall also perform all duties and exercise all powers usually
pertaining to the office of a chief executive officer or chief operating
officer of a corporation, as the case may be. Each shall have the authority
to sign, in the name and on behalf of the Corporation, checks, orders,
contracts, leases, notes, drafts and other documents and instruments in
connection with the business of the Corporation, and together with the
Secretary or an Assistant Secretary, conveyances of real estate and other
documents and instruments to which the seal of the Corporation is affixed.
Each shall have the authority to cause the employment or appointment of such
employees and agents of the Corporation as the conduct of the business of the
Corporation may require, to fix their compensation, and to remove or suspend
any employee or agent elected or appointed by a Co-President or the Board of
Directors, other than the other Co-President. The Co-Presidents shall
perform such other duties and have such other powers as the Board of
Directors or the Chairman may from time to time prescribe.
Section 4.5. THE VICE PRESIDENTS. Each Vice President shall
perform such duties and exercise such powers as may be assigned to him or her
from time to time by a President. In the absence of a President, the duties
of President shall be performed and his or her powers may be exercised by
such Vice President as shall be designated by a President, or failing such
designation, such duties shall be performed and such powers may be exercised
by each Vice President in the order of their earliest election to that
office; subject in any case to review and superseding action by a President.
Section 4.6. THE SECRETARY. The Secretary shall have the
following powers and duties:
(a) He or she shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these by-laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a
resolution of the Board of Directors, he or she shall furnish a copy of
such resolution to the members of such Committee.
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(d) He or she shall be the custodian of the records and of the seal
of the Corporation and cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the Corporation prior to
the issuance thereof and to all instruments the execution of which on
behalf of the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed he or she may attest the
same.
(e) He or she shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Articles of Incorporation or these by-laws.
(f) He or she shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the
Corporation of each class issued and outstanding, the names (alphabetically
arranged) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became
such holder of record.
(g) He or she shall sign (unless the Treasurer, an Assistant
Treasurer or an Assistant Secretary shall have signed) certificates
representing shares of the Corporation the issuance of which shall have
been authorized by the Board of Directors.
(h) He or she shall perform, in general, all duties incident to the
office of secretary and such other duties as may be specified in these
by-laws or as may be assigned to him or her from time to time by the Board
of Directors, the Chairman or a President.
Section 4.7. THE TREASURER. The Treasurer shall be the chief
financial officer of the Corporation and shall have the following powers and
duties:
(a) He or she shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records
of all receipts of the Corporation.
(b) He or she shall cause the moneys and other valuable effects of
the Corporation to be deposited in
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the name and to the credit of the Corporation in such banks or trust
companies or with such bankers or other depositaries.
(c) He or she shall cause the moneys of the Corporation to be
disbursed by checks or drafts upon the authorized depositaries of the
Corporation and cause to be taken and preserved proper vouchers for all
moneys disbursed.
(d) He or she shall render to the Board of Directors or the
President, whenever requested, a statement of the financial condition of
the Corporation and of all his or her transactions as Treasurer, and render
a full financial report at the annual meeting of the stockholders, if
called upon to do so.
(e) He or she shall be empowered from time to time to require from
all officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all financial
transactions of the Corporation.
(f) He or she may sign (unless an Assistant Treasurer or the
Secretary or an Assistant Secretary shall have signed) certificates
representing stock of the Corporation the issuance of which shall have been
authorized by the Board of Directors.
(g) He or she shall perform, in general, all duties incident to the
office of Treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, the Chairman or a President.
Section 4.8. ADDITIONAL OFFICERS. The Board of Directors may
appoint such other officers and agents as it may deem appropriate, and such
other officers and agents shall hold their offices for such terms and shall
exercise such powers and perform such duties as may be determined from time
to time by the Board of Directors. The Board of Directors from time to time
may delegate to any officer or agent the power to appoint subordinate
officers or agents and to prescribe their respective rights, terms of office,
authorities and duties. Any such officer or agent may remove any such
subordinate officer or agent appointed by him or her, for or without cause.
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Section 4.9. SECURITY. The Board of Directors may require any
officer, agent or employee of the Corporation to provide security for the
faithful performance of his or her duties, in such amount and of such
character as may be determined from time to time by the Board of Directors.
ARTICLE V
STOCK
Section 5.1. CERTIFICATES. Every holder of stock in the
corporation shall be entitled to have a certificate signed by or in the name
of the Corporation by the Chairman or Vice Chairman of the Board of
Directors, if any, or a President or a Vice President, and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the
Corporation, representing the number of shares of stock in the Corporation
owned by such holder. If such certificate is manually signed by one officer
or manually countersigned by a transfer agent or by a registrar, any other
signature on the certificate may be a facsimile, engraved or printed, to the
extent permitted by law. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with
the same effect as if such person were such officer, transfer agent or
registrar at the date of issue.
If the Corporation is authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications or restrictions
of such preferences and/or rights shall be set forth in full or summarized on
the face or back of the certificate which the Corporation shall issue to
represent such class or series of stock, provided that, except as otherwise
provided by law, in lieu of the foregoing requirements, there may be set
forth on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock a statement that the
Corporation will furnish without charge to each shareholder who so requests
the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
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Section 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES;
ISSUANCE OF NEW CERTIFICATES. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed upon delivery to the Board of Directors
of an affidavit of the owner or owners of such certificate, setting forth
such allegation. The Corporation may require the owner of the lost, stolen
or destroyed certificate, or such owner's legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or destruction of any
such certificate or the issuance of such new certificate.
Section 5.3. LEGENDS. Each certificate of stock shall bear such
legends as are required by the agreement or document pursuant to which such
stock was issued, the Articles of Incorporation and applicable law,
including, without limitation, a conspicuous notation of the restrictions on
transfer of such stock so long as the Articles of Incorporation remain in
effect. The Corporation shall, at the request of any shareholder holding a
certificate bearing any such legend, issue a new certificate or certificates
in lieu of and in exchange for such existing certificate, but free of any
such legend, at such time as any such agreement or document, the Articles of
Incorporation and applicable law cease to require such certificate to bear
such legend.
Section 5.4. TRANSFER OF SHARES. Upon surrender on any business
day to the Corporation at its principal office or the transfer agent of the
Corporation of a certificate of stock duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer or exchange, it
shall be the duty of the Corporation to issue a new certificate to the person
entitled thereto to reflect any such transfer or exchange, cancel the old
certificate, and record the transaction upon its books; provided, however,
that the Corporation shall (and shall cause its transfer agent to) close its
books against any transfer or exchange of shares of stock at any time if and
to the extent such transfer or exchange is not permitted pursuant to
applicable provisions of the Articles of Incorporation, any agreement or
document pursuant to which such stock was issued, any legend appearing on
such certificate or applicable law.
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ARTICLE VI
MISCELLANEOUS
Section 6.1. FISCAL YEAR. The fiscal year of the Corporation
shall begin on the first day of January and end on the thirty-first day of
December of each year.
Section 6.2. SEAL. The Corporation may have a corporate seal
which shall have the name of the Corporation inscribed thereon and shall be
in such form as may be approved from time to time by the Board of Directors.
The corporate seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
Section 6.3. WAIVER OF NOTICE OF MEETINGS OF SHAREHOLDERS,
DIRECTORS AND COMMITTEES. Whenever notice is required to be given by law or
under any provision of the Articles of Incorporation or these By-Laws, a
written waiver thereof, signed by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the shareholders, directors or members of a
committee of directors need be specified in any written waiver of notice
unless so required by the Articles of Incorporation or these By-Laws.
Section 6.4. INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS.
(a) The Corporation shall, to the fullest extent permitted by the General and
Business Corporation Law of Missouri (the "GBCL"), indemnify and advance
expenses to any person who was or is a party or threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
he is or was a Director or Officer of the Corporation or is or was serving at
the request of the Corporation as a director or officer of any other
corporation or enterprise. Such right of indemnification shall inure to the
benefit of the heirs, executors, administrators and personal representatives
of such a person. The indemnification and advancement of expenses provided
for herein shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses
21
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may be entitled under any agreement, vote of shareholders or disinterested
directors or otherwise.
(b) The Corporation may, to such extent as it deems appropriate
and as may be permitted by the GBCL, indemnify any other person acting in any
of the other capacities referred to in Section 351.355 of the GBCL against
any such claim by reason of the fact that he is or was serving the
Corporation or at the request of the Corporation in any of such capacities or
arising out of his status in any such capacity.
(c) The Corporation may, but shall not be required to, supplement
the right of indemnification under paragraph (a) above by (1) the purchase of
insurance on behalf of any one or more of such persons, whether or not the
Corporation would be obligated to indemnify such person under paragraph (a)
above, (2) individual or group indemnification agreements with any one or
more of such persons and (3) advances for related expenses of such a person.
Section 6.5. INTERESTED DIRECTORS; QUORUM. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or transaction,
if the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board or the
committee, and the Board or committee in good faith authorizes the contract
or transaction by a majority of the disinterested directors.
Section 6.6. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock
ledger, books of account and minute books, may be kept on, or be in the form
of, punch cards, magnetic tape, photographs, microphotographs or any other
information storage device, provided that the records so kept can be
converted into clearly legible form within a reasonable time. The
Corporation shall so convert any records so kept upon the request of any
person entitled to inspect the same.
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Section 6.7. AMENDMENT OF BY-LAWS. These By-Laws may be amended,
altered or repealed, and new By-Laws may be adopted:
(a) by resolution adopted by a majority of the Board of
Directors at any special or regular meeting of the Board if, in the
case of such special meeting only, notice of such amendment,
alteration, repeal or adoption is contained in the notice or waiver
of notice of such meeting; or
(b) by the affirmative vote of the holders of record of a
majority of the outstanding voting stock of the Corporation at any
regular or special meeting of the stockholders if, in the case of
such special meeting only, notice of such amendment, alteration,
repeal or adoption is contained in the notice or waiver of notice
of such meeting, unless the provision of the Articles of
Incorporation or these By-Laws provide for greater than majority vote.
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EXHIBIT 10.1
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of
May 30, 1997
among
WESTFIELD AMERICA INC.,
as Borrower
and
COMMONWEALTH BANK OF AUSTRALIA
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Co-Agents
and
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Documentary Agent
and
NATIONAL AUSTRALIA BANK LIMITED,
NEW YORK BRANCH,
as Administrative Agent
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
-----
ARTICLE I
DEFINITIONS .............................1
Section 1.01. DEFINITIONS..................................................1
(a) TERMS GENERALLY...................................................1
(b) ACCOUNTING TERMS..................................................1
(c) OTHER TERMS.......................................................2
ARTICLE II
THE CREDIT FACILITY........................13
Section 2.01. COMMITMENTS AND LOANS......................................13
Section 2.02. BORROWING PROCEDURE........................................14
Section 2.03. TERMINATION AND REDUCTION OF COMMITMENTS...................14
Section 2.04. REPAYMENT..................................................14
Section 2.05. OPTIONAL PREPAYMENT........................................14
Section 2.06. LETTER OF CREDIT FACILITY..................................14
(a) LETTERS OF CREDIT...............................................14
(b) PROCEDURE FOR OBTAINING LETTER OF CREDIT........................15
(c) PARTICIPATION BY LENDERS........................................15
(d) DRAWINGS AND REIMBURSEMENT......................................15
ARTICLE III
INTEREST AND FEES........................16
Section 3.01. INTEREST RATE DETERMINATION; CONVERSION...................16
Section 3.02. INTEREST ON ABR LOANS.....................................17
Section 3.03. INTEREST ON EURODOLLAR LOANS..............................17
Section 3.04. INTEREST ON OVERDUE AMOUNTS...............................18
Section 3.05. DAY COUNTS................................................18
Section 3.06. MAXIMUM INTEREST RATE.....................................19
Section 3.07. FEES......................................................19
(a) FACILITY FEE...................................................19
(b) COMMITMENT FEES................................................19
(c) LETTER OF CREDIT FEES..........................................19
ARTICLE IV
DISBURSEMENT AND PAYMENT.....................20
Section 4.01. DISBURSEMENT..............................................20
-i-
<PAGE>
Page
-----
Section 4.02. METHOD AND TIME OF PAYMENTS; SHARING AMONG LENDERS........20
Section 4.03. COMPENSATION FOR LOSSES...................................21
Section 4.04. WITHHOLDING AND ADDITIONAL COSTS..........................22
(a) WITHHOLDING....................................................22
(b) ADDITIONAL COSTS...............................................23
(c) LENDING OFFICE DESIGNATIONS....................................24
(d) CERTIFICATE, ETC...............................................24
(e) CERTAIN TREATIES...............................................24
Section 4.05. FUNDING IMPRACTICABLE.....................................24
Section 4.06. EXPENSES; INDEMNITY.......................................25
Section 4.07. SURVIVAL..................................................26
Section 4.08. REPLACEMENT OF LENDERS....................................26
ARTICLE V
REPRESENTATIONS AND WARRANTIES..................27
Section 5.01. REPRESENTATIONS AND WARRANTIES............................27
(a) GOOD STANDING AND POWER........................................27
(b) CORPORATE AUTHORITY............................................27
(c) AUTHORIZATIONS.................................................27
(d) PROPERTIES.....................................................27
(e) BINDING OBLIGATION.............................................27
(f) LITIGATION.....................................................28
(g) NO CONFLICTS...................................................28
(h) FINANCIAL CONDITION............................................28
(i) USE OF PROCEEDS...............................................28
(j) TAXES.........................................................28
(k) COMPLIANCE WITH ERISA..........................................29
(l) NOT AN INVESTMENT COMPANY.....................................29
(m) ENVIRONMENTAL PROTECTION........................................29
(n) INSURANCE......................................................29
(o) DISCLOSURE.....................................................30
Section 5.02. SURVIVAL..................................................30
ARTICLE VI
CONDITIONS PRECEDENT.......................30
Section 6.01. CONDITIONS TO THE AVAILABILITY OF THE COMMITMENTS.........30
(a) THIS AGREEMENT.................................................30
(b) THE CROSS GUARANTEES...........................................30
(c) EVIDENCE OF CORPORATE ACTION...................................30
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(d) OPINIONS OF COUNSEL............................................31
(e) REPRESENTATIONS AND WARRANTIES.................................31
(f) RELEASE OF MORTGAGES...........................................31
(g) OTHER DOCUMENTS................................................31
Section 6.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.............31
(a) BORROWING REQUEST..............................................32
(b) NO DEFAULT.....................................................32
(c) REPRESENTATIONS AND WARRANTIES.................................32
ARTICLE VII
COVENANTS............................32
Section 7.01. AFFIRMATIVE COVENANTS.....................................32
(a) FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES..................32
(b) CORPORATE EXISTENCE............................................33
(c) CONDUCT OF BUSINESS............................................33
(d) AUTHORIZATIONS.................................................33
(e) TAXES..........................................................33
(f) INSURANCE......................................................34
(g) INSPECTION.....................................................34
(h) ERISA..........................................................34
(i) ENVIRONMENTAL MATTERS..........................................35
(j) APPRAISALS.....................................................35
(k) CROSS GUARANTEES...............................................35
(l) TITLE REPORTS..................................................35
Section 7.02. NEGATIVE COVENANTS........................................35
(a) MERGERS, CONSOLIDATIONS AND SALES OF ASSETS....................36
(b) LIENS..........................................................36
(c) CHANGE IN CONTROL..............................................36
(d) SYNDICATE SUBSIDIARY INDEBTEDNESS..............................36
(e) REIT QUALIFICATION.............................................36
(f) DISPOSITION OF SYNDICATE PROPERTIES............................36
Section 7.03. FINANCIAL COVENANTS.......................................37
(a) SHAREHOLDERS' FUNDS............................................37
(b) FIXED CHARGE COVERAGE RATIO....................................37
(c) SYNDICATE PROPERTY COVERAGE....................................37
(d) TOTAL DEBT.....................................................37
(e) LOAN TO VALUE RATIO............................................37
(f) DIVIDEND LIMITATION............................................37
Section 7.04. PROPERTY UNDERTAKINGS.....................................37
(a) DEVELOPMENTS IN PROGRESS.......................................37
(b) PROPERTY VALUES................................................38
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ARTICLE VIII
EVENTS OF DEFAULT.......................38
Section 8.01. EVENTS OF DEFAULT........................................38
ARTICLE IX
THE ADMINISTRATIVE AGENT....................40
Section 9.01. THE AGENCY...............................................40
Section 9.02. THE ADMINISTRATIVE AGENT'S DUTIES........................40
Section 9.03. LIMITATION OF LIABILITIES................................41
Section 9.04. THE ADMINISTRATIVE AGENT AS A LENDER.....................41
Section 9.05. LENDER CREDIT DECISION...................................41
Section 9.06. INDEMNIFICATION..........................................42
Section 9.07. SUCCESSOR ADMINISTRATIVE AGENT...........................42
ARTICLE X
EVIDENCE OF LOANS; TRANSFERS..................43
Section 10.01. EVIDENCE OF LOANS.......................................43
Section 10.02. PARTICIPATIONS..........................................43
Section 10.03. ASSIGNMENTS.............................................43
Section 10.04. CERTAIN PLEDGES.........................................44
Section 10.05. LEGAL COMPLIANCE........................................44
ARTICLE XI
MISCELLANEOUS.........................44
Section 11.01. APPLICABLE LAW..........................................44
Section 11.02. WAIVER OF JURY..........................................44
Section 11.03. JURISDICTION AND VENUE..................................45
Section 11.04. CONFIDENTIALITY.........................................45
Section 11.05. AMENDMENTS AND WAIVERS..................................45
Section 11.06. EXTENSION...............................................46
Section 11.07. CUMULATIVE RIGHTS; NO WAIVER............................46
Section 11.08. NOTICES.................................................46
Section 11.09. SEPARABILITY............................................47
Section 11.10. PARTIES IN INTEREST.....................................47
Section 11.11. EXECUTION IN COUNTERPARTS...............................47
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SCHEDULES
Schedule I -- Lenders and Commitments
Schedule II -- Portfolio Properties
EXHIBITS
Exhibit A -- Form of Borrowing Request
Exhibit B -- Conversion Request
Exhibit C -- Form of Revolving Credit Note
Exhibit D -- Form of Cross Guarantee
Exhibit E -- Form of Opinion of Counsel for the Borrower
and the Cross-Guarantors
Exhibit F -- Form of Compliance Certificate
Exhibit G -- Form of Assignment and Acceptance
Exhibit H -- Form of Confidentiality Agreement
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CREDIT AGREEMENT, dated as of May 30, 1997, among WESTFIELD AMERICA
INC., a Missouri corporation (the "BORROWER"), NATIONAL AUSTRALIA BANK
LIMITED, COMMONWEALTH BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED and UNION BANK OF SWITZERLAND (collectively, the "LENDERS"),
COMMONWEALTH BANK OF AUSTRALIA and AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, as Co-Agents (the"Co-Agents"), UNION BANK OF SWITZERLAND, as
Documentary Agent (the "Documentary Agent") and NATIONAL AUSTRALIA BANK
LIMITED, NEW YORK BRANCH, as Administrative Agent for the Lenders (the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders severally to commit
to lend to the Borrower up to $600,000,000 on a revolving basis for general
corporate purposes; and
WHEREAS, the Borrower also has requested the Lenders to establish a
procedure pursuant to which it may obtain letters of credit; and
WHEREAS, the Lenders are willing to make loans, and to establish
such a procedure, on the terms and conditions provided herein;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. (a) TERMS GENERALLY. The definitions
ascribed to terms in this Agreement apply equally to both the singular and
plural forms of such terms. Whenever the context may require, any pronoun
shall be deemed to include the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" shall be interpreted
as if followed by the phrase "without limitation". The phrase "herein" shall
be deemed general in scope and not to refer to any specific Section or clause
of this Agreement. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. The table of contents, headings and captions herein shall not be
given effect in interpreting or construing the provisions of this Agreement.
Except as otherwise expressly provided herein, all references to "dollars" or
"$" shall be deemed references to the lawful money of the United States of
America.
(b) ACCOUNTING TERMS. Except as otherwise expressly provided
herein, the term "consolidated" and all other terms of an accounting nature
shall be interpreted and construed in accordance with GAAP, as in effect from
time to time; PROVIDED, HOWEVER, that, for purposes of determining compliance
with any covenant set forth in Section 7.03, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement, applied on a
basis
<PAGE>
consistent with the construction thereof applied in preparing the Borrower's
audited financial statements referred to in Section 5.01(h).
(c) OTHER TERMS. The following terms have the meanings ascribed
to them below or in the Sections of this Agreement indicated below:
"ABR LOANS" means Loans that bear interest at a rate or rates
determined by reference to the Alternate Base Rate.
"ADMINISTRATIVE AGENT" means National Australia Bank Limited,
New York Branch, acting in the capacity of administrative agent for the
Lenders, or any successor administrative agent appointed pursuant to the
terms of this Agreement.
"AFFECTED LENDER" has the meaning assigned to such term in
Section 4.08.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative details
reply form delivered by a Lender to the Administrative Agent, in
substantially the form provided by the Administrative Agent or the form
attached to an Assignment and Acceptance.
"AFFILIATE" means, with respect to any Person, any other Person
that controls, is controlled by, or is under common control with, such
Person.
"AGREEMENT" means this Credit Agreement, as it may be amended,
modified or supplemented from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal
to the greater of:
(i) the rate of interest from time to time established by the
Administrative Agent in The City of New York as its prime commercial
loan rate in effect on such day; and
(ii) the sum of (a) 1/2 of 1% per annum and (b) the Federal Funds
Rate in effect on such day.
The Alternate Base Rate shall change as and when the greater of the
foregoing rates shall change. Any change in the Alternate Base Rate shall
become effective as of the opening of business on the day of such change.
"APPLICABLE LENDING OFFICE" means, with respect to a Loan, the
applicable office of the Lender for making such Loan, as specified in
SCHEDULE I or in an Administrative Questionnaire delivered to the
Administrative Agent as the office from which such Lender makes Loans of the
relevant type.
"ASSIGNEE" has the meaning assigned to such term in Section 10.03.
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"ASSIGNMENT AND ACCEPTANCE" has the meaning assigned to such term
in Section 10.03.
"BORROWER" shall have the meaning assigned to such term in the
preamble.
"BORROWING DATE" means, (i) with respect to any Loan, the Business
Day set forth in the relevant Borrowing Request as the date upon which the
Borrower desires to borrow such Loan and (ii) with respect to any Letter of
Credit, the Business Day set forth in the relevant L/C Request as the date
upon which the Borrower desires the L/C Issuer to issue such Letter of Credit.
"BORROWING REQUEST" means a request by the Borrower for Loans,
which shall specify the requested Borrowing Date and the aggregate amount of
such Loans, and (a) whether such Loans are to bear interest initially as ABR
Loans or Eurodollar Loans and (b) if applicable, the initial Interest Period
therefor.
"BUSINESS DAY" means any day that is (i) not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close and (ii) with respect to any Eurodollar Loan, a day on which commercial
banks are open for domestic and international business (including dealings in
U.S. dollar deposits) in London and New York City.
"CAPITALIZED VALUE" means, at any date of determination, EBITDA for
the four fiscal quarters most recently ended, DIVIDED BY 8.00%.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under any lease with
respect to any property (whether real, personal or mixed) acquired or leased
by such Person that is required to be accounted for as a liability on a
consolidated balance sheet of such Person.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT" means, with respect to a Lender, the amount set forth
opposite such Lender's name under the heading "Commitment" on Schedule I, or
in the relevant Assignment and Acceptance, as such amount may be reduced from
time to time pursuant to Section 2.03.
"COMMITMENT FEE" has the meaning assigned to such term in Section
3.07(b).
"CONFIDENTIAL INFORMATION" means, with respect to the
Administrative Agent or any Lender (an "Affected Party"), information
delivered to the Administrative Agent or to such Affected Party by or on
behalf of the Borrower, the Administrative Agent or any other Lender in
connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is confidential or proprietary in nature at the time it
is so delivered or information obtained by the Affected Party in the course
of its review of the books or records of the Borrower contemplated herein;
PROVIDED that such term shall not include information (i) that was publicly
known or otherwise known to such Affected Party prior to
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<PAGE>
the time of such disclosure, (ii) that subsequently becomes publicly known
through no act or omission by such Affected Party or any Person acting on the
Affected Party's behalf, (iii) that otherwise becomes known to such Affected
Party other than through disclosure by or on behalf of the Borrower or (iv)
that constitutes financial information delivered to such Affected Party that
is otherwise publicly available.
"CONVERSION DATE" means, with respect to a Loan, the date on which
a conversion of interest rates on such Loan shall take effect.
"CONVERSION REQUEST" means a request by the Borrower substantially
in the form of EXHIBIT C to convert the interest rate basis for all or
portions of outstanding Loans, which shall specify (i) the requested
Conversion Date, which shall be not fewer than three Business Days after the
date of such Conversion Request, (ii) the aggregate amount of such Loans, on
and after the Conversion Date, which are to bear interest as ABR Loans or
Eurodollar Loans and (iii) the term of the Interest Periods therefor, if any.
"CREDIT DOCUMENTS" means this Agreement, the Notes, any Letters of
Credit and the related applications and agreements and the Cross Guarantees.
"CROSS GUARANTEE" means a Guarantee Agreement in the form of
EXHIBIT D hereto delivered by each of the Cross Guarantors.
"CROSS GUARANTOR" means each of The Connecticut Post Limited
Partnership, Westland South Shore Mall, L.P., Eagle Rock Properties, Inc.,
WAP HC Inc., Westland Properties Inc., Westfield Management Inc., Westland
Shopping Center L.P., Westland Partners Inc., Westland Milford Properties
Inc., any other Syndicate Subsidiary that is a Wholly Owned Subsidiary of the
Borrower or the UPREIT Entity and the UPREIT Entity.
"CURRENT VALUE", on any day, means as to any Portfolio Property,
the fair market value thereof established by the most recent appraisal
thereof made pursuant to Section 7.01(j); provided, however, that until so
appraised after the date hereof, the fair market value of each Portfolio
Property shall be deemed to be the market value as of March 31, 1996
specified in Schedule II.
"DEFAULT" means any event or circumstance which, with the giving of
notice or the passage of time, or both, would be an Event of Default.
"DIRECT FINANCE LEASE RECEIVABLES" means receivables under the May
Company Finance Leases.
"EBITDA" means, for any period, the sum of (i) the net income of
the Borrower and its proportionate interest in the net income of the Related
Entities for such period, adjusted to exclude non-recurring gains and losses
on unusual items and (ii) income taxes, Interest Expense, depreciation and
amortization of the Borrower and the proportionate interest of the Borrower
in income taxes, Interest Expense, depreciation and amortization of the
Related Entities.
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"EFFECTIVE DATE" has the meaning assigned to such term in Section
6.01.
"ENVIRONMENTAL CLAIM" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order that involves any Hazardous
Substance or Environmental Law, and that would reasonably be expected to have
a Material Adverse Effect.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute or common law, regulation, order, decree, opinion or agency
requirement as now in effect or hereinafter adopted relating to (i) the
handling, use, presence, disposal or release of any Hazardous Substance or
(ii) the protection, preservation or restoration of the environment or
natural resources, or the protection of human health or safety from
environmental factors.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA GROUP" means the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Code or are considered
to be one employer under Section 4001 of ERISA.
"EURODOLLAR LOANS" means Loans that bear interest at a rate or
rates determined by reference to LIBOR.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, the percentage
prescribed by the Federal Reserve Board for determining the maximum reserve
requirement (including any marginal, supplemental or emergency reserve
requirements) on such day for a member bank of the Federal Reserve System in
The City of New York with deposits exceeding one billion dollars in respect
of "Eurocurrency Liabilities" (as defined in Regulation D of the Federal
Reserve Board (or any successor regulation), as amended from time to time).
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
8.01.
"EXCLUDED TAXES" means all present and future (x) taxes, levies,
imposts, duties, deductions, withholdings, fees, liabilities and similar
charges imposed on or measured by the overall net income of any Lender (or
any office, branch or subsidiary of such Lender) or franchise taxes, taxes on
doing business or taxes measured by capital or net worth imposed on any
Lender (or any office, branch or subsidiary of such Lender), in each case
imposed by the United States of America or any political subdivision or
taxing authority thereof or therein, or (y) taxes on or measured by the
overall net income of any office, branch or subsidiary of a Lender or
franchise taxes, taxes imposed on doing business or taxes measured by capital
or net worth imposed on any office, branch or subsidiary of such Lender, in
each case imposed by any foreign country or subdivision thereof in which such
Lender's principal office or Eurodollar Lending Office is located.
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"FACILITY FEE" has the meaning assigned to such term in Section
3.07(a).
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded, if necessary, to the next greater 1/16 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; PROVIDED that (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, then the Federal Funds Rate for such day
shall be the average rate quoted to the Administrative Agent on such day on
such transactions, as determined by the Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System (or any successor Governmental Authority).
"FIXED CHARGES" means, for any period, the sum of (i) Interest
Expense for such period and (ii) regularly scheduled payments of principal
with respect to all outstanding Indebtedness (excluding Indebtedness relating
to the May Company Finance Leases) of the Borrower and with respect to its
proportionate interest in outstanding Indebtedness of the Related Entities
during such period.
"FUNDS FROM OPERATIONS" means, for any year, the consolidated net
income of the Borrower and its Subsidiaries for such year determined in
accordance with GAAP, (i) MINUS gains (or plus losses) from debt
restructuring and sales of property, and (ii) PLUS real estate related
depreciation and amortization, in each case after adjustments for
unconsolidated partnerships and joint ventures.
"GAAP" means generally accepted accounting principles, as set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entities as may be approved by a significant segment
of the accounting profession of the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
such obligation of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain
-6-
<PAGE>
working capital, equity capital or the financial condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness.
"HAZARDOUS SUBSTANCE" means any substance, in any concentration or
mixture, that is (i) listed, classified or regulated as a "hazardous",
"toxic" or similar substance pursuant to any Environmental Law, (ii)
petroleum product or by-product, asbestos containing material,
polychlorinated biphenyls, radioactive material or radon or (iii) any waste
or other similar substance regulated by any Governmental Authority under any
Environmental Law.
"INDEBTEDNESS" means, with respect to any Person, (i) all
obligations of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or
otherwise, of such Person in connection with letters of credit, bankers'
acceptances, Interest Rate Protection Agreements or other similar
instruments, including currency swaps) other than indebtedness to trade
creditors and service providers incurred in the ordinary course of business,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iii) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the remedies available to the
seller or lender under such agreement are limited to repossession or sale of
such property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv) above
secured by any Lien upon or in any property (including accounts, contract
rights and other intangibles) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, (vi)
all L/C Obligations, (vii) all preferred stock issued by such Person
(excluding the Series A preferred stock, par value $1.00 per share, and the
Series B preferred stock, par value $1.00 per share, of the Borrower) which
is redeemable prior to the scheduled repayment in full of the Loans, other
than at the option of such Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (viii)
all Indebtedness of others guarantied by such Person and (ix) all
Indebtedness of any partnership of which such Person is a general partner
(other than Indebtedness that is nonrecourse to such Person).
"INDEMNITEE" has the meaning assigned to such term in Section 4.06.
"INTEREST EXPENSE" means, for any period, the combined interest
expense (including that attributable to capital leases), accrued and paid or
payable in cash for such period, of the Borrower and the Related Entities
with respect to all outstanding Indebtedness (excluding Indebtedness relating
to the May Company Finance Leases) of the Borrower and its proportionate
interest in outstanding Indebtedness of the Related Entities, including
capitalized interest and including dividends on preferred stock included in
"Indebtedness" and net costs (but excluding net benefits) under Interest Rate
Protection Agreements.
"INTEREST PERIOD" means, with respect to any Eurodollar Loan, each
one, two, three or six-month period, such period being the one selected by
the Borrower pursuant to Section 2.02, 3.03 or 3.05 and commencing on the
date such Loan is made or at the end of the preceding Interest Period, as the
case may be; PROVIDED, HOWEVER, that:
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(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next Business Day,
unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business
Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last
Business Day of a calendar month; and
(iii) any Interest Period that would otherwise end after the
Termination Date then in effect shall end on the Termination Date.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement or similar hedging arrangement used by
a Person to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.
"L/C ISSUER" means National Australia Bank Limited, New York
Branch, acting in the capacity of issuer of Letters of Credit.
"L/C OBLIGATIONS" means, with respect to any Lender at any date of
determination, the sum of (i) such Lender's participating share of the
maximum aggregate amount which is or at any time thereafter may become
available for drawings under all Letters of Credit then outstanding AND (ii)
the aggregate amount such Lender is obligated to fund or has funded to the
L/C Issuer as a result of such Lender's participating share in all drawings
under Letters of Credit honored by the L/C Issuer and not theretofore
reimbursed by the Borrower; PROVIDED, that the L/C Issuer's participating
share of such aggregate amounts shall be equal to the portions of such
undrawn amounts in which the other Lenders have not acquired participating
interests, or the portions of such drawings which the other Lenders are not
obligated to fund pursuant to Section 2.06.
"L/C REQUEST" means a request by the Borrower for a Letter of
Credit, which shall (i) specify (A) the requested Borrowing Date and (B) the
aggregate amount of the L/C Obligations with respect to the requested Letter
of Credit, (ii) certify that, after issuance of the requested Letter of
Credit, (A) the aggregate amount of the L/C Obligations of all the Lenders
then outstanding will not exceed $50,000,000, and (B) the sum of the
aggregate amount of the L/C Obligations of all the Lenders then outstanding
and the aggregate amount of the Loans of all the Lenders then outstanding
will not exceed the Total Commitment then in effect and (iii) be accompanied
by such customary application and agreement for letter of credit, and such
other customary documents, as the L/C Issuer may reasonably specify from time
to time, all in form and substance reasonably satisfactory to the L/C Issuer.
"LENDERS" has the meaning assigned to such term in the preamble.
"LETTER OF CREDIT" has the meaning assigned to such term in Section
2.06(a).
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"LIBOR" means, with respect to any Interest Period, the rate per
annum determined by the Administrative Agent to be the offered rate for
dollar deposits with a term comparable to such Interest Period that appears
on the display designated as Page 3750 on the Dow Jones Telerate Service (or
such other page as may replace such page on such service, or on another
service designated by the British Bankers' Association, for the purpose of
displaying the rates at which dollar deposits are offered by leading banks in
the London interbank deposit market) at approximately 11:00 A.M., London
time, on the second Business Day preceding the first day of such Interest
Period. If such rate does not appear on such page, "LIBOR" shall mean the
arithmetic mean (rounded, if necessary, to the next higher 1/16 of 1%) of the
respective rates of interest communicated by the LIBOR Reference Banks to the
Administrative Agent as the rate at which U.S. dollar deposits are offered to
the LIBOR Reference Banks by leading banks in the London interbank deposit
market at approximately 11:00 A.M., London time, on the second Business Day
preceding the first day of such Interest Period in an amount substantially
equal to the respective LIBOR Reference Amounts for a term equal to such
Interest Period.
"LIBOR REFERENCE AMOUNT" means, with respect to any LIBOR Reference
Bank and Interest Period, the amount of the Eurodollar Loan of the Lender
which is, or is affiliated with, such LIBOR Reference Bank, scheduled to be
outstanding during that Interest Period without taking into account any
assignment or participation and rounded up to the nearest integral multiple
of $1,000,000.
"LIBOR REFERENCE BANK" means each of National Australia Bank
Limited, Commonwealth Bank of Australia and Australia and New Zealand Banking
Group Limited; PROVIDED that if any such LIBOR Reference Bank assigns its
Commitment or all its Loans to an unaffiliated institution, such Person shall
be replaced as a LIBOR Reference Bank by the Administrative Agent's
appointment, in consultation with the Borrower and with the consent of the
Required Lenders, of another bank which is a Lender (or an Affiliate of a
Lender).
"LIEN" means, with respect to any asset of a Person, (i) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (ii) the interest of a vendor or lessor under
any conditional sale agreement, capital lease or title retention agreement
relating to such asset, and (iii) in the case of securities, any purchase
option, call or similar right of any other Person with respect to such
securities.
"LOAN" has the meaning assigned to such term in Section 2.01.
"MATERIAL ADVERSE EFFECT" means any material and adverse effect on
(i) the consolidated business, properties, condition (financial or otherwise)
or operations of the Borrower and its Subsidiaries, (ii) the ability of the
Borrower or the Cross-Guarantors timely to perform their material
obligations under the Credit Documents, or of the Lenders to exercise their
remedies under the Credit Documents, taken as a whole or (iii) the
enforceability of the Credit Documents, taken as a whole.
"MAY COMPANY FINANCE LEASES" means the financial leases under which
CMF, Inc. net leased 13 department store properties to the May Company in
1988.
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"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any member of the ERISA Group is making
or accruing an obligation to make contributions or has within the preceding
five plan years made or accrued contributions.
"NET OPERATING INCOME" means, as to any Syndicate Property, tenant
rents and recoveries from such Syndicate Property, less operating expenses
(including real estate taxes, insurance premiums, management fees, utilities,
cleaning and maintenance) determined in accordance with generally accepted
industry methods.
"NON-SYNDICATE PROPERTY" means any Portfolio Property that is not a
Syndicate Property.
"NOTES" means, collectively, promissory notes of the Borrower,
issued in accordance with Section 10.01(d) in order to evidence Loans.
"PARTICIPANT" has the meaning assigned to such term in Section
10.02.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor Governmental Authority).
"PENSION PLAN" means a Plan that (i) is an employee pension benefit
plan, as defined in Section 3(3) of ERISA (other than a Multiemployer Plan)
and (ii) is subject to the provisions of Title IV of ERISA or is subject to
the minimum funding standards under Section 412 of the Code.
"PERMITTED LIENS" means, collectively, the following: (i) Liens
for taxes, assessments or charges not yet delinquent or the nonpayment of
which in the aggregate would not reasonably be expected to have a Material
Adverse Effect, or that are being contested in good faith by appropriate
proceedings and (unless the amount thereof is not material to the Borrower's
consolidated financial condition) for which adequate reserves are being
maintained (in accordance with GAAP); (ii) deposits, pledges or other Liens
to secure obligations under or in connection with workers' compensation,
social security or similar laws, or unemployment or other insurance
arrangements; (iii) deposits, pledges or other Liens to secure bids, tenders,
contracts (other than contracts constituting Indebtedness), obligations for
utilities, leases, statutory obligations, surety, performance, replevin,
judgment and appeal bonds and other obligations of like nature arising in the
ordinary course of business; (iv) mechanics', workers', materialmen's,
landlords', carriers', warehousemen's, repairmen's or similar Liens arising
in the ordinary course of business with respect to obligations which are not
overdue for a period of more than 60 days or which are being contested in
good faith by appropriate proceedings or which in the aggregate would not
reasonably be expected to have a Material Adverse Effect; (v) Liens securing
judgments in an amount and for a period not constituting an Event of Default
under Section 8.01(i); (vi) zoning restrictions, easements, rights-of-way,
restrictions on use of property, other similar encumbrances incurred in the
ordinary course of business and minor imperfections of title on real estate
that do not interfere materially with the use of such property or render
title unmarketable; (vii) any Lien upon or in any asset or property
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hereafter acquired by the Borrower, PROVIDED that such Lien is created
contemporaneously with such acquisition or the financing or refinancing
thereof to secure or provide for the payment, financing or refinancing of any
part of the cost (including construction costs) thereof and, PROVIDED FURTHER
that such Lien attaches only to the asset or property so acquired and fixed
improvements thereon; and (viii) any purchase option, call or similar right
in favor of another stockholder, partner or joint venturer or other Person
with respect to any capital stock or other equity interest of or in any
Affiliate of the Borrower or other joint venture or entity pursuant to any
related stockholder, partnership, joint venture or similar agreement or
arrangement.
"PERSON" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) which is maintained or contributed to
by the Borrower or any member of the ERISA Group.
"PORTFOLIO PROPERTY" means any property in which the Borrower has a
direct or indirect ownership interest, other than any property subject to any
of the May Company Finance Leases.
"PRESCRIBED FORMS" has the meaning assigned to such term in Section
4.04(a).
"PRO RATA SHARE" means, with respect to any Lender at any time of
determination, in relation to Loans and Letters of Credit, the proportion of
such Lender's Commitment to the Total Commitment then in effect.
"RELATED ENTITIES" means all Subsidiaries of the Borrower and each
other Person in which the Borrower owns a direct or indirect equity interest.
"REQUIRED LENDERS" means, at any date of determination, two or more
Lenders having more than 50% of the Total Commitment then in effect or, if
the Total Commitment has been cancelled or terminated, holding more than 50%
of the aggregate unpaid principal amount of the Loans then outstanding.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, chief accounting officer, treasurer or any vice
president, senior vice president or executive vice president of the Borrower.
"SHAREHOLDERS' FUNDS" means, at any date of determination,
shareholders' equity (as shown on the financial statements for the latest
period ending on or before such date delivered to the Lenders pursuant to
Section 7.01(a)) PLUS the Borrower's proportionate interest in the Current
Value of Portfolio Properties, MINUS (i) the value at which the Portfolio
Properties are reflected in such financial statements and (ii) Direct
Financing
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Lease Receivables (net of Indebtedness associated therewith) as shown on such
financial statements.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Borrower that
is a "significant subsidiary" of the Borrower within the meaning of Rule 1-02
under Regulation S-X promulgated by the United States Securities and Exchange
Commission, as in effect on the Effective Date.
"SUBSIDIARY" means, at any time and with respect to any Person, any
other Person the shares of stock or other ownership interests of which having
ordinary voting power to elect a majority of the board of directors or other
managers of such Person are at the time owned directly or indirectly by such
first Person. Unless otherwise qualified or the context indicates clearly to
the contrary, all references to a "Subsidiary" or "Subsidiaries" in this
Agreement refer to a Subsidiary or Subsidiaries of the Borrower.
"SYNDICATE PROPERTY" means each of the following properties, but
only so long as such property is at least 50% owned, directly or indirectly,
by the Borrower and/or a Wholly Owned Subsidiary of the Borrower or the
UPREIT Entity: (i) each of the properties identified as such on Schedule II,
except to the extent the Borrower, in connection with a disposition of an
interest therein pursuant to Section 7.02(f), elects not to have any such
property qualify as a Syndicate Property, (ii) each of Annapolis Mall,
Vancouver Mall and Topanga Plaza at such time as it becomes at least 50%
owned, directly or indirectly, by the Borrower, and/or a Wholly Owned
Subsidiary of the Borrower or the UPREIT Entity, is free and clear of any
Lien other than Permitted Liens and is designated by the Borrower as a
Syndicate Property, and (iii) each other Portfolio Property which (w) is at
least 50% owned, directly or indirectly, by the Borrower and/or a Wholly
Owned Subsidiary of the Borrower or the UPREIT Entity, (x) free of any Lien
other than Permitted Liens, (y) shall have been appraised in accordance with
Section 7.01(j) no more than three months prior to its becoming a Syndicate
Property, and (z) shall, with the consent (not to be unreasonably withheld)
of the Required Lenders, have been designated by the Borrower as a Syndicate
Property, PROVIDED, that no such consent shall be required for the
designation of Wheaton Plaza as a Syndicate Property at such time as it
otherwise qualifies under the foregoing clauses (w), (x) and (y).
"SYNDICATE SUBSIDIARY" means each Subsidiary of the Borrower which
is the owner, in whole or in part, of a Syndicate Property. Any Subsidiary
of the Borrower shall cease being a Syndicate Subsidiary upon any sale or
disposition in compliance with Section 7.02(a) of such Subsidiary or the
Syndicate Property which it owns that results in such Syndicate Property no
longer being at least 50% owned, directly or indirectly, by the Borrower
and/or a Wholly Owned Subsidiary of the Borrower or the UPREIT Entity.
"TAXES" has the meaning assigned to such term in Section 4.04(a).
"TERMINATION DATE" means the earlier to occur of (i) May 30, 2000
(as such date may be extended pursuant to Section 11.07) and (ii) the date,
if any, on which the Total Commitment is terminated.
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"TOTAL COMMITMENT" means, on any day, the aggregate Commitments of
all the Lenders on such day.
"TOTAL DEBT" means, at any date of determination, the aggregate
Indebtedness of the Borrower and its proportionate interest in Indebtedness
of the Related Entities, excluding any Indebtedness relating to the May
Company Finance Leases.
"TOTAL TANGIBLE ASSETS" means, at any date of determination, the
total assets of the Borrower and its Subsidiaries as shown on the
consolidated balance sheets of the Borrower and its Subsidiaries as of the
end of the latest period for which financial statements have been delivered
to the Lenders pursuant to Section 7.01(a), MINUS intangible assets of the
Borrower and its Subsidiaries, as shown on such balance sheets, PLUS the
Borrower's proportionate interest in the Current Value of Portfolio
Properties and MINUS (i) the value at which the Portfolio Properties are
reflected in such balance sheets and (ii) Direct Financing Lease Receivables
(net of Indebtedness associated therewith) as shown on such balance sheets.
"UNDRAWN COMMITMENT" means, on any day, an amount equal to the
Total Commitment on such day MINUS (i) the aggregate outstanding principal
amount of Loans on such day and (ii) the then aggregate L/C Obligations of
the Lenders.
"UPREIT ENTITY" means a Subsidiary of the Borrower that is a
limited partnership (x) having the Borrower as its sole general partner and
one or more Subsidiaries of the Borrower as its initial limited partner or
partners, and (y) holding substantially all of its assets and liabilities
(other than in respect of Loans or other obligations hereunder or any Cross
Guarantee thereof) directly or indirectly through partnerships or limited
liability companies that are Wholly Owned Subsidiaries of the UPREIT Entity.
"WHOLLY OWNED SUBSIDIARY" means, at any time and with respect to
any Person, a Subsidiary, all the shares of stock of all classes of which
(other than directors' qualifying shares) or other ownership interests at the
time are owned directly or indirectly by such Person and/or one or more other
Wholly Owned Subsidiaries of such Person.
ARTICLE II
THE CREDIT FACILITY
Section 2.01. COMMITMENTS AND LOANS. Until the Termination Date,
subject to the terms and conditions of this Agreement, each of the Lenders,
severally and not jointly with the other Lenders, agrees to make revolving
credit loans (collectively, "LOANS") in dollars to the Borrower in an
aggregate principal amount at any one time outstanding not to exceed such
Lender's Commitment. Loans shall be made on any Borrowing Date only (i) in
the minimum aggregate principal amount of $1,000,000 or in integral multiples
thereof (except that ABR Loans may always be borrowed in the aggregate amount
of the Undrawn Commitment) and (ii) in a maximum aggregate principal amount
not exceeding the Undrawn Commitment (after giving effect to any repayments
or prepayments and any other borrowings of Loans on such
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Borrowing Date). The Undrawn Commitment may be utilized by the Borrower to
obtain Letters of Credit in accordance with Section 2.06.
Section 2.02. BORROWING PROCEDURE. In order to borrow Loans, the
Borrower shall give a Borrowing Request to the Administrative Agent, by
telephone, telex or telecopy or otherwise in writing, not later than 12:00
noon, New York time (and if not in writing, to be confirmed in writing not
later than 2:00 P.M. on the same day), (i) on the Borrowing Date for ABR
Loans and (ii) on the third Business Day before the Borrowing Date for
Eurodollar Loans. Upon receipt, the Administrative Agent forthwith shall
give notice to each Lender of the substance of the Borrowing Request. Not
later than 2:00 P.M., New York time, on the Borrowing Date, each Lender shall
make available to the Administrative Agent such Lender's Pro Rata Share of
the requested Loans in funds immediately available at the Administrative
Agent's office specified pursuant to Section 11.09(a). Subject to
satisfaction, or waiver by all of the Lenders, of each of the applicable
conditions precedent contained in Article VI, on the Borrowing Date the
Administrative Agent shall make available, in like funds, to the Borrower the
amounts received by the Administrative Agent from the Lenders.
Section 2.03. TERMINATION AND REDUCTION OF COMMITMENTS. The
Borrower may terminate the Total Commitment, or reduce the amount thereof, by
(i) giving written notice to the Administrative Agent in accordance with
Section 11.08, at least 30 days prior to the date of termination or reduction
and (ii) paying the amount of the Commitment Fees accrued through such date
of termination or reduction. Reductions of the Total Commitment shall be in
the amount of $10,000,000 or in integral multiples thereof (or, if the amount
of the Undrawn Commitment is less than $10,000,000, then all of such lesser
amount), but shall not exceed the Undrawn Commitment in effect immediately
before giving effect to such reduction (after giving effect to any repayment
of Loans prior to or concurrently with such reduction). Any termination, and
all reductions, of the Total Commitment shall be permanent.
Section 2.04. REPAYMENT. The Loans shall be repaid, together with
all accrued and unpaid interest thereon, on the Termination Date.
Section 2.05. OPTIONAL PREPAYMENT. The Borrower may prepay Loans
bearing interest on the same basis and having the same Interest Period, if
any, by giving notice to the Administrative Agent, by telephone, telex,
telecopy or in writing not later than 12:00 noon, New York time, on the third
Business Day preceding the proposed date of prepayment, in the case of
Eurodollar Loans, or on the proposed date of prepayment, in the case of ABR
Loans. Each such prepayment shall be in an amount equal to the aggregate
principal amount of Loans being prepaid (which, in the case of Eurodollar
Loans, shall be in an aggregate principal amount of $1,000,000 or in integral
multiples thereof or, if the aggregate amount of outstanding Eurodollar Loans
is less than $1,000,000, then all of such lesser amount), together with
accrued interest on the principal being prepaid to the date of prepayment
and, in the case of Eurodollar Loans, any amounts required by Section 4.03.
Subject to the terms and conditions of this Agreement, prepaid Loans may be
reborrowed.
Section 2.06. LETTER OF CREDIT FACILITY. (a) LETTERS OF CREDIT.
Prior to the Termination Date, and subject to the terms and conditions of
this Agreement, from time to time, the Borrower may request that the L/C
Issuer issue under this Agreement, and the L/C Issuer
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agrees, upon such request of the Borrower and upon the satisfaction or waiver
of each of the conditions contained in Article VI applicable thereto, to
issue for the account of the Borrower, one or more nontransferable letters of
credit (each, a "LETTER OF CREDIT") in the L/C Issuer's then-customary form;
PROVIDED, that the L/C Issuer shall not issue any Letter of Credit: (i) if,
after giving effect to such issuance, the sum of the aggregate amount of the
L/C Obligations of all the Lenders then outstanding and the aggregate amount
of Loans of all the Lenders then outstanding would exceed the Total
Commitment then in effect; (ii) having a stated amount of less than $25,000;
(iii) having an expiration date later than the date that is four Business
Days prior to the Termination Date; or (iv) if, after giving effect to such
issuance, the aggregate amount of L/C Obligations of all the Lenders then
outstanding would exceed $50,000,000.
(b) PROCEDURE FOR OBTAINING LETTER OF CREDIT. The Borrower may
request that the L/C Issuer issue a Letter of Credit pursuant to Section
2.06(a) by giving a L/C Request to the Administrative Agent by telex,
telecopy or otherwise in writing not later than 12:00 noon, New York time, on
the third Business Day prior to the proposed Borrowing Date for such Letter
of Credit. Upon receipt of any L/C Request, the Administrative Agent shall
forthwith give notice to each Lender of the substance thereof. On the date
specified by the Borrower in such notice and upon fulfillment of the
applicable conditions set forth in this Section 2.06 and Article VI, the L/C
Issuer will issue such Letter of Credit in the form specified in such L/C
Request.
(c) PARTICIPATION BY LENDERS. Each Lender other than the L/C Issuer
shall be deemed to, and hereby agrees to, irrevocably and unconditionally
participate in such Letter of Credit and each drawing thereunder in an amount
equal to such Lender's Pro Rata Share of the maximum amount which is or at
any time may become available to be drawn thereunder.
(d) DRAWINGS AND REIMBURSEMENT. (i) In the event of any request
for a drawing under any Letter of Credit by the beneficiary thereof, the L/C
Issuer shall notify the Borrower and the Administrative Agent in accordance
with Section 11.08 as promptly as practicable following receipt of such
request, and the Borrower shall reimburse the L/C Issuer no later than the
Business Day after the day on which such drawing is honored in an amount in
immediately available funds equal to the amount of such drawing. If the
Borrower shall fail to reimburse the L/C Issuer in an amount equal to the
amount of any drawing honored by the L/C Issuer under a Letter of Credit,
then the L/C Issuer shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation therein.
Not later than 1:00 P.M., New York time, on the Business Day after the date
notified by the L/C Issuer, each Lender shall make available to the L/C
Issuer in immediately available funds at the aforementioned office of the L/C
Issuer in New York City an amount equal to its participation. In the event
that any Lender fails to make available to the L/C Issuer on such Business
Day the amount of such Lender's participation in such Letter of Credit as
provided in this Section 2.06(d), the L/C Issuer shall be entitled to recover
such amount on demand from such Lender, together with interest thereon at a
rate per annum equal to (A) from (and including) such Business Day to (and
including) the third Business Day thereafter, the Federal Funds rate, and (B)
from (but excluding) such third Business Day, the sum of 2% and the Federal
Funds Rate. The L/C Issuer shall distribute to each Lender that has paid all
amounts payable by it under this Section 2.06 with respect to any Letter of
Credit such Lender's Pro Rata Share of all payments received by the L/C
Issuer from the Borrower in reimbursement of drawings honored by the L/C
Issuer under such Letter of Credit when such payments are received.
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The obligation of the Borrower to reimburse the L/C Issuer for
payments made in honoring drawings made under the Letters of Credit and the
obligations of the Lenders under Section 2.06(d) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of the
Credit Documents under all circumstances, including the following
circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower or any Affiliate of the Borrower may have
at any time against a beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary or
transferee may be acting), the L/C Issuer, any Lender or any other
Person, whether in connection with any Credit Document, any
transaction contemplated thereby or any unrelated transaction;
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by the L/C Issuer under any Letter of Credit
against presentation of a demand, draft or certificate or other
document that does not comply with the terms of the Credit Documents;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that a Default or Event of Default shall have
occurred;
; PROVIDED that this paragraph shall not relieve the L/C Issuer or any other
Person of any liability resulting from its gross negligence or willful
misconduct, or otherwise affect any claim, that the Borrower may have as a
result of any such gross negligence or willful misconduct.
ARTICLE III
INTEREST AND FEES
Section 3.01. INTEREST RATE DETERMINATION; CONVERSION. (a) Except
to the extent that the Borrower shall request, in a Borrowing Request or in a
Conversion Request, that Loans (or portions thereof) bear interest as
Eurodollar Loans, Loans shall bear interest as ABR Loans.
(b) The Borrower may request, by giving a Conversion Request to the
Administrative Agent not later than 2:00 P.M., New York time, on the third
Business Day prior to the requested Conversion Date, that all or portions of
the outstanding Loans, in the aggregate principal amount of $1,000,000 or in
integral multiples of $1,000,000 in excess thereof (or, if the aggregate
principal amount of outstanding Loans is less than $1,000,000, then all such
lesser amount), bear interest from and after the Conversion Date as either
ABR Loans or Eurodollar
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Loans; PROVIDED, HOWEVER, that during the continuance of any Default or Event
of Default that shall have occurred, no Loan (or portion thereof) may be
converted into Eurodollar Loans. Upon receipt, the Administrative Agent
forthwith shall give notice to each Lender of the substance of each
Conversion Request. Upon payment by the Borrower of the amounts, if any,
required by Section 4.03, on the Conversion Date, the Loans or portions
thereof as to which the Conversion Request was made shall commence to accrue
interest in the manner selected by the Borrower therein.
Section 3.02. INTEREST ON ABR LOANS. Each ABR Loan shall bear
interest from (and including) the date made until the date repaid, or (if
converted into a Eurodollar Loan) to (but excluding) the first day of any
relevant Interest Period, as the case may be, payable in arrears on the last
day of each calendar quarter of each year, commencing with the first such
date after the Effective Date, and on the date such Loan is repaid, at a rate
per annum equal to the Alternate Base Rate in effect from time to time, which
rate shall change as and when said Alternate Base Rate shall change.
Section 3.03. INTEREST ON EURODOLLAR LOANS. (a) Each Eurodollar
Loan shall bear interest from (and including) the first day of each Interest
Period to but excluding the last day of such Interest Period (or, if sooner,
the date such Loan is repaid or converted to an ABR Loan), payable in arrears
on the last day of such Interest Period, and with respect to Interest Periods
longer than three months on the day which is three months after the
commencement of such Interest Period and on the last day of such Interest
Period (or on the date such Loan is repaid or converted, as the case may be),
at a rate per annum equal to the sum of (i) 1% and (ii) LIBOR for such
Interest Period.
(b) Each Eurodollar Loan shall become an ABR Loan at the end of the
Interest Period therefor, unless (i) there shall not have occurred and be
continuing a Default or Event of Default and (ii) not later than the third
Business Day prior to the last day of such Interest Period, the Borrower
shall have delivered to the Administrative Agent an irrevocable written
election of the subsequent Interest Period, in which case such Eurodollar
Revolving Loan shall remain outstanding as a Eurodollar Loan.
(c) If, during any period, a Lender shall be required to maintain
reserves against "Eurocurrency Liabilities" in accordance with Federal
Reserve Board Regulation D (or any successor regulation), the Borrower shall
pay additional interest during such period on each outstanding Eurodollar
Loan of such Lender (contemporaneously with each interest payment due
thereon) at a marginal rate per annum determined by the following formula:
LIBOR - LIBOR.
----------------------------------
1 - Eurodollar Reserve Percentage
Each Lender shall promptly notify the Borrower, with a copy to the
Administrative Agent, upon becoming aware that the Borrower may be required
to make a payment of additional interest to such Lender. When requesting
payment pursuant to this Section 3.03(c), a Lender shall provide to the
Borrower, with a copy to the Administrative Agent, a certificate, signed by
an officer of such Lender setting forth, in reasonable detail, the basis of
such claim, the amount required to be paid by the Borrower to such Lender and
the computations made by such Lender to determine
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such amount. Absent manifest error, such certificate shall be binding as to
the amounts of additional interest owing in respect of such Lender's
Eurodollar Loans. Any Lender that gives notice under this Section 3.03(c)
shall promptly withdraw such notice (by written notice of withdrawal given to
the Administrative Agent and the Borrower) whenever such Lender is no longer
required to maintain such reserves or the circumstances giving rise to such
notice shall otherwise cease.
Section 3.04. INTEREST ON OVERDUE AMOUNTS. All overdue amounts
(including principal, interest and fees) hereunder shall bear interest,
payable on demand, at a rate per annum equal to the sum of 2% and (i) in the
case of Eurodollar Loans, the rate then applicable thereto until the end of
the current Interest Period therefor, and thereafter the rate of interest
applicable to ABR Loans, changing as and when such rate shall change and (ii)
in the case of all other amounts, the rate of interest applicable to ABR
Loans, changing as and when such rate shall change.
Section 3.05. DAY COUNTS. Interest on ABR Loans shall be
calculated on the basis of (a) a 365- or, if applicable, a 366-day year for
the actual number of days elapsed for so long as interest is determined
pursuant to clause (i) of the definition of "Alternate Base Rate" and (b) a
360-day year for the actual number of days elapsed for so long as interest is
determined based on clause (ii) of the definition of "Alternate Base Rate".
Interest on all other Loans shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. All Fees shall be calculated on
the basis of a 365-or, if applicable, a 366-day year for the actual number of
days elapsed.
Section 3.06. MAXIMUM INTEREST RATE. (a) Nothing in this
Agreement shall require the Borrower to pay interest at a rate exceeding the
maximum rate permitted by applicable law. Neither this Section nor Section
11.01 is intended to limit the rate of interest payable for the account of
any Lender to the maximum rate permitted by the laws of the State of New York
(or any other applicable law) if a higher rate is permitted with respect to
such Lender by supervening provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Lender
on any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by such Lender, the
amount of interest payable for its account on such interest payment date
shall automatically be reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Lender
in respect of any interest computation period is reduced pursuant to Section
3.06(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by such Lender, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to such maximum permissible amount;
PROVIDED that at no time shall the aggregate amount by which interest paid
for the account of any Lender has been increased pursuant to this Section
3.06(c) exceed the aggregate amount by which interest paid for its account
has theretofore been reduced pursuant to Section 3.06(b).
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Section 3.07. FEES. (a) FACILITY FEE. The Borrower agrees to pay
to the Administrative Agent, for the account of each Lender, on the Effective
Date, a one-time fee (the "FACILITY FEE") in an amount equal to 1/4 of 1% of
such Lender's Commitment in effect on the Effective Date.
(b) COMMITMENT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of each Lender, in arrears on the last
day of each calendar quarter of each year, commencing with the first such day
after the Effective Date (for the period from the Effective Date to such
date), and on the Termination Date or other date on which the Total
Commitment shall terminate (for the period from the last payment date to the
Termination Date or such other date) a fee (the "COMMITMENT FEE") in an
amount equal to 35/100% per annum of such Lender's Pro Rata Share of the
Undrawn Commitment in effect from time to time.
(c) LETTER OF CREDIT FEES. In lieu of any letter of credit
commissions or fees provided for in any letter of credit application (other
than standard administration, amendment or negotiation fees referred to in
clause (iv) below), the Borrower agrees to pay to the L/C Issuer in funds
immediately available at the office of the L/C Issuer specified in Section
10.09(a) the following fees and other amounts with respect to each
outstanding Letter of Credit:
(i) an administrative fee equal to 3/16 of 1% per annum on the
daily amount stated to be available from time to time for drawing
under such Letter of Credit from (and including) the date of issuance
until (but excluding) the expiration date of such Letter of Credit,
payable to the L/C Issuer in arrears on the last day of each calendar
quarter, commencing on the first such date after the Borrowing Date
for such Letter of Credit (for the period from such Borrowing Date to
such date), and on such expiration date (for the period from the last
such payment date to such expiration date);
(ii) a letter of credit fee equal to 13/16 of 1% per annum on the
daily amount stated to be available from time to time for drawing
under such Letter of Credit from (and including) the date of issuance
until (but excluding) the expiration date of such Letter of Credit
payable to the L/C Issuer for the account of the Lenders in arrears on
the last day of each calendar quarter, commencing on the first such
date after the Borrowing Date for such Letter of Credit (for the
period from such Borrowing Date to such date), and on such expiration
date (for the period from the last such payment date to such
expiration date);
(iii) with respect to drawings made thereunder, interest, payable
on demand to the L/C Issuer (if applicable, for the benefit of the
Lenders that have funded a participation therein pursuant to
Section 2.07(d), but only for period following such funding), on the
amount paid by the L/C Issuer in respect of each such drawing from
(and including) the date of the drawing to (but excluding) the date
such amount is reimbursed by the Borrower, at a rate per annum equal
to (A) from (and including) the date of such drawing to (and
including) the third Business Day after the date of such drawing, the
rate of interest then applicable to ABR Loans, changing as and when
said rate shall change, and (B) from (but excluding) the third
Business Day
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after the date of such drawing, the sum of (x) 2% and
(y) the rate specified in clause (A); and
(iv) with respect to the issuance or amendment of such Letter of
Credit and each drawing made thereunder, reasonable and customary
documentary and processing charges payable to the L/C Issuer in
accordance with the L/C Issuer's standard schedule for such charges in
effect at the time of such issuance, amendment or drawing, as the case
may be.
Promptly upon receipt by the L/C Issuer of any amount described in clause
(ii) or (iii) of this Section 3.07(c), the L/C Issuer shall distribute to
each Lender that has paid all amounts payable by it under Section 2.06(d)
such Lender's Pro Rata Share of such amount. Amounts payable under clauses
(i) and (iv) of this Section 3.07(c) shall be retained by the L/C Issuer.
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01. DISBURSEMENT. (a) Each Loan shall be made by the
relevant Lender from such Lender's branch or affiliate identified as its
Applicable Lending Office.
(b) The failure of any Lender to make any Loan to be made by it on
the Borrowing Date therefor shall not relieve any other Lender of its
obligation to make its Loan or Loans on such date, but neither any Lender nor
the Administrative Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender.
(c) The Administrative Agent may, but shall not be required to,
advance on behalf of any Lender the amount of such Lender's Loans to be made
on a Borrowing Date, unless such Lender shall have notified the
Administrative Agent prior to such Borrowing Date that it does not intend to
make such Loans on such date. If the Administrative Agent makes any such
advance, the Administrative Agent shall be entitled to recover the amount so
advanced on demand from the Lender on whose behalf such advance was made and,
if such Lender does not pay the Administrative Agent the amount of such
advance on demand, the Borrower agrees promptly to repay such amount to the
Administrative Agent. Until such amount is repaid to the Administrative Agent
by such Lender or the Borrower, such advance shall be deemed for all purposes
to be a Loan made on such Borrowing Date by the Administrative Agent. The
Administrative Agent shall be entitled to recover from the Lender or the
Borrower, as the case may be, interest on the amount advanced by it for each
day from the Borrowing Date therefor until repaid to the Administrative
Agent, at a rate per annum equal to the Federal Funds Rate until the third
Business Day after the date of the advance and, thereafter, at the rate per
annum equal to the relevant rate on Loans made on the relevant Borrowing Date.
Section 4.02. METHOD AND TIME OF PAYMENTS; SHARING AMONG LENDERS.
(a) All funds received by the Administrative Agent for the account of the
Lenders in respect of payments made by the Borrower under, or from any other
Person on account of, any Credit Document shall be distributed forthwith by
the Administrative Agent among the Lenders, in like funds as received,
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ratably in proportion to their respective interests therein. Each payment of
the Facility Fee and each reduction of the Commitments shall be apportioned
among the Lenders in proportion to each Lender's Pro Rata Share.
(b) All payments by the Borrower hereunder shall be made without
setoff or counterclaim to the Administrative Agent, for its account or for
the account of the Lenders entitled thereto in dollars and in immediately
available funds at the office of the Administrative Agent theretofore
designated in writing to the Borrower prior to 2:00 P.M., New York time, on
the date when due.
(c) Whenever any payment from the Borrower shall be due on a day
that is not a Business Day, the date of payment thereof shall be extended to
the next succeeding Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be
payable for such extended time.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment from the Borrower is due
that the Borrower will not make such payment in full, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, but shall not be obligated to, cause to be
distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent that the Borrower shall not have
so made such payment, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
(e) If any Lender shall receive from the Borrower or any other
Person any amount owing under any Credit Document (whether received pursuant
to the exercise of any right of set-off, banker's lien, realization upon any
security held for or appropriated to such obligation or otherwise) other than
in proportion to such Lender's ratable share thereof, then such Lender shall
purchase from each other Lender a participating interest in so much of the
other Lenders' Loans as shall be necessary in order that each Lender shall
share such payment with each of the other Lenders in proportion to each
Lender's ratable share; PROVIDED that nothing herein contained shall obligate
any Lender to apply any set-off or banker's lien or collateral security
permitted hereby first to the obligations of the Borrower hereunder if the
Borrower is obligated to such Lender pursuant to other loans or notes. If
any purchasing Lender shall be required to return any excess payment received
by it, such participation shall be rescinded and the purchase price restored
to the extent of such return, but without interest.
Section 4.03. COMPENSATION FOR LOSSES. (a) If (i) the Borrower
makes a prepayment of a Eurodollar Loan, other than on the last day of the
relevant Interest Period, (ii) the Borrower revokes any Borrowing Request for
Eurodollar Loans, (iii) Eurodollar Loans (or portions thereof) are converted
into ABR Loans pursuant to Section 4.05 other than on the last day of the
relevant Interest Period, or (iv) Loans (or portions thereof) become or are
declared to be due prior to the scheduled maturity thereof, then the Borrower
shall pay to each Lender an amount that will compensate such Lender for any
loss (other than lost profit) or premium or penalty incurred by such Lender
as a result of such prepayment, conversion, declaration or revocation in
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respect of funds obtained for the purpose of making or maintaining such
Lenders's Eurodollar Loans, or any portion thereof. Such compensation may
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so paid or prepaid, not borrowed or
converted, for the period from the date of such payment or prepayment or
conversion or failure to borrow to the last day of such Interest Period (or,
in the case of a failure to borrow, the Interest Period that would have
commenced on the date of such failure to borrow) in each case at the
applicable rate of interest for such Loan provided for herein (excluding,
however, any margin included therein) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the London interbank deposit market.
(b) In connection with a demand for payment pursuant to this
Section 4.03, a Lender shall provide to the Borrower, with a copy to the
Administrative Agent, a certificate, signed by an officer of such Lender,
setting forth in reasonable detail the amount required to be paid by the
Borrower to such Lender and the computations made by such Lender to determine
such amount. In the absence of manifest error, such certificate shall be
conclusive as to the amount so required to be paid.
Section 4.04. WITHHOLDING AND ADDITIONAL COSTS. (a) WITHHOLDING.
(i) To the extent permitted by law, all payments under this Agreement and
under the Notes (including payments of principal and interest) shall be
payable to each Lender free and clear of any and all present and future
taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities
and similar charges other than Excluded Taxes (collectively, "TAXES"). If
any Taxes are required to be withheld or deducted from any amount payable
under this Agreement, then the amount payable under this Agreement shall be
increased to the amount which, after deduction from such increased amount of
all Taxes required to be withheld or deducted therefrom, will yield to such
Lender the amount stated to be payable under this Agreement. The Borrower
shall also hold each Lender harmless and indemnify it for any stamp or other
similar taxes with respect to the preparation, execution, delivery,
recording, performance or enforcement of the Credit Documents other than
Excluded Taxes (all of which shall be included within "Taxes"). If any of
the Taxes specified in this Section 4.04(a) are paid by any Lender, the
Borrower shall, upon demand of such Lender, promptly reimburse such Lender
for such payments, together with any interest, penalties and expenses
incurred in connection therewith. The Borrower shall deliver to the
Administrative Agent certificates or other valid vouchers for all Taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder. Notwithstanding the foregoing, the Borrower shall be
entitled, to the extent required to do so by law, to deduct or withhold (and
shall not be required to make payments as otherwise required by this Section
4.04 on account of such deductions or withholdings) income or other Taxes
imposed by the United States of America from interest, fees or other amounts
payable hereunder for the account of any Lender other than a Lender (A) that
is a U.S. Person for U.S. federal income tax purposes or (B) that has the
Prescribed Forms on file with the Borrower for the applicable year to the
extent deduction or withholding of such taxes is not required as a result of
such filing of such Prescribed Forms; PROVIDED that, if the Borrower shall so
deduct or withhold any such taxes, the Borrower shall provide a statement to
the Administrative Agent and such Lender, setting forth the amount of such
taxes so deducted or withheld, the applicable rate and any other information
or documentation which such Lender may reasonably request for assisting such
Lender to obtain
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any allowable credits or deductions for the taxes so deducted or withheld in
the jurisdiction or jurisdictions in which such Lender is subject to tax.
(ii) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall deliver to the Borrower and
the Administrative Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 (or any successor form or forms),
certifying in either case that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes ("PRESCRIBED FORMS"). Each Lender that so delivers such
Prescribed Forms further undertakes to deliver to the Borrower and the
Administrative Agent two additional copies of such Prescribed Forms on or
before the date that such Prescribed Forms expire or become obsolete or after
the occurrence of any event requiring a change in the most recent Prescribed
Forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such Prescribed Forms inapplicable or which would prevent such Lender from
duly completing and delivering Prescribed Forms with respect to it and such
Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax. If any Lender that is not incorporated under the
laws of the United States of America or a state thereof fails to comply with
the provisions of this Section, the Borrower and/or the Administrative Agent,
may, as required by law, deduct and withhold federal income tax payments from
payments to such Lender under this Agreement.
(b) ADDITIONAL COSTS. Subject to Sections 4.04(c) and (d):
(i) Without duplication of any amounts payable described in Section
3.03(c), 4.03(a) or 4.04(b)(ii), if after the Effective Date (or, if later,
the date on which the relevant Lender becomes a Lender), any change in any
law or regulation or in the interpretation thereof by any court or
administrative or Governmental Authority charged with the administration
thereof or the enactment of any law or regulation shall either (1) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against any Lender's Commitment, its L/C Obligations or its Loans or (2)
impose on any Lender (or such Lender's Applicable Lending Office) any other
condition (excluding any Tax) regarding this Agreement, its Commitment, its
L/C Obligations or its Loans and the result of any event referred to in
clause (1) or (2) shall be to increase the cost to such Lender (or such
Lender's Applicable Lending Office) of maintaining its Commitment, its L/C
Obligations or any Loans made by such Lender (which increase in cost shall be
calculated in accordance with such Lender's reasonable averaging and
attribution methods) by an amount which such Lender deems to be material,
then, upon demand by such Lender, then the Borrower shall pay to such Lender,
on demand, an amount equal to such increase in cost; and
(ii)Without duplication of any amounts payable described in Section
3.03(c), 4.03(a) or 4.04(b)(i), if any Lender shall have determined in good
faith that the adoption of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein, or
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any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender with
any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency,
in each case, made subsequent to the Effective Date (or, if later, the date
on which such Lender becomes a Lender) has or will have the effect of
reducing the rate of return on capital for such Lender or any corporation
controlling such Lender as a consequence of its obligations under this
Agreement to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by a material amount, then from time to time, upon demand
by such Lender and within ten Business Days after submission by such Lender
of the certificate referred to in Section 4.04(d), the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction.
(c) LENDING OFFICE DESIGNATIONS. Before making any demand for
payment pursuant to this Section 4.04, each Lender shall, if possible,
designate a different Applicable Lending Office if such designation will
avoid the need for giving such notice and will not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender. If a
Lender changes its applicable lending office (other than pursuant to this
Section 4.04(c) or Section 4.08(c)) and the effect of such change, as of the
date of such change, would be to cause any of the Borrowers to become
obligated to pay any additional amount under this Section 4.04, the Borrower
shall not be obligated to pay such additional amount.
(d) CERTIFICATE, ETC. In connection with any demand for payment
pursuant to this Section 4.04, a Lender shall provide to the Borrower, with a
copy to the Administrative Agent, a certificate, signed by an officer of such
Lender, setting forth in reasonable detail the basis for such demand, the
amount required to be paid by the Borrower to such Lender and the
computations made by such Lender to determine such amount. In the absence of
manifest error, the certificate referred to above shall be conclusive as to
the amount so required to be paid.
(e) CERTAIN TREATIES. For purposes of Section 4.04, a change in
treaty, law, rule or regulation shall not include the ratification or entry
into force of (i) the protocol amending the income tax treaty between Canada
and the United States, signed August 31, 1994 (ii) the income tax treaty
between France and the United States, signed August 31, 1994, (iii) the
income tax treaty between Portugal and the United States, signed September 6,
1994, (iv) the protocol amending the income tax treaty between the
Netherlands and the United States, signed October 15, 1995, (v) the income
tax treaty between Sweden and the United States signed September 1, 1994 and
(vi) the income tax treaty between Luxembourg and the United States,
initiated on September 21, 1995, in each case in substantially similar form
as such protocol or treaty may exist as of the date hereof.
Section 4.05. FUNDING IMPRACTICABLE. If at any time the making or
maintenance of all or any part of any Lender's Eurodollar Loans has been made
unlawful because of compliance by such Lender in good faith with any law or
guideline or interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof or with
any request or directive of such body (whether or not having the effect of
law), then the
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Administrative Agent, upon notification to it of such circumstance by such
Lender (which notice shall be promptly withdrawn whenever such circumstance
no longer exists), shall forthwith advise the other Lenders and the Borrower
thereof. Upon such date as shall be specified in such notice and until such
time as the Administrative Agent, upon notification to it by such Lender,
shall notify the Borrower and the other Lenders that the circumstances
specified by it in such notice no longer apply, (i) notwithstanding any other
provision of this Agreement, such Eurodollar Loans shall, automatically and
without requirement of further notice, be converted to ABR Loans and (ii) the
obligation of such Lender to make or continue Eurodollar Loans shall be
suspended, and, if the Borrower shall request in a Borrowing Request or
Conversion Request that the Lenders make Eurodollar Loans, the Loan requested
to be made by such Lender shall instead be made as an ABR Loan.
Section 4.06. EXPENSES; INDEMNITY. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses (i) incurred by the Administrative
Agent (including reasonable fees and disbursements of outside counsel) in
connection with the negotiation and preparation of the Credit Documents or
any amendment or supplement to this Agreement and (ii) incurred by the
Administrative Agent or any Lender (including reasonable fees and
disbursements of outside counsel) in connection with the enforcement of the
Credit Documents or any amendment or supplement to this Agreement.
(b) The Borrower agrees to indemnify the Administrative Agent and
each of the Lenders and their respective directors, officers, employees and
agents (each, an "INDEMNITEE") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including outside counsel fees and expenses, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a result of
(i) the execution or delivery of any Credit Document or any agreement or
instrument contemplated by any Credit Document, the performance by the
parties thereto of their respective obligations under any Credit Document or
the consummation of the transactions and the other transactions contemplated
by any Credit Document, (ii) the use of the proceeds of the Loans or (iii)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; PROVIDED that
such indemnity shall not, as to the Administrative Agent, any Lender or any
officer, director, employee or agent thereof, be available to the extent that
such losses, claims, damages, liabilities or related expenses result from the
gross negligence or willful misconduct of any such Indemnitee, or arise out
of or in connection with any claims made or proceedings commenced against the
Administrative Agent or any Lender by any securityholder or creditor thereof
arising out of and based upon rights afforded any such securityholder or
creditor solely in its capacity as such.
(c) The Borrower agrees to indemnify the L/C Issuer and its
directors, officers, employees, affiliates, agents and controlling persons
against, and to hold each of them harmless from, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including fees and
expenses of counsel) incurred by or asserted against any of them arising out
of, in any way connected with, or as a result of the issuance of any Letter
of Credit; PROVIDED, that such indemnity shall not, as to any such
indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses result from the gross negligence or willful
misconduct of any such indemnitee, or arise out of or in connection with any
claims made or proceedings commenced against the L/C Issuer by any
securityholder or creditor thereof arising
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out of and based upon rights afforded any such securityholder or creditor
solely in its capacity as such. As between the Borrower and the L/C Issuer,
the Borrower assumes all risks of the acts and omissions of, or misuse of a
Letter of Credit by, a beneficiary of such Letter of Credit. In furtherance
and not in limitation of the foregoing, the L/C Issuer shall not be
responsible for any of the following: (A) the form, validity, sufficiency,
accuracy, genuineness or legal effects of any documents submitted by any
party in connection with the request and application for and issuance of any
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B) any
misapplication by a beneficiary of any Letter of Credit of the proceeds of
any drawing thereunder; or (C) any consequences arising from or related to
events or circumstances beyond the control of the L/C Issuer, including any
act or omission, whether rightful or wrongful, of any Governmental Authority.
In furtherance and not in limitation of the specific provisions herein set
forth, any action taken or omitted by the L/C Issuer under or in connection
with any Letter of Credit or related certificates, if taken or omitted in
good faith, shall not result in or give rise to any liability of the L/C
Issuer or the Administrative Agent to the Borrower.
(d) All amounts due under this Section 4.06 shall be payable in
immediately available funds upon written demand therefor.
Section 4.07. SURVIVAL. The provisions of Sections 4.03, 4.04,
4.06, 4.08 and 9.06, shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation
of the transactions contemplated hereby, the repayment of any of the Loans,
the reduction or termination of any Commitments, the invalidity or
unenforceability of any term or provision of any Credit Document, or any
investigation made by or on behalf of the Lenders.
Section 4.08. REPLACEMENT OF LENDERS. If no Default or Event of
Default shall have occurred and be continuing, the Borrower may, at any time,
replace any Lender that has requested the Borrower to pay amounts pursuant to
Section 4.04 or whose obligation to make any Loans has been suspended
pursuant to Section 4.05 (each, an "AFFECTED LENDER"), by giving not less
than 10 Business Days' prior notice to the Administrative Agent (which shall
promptly notify such Affected Lender and each other Lender), that it intends
to replace such Affected Lender with one or more banks (including, but not
limited to, any other Lender under this Agreement) selected by the Borrower
and reasonably acceptable to the Administrative Agent (which shall not
unreasonably withhold its consent). The method (whether by assignment or
otherwise) of and documentation for such replacement shall be reasonably
acceptable to the Affected Lender, the other Lenders and the Administrative
Agent (which shall not unreasonably withhold their consent and shall
cooperate with the Borrower in effecting such replacement). Upon the
effective date of any replacement under this Section 4.08, and as a condition
thereto, the Borrower shall, or shall cause the replacement Lender or Lenders
to, pay to the Affected Lender being replaced any amounts owing to such
Affected Lender hereunder (including, without limitation, interest, facility
fees, compensation and additional amounts under this Article IV, in each case
accrued to the effective date of such replacement), whereupon each
replacement Lender shall become a "Lender" for all purposes of this Agreement
having a Commitment in the amount of such Affected Lender's Commitment
assumed by it, such Commitment of the Affected Lender being replaced shall be
terminated upon such effective date and such Affected Lender shall have no
further obligation as a "Lender" as of such effective date.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Administrative Agent and each Lender as
follows:
(a) GOOD STANDING AND POWER. The Borrower and each Cross Guarantor is
a corporation or limited partnership, duly incorporated or organized and
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization; each has the power to own its property and
to carry on its business as now being conducted; and each is duly qualified
to do business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except
where the failure to be so qualified, or to be in good standing,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
(b) CORPORATE AUTHORITY. The Borrower and each Cross Guarantor has
full corporate or partnership power and authority to execute and deliver,
and to incur and perform its obligations under, each of the Credit
Documents to which it is a party, all of which have been duly authorized by
all necessary corporate or partnership action. No consent or approval of
stockholders or limited partners of the Borrower or such Cross Guarantor,
as the case may be, is required to be obtained as a condition to the
validity or performance of, or the exercise by the Administrative Agent or
the Lenders of any of their rights or remedies under, any Credit Document
(other than any such consent or approval that has been obtained).
(c) AUTHORIZATIONS. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from any
Governmental Authority or other Person necessary for the execution,
delivery and performance by the Borrower and each Cross Guarantor of, and
the incurrence and performance of each of its obligations under, each of
the Credit Documents, and the exercise by the Administrative Agent and the
Lenders of their remedies under each of the Credit Documents have been
effected or obtained and are in full force and effect.
(d) PROPERTIES. As of the Effective Date, the Borrower or a Wholly
Owned Subsidiary owns directly the proportionate interest in each Portfolio
Property indicated on Schedule II.
(e) BINDING OBLIGATION. This Agreement constitutes and, when issued
in accordance with the terms hereof, each Note will constitute the valid
and legally binding obligation of the Borrower enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
fraudulent transfer, fraudulent conveyance, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
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(f) LITIGATION. There are no proceedings or investigations now
pending or, to the knowledge of the Borrower, threatened before any court
or arbitrator or before or by any Governmental Authority which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(g) NO CONFLICTS. There is no statute, regulation, rule, order,
judgment, agreement or instrument binding upon the Borrower or any
Subsidiary, or affecting their properties, and no provision of the
certificate of incorporation or by-laws (or similar constitutive
instruments) of the Borrower or any Subsidiary, that would prohibit,
materially conflict with or materially impair the execution or delivery of,
or the incurrence or performance of any obligations of the Borrower or any
Cross Guarantor under, any Credit Document, or result in or require the
creation or imposition of any Lien on property of the Borrower or any
Subsidiary (other than any Lien permitted under Section 7.02(b)) as a
consequence of the execution, delivery and performance of any Credit
Document.
(h) FINANCIAL CONDITION. (i) The consolidated balance sheets of the
Borrower and its Subsidiaries as of December 31, 1996, together with
consolidated statements of income, shareholders' equity and cash flows for
the fiscal year then ended, reported upon by Ernst & Young, heretofore
delivered to the Administrative Agent and the Lenders, fairly present, in
all material respects, the Borrower's consolidated financial condition,
consolidated results of operations and transactions in surplus accounts as
of the date and for the fiscal year referred to and have been prepared in
accordance with GAAP consistently applied throughout the period involved.
There are no liabilities (whether known or unknown, direct or indirect,
fixed or contingent, and of any nature whatsoever) of the Borrower or any
Subsidiary as of the date of such balance sheet that are not reflected
therein or in the notes thereto, and that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
(ii) There has been no material adverse change in the business,
properties, condition (financial or otherwise) or operations of the
Borrower and its Subsidiaries, taken as a whole, since the date of the
balance sheet dated December 31, 1996 referred to in Section 5.01(h)(i).
(i) USE OF PROCEEDS. The proceeds of the Loans will be applied only
to the refinancing of outstanding Indebtedness of the Borrower and its
Subsidiaries, to the working capital needs of the Borrower and its
Subsidiaries, to costs of redeveloping, refurbishing and/or expanding
Portfolio Properties, and to the acquisition of other shopping centers or
malls in the United States and other uses directly related to the
operations of the Borrower and its Subsidiaries and the ownership of their
properties.
(j) TAXES. The Borrower and the Subsidiaries each has filed or caused
to be filed all tax returns that are required to be filed and paid all
taxes that are required to be shown to be due and payable on said returns
or on any assessment made against it or any of its property and all other
taxes, assessments, fees, liabilities, penalties or other charges imposed
on it or any of its property by any Governmental Authority, except for any
taxes, assessments, fees, liabilities, penalties or other charges (x) which
are being contested in good faith and (unless the amount thereof is not
material to the Borrower's consolidated
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financial condition) for which adequate reserves have been established in
accordance with GAAP, or (y) the failure of which to be paid, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
(k) COMPLIANCE WITH ERISA. Each member of the ERISA Group is in
compliance with the applicable provisions of ERISA and the Code with
respect to each Plan, except for any failure so to comply that,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. No member of the ERISA Group has (i) an
accumulated funding deficiency under Section 412 of the Code in respect of
any Pension Plan, whether or not waived, (ii) failed to make any
contribution or payment to any Pension Plan, or made any amendment to any
Pension Plan, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under Section 302(f) of
ERISA or Section 401(a)(29) of the Code, (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA, all of which have been paid or (iv) engaged in a
transaction with respect to a Plan, which (assuming the taxable period of
such transaction, within the meaning of Section 4975(f)(2) of the Code, to
have expired as of the date hereof) has resulted or could reasonably be
expected to result in such member being subject to a material tax or
penalty imposed by Section 4975 of the Code or Section 502 of ERISA.
(l) NOT AN INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is (i) an "investment company" or a company "controlled" by an
entity required to be registered as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or (ii) subject
to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, each as amended, or any foreign, federal, state or local
statute or regulation limiting its ability to incur indebtedness for money
borrowed as contemplated hereby.
(m) ENVIRONMENTAL PROTECTION. To the Borrower's knowledge, based upon
reasonable investigation, all real property owned or leased by the Borrower
or any Subsidiary is free of contamination from any substance that could
result in the incurrence of material liabilities, or constituent thereof,
currently identified or listed as hazardous or toxic pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601, et seq., or any other Environmental Laws, or any other
substance which has in the past or could at any time in the future cause or
constitute a health, safety or environmental hazard to any person or
property, including asbestos in any building, petroleum products, PCBs,
pesticides, or radioactive materials, in each case other than any
contamination that would not reasonably be expected to result in the
incurrence by the Borrower or any Subsidiary of any material liabilities
under any Environmental Laws. To the Borrower's knowledge, based upon
reasonable investigation, neither the Borrower nor any Subsidiary has
caused or suffered to occur any conditions that, individually or in the
aggregate, would reasonably be expected to result in the incurrence by the
Borrower or any Subsidiary of material liabilities under, or any material
violations by the Borrower or any Subsidiary of, any Environmental Laws.
(n) INSURANCE. All of the properties and operations of the Borrower
and each Subsidiary of a character usually insured by companies of
established reputation engaged
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in the same or a similar business similarly situated are adequately
insured, by financially sound and reputable insurers, against loss or
damage of the kinds and in amounts customarily insured against by such
Persons, and the Borrower and the Subsidiaries carry, with such insurers
in customary amounts, such other insurance, including larceny,
embezzlement or other criminal misappropriation insurance and business
interruption insurance, as is usually carried by companies of established
reputation engaged in the same or a similar business similarly situated.
(o) DISCLOSURE. All information relating to the Borrower or its
Subsidiaries heretofore delivered in writing to the Administrative Agent or
any Lender in connection with the negotiation, execution and delivery of
this Agreement and the other Credit Documents, taken as a whole, is true
and complete in all material respects as of the date hereof.
Section 5.02. SURVIVAL. All representations and warranties made
by the Borrower in this Agreement, and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement, shall (i) be considered to have been relied upon by the Lenders,
(ii) survive the making of Loans and the issuance of Letters of Credit
regardless of any investigation made by, or on behalf of, the Lenders, and
(iii) continue in full force and effect as long as the Commitments have not
been terminated and, thereafter, until payment in full of the Loans and any
L/C Obligations, fee or other amount then due and owing to any Lender or the
Administrative Agent under any Credit Document and termination or expiration
of all Letters of Credit, whereupon such representations and warranties shall
expire and be of no further force or effect.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. CONDITIONS TO THE AVAILABILITY OF THE COMMITMENTS.
The obligations of each Lender and the L/C Issuer hereunder are subject to
satisfaction or waiver in writing by each of the Lenders of each of the
following conditions precedent, and the Lenders' Commitments shall not become
available until the date (the "EFFECTIVE DATE") (which shall be no later than
June 30, 1997) on which each of the following conditions precedent shall have
been satisfied or waived in writing by each of the Lenders:
(a) THIS AGREEMENT. The Administrative Agent shall have received this
Agreement duly executed and delivered by each of the Lenders and the
Borrower.
(b) THE CROSS GUARANTEES. The Administrative Agent shall have
received the Cross Guarantees duly executed and delivered by each of the
Cross Guarantors.
(c) EVIDENCE OF CORPORATE ACTION. The Administrative Agent shall have
received the following:
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(i) a copy of the Certificate of Incorporation, or Certificate
of Limited Partnership, as the case may be, of the Borrower and each
Cross Guarantor, as in effect on the Effective Date, certified by the
Secretary of State of the state in which the same is incorporated or
organized, and (to the extent applicable) a certificate from such
Secretary of State as to the good standing of the Borrower or such
Cross Guarantor, in each case as of a date reasonably close to the
Effective Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of
the Borrower, and each Cross Guarantor (or of the general partner of
each Cross Guarantor organized as a limited partnership) dated the
Effective Date, and stating (A) that attached thereto is a correct and
complete copy of the by-laws of the Borrower or such Cross Guarantor
(or corporate general partner) as in effect on such date and at all
times since the date of the resolutions described in clause (B) below,
(B) that attached thereto is a correct and complete copy of
resolutions duly adopted by the Board of Directors of the Borrower or
such Cross Guarantor (or corporate general partner thereof)
authorizing the execution, delivery and performance of this Agreement,
and each other Credit Document to which the Borrower or such Cross
Guarantor is a party and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate of incorporation of the Borrower or such Cross Guarantor
(or corporate general partner), as the case may be, has not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and signature of each officer executing
this Agreement or the relevant Cross Guarantee, as the case may be,
and any document delivered in connection herewith or therewith on
behalf of the Borrower, or such Cross Guarantor.
(d) OPINIONS OF COUNSEL. The Lenders shall have received (a) a
written opinion, dated the Effective Date, of Bryan Cave, special Missouri
counsel to the Borrower, substantially in the form of EXHIBIT E-1, and (b)
a written opinion, dated the Effective Date, of Debevoise & Plimpton,
special New York counsel for the Borrower and the Cross Guarantors, in
substantially the form of EXHIBIT E-2.
(e) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 5.01 shall be true and correct in all
material respects on the Effective Date, and the Lenders shall have
received a certificate, signed by a Responsible Officer of the Borrower, to
that effect.
(f) RELEASE OF MORTGAGES. Any mortgages on Syndicate Properties shall
have been or shall concurrently be released.
(g) OTHER DOCUMENTS. The Lenders shall have received such other
certificates, opinion and other documents as the Required Lenders
reasonably may require.
Section 6.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The
obligations of each Lender to make each Loan and of the L/C Issuer to issue
each Letter of Credit are subject to the conditions precedent that, on the
Borrowing Date therefor, each of the following conditions precedent shall
have been satisfied, or waived in writing by the Lenders:
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(a) BORROWING REQUEST. The Administrative Agent shall have received a
Borrowing Request or L/C Request in accordance with the terms of this
Agreement.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing, nor shall any Default or Event of Default occur as a
result of the making of such Loan or the issuance of such Letter of Credit.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 5.01 shall have been true and correct in
all material respects when made and (except to the extent that any
representation or warranty speaks as of a date certain) shall be true and
correct in all material respects on the Borrowing Date with the same effect
as though such representations and warranties were made on such Borrowing
Date.
ARTICLE VII
COVENANTS
Section 7.01. AFFIRMATIVE COVENANTS. Until termination of the
Commitments of the Lenders hereunder, payment in full of the Loans and any
L/C Obligation, fee or other amount then due and owing to any Lender or the
Administrative Agent under any Credit Document, and termination or expiration
of all Letters of Credit, the Borrower will:
(a) FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES. Furnish to
the Administrative Agent and each Lender:
(i)as soon as available, but in no event more than 60 days after
the end of each of the first three fiscal quarters in each year,
consolidated balance sheets of the Borrower and its Subsidiaries as
of the end of such period, consolidated statements of income and cash
flows of the Borrower and its Subsidiaries from the beginning of the
then current fiscal year and from the beginning of such fiscal quarter
to the end of such period, certified by the Chief Financial Officer of
the Borrower;
(ii)as soon as available, but in no event more than 120 days
after the end of each fiscal year, annual financial statements of the
Borrower in reasonable detail and prepared in accordance with GAAP,
including consolidated balance sheets as of the end of such fiscal
year and consolidated statements of income, cash flows and
shareholders' equity, together with an audit report of Ernst & Young,
or other independent auditors reasonably satisfactory to the
Administrative Agent;
(iii)together with each report delivered pursuant to
Sections 7.01(a)(i) and (ii), a certificate of the Borrower, signed by
a Responsible Officer, in substantially the form of EXHIBIT F, stating
whether, as of the last date of the financial statements included in
such report, any event occurred or circumstance existed which,
individually or in the aggregate, constituted a Default or Event of
Default (and, if so, detailing the facts with respect thereto) and
whether the Borrower was in compliance
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with the covenants set forth in this Article VII, together with
calculations to establish the Borrower's compliance with the
covenants contained in Section 7.03;
(iv)within five Business Days of any Responsible Officer of the
Borrower obtaining knowledge of any Default or Event of Default, if
such Default or Event of Default is then continuing, a certificate of
a Responsible Officer of the Borrower stating that such certificate is
a "Notice of Default" and setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(v)annually, no later than one month prior to the beginning of
each fiscal year, a written business plan and a written capital
expenditure plan for the Borrower, including forecasted combined cash
flows for the Borrower and the Related Entities for such fiscal year;
and
(vi) such additional information, reports or statements,
regarding the business, financial condition or results of operations
of the Borrower and its Subsidiaries, as the Administrative Agent and
the Lenders from time to time may reasonably request.
(b) CORPORATE EXISTENCE. Except as permitted by Section 7.02(a),
maintain, and cause each Significant Subsidiary to maintain, its existence
in good standing and qualify and remain qualified to do business in each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business is such that the
failure so to qualify, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(c) CONDUCT OF BUSINESS. Preserve, renew and keep in full force and
effect, and cause each Significant Subsidiary to preserve, renew and keep
in full force and effect, all its material franchises and licenses
necessary to the normal conduct of its business; and comply, and cause each
Significant Subsidiary to comply, with all applicable laws, orders, rules
and regulations of all Governmental Authorities the failure with which so
to comply, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect.
(d) AUTHORIZATIONS. Obtain, make and keep in full force and effect
all material authorizations from and registrations with Governmental
Authorities required for the validity or enforceability of the Credit
Documents.
(e) TAXES. Pay and discharge, and cause each Subsidiary to pay and
discharge, all taxes, assessments and governmental charges upon it, its
income and its properties prior to the date on which penalties are attached
thereto, except to the extent that (i) such taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings by the Borrower or such Subsidiary, as the case may be,
(ii) the amount thereof is not material to the Borrower's consolidated
financial condition, and adequate reserves are maintained (in accordance
with GAAP) by the Borrower or such Subsidiary, as the case may be, with
respect thereto, or (iii) any failure to pay and discharge such taxes,
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assessments and governmental charges would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(f) INSURANCE. Maintain, and cause each Subsidiary to maintain,
insurance with creditworthy insurance companies against such risks, of such
types (including general liability, larceny, embezzlement or other criminal
misappropriation insurance), on such properties and with such coverages as
is currently maintained by the Borrower, to the extent available on
reasonable commercial terms, and file and cause each Subsidiary to file
with the Administrative Agent upon its reasonable request or the reasonable
request of any Lender a reasonably detailed list of the insurance
companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.
(g) INSPECTION. Permit, and cause each Subsidiary to permit, the
Administrative Agent and the Lenders to have one or more of their officers
and employees, or any other Person designated by the Administrative Agent
or the Lenders, to visit and inspect any of the properties of the Borrower
and the Subsidiaries and to examine the minute books, books of account and
other records of the Borrower and the Subsidiaries, and discuss its
affairs, finances and accounts with its officers and with the Borrower's
independent accountants, for so long as there shall not have occurred and
be continuing a Default or Event of Default on reasonable notice and during
normal business hours and at such other reasonable times, for the purpose
of monitoring the Borrower's compliance with its obligations under the
Credit Documents.
(h) ERISA. Furnish to the Lenders:
(i) within ten days after a Responsible Officer learns that any
"reportable event" (as defined in Section 4043(b) of ERISA), other
than a reportable event for which the 30-day notice requirement has
been waived by the PBGC, has occurred with respect to a Pension Plan,
a statement setting forth details as to such reportable event and the
action proposed to be taken with respect thereto;
(ii) within ten days after receipt thereof, a copy of any notice
that any member of the ERISA Group may receive from the PBGC relating
to the intention of the PBGC to terminate any Pension Plan or to
appoint a trustee to administer any Plan, within ten days after filing
with any affected party (as such term is defined in Section 4001 of
ERISA) of a notice of intent to terminate a Pension Plan, a copy of
such notice and a statement setting forth the details of such
termination, including the amount of liability, if any, of any member
of the ERISA Group under Title IV of ERISA;
(iii) within ten days after failure by any member of the ERISA
Group to make payment to a Pension Plan which would give rise to a
lien in favor of the Plan under Section 302(f) of ERISA, a statement
setting forth the details thereof, including the amount of such lien;
(iv) within ten days after the due date for filing with the PBGC,
pursuant to Section 412(n) of the Code, of a notice of failure to make
a required installment or
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other payment with respect to a Pension Plan, a statement setting
forth details as to such failure and the action proposed to be taken
with respect thereto; and
(v) within 30 days after receipt thereof by any member of the
ERISA Group from the sponsor of a Multiemployer Plan, a copy of each
notice concerning the imposition of withdrawal liability or the
termination or reorganization of a Multiemployer Plan.
(i) ENVIRONMENTAL MATTERS. (i) Comply, and cause each Subsidiary to
comply, in all material respects with all applicable Environmental Laws,
(ii) notify the Agent promptly after receiving notice of any Environmental
Claim with respect to the Borrower's or any Subsidiaries' properties or
facilities, and (iii) promptly forward to the Administrative Agent a copy
of any material order, notice, permit, application, or other communication
or report received by the Borrower in connection with any such
Environmental Claim as they may affect such premises.
(j) APPRAISALS. (i) At its sole expense cause full narrative
appraisals of the Portfolio Properties to be delivered to the Lenders on a
rolling three year basis, with one-third of the Portfolio Properties (each
such third to include approximately one-third of the Syndicate Properties)
being appraised no later than March 31 each year and each Portfolio
Property being appraised at least once every three years. Each such
appraisal shall be prepared by a Member Appraisal Institute designated
appraiser reasonably acceptable to the Required Lenders and shall show the
fair market value of such property as of a date no earlier than December 31
of the immediately preceding year and shall otherwise be reasonably
acceptable to the Required Lenders.
(ii) The Administrative Agent may require additional appraisals
at the Borrower's expense of any Portfolio Properties which have not been
appraised during the previous twelve months and the fair market value of
which, in the reasonable opinion of the Required Lenders, may have
materially deteriorated since the last previous appraisal delivered under
clause (i) of this Section 7.01(j).
(k) CROSS GUARANTEES. Promptly upon any Person becoming the UPREIT
Entity or a Syndicate Subsidiary which is a Wholly Owned Subsidiary of the
Borrower or the UPREIT Entity, cause such Person to duly execute and
deliver to the Agent and the Lenders a Cross Guarantee.
(l) TITLE REPORTS. No later than June 30, 1997 (as to each Syndicate
Property) and no later than July 31, 1997 (as to each other Portfolio
Property) furnish to each Lender a title report with respect to each
Portfolio Property dated no earlier than May 1, 1997.
Section 7.02. NEGATIVE COVENANTS. Until termination of the
Commitments of the Lenders hereunder, payment in full of the Loans and any
L/C Obligation, fee or other amount then due and owing to any Lender or the
Administrative Agent under any Credit Document, and termination or expiration
of all Letters of Credit, the Borrower will not:
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(a) MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. Enter into, or
permit any Subsidiary to enter into, any merger or consolidation with or
into any Person, or sell or otherwise dispose of any material asset of the
Borrower and its Subsidiaries, except (i) with, into or to the Borrower,
the UPREIT Entity or one or more Wholly Owned Subsidiaries of the Borrower
or the UPREIT Entity, or (ii) for any such sale or disposition (other than
of the Borrower) if, (x) at the time of such sale or disposition there
shall not have occurred and be continuing any Default or Event of Default
and (y) upon giving effect thereto on a pro forma basis, the Borrower would
be in compliance with each covenant in Section 7.03.
(b) LIENS. Create, incur, assume or suffer to exist any Lien, upon or
in any Portfolio Property, whether now owned or hereafter acquired, except
(i) Permitted Liens, (ii) mortgages (but not renewals or extensions
thereof) on Non-Syndicate Properties in effect on the date hereof, (iii)
mortgages or other Liens on Non-Syndicate Properties which are not 100%
owned by the Borrower and/or one or more Wholly Owned Subsidiaries of the
Borrower, (iv) mortgages on Non-Syndicate Properties that are 100% owned by
the Borrower and/or one or more Wholly Owned Subsidiaries of the Borrower
securing Indebtedness which, together with any mortgages on such properties
permitted under clause (ii) above, do not at any time exceed in the
aggregate 10% of the then Current Value of all Portfolio Properties, (v)
Liens on Non-Syndicate Properties acquired after the Effective Date which
were in effect at the time they became Portfolio Properties and (vi)
mortgages on Mid Rivers Mall and Mission Valley Center securing
Indebtedness not exceeding $15,000,000 and $48,000,000, respectively, as of
the date hereof; provided that (x) any such mortgage referred to in clause
(ii), (iii), (iv) or (v) of this Section 7.02(b) and the Indebtedness
secured thereby does not extend to any other property and is without
recourse to any of the Borrower and its Subsidiaries other than the direct
owner of the property subject to such mortgage (and other than pursuant to
customary recourse exceptions) and (y) from and after September 30, 1997
any such Indebtedness referred to in clause (vi) of this Section 7.02(b)
that is recourse to any of the Borrower and its Subsidiaries other than the
direct owner of the property subject to the related mortgage (other than
pursuant to customary recourse exceptions) shall not exceed $25,000,000 in
the aggregate.
(c) CHANGE IN CONTROL. Permit the advisor to the Borrower or the
manager of the Portfolio Properties listed on Schedule II (other than North
County Fair) to be any Person other than Westfield Holdings Limited or any
wholly owned subsidiary of Westfield Holdings Limited for a period of more
than 30 days.
(d) SYNDICATE SUBSIDIARY INDEBTEDNESS. Permit any Syndicate
Subsidiary to create, incur, assume or suffer to exist any Indebtedness for
borrowed money (other than Indebtedness owed to the Borrower or any Cross-
Guarantor).
(e) REIT QUALIFICATION. Fail at any time to continue to qualify as a
Real Estate Investment Trust under Section 856 through 859 of the Code.
(f) DISPOSITION OF SYNDICATE PROPERTIES. Without the prior consent of
the Required Lenders, which consent will not be unreasonably withheld,
cease to own, directly or
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indirectly, 100% of each of the Syndicate Properties identified on
Schedule II, unless the Borrower elects no longer to have such property
qualify as a Syndicate Property.
Section 7.03. FINANCIAL COVENANTS. Until termination of the
Commitments of the Lenders hereunder, payment in full of the Loans and any
L/C Obligation, fee or other amount then due and owing to any Lender or the
Administrative Agent under any Credit Document, and termination or expiration
of all Letters of Credit, the Borrower will not:
(a) SHAREHOLDERS' FUNDS. Permit Shareholders' Funds to be less than
$700,000,000 as of the last day of any fiscal quarter, commencing with the
second quarter of 1997.
(b) FIXED CHARGE COVERAGE RATIO. Permit the ratio of (i) EBITDA to
(ii) Fixed Charges for the twelve month period ending on the last day of
each calendar quarter commencing with the second quarter of 1997, to be
less than 1.75:1.
(c) SYNDICATE PROPERTY COVERAGE. Permit the ratio of (i) Net
Operating Income of the Syndicate Properties, to (ii) Interest Expense of
the Borrower and its Subsidiaries in respect of unsecured Indebtedness for
the twelve month period ending on the last day of each calendar quarter,
commencing with the second quarter of 1997, to be less than 1.75:1.
(d) TOTAL DEBT. Permit Total Debt, at any time, to exceed 60% of the
lesser of (i) Total Tangible Assets and (ii) Capitalized Value.
(e) LOAN TO VALUE RATIO. Permit the sum of the principal amount of
Loans and L/C Obligations outstanding at any time to exceed 60% of the
Current Value of the Syndicate Properties which are 100% owned directly or
indirectly by the Borrower or the UPREIT Entity (if it is then a Cross-
Guarantor) and the greater of the proportionate share interest of the
Borrower and the proportionate share interest of the UPREIT Entity (if it
is then a Cross-Guarantor) in the Current Value of all other Syndicate
Properties.
(f) DIVIDEND LIMITATION. Pay dividends in the aggregate (i) in 1997
in an amount exceeding Funds from Operations for that year PLUS
$13,000,000, (ii) in 1998 in an amount exceeding 90% of Funds from
Operations for that year, or (iii) in any subsequent calendar year in an
amount exceeding Funds from Operations for that year.
Section 7.04. PROPERTY UNDERTAKINGS. Until termination of the
Commitments of the Lenders, payment in full of the Loans and any L/C
Obligation, fee or other amount then due and owing to any Lender or the
Administrative Agent under any Credit Document, and termination or expiration
of all Letters of Credit, without consulting with the Administrative Agent
and the Lenders to establish a mutually acceptable correction period (and
effecting such correction within six months), the Borrower will endeavor not
to:
(a) DEVELOPMENTS IN PROGRESS. Permit the value of developments
in progress committed and approved by the Board of Directors of the
Borrower at any time to exceed 20% of the aggregate Current Value of the
Portfolio Properties.
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(b) PROPERTY VALUES. Permit the Current Value of any single
Portfolio Property at any time to exceed 25% of the Current Value of all of
the Portfolio Properties or the aggregate Current Value of the Portfolio
Properties having the three highest Current Value at any time to exceed 50%
of the Current Value of all of the Portfolio Properties.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. EVENTS OF DEFAULT. If one or more of the following
events (each, an "EVENT OF DEFAULT") shall occur:
(a) The Borrower shall fail duly to pay any principal of any Loan when
due, whether at maturity, by notice of intention to prepay or otherwise, or
to reimburse a drawing under a Letter of Credit within three Business Days
after such drawing; or
(b) The Borrower shall fail duly to pay (i) any interest within two
days after the same shall be due or (ii) any fee or other amount payable
under the Credit Documents within two Business Days after notice of its
failure to pay such fee or other amount when due shall have been given to
the Borrower by the Administrative Agent or the Required Lenders; or
(c) The Borrower shall fail duly to observe or perform any term,
covenant, or agreement contained in Section 7.02 or 7.03; or
(d) The Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall
have continued unremedied for a period of 30 days after written notice
thereof has been given to the Borrower by the Administrative Agent or the
Required Lenders; or
(e) Any representation or warranty made or deemed made by the Borrower
or a Cross Guarantor in a Credit Document, or any statement or
representation made in any certificate, report or opinion delivered by or
on behalf of the Borrower or a Cross Guarantor in connection with a Credit
Document, shall prove to have been false in any material respect when so
made or deemed made; or
(f) The Borrower or any Syndicate Subsidiary or Cross-Guarantor shall
fail to pay any Indebtedness thereof (other than obligations hereunder) in
an amount of $20,000,000 or more beyond the lapse of any applicable grace
period provided for in the instrument or instruments evidencing such
Indebtedness; or any such Indebtedness having an aggregate principal amount
outstanding of $20,000,000 or more shall become or be declared to be due
(other than at the option of the obligor thereon) prior to the expressed
maturity thereof; or
(g) An involuntary case or other proceeding shall be commenced against
the Borrower or any Syndicate Subsidiary or Cross-Guarantor seeking
liquidation,
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reorganization or other relief with respect to it or its debts
under any applicable bankruptcy, insolvency, reorganization or similar law
or seeking the appointment of a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of more than 60 days; or an order or
decree approving or ordering any of the foregoing shall be entered and
continued unstayed and in effect; or
(h) The Borrower or any Syndicate Subsidiary or Cross-Guarantor shall
commence a voluntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or similar law or any other case or proceeding
to be adjudicated a bankrupt or insolvent, or any of them shall consent to
the entry of a decree or order for relief in respect of the Borrower or any
Syndicate Subsidiary or Cross-Guarantor in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against any of them, or any of them shall file a
petition or answer or consent seeking reorganization or relief under any
applicable law, or any of them shall consent to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Borrower or any Syndicate Subsidiary or Cross-Guarantor or any substantial
part of their respective property, or any of them shall make a general
assignment for the benefit of creditors, or the Borrower or any Syndicate
Subsidiary or Cross-Guarantor shall take corporate action in furtherance of
any such action, or any of them shall admit in writing its inability to pay
its debts generally as they become due; or
(i) One or more judgments against the Borrower or any Syndicate
Subsidiary or Cross-Guarantor or attachments against its property, which in
the aggregate involve a liability (net of any insurance or indemnity
payments actually received in respect thereof prior to or within 45 days
from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) of $10,000,000 or more, remain
unpaid, unstayed on appeal, undischarged, unbonded, or undismissed for a
period of more than 45 days from the date of entry thereof; or
(j) Notice of intent to terminate a Pension Plan shall have been filed
with any affected party (as defined in Section 4001 of ERISA), or notice of
an application by the PBGC to institute proceedings to terminate a Pension
Plan pursuant to Section 4042 of ERISA shall have been received by any
member of the ERISA Group, in each case only if the amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA) as of the
date such notice is filed or received exceeds $500,000; any member of the
ERISA Group incurs liability under Sections 4062(e), 4063 or 4064 of ERISA
in respect of a Pension Plan in an amount in excess of $500,000; an
amendment is adopted to a Pension Plan which would require security to be
given to such Pension Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA in an amount in excess of $500,000; any member of the
ERISA Group fails to make a payment to a Pension Plan which would give rise
to a Lien in favor of such Plan under Section 302(f) of ERISA in an amount
in excess of $500,000;
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then, at any time upon the occurrence and during the continuance of such
Event of Default, the Required Lenders, may, by written notice to the
Borrower, take either or both of the following actions, at the same or
different times: (i) terminate forthwith the Commitments and (ii) declare any
Loans and L/C Obligations then outstanding to be due, whereupon the Loans so
declared to be due, together with accrued interest thereon and any unpaid
amounts accrued under the Credit Documents, shall become forthwith due,
without presentment, demand, protest or any other notice of any kind (all of
which are hereby expressly waived by the Borrower); PROVIDED that, in the
case of any Event of Default described in Section 8.01(g) or (h) occurring
with respect to the Borrower, the Commitments shall automatically and
immediately terminate and all Loans and L/C Obligations then outstanding,
together with accrued interest thereon and any unpaid amounts accrued under
the Credit Documents, shall automatically and immediately become due without
presentment, demand, protest or any other notice of any kind (all of which
are hereby expressly waived by the Borrower).
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01. THE AGENCY. Each Lender appoints National Australia
Bank Limited, New York Branch as its Administrative Agent hereunder and
irrevocably authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers hereunder and under the other Credit
Documents as are specifically delegated to the Administrative Agent by the
terms hereof and thereof, together with such powers as are reasonably
incidental thereto, including the exercise of powers delegated to the
Administrative Agent and the Lenders hereby or thereby, and the
Administrative Agent hereby accepts such appointment subject to the terms
hereof. The relationship between the Administrative Agent and the Lenders
shall be that of agent and principal only and nothing herein shall be
construed to constitute the Administrative Agent a trustee or fiduciary for
any Lender (except to the extent that the Administrative Agent acts as an
agent with respect to the payment or receipt of funds) nor to impose on the
Administrative Agent duties or obligations other than those expressly
provided for herein.
Section 9.02. THE ADMINISTRATIVE AGENT'S DUTIES. The
Administrative Agent shall promptly forward to each Lender copies, or notify
each Lender as to the contents (whereupon, if requested by a Lender the
Administrative Agent will forthwith forward a copy to such Lender), of all
notices received from the Borrower pursuant to the terms of this Agreement
and, in the event that the Borrower fails to pay when due the principal of
or interest on any Loan, the Administrative Agent shall promptly give notice
thereof to the Lenders. As to any other matter not expressly provided for
herein, the Administrative Agent shall have no duty to act or refrain from
acting with respect to the Borrower, except upon the instructions of the
Required Lenders. The Administrative Agent shall not be bound by any waiver,
amendment, supplement, or modification of this Agreement or the other Credit
Documents which affects its duties hereunder and thereunder, unless it shall
have given its prior written consent thereto. The Administrative Agent shall
have no duty to ascertain or inquire as to the performance or observance of
any of the terms, conditions, covenants or agreements binding on the Borrower
pursuant to any Credit Document nor shall the Administrative Agent be deemed
to have knowledge of the occurrence of any Default or Event of Default (other
than a failure of the Borrower to pay when due the
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principal or interest on any Loan), unless it shall have received written
notice from the Borrower or a Lender specifying such Default or Event of
Default and stating that such notice is a "Notice of Default".
Section 9.03. LIMITATION OF LIABILITIES. Each of the Lenders and
the Borrower agree that (i) neither the Administrative Agent nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them hereunder except for gross negligence or wilful
misconduct of the Administrative Agent or any of its officers or employees,
(ii) neither the Administrative Agent nor any of its officers or employees
shall be liable for any action taken or omitted to be taken by any of them in
good faith in reliance upon the advice of counsel, independent public
accountants or other experts selected by the Administrative Agent, and (iii)
the Administrative Agent shall be entitled to rely upon any notice, consent,
certificate, statement or other document believed by it in good faith to be
genuine and correct and to have been signed and/or sent by the proper Persons.
Section 9.04. THE ADMINISTRATIVE AGENT AS A LENDER. The
Administrative Agent may, without any liability to account, maintain deposits
or credit balances for, invest in, lend money to and generally engage in any
kind of banking business with the Borrower or any Subsidiary or Affiliate of
the Borrower as if it were any other borrower and without any duty to account
therefor to the other Lenders.
Section 9.05. LENDER CREDIT DECISION. Neither the Administrative
Agent, nor any of its Affiliates, officers or employees has any
responsibility for, gives any guaranty in respect of, nor makes any
representation to the Lenders as to, (i) the condition, financial or
otherwise, of the Borrower or any Subsidiary thereof or the truth of any
representation or warranty given or made in this Agreement, or in connection
herewith or therewith or (ii) the validity, execution, sufficiency,
effectiveness, construction, adequacy, enforceability or value of this
Agreement or any other document or instrument related hereto or thereto.
Except as specifically provided herein, neither the Administrative Agent nor
any of its Affiliates, officers or employees shall have any duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect to the operations,
business, property, condition or creditworthiness of the Borrower or any of
its Subsidiaries, whether such information comes into the Administrative
Agent's possession on or before the date hereof or at any time thereafter.
Each Lender acknowledges that (i) it has, independently and without reliance
upon the Administrative Agent or any other Lender, based on such documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement and (ii) all information reviewed
by it in its credit analysis or otherwise in connection herewith (including
information relating to the Administrative Agent) has been provided solely by
or on behalf of the Borrower, and the Administrative Agent has no
responsibility for such information. Each Lender also acknowledges that it
will independently and without reliance upon the Administrative Agent or any
other Lender, based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under any Credit Document. Each Lender represents to
each other party hereto that it is a bank, savings and loan association or
other similar savings institution, insurance company, investment fund or
company or other financial institution that makes or acquires commercial
loans in the ordinary course of its business, that it is participating
hereunder as a Lender for such commercial purposes, and that it has the
knowledge and experience to be and is capable of evaluating the merits and
risks of being
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a Lender hereunder. Each Lender acknowledges and agrees to comply with the
provisions of Section 10.03 applicable to the Lenders hereunder.
Section 9.06. INDEMNIFICATION. Each Lender agrees to indemnify
the Administrative Agent, to the extent not reimbursed by the Borrower,
ratably in proportion to its Commitment (as of the time of the incurrence of
the liability being indemnified against), from and against any and all
liabilities, obligations, losses, claims, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of any Credit
Document, or any action taken or omitted to be taken by the Administrative
Agent hereunder or thereunder; PROVIDED, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the gross negligence or wilful misconduct of the Administrative Agent or any
of its officers or employees. Without limiting the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including fees and disbursements
of counsel incurred by the Administrative Agent in such capacity in
connection with the preparation, execution or enforcement of, or legal advice
in respect of rights or responsibilities under, any Credit Document or any
amendments or supplements hereto or thereto) to the extent that the
Administrative Agent is not reimbursed for such expenses by the Borrower.
Except for action expressly required of the Administrative Agent hereunder,
the Administrative Agent shall in all cases by fully justified in failing or
refusing to act hereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations under this
Section 9.06 hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.
Section 9.07. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the resigning
Administrative Agent's giving of notice of resignation the resigning
Administrative Agent may, on behalf of the Lenders and with the written
consent of the Borrower (which consent shall not be unreasonably withheld),
appoint a successor Administrative Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the resigned Administrative Agent, and the
resigned or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any Administrative Agent's
resignation as Administrative Agent, the provisions of this Article IX shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
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ARTICLE X
EVIDENCE OF LOANS; TRANSFERS
Section 10.01. EVIDENCE OF LOANS. The Borrower's obligations to
repay Loans shall be evidenced by Notes, in substantially the form of EXHIBIT
C. Each Note shall be in the principal amount of the Commitment of the
applicable Lender and stated to mature on the Termination Date and bear
interest from its date until paid in full on the principal amount of the
Loans outstanding thereunder payable at the rates and in the manner provided
herein.
Section 10.02. PARTICIPATIONS. Any Lender may at any time grant
to one or more financial institutions (each a "PARTICIPANT") participating
interests in its Commitment or any or all of its Loans. In the event of any
such grant by a Lender of a participating interest to a Participant, whether
or not upon notice to the Borrower and the Administrative Agent, such Lender
shall remain responsible for the performance of its obligations hereunder,
and, except to the extent such participating interest has been granted
pursuant to Section 4.02(e), the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement pursuant
to which any Lender may grant such a participating interest shall provide
that such Lender shall retain the sole right and responsibility to enforce
the obligations of the Borrower hereunder including the right to approve any
amendment, modification or waiver of any provision of this Agreement;
PROVIDED, that such participation agreement may provide that such Lender will
not agree to any modification, amendment or waiver of this Agreement
described in clauses (i) through (vi), inclusive, of Section 11.05 without
the consent of the Participant. An assignment or other transfer which is not
permitted by Section 10.03 shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in
accordance with this Section 10.02.
Section 10.03. ASSIGNMENTS. (a) Any Lender may at any time assign
to one or more financial institutions (each an "ASSIGNEE") all, or a
proportionate part of all, of its rights and obligations under this
Agreement, and such Assignee shall assume such rights and obligations,
pursuant to an instrument, in substantially the form of EXHIBIT G (an
"ASSIGNMENT AND ACCEPTANCE"), executed by such Assignee and such transferor
Lender, with (and subject to) the signed consent of the Borrower and the
Administrative Agent (which consent shall not be unreasonably withheld);
PROVIDED, that the foregoing consent requirement shall not be applicable in
the case of an assignment or other transfer by any Lender to an affiliate of
such Lender (other than in connection with or in contemplation of any
transaction following which such Person will no longer be such an affiliate
of such Lender) or to another Lender. Upon execution and delivery of an
Assignment and Acceptance and payment by such Assignee to such transferring
Lender of an amount equal to the purchase price agreed between such
transferring Lender and such Assignee and payment by the transferring Lender
or the Assignee of an assignment fee of $3,000 to the Administrative Agent,
such Assignee shall be a Lender party to this Agreement and shall have all
the rights and obligations of a Lender with a Commitment as set forth in such
Assignment and Acceptance, and the transferring Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required.
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(b) No Assignee of any Lender's rights shall be entitled to receive
any greater payment under Section 4.03 or 4.04 than such Lender would have
been entitled to receive with respect to the rights transferred, unless such
transfer is made with the Borrower's prior written consent.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain at its address referred to in Section 11.08 a copy of each
Assignment and Acceptance delivered to it and a register (the "REGISTER") for
the recordation of the names and addresses of the Lenders and the Commitments
of, and the principal amount of the Loans owing to, and any Notes evidencing
such Loans owned by, each Lender from time to time. Notwithstanding anything
in this Agreement to the contrary, the Borrower, the Administrative Agent and
the Lenders shall treat each Lender whose name is recorded in the Register
as the owner of any Loan, any Notes and the Commitments recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice. Notwithstanding anything in this
Agreement to the contrary, no assignment under this Section 10.03 of any
rights or obligations under or in respect of the Loans or the Notes shall be
effective unless and until the Administrative Agent shall have recorded the
assignment pursuant to this Section 10.03(c).
Section 10.04. CERTAIN PLEDGES. Notwithstanding any other
provision in this Agreement, any Lender may at any time create a security
interest in, or pledge, all or any portion of its rights under this Agreement
and any Note held by it in favor or any Federal Reserve bank in accordance
with Federal Reserve Board Regulation A (or any successor provision) or U.S.
Treasury Regulation 31 C.F.R. Section 203.14 (or any successor provision),
and such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under applicable law.
Section 10.05. LEGAL COMPLIANCE. No assignment or participation
made or purported to be made to any Participant or Assignee or purported
Participant or Assignee (each a "TRANSFEREE") shall be effective without the
prior written consent of the Borrower if it would require the Borrower to
make any filing with any Governmental Authority, or qualify any Loan or Note,
under the securities laws of any jurisdiction, and the Borrower shall be
entitled to request and receive such information and assurances as it may
reasonably request from any Lender or any Transferee to determine whether any
such filing or qualification is required or whether any assignment or
participation is otherwise in accordance with applicable law.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 11.02. WAIVER OF JURY. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS EACH HEREBY WAIVES TRIAL
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BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR THE
RELATIONSHIPS ESTABLISHED HEREUNDER.
Section 11.03. JURISDICTION AND VENUE. The Borrower, the
Administrative Agent and the Lenders each hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court in the Borough of
Manhattan, The City of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of any Credit Document.
The Borrower hereby appoints CT Corporation System, with offices on the date
hereof at 1633 Broadway, New York, New York, 10019, as its authorized agent
on whom process may be served in any action which may be instituted against
it by the Administrative Agent or any Lender in any state or federal court in
the Borough of Manhattan, The City of New York, arising out of or relating to
this Agreement or any other Credit Document. Service of process upon such
authorized agent and written notice of such service to a Person shall be
deemed in every respect effective service of process upon such Person, and
the Borrower, the Administrative Agent and the Lenders each hereby
irrevocably consents to the jurisdiction of any such court in any such action
and, to the fullest extent permitted by applicable law, to the laying of
venue in the Borough of Manhattan, The City of New York. The Borrower, the
Administrative Agent and the Lenders each hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection to the laying of
the venue of any such suit, action or proceeding brought in the aforesaid
courts, and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
Section 11.04. CONFIDENTIALITY. Each Lender and the
Administrative Agent agrees (on behalf of itself and each of its affiliates,
directors, officers, employees, agents, advisors and representatives) to keep
confidential any Confidential Information, and in connection therewith comply
with their customary procedures for handling confidential information of this
nature and with safe and sound banking practices; PROVIDED that nothing
herein shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii) to counsel
for any of the Lenders or the Administrative Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Administrative Agent or any other
Lender, (v) by the Administrative Agent or any Lender to an Affiliate
thereof, (vi) in connection with any litigation relating to enforcement of
the Credit Documents or (vii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Bank a Confidentiality Agreement, in substantially the form of
EXHIBIT H, for the benefit of and enforceable by the Borrower, which
Confidentiality Agreement shall be delivered to the Borrower promptly after
the execution thereof; PROVIDED that in the case of the preceding clauses (i)
and (iii), such Lender or Administrative Agent shall, to the extent legally
permissible, use reasonable efforts to notify the Borrower of the proposed
disclosure as far in advance as is reasonably practicable under the
circumstances..
Section 11.05. AMENDMENTS AND WAIVERS. Any provision of this
Agreement may be amended, modified, supplemented or waived, but only by a
written amendment or supplement, or written waiver, signed by the Borrower
and either the Required Lenders (and, if the rights or
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duties of the Administrative Agent are affected thereby, by the
Administrative Agent), or the Administrative Agent with the consent of the
Required Lenders; PROVIDED, HOWEVER, that no such amendment, modification, or
waiver shall, unless signed by all the Lenders, or by the Administrative
Agent with the consent of all the Lenders, (i) increase or decrease the
Commitment of any Lender, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone any payment of principal of or
interest on any Loan or any fees hereunder, (iv) postpone any reduction or
termination of any Commitment, (v) change the percentage, or type of, the
Commitments or of the aggregate unpaid principal amount of Loans, or the
number of Lenders, which shall be required for the Lenders or any of them to
take any action under this Section 11.05 or any other provision of this
Agreement, or (vi) amend, modify, supplement or waive the provisions of this
Section 11.05. Except to the extent expressly set forth therein, any waiver
shall be effective only in the specific instance and for the specific purpose
for which such waiver is given.
Section 11.06. EXTENSION. The Borrower may prior to the first and
every subsequent anniversary of the date of this Agreement, request the
Lenders to extend the Termination Date for an additional year. If all of the
Lenders, in their sole discretion, consent to such extension, the Termination
Date shall be so extended. If the Required Lenders, but not all the Lenders,
shall so consent, the Termination Date shall be extended for an additional
year only upon the elimination and/or replacement of the non-consenting
Lenders pursuant to an amendment to this Agreement.
Section 11.07. CUMULATIVE RIGHTS; NO WAIVER. Each and every right
granted to the Administrative Agent, the L/C Issuer and the Lenders hereunder
or under any other document delivered in connection herewith, or allowed them
by law or equity, shall be cumulative and not exclusive and may be exercised
from time to time. No failure on the part of the Administrative Agent, the
L/C Issuer or any Lender to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by
the Administrative Agent, the L/C Issuer or any Lender of any right preclude
any other or future exercise thereof or the exercise of any other right.
Section 11.08. NOTICES. (a) Any communication, demand or notice
to be given hereunder will be duly given when delivered in writing or by
telecopy to a party at its address as indicated below or such other address
as such party may specify in a notice to each other party hereto. A
communication, demand or notice given pursuant to this Section 11.09 shall be
addressed:
If to the Borrower, at
11601 Wilshire Boulevard
12th Floor
Los Angeles, California 90025
Attention: Mark Stefanek
Telecopy: (310) 478-3987
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If to the Administrative Agent, at
National Australia Bank Limited
200 Park Avenue
New York, New York 10166
Telecopy: (212) 983-1969
Attention: Corporate Banking
If to the L/C Issuer, at
National Australia Bank Limited
200 Park Avenue
New York, New York 10166
Telecopy: (212) 983-1969
Attention: Corporate Banking
If to any Lender, at its address indicated on Schedule I, or at
such other address as may be designated by such Lender in an Administrative
Questionnaire or other appropriate writing, delivered to the Administrative
Agent and the Borrower.
This Section 11.08 shall not apply to notices referred to in
Article II of this Agreement, except to the extent set forth therein.
(b) Unless otherwise provided to the contrary herein, any notice
which is required to be given in writing pursuant to the terms of this
Agreement may be given by telecopy.
Section 11.09. SEPARABILITY. In case any one or more of the
provisions contained in any Credit Document shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained herein or in any other
Credit Document shall not in any way be affected or impaired thereby.
Section 11.10. PARTIES IN INTEREST. This Agreement shall be
binding upon and inure to the benefit of the Borrower and the Lenders and
their respective successors and assigns, except that the Borrower may not
assign any of its rights hereunder without the prior written consent of all
of the Lenders, and any purported assignment by the Borrower without such
consent shall be void.
Section 11.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be
an original, but all the counterparts shall together constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
WESTFIELD AMERICA INC.
By: /S/ Peter S. Lowy
-----------------------------------
Name: Peter S. Lowy
Title: Co-President
NATIONAL AUSTRALIA BANK LIMITED,
NEW YORK BRANCH (ACN 004 044 937),
as Administrative Agent and a Lender
By: /s/ Shaun Dooley
-----------------------------------
Name: Shaun Dooley
Title: Vice President
COMMONWEALTH BANK OF AUSTRALIA,
as Co-Agent and a Lender
By: /s/ Ian M. Phillips
-----------------------------------
Name: Ian M. Phillips
Title: EVP & GM
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
as Co-Agent and a Lender
By: /s/ S.V. Christenson
-----------------------------------
Name: S.V. Christenson
Title: V.P.
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH, as
Documentary Agent and a Lender
By: /s/ Jay H. Bhatt /s/ Joseph Bassil
----------------------------------- ---------------------------------
Name: Jay H. Bhatt Joseph Bassil
Title: Assistant Treasurer Vice President
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SCHEDULE I
LENDERS AND COMMITMENTS
Lender Commitment Address for Notices
------ ---------- --------------------
National Australia Bank Limited $250,000,000 200 Park Avenue
New York, NY 10166
Telecopy: (212) 983-1969
Attn: Corporate Banking
Commonwealth Bank of Australia $150,000,000 599 Lexington Avenue
New York, NY 10022-6072
Telecopy: (212) 336-7722
Attn: Christine A. Renard
Australia and New Zealand $150,000,000 1177 Avenue of the Americas
Banking Group Limited New York, NY 10036-2798
Telecopy: (212) 801-9131
Attn: Stephen Christenson
Union Bank of Switzerland $50,000,000 299 Park Avenue
New York, NY 10171
Telecopy: (212) 821-4138
Attn: Department Head,
Commercial Real Estate
Finance
<PAGE>
SCHEDULE II
PORTFOLIO PROPERTIES
Market Value of
Syndicate Properties March 31, 1996 % Ownership
-------------------- --------------- -----------
Apartments on the Square $ 5,400,000 100.0%
Connecticut Post Mall 146,900,000 100.0%
Eagle Rock Plaza 24,600,000 100.0%
Eastland Center 23,100,000 100.0%
Enfield Square 43,000,000 100.0%
South Shore Mall 146,700,000 100.0%
Westland Towne Center 25,000,000 100.0%
Market Value of
Non Syndicate Properties March 31, 1996 % Ownership
------------------------ --------------- -----------
Vancouver Mall $ 81,600,000 50%
Topanga Plaza 148,300,000 42%
Annapolis Mall 179,900,000 30%
Meriden Square 101,300,000 50.0%
Mid Rivers Mall 74,100,000 100.0%
Mission Valley Center 112,400,000 75.8%
Montgomery Mall 229,400,000 100.0%
North County Fair 116,100,000 45.0%
Plaza Bonita 121,600,000 100.0%
Plaza Camino Real 106,900,000 40.0%
Plaza West Covina 135,000,000 100.0%
South County Center 69,300,000 100.0%
Trumbull Shopping Park 190,500,000 100.0%
West County Center 44,100,000 100.0%
West Park Mall 48,900,000 100.0%
West Valley 6,800,000 43.0%
<PAGE>
EXHIBIT A
FORM OF BORROWING REQUEST
[Date]
[Address of Administrative Agent]
Attention:
-----------------
BORROWING REQUEST
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May __, 1997
(as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), among Westfield America Inc. (the "BORROWER"), the Lenders,
Co-Agents and Documentary Agent from time to time parties thereto and
National Australia Bank Limited, New York Branch, as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.
The Borrower hereby gives you notice, pursuant to Section 2.02 of
the Credit Agreement, that it requests Loans, and in that connection sets
forth below the terms on which such Loans are requested to be made:
(A) Borrowing Date (1)
--------------------------
(B) Aggregate Principal Amount (2) $
--------------------------
(C) Interest Rate Basis [ABR] [EURODOLLAR] LOAN
--------------------------
- ------------------------------
(1) Must be a Business Day.
(2) Must be equal to $__________ or an integral multiple of $_________ in
excess thereof.
<PAGE>
(D) Interest Period and the
last day thereof (3)
---------------------------
Very truly yours,
WESTFIELD AMERICA INC.
By:
---------------------------
Title:
- -------------------------
(3) One, two, three or six months. Not applicable to ABR Loans.
-2-
<PAGE>
EXHIBIT B
FORM OF CONVERSION REQUEST
[Date]
[Address of Administrative Agent]
Attention:
----------------
CONVERSION REQUEST
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of ____ __,
199_ (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), among Westfield America Inc. (the "BORROWER"), the Lenders,
Co-Agents and Documentary Agent from time to time parties thereto and
National Australia Bank Limited, New York Branch, as Administrative Agent.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.
The Borrower hereby requests, pursuant to Section 3.01(b) of the
Credit Agreement, that on __________, 199_:
(1) $___,000,000 of the presently outstanding principal amount of
Loans originally made on ___________, 19__ [and $_________ of the presently
outstanding principal amount of the Loans originally made on ________,
19__],
(2) presently being maintained as [ABR] [Eurodollar] Loans,
(3) bear interest Eurodollar Loans having an Interest Period of
[one][two][three][six] months] [ABR Loans].
Very truly yours,
WESTFIELD AMERICA INC.
By:
--------------------
Title:
<PAGE>
EXHIBIT C
FORM OF REVOLVING CREDIT NOTE
PROMISSORY NOTE
[Principal Amount] [Date]
Westfield America Inc., a Missouri corporation (the "BORROWER"),
for value received, promises to pay to the order of [LENDER] (the "LENDER"),
on the Termination Date (as defined in the Credit Agreement referred to
below), the principal sum of [PRINCIPAL AMOUNT IN DOLLARS] or, if less, the
aggregate principal amount of the then outstanding Loans made by the Lender
to the Borrower pursuant to that certain Credit Agreement, dated as of May
30, 1997 (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), among the Borrower, the Lenders, Co-Agents and Documentary Agent
from time to time parties thereto and National Australia Bank Limited, New
York Branch, as Administrative Agent.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding, from the date hereof until the
date of repayment, at the rate or rates per annum and on the date or dates
specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful
money of the United States of America in funds immediately available to the
Lender at its office or offices designated in accordance with the Credit
Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive diligence, presentment, demand, protest and notice of any
kind whatsoever. The failure or forbearance by the holder to exercise any of
its rights hereunder in any particular instance shall in no event constitute
a waiver thereof.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder of this Note on the schedule
attached hereto and made a part hereof, or on a continuation thereof which
shall be attached hereto and made a part hereof, or shall be recorded by the
holder of this Note in its internal records; PROVIDED, HOWEVER, that any
failure of the holder of this Note to make such a notation or any error in
such notation shall in no manner affect the validity or enforceability of the
obligation of the Borrower to make payments of principal and interest in
accordance with the terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
which, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional prepayment
of the principal hereof prior to the maturity thereof and for the amendment
or waiver of certain provisions of the Credit Agreement and/or this Note, all
upon the terms and conditions therein specified. Capitalized terms used and
not otherwise defined herein have the meanings ascribed thereto in the Credit
Agreement.
<PAGE>
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
This Note is not negotiable and interests herein may be assigned
only upon the terms and conditions specified in the Credit Agreement.
WESTFIELD AMERICA INC.
By:
----------------------
Title:
-2-
<PAGE>
<TABLE>
<CAPTION>
REVOLVING CREDIT LOANS AND PRINCIPAL PAYMENTS
Amount of Revolving Amount of Principal Amount of Unpaid
Credit Loans Made Repaid Principal Balance
------------------- ------------------- -----------------
Euro Interest Euro Euro
ABR dollar Period (if ABR dollar ABR dollar Notation
Date Loan Loan applicable) Loan Loan Loan Loan Total Made By
- ---- ---- ------ ----------- ---- ------ ---- ------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT D
GUARANTEE AGREEMENT (this "Guarantee"), dated as of May __, 1997,
by_____________________, a [CORPORATION/PARTNERSHIP] organized under the laws
of _____________ (the "Guarantor") in favor of the Agent and Lenders from
time to time parties to the Credit Agreement dated as of May __, 1997 (the
"Credit Agreement") among Westfield America Inc. (the "Borrower"), National
Australia Bank Limited ("NAB"), Commonwealth Bank of Australia ("CBA"),
Australia and New Zealand Banking Group Limited ("ANZ") and Union Bank of
Switzerland ("UBS" and together with NAB, CBA and ANZ, collectively, the
"Lenders"), CBA and ANZ, as Co-Agents, UBS, as Documentary Agent, and NAB, as
Administrative Agent (the "Agent").
WHEREAS, the Borrower, the Lenders, the Co-Agents, the Documentary
Agent and the Administrative Agent have entered into the Credit Agreement
pursuant to which the Lenders have agreed to make Loans to and to arrange for
the issuance of Letters of Credit for the account of the Borrower from time
to time; and
WHEREAS, the Guarantor is a [WHOLLY OWNED] Subsidiary of the
Borrower, and it is to the advantage and benefit of the Guarantor that the
Lenders make such Loans and arrange for the issuance of such Letters of
Credit; and
WHEREAS, the Guarantor has agreed to guarantee the obligations of
the Borrower in respect of the Loans, the L/C Obligations and all other
obligations of the Borrower under the Credit Agreement (the "Guaranteed
Obligations"); and
WHEREAS, capitalized terms used herein which are defined in the
Credit Agreement have the meanings herein ascribed to them in the Credit
Agreement.
NOW, THEREFORE, the Guarantor, in consideration of the credit
extended to the Borrower and other valuable consideration, the receipt of
which is hereby acknowledged by the Guarantor, hereby agrees as follows:
Section 1. GUARANTEE. The Guarantor, as primary obligor and not
merely as a surety, unconditionally and irrevocably guarantees to the Agent
and the Lenders and their successors, endorsees and assigns (collectively,
the "Credit Parties"), the prompt payment when due of all obligations and
liabilities of all kinds of the Borrower in respect of the Guaranteed
Obligations, whether due or to become due, secured or unsecured, absolute or
contingent, joint or several, and howsoever or whenever incurred by the
Borrower.
The Guarantor agrees that the Credit Parties may at any time and
from time to time, without notice to or further consent of the Guarantor,
extend the time of payment of, or exchange or surrender any collateral for,
any of the Guaranteed Obligations, and may also make any agreement with the
Borrower or with any other party liable on any of the Guaranteed Obligations
for the extension, renewal, payment, compromise, discharge or release
thereof, in whole or in part, or for any modification of the terms thereof,
without in any way impairing or affecting this Guarantee or the liability of
the Guarantor hereunder.
<PAGE>
Section 2. GUARANTEE ABSOLUTE. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with their terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Credit Parties
with respect thereto. The liability of the Guarantor hereunder shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Guaranteed
Obligations or any agreement or instrument relating hereto or thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Guaranteed Obligations;
(iii) any exchange, release or non-perfection of any collateral
or any release or amendment to, waiver of, or consent to departure
from, any other guarantee for all or any part of the Guaranteed
Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of
the Guaranteed Obligations or of the Guarantor hereunder (other than a
defense of or discharge by payment or performance).
This Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Credit Parties or any of them
upon the insolvency, bankruptcy or reorganization of the Borrower, as though
such payment had not been made.
Section 3. WAIVER. The Guarantor hereby waives promptness,
diligence, notice of the acceptance hereof and any other notice with respect
to any of the Guaranteed Obligations and any requirement that the Credit
Parties exhaust any right or take any action against the Borrower or any
other person or entity or any collateral before proceeding hereunder.
Section 4. SUBROGATION. The Guarantor will not exercise any
rights which it may acquire by way of subrogation by any payment made
hereunder or otherwise, until all the Guaranteed Obligations shall have been
paid in full. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all the Guaranteed Obligations shall not
have been paid in full, such amount shall be held in trust for the benefit of
the Credit Parties and shall forthwith be paid to the Agent to be credited
and applied to the Guaranteed Obligations, whether matured or unmatured.
Section 5. REPRESENTATIONS AND WARRANTIES. The Guarantor
represents and warrants (and such representations and warranties shall be
deemed to be repeated in all material respects as of each Borrowing Date),
that:
(a) GOOD STANDING AND POWER. The Guarantor is a
[CORPORATION/LIMITED PARTNERSHIP], duly incorporated or organized and validly
existing in good standing under the laws of the jurisdiction of its
[INCORPORATION/ORGANIZATION]; it has the power to own its property and to
carry on
-2-
<PAGE>
its business as now being conducted; and it is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be
so qualified, or to be in good standing, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
(b) [CORPORATE] AUTHORITY. The Guarantor has full
[CORPORATE/PARTNERSHIP] power and authority to execute and deliver, and to
incur and perform its obligations under this Guarantee, all of which have
been duly authorized by all necessary [CORPORATE/PARTNERSHIP] action. No
consent or approval of [STOCKHOLDERS/LIMITED PARTNERS] of the Guarantor is
required to be obtained as a condition to the validity or performance of, or
the exercise by the Credit Parties of any of their rights or remedies under
this Guarantee (other than any such consent or approval that has been
obtained).
(c) AUTHORIZATIONS. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from any Governmental
Authority or other Person necessary for the execution, delivery and
performance by the Guarantor of, and the incurrence and performance of each
of its obligations under this Guarantee have been effected or obtained and
are in full force and effect.
(d) BINDING OBLIGATION. This Guarantee constitutes the valid and
legally binding obligation of the Guarantor enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles.
(e) NO CONFLICTS. There is no statute, regulation, rule, order,
judgment, agreement or instrument binding upon the Guarantor, or affecting
its properties, and no provision of the [CERTIFICATE OF INCORPORATION OR
BY-LAWS/LIMITED PARTNERSHIP AGREEMENT] of the Guarantor, that would prohibit,
materially conflict with or materially impair the execution or delivery of,
or the incurrence or performance of the obligations of the Guarantor under
this Guarantee, or result in or require the creation or imposition of any
Lien on property of the Guarantor (other than any Lien of the type permitted
under Section 7.02(b) of the Credit Agreement) as a consequence of the
execution, delivery and performance of this Guarantee.
Section 6. NOTICES. Any communication, notice or demand to be
given hereunder shall be duly given when delivered in writing or sent by
telecopier to a party at its address indicated below.
-3-
<PAGE>
If to the Credit Parties, at: National Australia Bank Limited,
New York Branch
200 Park Avenue
New York, New York 10166
Attention:
If to the Guarantor, at: Westfield Corporation, Inc.
11601 Wilshire Boulevard
12th Floor
Los Angeles, California
Attention: Mark Stefanek
Telecopy No.: (310) 478-3987
or, as to any party, to such other address as shall be designated by such
party in a written notice to the other parties.
Section 7. EXPENSES. The Guarantor agrees to pay on demand all
reasonable out-of-pocket expenses (including the reasonable fees and expenses
of counsel to the Credit Parties) in any way relating to the enforcement of
the rights of the Credit Parties hereunder.
Section 8. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part
of the Credit Parties to exercise, and no delay in exercising, any right or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Credit Parties of any right or remedy hereunder
preclude any other or future exercise of any other right or remedy. Each and
every right and remedy hereby granted to the Credit Parties or allowed them
by law or other agreement shall be cumulative and not exclusive the one of
any other, and may be exercised by the Credit Parties from time to time.
Section 9. MODIFICATIONS, CONSENTS AND WAIVERS. No modification
or waiver of any provision of this Guarantee and no consent to any departure
by the Guarantor therefrom shall in any event be effective unless the same
shall be in writing and signed by the Agent and the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.
Section 10. CONTINUING EFFECT; SUCCESSORS. This Guarantee shall
remain in full force and effect until payment in full of the Loans and all
other amounts then due and owing under the Credit Agreement or this Guarantee
and termination or expiration of all Letters of Credit; PROVIDED, HOWEVER,
that the Obligations of the Guarantor hereunder shall terminate upon its
ceasing to be a Syndicate Subsidiary in accordance with Section 1.01(c) of
the Credit Agreement as a result of a sale or disposition of the Guarantor or
the Syndicate Property which it owns that complies with Section 7.02(a) of
the Credit Agreement. This Guarantee shall inure to the benefit of, and be
enforceable by, the Credit Parties and their successors, transferees and
assigns. Without limiting the generality of the foregoing, the Credit
Parties or any of them may assign or otherwise transfer any of the Guaranteed
Obligations (or any portion thereof) to any other Person or entity in
accordance with the terms of the Credit Agreement, and such other
-4-
<PAGE>
Person or entity shall thereupon become vested with all rights in respect
thereof granted to the Credit Parties herein or otherwise.
Section 11. CHOICE OF LAW. THIS GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
duly executed as of the date first above written.
[NAME OF GUARANTOR]
By
----------------------
Name:
Title:
-5-
<PAGE>
EXHIBIT E
FORM OF OPINION OF
COUNSEL FOR THE BORROWER
[TO BE PROVIDED]
-6-
<PAGE>
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending ]
-------
[For the Fiscal Year ending ]
-------
Reference is made to the Credit Agreement, dated as of May ___,
1997 (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), among Westfield America Inc. (the "BORROWER"), the Lenders,
Co-Agents and Documentary Agent from time to time parties thereto and
National Australia Bank Limited, New York Branch, as Administrative Agent.
Pursuant to Section 7.01(a)(iii) of the Credit Agreement, the undersigned
Responsible Officer of the Borrower hereby certifies on behalf of the
Borrower that:
(a) During the period of four consecutive fiscal quarters ended on
____________ __, 199__, such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as follows: _________________________.
The financial statements referred to in Section 7.01(a) of the Credit
Agreement which are delivered concurrently with the delivery of this Compliance
Certificate fairly present, in all material respects, the financial position,
results of operations, cash flows and changes in stockholders' equity of the
Borrower and its Subsidiaries, subject to normal year-end audit adjustments
which are not expected to be material in amount.(*)
(b) The covenant calculations set forth below are based on the
Borrower's [audited] balance sheet and statements of income, cash flows and
shareholders' equity for the fiscal [quarter] [year] ended _________________,
____ (the "PERIOD-END DATE").
1. SHAREHOLDERS' FUNDS (SECTION 7.03(a))
Shareholders' Funds on the Period-End Date $
----------
----------
2. INTEREST COVERAGE RATIO (SECTION 7.03(b))
(a) EBITDA : $ (x)
------
(b) Interest Expense : $ (y) (x) : (y)
------ --------------
- ---------------------------
* Insert only in Compliance Certificates accompanying quarterly
financial statements delivered pursuant to Section 7.01(a)(i)
of the Credit Agreement.
<PAGE>
3. SYNDICATE PROPERTY COVERAGE (SECTION 7.03(c))
(a) Net Operating Income: $ (x)
------
(b) Interest Expense : $ (y) (x) : (y)
------ --------------
4. TOTAL DEBT (SECTION 7.03(d))
(a) Total Debt: $ (x)
------
(b) Total Tangible Assets : $ (y) (x) (.60) (y)
------ --------------
5. LOAN TO VALUE RATIO (SECTION 7.03(d))
(a) Loans and L/C Obligations: $ (x)
------
(b) Current Value of Syndicate Properties : $ (y) (x) (.60) (y)
------ --------------
6. DIVIDEND LIMITATION (SECTION 7.03(f))
(a) Dividends: $ (x)
------
(b) Funds from Operations : $ (y) (x) (y)
------ --------------
IN WITNESS WHEREOF, on behalf of the Borrower, the undersigned has
hereto set his or her hand.
Dated: WESTFIELD AMERICA INC.
----------------, ---
By:
-----------------------------------
A Responsible Officer
-2-
<PAGE>
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of May __, 1997
(as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), among Westfield America Inc. (the "BORROWER"), the Lenders,
Co-Agents and Documentary Agent from time to time parties thereto and
National Australia Bank Limited, New York Branch, as Administrative Agent.
Capitalized terms defined in the Credit Agreement are used herein with the
same meanings.
Section 1. ASSIGNMENT AND ACCEPTANCE. The Assignor identified in
ANNEX 1 hereto (the "ASSIGNOR") hereby sells and assigns, without recourse,
to the Assignee identified in ANNEX 1 hereto (the "ASSIGNEE"), and the
Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Effective Date set forth in ANNEX 1 hereto, the
interests set forth on ANNEX 1 hereto (the "ASSIGNED INTEREST") in the
Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on ANNEX 1 in the Commitment of
the Assignor on the Effective Date and the Loans owing to the Assignor which
are outstanding on the Effective Date. The Assignee hereby makes and agrees
to be bound by all the representations, warranties and agreements set forth
in Section 9.05 of the Credit Agreement, a copy of which has been received by
such party. From and after the Effective Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
Section 2. OTHER DOCUMENTATION. This Assignment and Acceptance
is being delivered to the Administrative Agent together with a properly
completed Administrative Questionnaire, attached as ANNEX 2 hereto, if the
Assignee is not already a Lender under the Credit Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR. The
Assignor (i) represents and warrants that, as of the date hereof, it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is held by it free and clear of any adverse claim; (ii)
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, or
any other instrument or document executed or furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit
Agreement or any other instrument or document furnished pursuant thereto.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE. The
Assignee (a) confirms that it has received a copy of the
<PAGE>
Credit Agreement, together with copies of the financial statements delivered
on or before the date hereof pursuant to Sections 5.01(h) and 7.01(a) thereof
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (b) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking any action under the
Credit Documents; (c) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (d)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender; and (e) if the Assignee is organized under the
laws of a jurisdiction outside the United States, confirms to the Borrower
(and is providing to the Administrative Agent and the Borrower Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service) that (i) the Assignee is entitled
to benefits under an income tax treaty to which the United States is a party
that reduces the rate of withholding tax on payments under the Credit
Agreement or (ii) that the income receivable pursuant to the Credit Agreement
is effectively connected with the conduct of a trade or business in the
United States.
SECTION 5. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
ANNEX 1 hereto.
-2-
<PAGE>
ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than two Business
Days after the Date of Assignment):
PERCENTAGE ASSIGNED OF
PRINCIPAL AMOUNT ASSIGNED COMMITMENT
Commitment Assigned: $ %
The terms set forth above
are hereby agreed to: Consent given:
, as Assignor WESTFIELD AMERICA INC.
- -------------
By: By:
-------------------------- ---------------------------
Name: Name:
Title: Title:
, as Assignee
- -------------
By:
-------------------------
Name:
Title:
<PAGE>
ANNEX 2 TO ASSIGNMENT AND ACCEPTANCE
LEGAL NAME OF ASSIGNEE TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION
ABR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Country, Zip Code:
EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Country, Zip Code:
CONTACTS/NOTIFICATION METHODS
CREDIT CONTACTS:
Primary Contact:
Street Address:
City, State, Country, Zip Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Country, Zip Code:
<PAGE>
Phone Number:
FAX Number:
ADMINISTRATIVE CONTACTS -- BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
Street Address:
City, State, Country, Zip Code:
Phone Number:
FAX Number:
PAYMENT INSTRUCTIONS
Name of bank where funds are to be transferred:
Routing Transit/ABA number of bank where funds are to be transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
TAX WITHHOLDING
Non Resident Alien Y* N
-------- ---------
* Form 4224 Enclosed
Tax ID Number
------------------------
-2-
<PAGE>
MAILINGS
Please specify who should receive financial information:
Name:
Street Address:
City, State, Country, Zip Code:
-3-
<PAGE>
EXHIBIT H
FORM OF CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement, dated as of May__, 1997, among
Westfield America Inc., the Lenders, Co-Agents and
Documentary Agent from time to time parties
thereto and National Australia Bank Limited,
NEW YORK BRANCH , AS ADMINISTRATIVE AGENT
Dear
-------------------
As a Lender party to the above-referenced Credit Agreement (the
"CREDIT AGREEMENT"), we have agreed with Westfield America Inc., (the
"BORROWER"), pursuant to Section 11.04 of the Credit Agreement, to keep
confidential, except as otherwise provided therein, all Confidential
Information (as defined in the Credit Agreement) regarding the Borrower and
its Subsidiaries.
As provided in said Section 11.04, we are permitted to provide you,
as a prospective participant or assignee, with certain of such Confidential
Information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form.
Such information will not be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers,
employees and representatives) that (A) such information will not be used by
you except in connection with the proposed [participation] [assignment]
mentioned above and (B) you shall keep confidential any Confidential
Information and in connection therewith comply with your customary procedures
for handling confidential information and with safe and sound banking
practices; PROVIDED that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to your counsel or to counsel for any of the Lenders
or the Administrative Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Administrative Agent or any other Lender, and (v) in
connection with any litigation relating to enforcement of the Credit
Documents; PROVIDED FURTHER, that, unless specifically prohibited by
applicable law or court order, you agree, prior to disclosure thereof, to
notify the Borrower of any request for disclosure of any such non-public
information (x) by any Governmental Authority or representative thereof
(other than any such request in connection with an examination of your
financial condition by such Governmental Authority) or (y) pursuant to legal
process. You further agree that this Confidentiality Agreement is for the
benefit of and is enforceable by the Borrower.
<PAGE>
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE. The provisions of Sections 11.02 and
11.03 of the Credit Agreement are hereby incorporated herein by references as
if each reference therein to "the Administrative Agent and the Lenders" were
a reference to the Borrower and you, respectively.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this Confidentiality
Agreement.
Very truly yours,
[Insert Name of Lender]
By
----------------------
Agreed as of the date of this letter.
[Insert name of prospective
participant or assignee]
By:
----------------------
-2-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WESTFIELD
AMERICA INC. FOR THE PERIOD AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 43,468
<SECURITIES> 0
<RECEIVABLES> 30,771
<ALLOWANCES> (5,552)
<INVENTORY> 0
<CURRENT-ASSETS> 68,687
<PP&E> 1,551,159
<DEPRECIATION> (189,016)
<TOTAL-ASSETS> 1,755,289
<CURRENT-LIABILITIES> 72,707
<BONDS> 0
0
121,000
<COMMON> 733
<OTHER-SE> 654,759
<TOTAL-LIABILITY-AND-EQUITY> 1,755,289
<SALES> 0
<TOTAL-REVENUES> 50,656
<CGS> 0
<TOTAL-COSTS> 13,897
<OTHER-EXPENSES> 12,195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,222
<INCOME-PRETAX> 10,808
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,808
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,808
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
