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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JUNE 4, 1997
WESTFIELD AMERICA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MISSOURI 333-22731 43-0758627
(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION
INCORPORATION) NUMBER)
11601 WILSHIRE BOULEVARD
12TH FLOOR
LOS ANGELES, CALIFORNIA 90025
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
- --------------------------------------------------------------------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 310 445-2427
Page 1 of 4
Exhibit Index appears on Page 4
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Item 2. Acquisition or Disposition of Assets.
On June 4, 1997, Registrant announced the completion, on that date, of
its acquisition of additional interests in Annapolis Mall in Annapolis,
Maryland (the "Mall"). A copy of the press release is attached as Exhibit
99.2. Westfield America of Annapolis, Inc., a Delaware corporation (a
wholly-owned subsidiary of Registrant hereinafter called "Buyer"), acquired
from RREEF USA FUND-III/ANNAPOLIS, INC., a Delaware corporation ("Seller"), a
fifty percent (50%) general partnership interest and a twenty percent (20%)
limited partnership interest (the "Partnership Interests") in Annapolis Mall
Limited Partnership, a Maryland limited partnership (the "Partnership").
Immediately prior to June 4, 1997, and for all relevant time periods prior to
that date, Buyer owned a thirty percent (30%) general partnership interest in
the Partnership. The acquisition was made pursuant to an Agreement for
Purchase and Sale of Partnership Interest and Real Property dated as of June
4, 1997 (the "Agreement"). Also pursuant to the Agreement, on June 4, 1997,
Buyer acquired from Seller real property (approximately 13.17 acres)
adjoining the Partnership property, (the "Real Property").
The total consideration paid to Seller on June 4, 1997, for the
Partnership Interests and the Real Property was One Hundred Thirty-Three
Million Dollars ($133,000,000.00) in cash. Buyer and Seller determined the
amount of the consideration through arms-length negotiations. The funds for
this acquisition came in part from proceeds of the sale of 18,000,000 shares
of Registrant's common stock (par value $.01 per share) registered with the
Securities and Exchange Commission on a Form S-11 Registration Statement that
became effective May 16, 1997, and in part from a Six Hundred Million Dollar
($600,000,000.00) line of credit available to Registrant with National
Australia Bank Limited, Australia and New Zealand Banking Group Limited,
Commonwealth Bank of Australia, and Union Bank of Switzerland.
The Mall has over 990,000 square feet of gross leasable area with 148
mall stores and four anchors: Hecht's, Montgomery Ward, J.C. Penney and
Nordstrom. Prior to June 4, 1997, the Mall was operated as a regional
shopping center, and Registrant intends to continue to do so for the
foreseeable future.
2
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTFIELD AMERICA, INC,.
(REGISTRANT)
Dated June 19, 1997 By: /s/ MARK A. STEFANEK
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Name: Mark A. Stefanek
Title: Chief Financial Officer and Treasurer
3
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INDEX TO EXHIBITS
EXHIBIT NUMBER EXHIBIT METHOD OF FILING
2.1 Agreement for Purchase and Filed herewith.
Sale of Partnership Interest and
Real Property, dated as of June
4, 1997, between RREEF USA
FUND-III/Annapolis, Inc.
("Seller") and Westfield
America of Annapolis, Inc.
("Buyer").
99.1 Financial statements on Pages Pages F-1 through F-12
F-1 through F-5 are are incorporated by
incorporated herein by reference; copies
reference from pages F-38 attached pursuant to
through F-41 of the Registration Instruction F.
Statement on Form S-11 filed by
Registrant on May 15, 1997 ("the
Registration Statement"). The
Pro forma financial information
included on Pages F-6 to F-12 is
incorporated by reference from
pages F-2 through F-7 of the
Registration Statement.
99.2 Press Release dated June 4, Filed herewith.
1997
4
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EXHIBIT 2.1
Please note the following described exhibits to the Agreement for Purchase
and Sale of Partnership Interest and Real Property are not being filed
electronically as prescribed by EDGAR, but Registrant hereby agrees to
furnish any or all of such exhibits supplementally upon the request of the
Securities and Exchange Commission:
(i) Exhibit B -- the legal description of the Real Property being purchased.
(ii) Exhibit L -- permitted exceptions to title for the Real Property being
purchased.
(iii) Exhibit M -- description of known environmental problems regarding the
Real Property being purchased.
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AGREEMENT FOR PURCHASE AND SALE
OF
PARTNERSHIP INTEREST AND REAL PROPERTY
THIS AGREEMENT ("Agreement") is made this 4th day of June, 1997, by
and between RREEF USA FUND-III/ANNAPOLIS, INC., a Delaware corporation
("Seller"), and WESTFIELD AMERICA OF ANNAPOLIS, INC., a Delaware corporation
("Buyer").
RECITALS
A. Seller and Buyer are each partners of Annapolis Mall Limited
Partnership, a Maryland limited partnership (the "Partnership"). Seller
currently owns a fifty percent (50%) general partnership interest and a
twenty percent (20%) limited partnership interest in the Partnership
(collectively, the "Partnership Interest") and Buyer currently owns a thirty
percent (30%) general partnership interest in the Partnership.
B. The Partnership was created by and exists by virtue of the
documents described on EXHIBIT A hereto (the "Partnership Documents").
C. The Partnership owns the regional shopping center commonly known
as Annapolis Mall, Annapolis, Maryland (the "Shopping Center") other than the
portions of the Shopping Center occupied by certain anchor department stores.
D. Seller is also the owner of the tract of land more fully described
on EXHIBIT B hereto (the "Land"), together with all improvements thereon (the
"Improvements"), including, without limitation, the "department store building"
operated by Montgomery Ward & Co. and the building occupied by NationsBank, N.A.
(the Land, together with the Improvements, the rights appurtenant to the Land
and the Improvements and the other property described herein, is hereinafter
referred to as the "Real Property").
E. Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, the Partnership Interest and the Real Property on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the terms and
conditions hereinafter set forth, Seller and Buyer hereby agree as follows:
AGREEMENT
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1. SALE OF PARTNERSHIP INTEREST AND REAL PROPERTY
Upon the terms and conditions hereinafter set forth, Seller shall
sell, transfer and assign to Buyer, and Buyer shall purchase from Seller, the
Partnership Interest and the Real Property. The Real Property includes (a) all
easements, rights-of-way, development rights, privileges, licenses and other
rights and benefits belonging to, running with or in any way relating to the
Land or Improvements; (b) all right, title and interest of Seller in and to any
land lying in the bed of any street, opened or proposed, abutting the Land;
(c) all right, title and interest of Seller in and to any unpaid award for the
taking by eminent domain of any part of the Land or Improvements or for damage
to the Land or Improvements by reason of a change of grade of any street;
(d) all fixtures, furniture, equipment, supplies, and other personal property
attached or appurtenant to, or located in or on, or used in connection with the
Land or Improvements, which are not owned by tenants of the Land or
Improvements; (e) all of Seller's right, title and interest in all leases and
occupancy agreements and in all reciprocal easement agreements relating to the
Land or Improvements; and (f) all of Seller's right, title and interest in the
intangible property used in the ownership, operation or maintenance of the Land
or Improvements.
2. PURCHASE PRICE.
The aggregate purchase price for the Partnership Interest and the Real
Property is One Hundred Thirty-Three Million Dollars ($133,000,000) (the
"Purchase Price"), allocated $128,750,000 for the Partnership Interest and
$4,250,000 for the Real Property. The Purchase Price shall be paid by Buyer to
Seller at the Closing (as hereinafter defined) by wire transfer of immediately
available funds.
3. CLOSING.
Subject to the satisfaction of the conditions set forth herein, the
closing ("Closing") of the sale and purchase of the Partnership Interest and the
Real Property shall occur on June 16, 1997 ("Closing Date"). The Closing may
occur on such earlier or later date as the parties may otherwise agree.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Seller's Representations and Warranties. Seller makes the
following representations and warranties, which representations and warranties
are true and correct as of the date of this Agreement, and which representations
and warranties shall be true and correct at and as of the Closing Date in all
respects as though such representations and warranties were made as of the
Closing Date.
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(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is duly qualified to
conduct business in the State of Maryland, and has the full power and
authority to enter into this Agreement, to execute and deliver the
"Seller's Closing Documents" (as hereinafter defined) and all other
documents contemplated hereby, and to perform all of the terms, conditions
and provisions thereof and hereof. This Agreement and all documents which
are to be executed by Seller and to be delivered to Buyer at the Closing
are or at the time of Closing will be duly authorized, executed and
delivered by Seller and at the time of Closing will be legal, valid and
binding obligations of Seller, enforceable in accordance with their terms,
and do not and at the time of Closing will not violate any provisions of
any agreement or judicial order to which Seller is a party or to which
Seller or the Partnership Interest or the Real Property is subject.
(b) Seller owns the Partnership Interest free and clear of all rights
and claims of third parties and has not directly or indirectly, voluntarily
or involuntarily, by operation of law or otherwise, assigned, transferred,
encumbered or granted a security interest in the Partnership Interest, or
the Seller's rights under the Partnership Documents.
(c) Seller has received no notice and to the best of its knowledge
there does not exist any default by Seller under any agreement pertaining
to the Partnership Interest or the Partnership Documents.
(d) EXHIBIT C to this Agreement is a list of all of the leases,
tenancies, licenses and other agreements (excluding subleases entered into
by any tenant without Seller's consent or approval) for the use or
occupancy of any portion of the Real Property in effect on the date of this
Agreement, as the same may have been amended, modified or supplemented
(the "Tenant Leases"). Seller has delivered to Buyer true, correct and
complete copies of the Tenant Leases.
(e) To the best of Seller's knowledge, each of the Tenant Leases is
valid and in full force and effect and neither Seller, as landlord, nor the
tenant is in default thereunder. Seller has not received any written
notice from any tenant under a Tenant Lease alleging a default by Seller as
landlord under such Tenant Lease. Seller has fully performed all of its
obligations under the Tenant Leases required to be performed as of the date
hereof. There are no unpaid tenant allowances or similar concessions
payable to the tenants under the Tenant Leases.
(f) None of the Tenant Leases and none of the rents or other amounts
payable under the Tenant Leases has been assigned, pledged or encumbered by
Seller, and the Tenant Leases may be assigned by Seller. No security
deposits have been paid by tenants under the Tenant Leases which have not
previously been returned to the tenants.
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(g) EXHIBIT D to this Agreement sets forth the reciprocal easement
agreement affecting the Real Property, together with all amendments,
modifications and supplements hereto (the "REA"). To the best of Seller's
knowledge, Seller is not in default under the REA. Seller has not received
any written notice from any party to the REA alleging a default by Seller
of its obligations under the REA.
(h) There are no management, service, equipment, supply, security,
maintenance, construction, concession or other agreements with respect to
or affecting the Real Property which will be binding on Buyer or the Real
Property following the Closing.
(i) Seller has not received written notice of any violation
("Violation") of any applicable law, ordinance, code, rule, order,
regulation or requirement of any governmental authority, the requirements
of any local board of fire underwriters (or other body exercising similar
functions).
(j) There is no action, suit or proceeding pending or, to the best of
Seller's knowledge, threatened against Seller or the Real Property or any
portion thereof or any of the Tenant Leases or the REA in any court or
before or by any federal, state, county or municipal department,
commission, board, bureau or agency or other governmental instrumentality.
(k) The Real Property constitutes a separate tax parcel and is
separately assessed for real estate tax purposes, and Seller is not a party
to any proceeding pending for the adjustment of the assessed valuation of
all or any portion of the Real Property.
(l) Seller has not received any written notice of any condemnation
proceeding or other proceedings in the nature of eminent domain ("Taking")
in connection with the Real Property, and to the best of Seller's
knowledge, no Taking has been threatened.
(m) All of the books, records, information, data and other items
supplied by Seller to Buyer with respect to the Real Property are true,
complete and correct in all material respects and fairly and accurately
presented the results of operations of the Real Property.
(n) Seller is not a "foreign person" within the meaning of Section
1445 of the U.S. Internal Revenue Code.
4.2 Buyer's Representations and Warranties. Buyer makes the following
representations and warranties, which representations and warranties are true
and correct as of the date of this Agreement, and which representations and
warranties shall
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be true and correct at and as of the Closing Date in all respects as though
such representations and warranties were made as of the Closing Date.
(a) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is duly qualified to
conduct business in the State of Maryland, and has the full power and authority
to enter into this Agreement, to execute and deliver the "Buyer's Closing
Documents" (as hereinafter defined) and all other documents contemplated hereby,
and to perform all of the terms, conditions and provisions thereof and hereof.
This Agreement and all documents which are to be executed by Buyer and to be
delivered to Seller at the Closing are or at the time of Closing will be duly
authorized, executed and delivered by Buyer and at the time of Closing will be
legal, valid and binding obligations of Buyer, enforceable in accordance with
their terms, and do not and at the time of Closing will not violate any
provisions of any agreement or judicial order to which Buyer is a party or to
which Buyer is subject.
(b) There are no pending actions, suits, proceedings or
investigations to which Buyer is a party before any court or other
governmental authority which may have an adverse impact on the transactions
contemplated hereby.
(c) One or more of the following circumstances applies to Buyer:
(i) Equity interests in Buyer are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2); or (ii) less
than twenty-five percent (25) of all equity interests in Buyer are
held by "benefit plan investors" within the meaning of 29 C.F.R.
Section 2510.3-101(f)(2); or (iii) Buyer qualifies as an "operating
company" or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e); or (iv) equity interests in Buyer
are held by a foreign pension plan or pension fund which is not
subject to ERISA.
4.3 NO OTHER REPRESENTATIONS AND WARRANTIES. Except as expressly set
forth in this Agreement, neither Seller nor Buyer have made, make or have
authorized anyone to make on its behalf, any warranty or representation as to
the Real Property or the Partnership Interest. Except as otherwise provided for
in this Agreement, Buyer will acquire the Real Property and the Partnership
Interest on the understanding that there are no express or implied warranties.
The provisions of this section 4.3 shall not negate any express representations
of Seller set forth in this Agreement. Buyer shall accept the Real Property and
the property owned by the Partnership "as is" and in its condition on Closing
Date subject only to the express provisions of this Agreement.
4.4 Continuation and Survival of Representations and Warranties. All
representations and warranties by the respective parties contained in this
Agreement or made in writing pursuant to this Agreement are intended to and
shall remain true and
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correct as of the time of Closing, shall be deemed to be material, and shall
survive the Closing for a period of one year from and after the Closing. If
either Buyer or Seller has actual knowledge of a representation or warranty
made by the other party is not true and correct as of the time of Closing but
elects to proceed with the Closing, such party shall be deemed to have waived
its rights to make a claim against the other party by reason of such
misrepresentation. References to "Seller's" Knowledge" or "actual knowledge"
with respect to Seller shall refer to the knowledge of Thomas Caputo, Lee
Letchford, and A. Jay Jehle and with respect to Buyer shall refer to the
actual knowledge of Richard Green and Dimitri Vazelakis.
5. DELIVERY OF DOCUMENTS.
5.1 Documents To Be Executed and Delivered. At the Closing, the following
documents are to be executed and delivered by or on behalf of the respective
parties as set forth below. To the extent that such documents are not attached
to this Agreement as Exhibits, such documents shall be in form and substance
reasonably satisfactory to the parties.
(a) Documents to be executed and delivered by the Seller ("Seller's
Closing Documents"):
(i) The Assignment of Partnership Interest in the form of EXHIBIT E
hereto (the "Assignment of Partnership Interest").
(ii) All required filings with respect to the Partnership Agreement or
fictitious name certificate for the Partnership.
(iii) An opinion of counsel issued by D'Ancona & Pflaum on behalf of
Seller to Buyer as to the matters set forth in 4.1(a) above.
(iv) A certificate of Seller's non-foreign status in the form of
EXHIBIT F hereto.
(v) An original executed special warranty deed, duly executed and
acknowledged by Seller and in proper form for recording, transferring
title to the Real Property.
(vi) Assignments in the form of EXHIBIT G and EXHIBIT H respectively,
of the Tenant Leases and the REA, duly executed and acknowledged by
Seller, assigning all of the Seller's right, title and interest in the
Tenant Leases and the REA, together with an original executed copy or,
if Seller is not in possession of such original executed counterpart,
a copy of such agreement certified by Seller of each of the Tenant
Leases and all guarantees of the Tenant Leases and the REA and a
letter, duly executed by Seller, in form
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satisfactory to Buyer and addressed to each of the tenants under the
Tenant Leases and the parties to the REA informing it of the
assignments.
(vii) A General Assignment in the form of EXHIBIT I, duly
executed and acknowledged by Seller, assigning Seller's interest in
(and delivery to Buyer of originals of): all permanent certificates
of occupancy and all other licenses, permits, authorizations,
consents, certificates and approvals required by all governmental
authorities having jurisdiction over the Real Property; all
certificates issued by the local Board of Fire Underwriters (or other
body exercising similar functions); all plans, specifications and
project manuals for the Real Property; all guarantees, bonds and
warranties with respect to the Real Property (together with original
counterparts of such instruments).
(viii) Original counterparts of the Tenant Estoppel Certificates
(as hereinafter defined).
(ix) Such resolutions and certificates as Buyer or the Title Company
(as hereinafter defined) shall reasonably require to evidence the due
authorization of the execution and performance of this Agreement and
the documents to be delivered pursuant hereto; and all affidavits,
indemnities, certificates, and other agreements reasonably required by
the Title Company to permit it to issue to Buyer the owner's policy of
title insurance required pursuant to Section 6.3.
(x) Any other documents required to be delivered by Seller pursuant
to any other provisions of this Agreement.
(b) Documents to be delivered by Buyer ("Buyer's Closing Documents",
collectively with Seller's Closing Documents, the "Closing Documents"):
(i) Counterpart of Assignment of Partnership Interest.
(ii) Counterparts of the documents referenced in Section 5.1(a)(ii)
above.
(iii) Counterparts of the documents referenced in Section
5.1(a)(vi) above.
(v) Counterparts of the document referenced in Section 5.1(a)(vii)
above.
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(vi) An opinion of counsel issued by Debevoise & Plimpton on
behalf of Buyer to Seller as to the matters set forth in
Section 4.2(a) above.
(vii) Any other documents required to be delivered by Seller
pursuant to any other provisions of this Agreement.
6. CONDITIONS TO CLOSING.
6.1 Conditions Precedent to Seller's Obligation to Close. The following
conditions are conditions precedent to Seller's obligation to sell the
Partnership Interest and the Real Property, each of which may be waived in
writing by Seller in its sole discretion:
(a) Buyer shall have paid to Seller the Purchase Price.
(b) Buyer shall have delivered to Seller the documents set forth in
Section 5.1(b) above.
(c) Buyer's warranties and representations shall be true and correct
in all material respects as at the time of Closing.
6.2 Conditions Precedent to Buyer's Obligation to Close. The following
conditions are conditions precedent to Buyer's obligation to purchase the
Seller's Interest, each of which may be waived in writing by Buyer in its sole
discretion:
(a) Buyer shall have received from Seller the documents set forth in
Section 5.1(a) above.
(b) The Title Company (as hereinafter defined) shall have issued
or irrevocably committed to issue to Buyer an ALTA 1994 Form of
Owner's Policy of Title Insurance, dated the Closing Date,
insuring Buyer in the amount of $4,250,000 as the owner of good
and marketable fee title to the Real Property, subject only to
the Permitted Encumbrances (as hereinafter defined). The Title
Company shall have also issued or irrevocably committed to issue
to Buyer as of the Closing Date a title endorsement in the form
of EXHIBIT J hereto to the Partnership's existing title insurance
policy on the Shopping Center.
(c) Seller's warranties and representations shall be true and
correct in all material respects as at the time of Closing.
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(d) Seller shall have performed all covenants, agreements and
conditions required by this Agreement to be performed by Seller
prior to or as of the Closing Date.
(e) None of the tenants under the Tenant Leases shall be in material
default of their obligations under the Tenant Leases or shall be
the subject of a bankruptcy proceeding.
(f) Executed Tenant Estoppel Certificates (as hereinafter defined)
shall have been received by Buyer from all of the tenants under
the Tenant Leases, all dated no more than thirty (30) days prior
to the Closing Date and in the form of EXHIBIT K hereto or in
such other form as may be satisfactory to Buyer.
(g) Buyer shall have completed its due diligence investigation of the
Real Property on or before the date hereof and shall not have
elected to terminate this Agreement (which right Buyer may
exercise in its sole discretion if it is not satisfied with any
aspect of its due diligence investigation of the Real Property).
6.3 Title Commitment. Promptly after the execution of this Agreement,
Buyer shall request that First American Title Insurance Company (the "Title
Company") issue a Commitment for Title Insurance ("Title Commitment") with
respect to the Real Property. Buyer shall, within ten (10) days after the date
of Buyer's receipt of the Title Commitment and a current ALTA survey of the Real
Property, give to Seller notice ("Exception Notice") of any exceptions to title
set forth in the Title Commitment which are not acceptable to Buyer
("Unacceptable Exceptions"); PROVIDED, HOWEVER, that the Tenant Leases and the
exceptions listed on EXHIBIT L, if any, shall not be Unacceptable Exceptions.
Seller shall, within ten (10) days after the date of Seller's receipt of the
Exception Notice, either (i) provide to the Title Company such agreements,
indemnities, documents or other items as shall be required to cause the Title
Company to remove the Unacceptable Exceptions as title exceptions from the Title
Commitment or (ii) give to Buyer written notice stating which of the
Unacceptable Exceptions Seller will not cause the Title Company to remove as
title exceptions from the Title Commitment. If the Title Company has not issued
an endorsement to the Title Commitment removing all of the Unacceptable
Exceptions as title exceptions from the Title Commitment within thirty (30) days
from the date of the Exception Notice, then Buyer shall have the right to
terminate this Agreement by written notice to Seller. If Buyer terminates this
Agreement pursuant to the provisions of the preceding sentence, there shall be
no further liability or obligations on the part of Buyer or Seller under this
Agreement. If Buyer does not terminate this Agreement pursuant to the
provisions of this section, then the exceptions remaining on Schedule B, Section
II of the Title Commitment which are not liens securing payment of monetary sums
("Liens") shall be the "Permitted Encumbrances" and shall be deemed added to
EXHIBIT L hereto. Seller agrees fully to pay in full all Liens and cause all
Liens to be released and satisfied of record prior to the Closing Date.
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6.4 Tenant Estoppel Certificates. Promptly after the execution of
this Agreement, Seller shall complete and deliver for execution by each tenant
under the Tenant Leases a written certification in the form of EXHIBIT M to this
Agreement ("Tenant Estoppel Certificate"); and Seller shall use diligent efforts
to obtain an executed Tenant Estoppel Certificate from each tenant. Seller
shall deliver to Buyer a copy of each executed Tenant Estoppel Certificate
delivered to Seller promptly after receiving such certificate.
7. APPORTIONMENTS.
7.1 APPORTIONMENTS WITH RESPECT TO THE PARTNERSHIP INTEREST. In addition
to the Purchase Price, Seller shall be entitled to receive from Buyer its share
(being 70%) of Cash Flow (as defined in the Partnership Documents) allocable to
periods prior to the Closing Date and Seller's share (being 70%) of Partnership
reserves, in both cases less its share of the expenses allocable to such period.
For such purposes, the following treatment shall be utilized to calculate the
sums due and owing Seller ("Seller's NCF"), which sums shall be calculated as of
the close of business on the day prior to the Closing Date ("Proration Date"):
7.1.1 EXPENSES. Except as set forth in Section 7.1.5, all items
which are considered expenses pursuant to the Partnership Documents,
including, but not limited to, real estate and personal property taxes,
utilities, maintenance costs, payments due under the REA and other
operating expenses, and are allocable to periods prior to the Closing Date
but are unpaid shall be considered expenses in determining Seller's NCF.
Any expense which is allocable to a period both before and after the
Proration Date shall be allocated ratably on a PER DIEM basis for the
period to which it applies. Any expense which is prepaid as of the
Proration Date shall be considered a receipt in determining Seller's NCF
("Receipt").
7.1.2 RENT AND OTHER RECEIPTS. All payments made pursuant to
leases with respect to property owned by the Partnership (other than
percentage rents) and all other income of the Partnership which is
allocable to periods prior to the Closing Date and not previously paid to
Seller shall be considered Receipts except for all unapplied cash security
deposits and all interest thereon, if any, made by tenants under such
leases which is payable to such tenants pursuant to law or the lease.
Deposits by tenants for utility costs, operating expenses, insurance costs
and real estate tax expenses including specifically tenant contributions
for unbilled real estate taxes which are to be paid after the Proration
Date (collectively, "Expense Contributions") shall be considered Receipts
but shall be allocated ratably over the period to which they apply on a PER
diem basis for the expenses to which they apply. Income that is received
subsequent to the Proration Date shall be allocated: (i) first, to any
rental obligations or Expense Contributions due no more than thirty (30)
days prior to the Proration Date and remaining unpaid as of the
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Proration Date; (ii) second, to any rental obligations or Expense
Contributions for the period subsequent to the Proration Date which are
then due and payable; and (iii) third, to any other rental obligations
or Expense Contributions due as of the Proration Date, PROVIDED that to
the extent a tenant designates the period or item for which such payment
is to be made then the payment shall be applied as so designated. Buyer
assumes no obligation to collect or enforce the payment of any such
moneys which may be owing to Seller.
7.1.3 PERCENTAGE RENT. Percentage rents actually received from
tenants allocable to a lease year (as defined in each lease) ending prior
to the Proration Date shall be considered a Receipt. A pro rata portion of
percentage rents actually received from tenants under leases in existence
prior to the Proration Date allocable to a lease year which began before
the Proration Date and ends after the Proration Date but no later than one
year after the Proration Date shall be considered a Receipt, with the pro
rata portion being equal to the product of (i) the amount of such
percentage rent actually received, and (ii) a fraction, the numerator of
which is the number of days in such lease year prior to and including the
Proration Date and the denominator of which is 365.
7.1.4 PARTNERSHIP RESERVES. To the extent not accounted for
above, any reserves which are held by the Partnership as of the Proration
Date shall be considered a Receipt; however, such reserves shall not be
credited until the earlier of when the expense for which they are being
held is paid or one year after Closing.
7.1.5 TENANT ALLOWANCE, ETC. Buyer shall receive a credit against
the Purchase Price for the pro rata share of all unpaid tenant allowances
(which are not reimbursable by the tenant), leasing commissions and capital
expenditures, which are contracted for and relate to leases executed prior
to April 15, 1997. Buyer shall reimburse Seller at Closing for any such
costs related to leases executed subsequent to April 15, 1997 which Seller
has incurred prior to Closing. In addition, any other capital expenditures
incurred by the Partnership after the date hereof shall be the
responsibility of Buyer and, to the extent Seller has paid any such amounts
prior to Closing, Buyer shall reimburse Seller at Closing.
7.1.6 CALCULATION AND FINAL ADJUSTMENT. Seller and Buyer shall
use reasonable efforts to accurately estimate Seller's NCF at Closing Date
and Buyer shall pay to Seller the amount of such estimate at Closing. If
the amount of the current general real estate taxes is not then
ascertainable, the estimate thereof shall be predicated upon the most
recent ascertainable taxes. No more than sixty (60) days after the
Closing Date, Buyer shall provide to Seller a schedule prepared by a
national accounting firm reasonably acceptable to Seller (which accounting
firm shall not be the firm that prepares the consolidated financial
statements for Westfield America, Inc. without Seller's approval in its
sole discretion) of Seller's NCF based on actual financial data, detailing
distributions made to Seller,
<PAGE>
receipts, expenses and Partnership reserves relating to the period prior
to the Closing Date. On or before March 1, 1998 and June 1, 1998,
Buyer shall provide to Seller an updated report on Seller's NCF. In the
event any such report indicates an underpayment of Seller's NCF, Buyer
shall pay Seller the deficiency within twenty (20) days of receipt by
Seller of such report. In the event any such report indicates an
overpayment of Seller's NCF, Seller shall refund such amount to Buyer
within twenty (20) days of receipt by Seller of such report. Buyer shall
have no obligation to remit to Seller any sums under this Section 7.1
after the later of (x) June 30, 1998 or (y) three months after the
Partnership has distributed to tenants of the Shopping Center the
reconciliation of the common area maintenance charges for calendar year
1997.
7.2 APPORTIONMENTS WITH RESPECT TO THE REAL PROPERTY. All income and
expenses relating to the Real Property shall be apportioned pro rata between
Seller and Buyer on a per diem basis as of the Proration Date. For such
purposes, the following treatment shall be utilized to calculate the prorations
with respect to the Real Estate:
7.2.1 EXPENSES. Except as set forth in Section 7.2.4, all items
which are considered expenses, including, but not limited to, real estate
and personal property taxes, utilities, maintenance costs, payments due
under the REA and other operating expenses, and are allocable to periods
prior to the Closing Date but are unpaid shall be considered expenses to be
paid by Seller. Any expense which is allocable to a period both before and
after the Proration Date shall be allocated ratably on a PER DIEM basis for
the period to which it applies.
7.2.2 RENT AND OTHER RECEIPTS. All payments made pursuant to
Tenant Leases (other than percentage rents) which is allocable to periods
prior to the Closing Date and not previously paid to Seller shall be
considered to be the property of Seller. Deposits by the tenants under the
Tenant Leases for utility costs, operating expenses, insurance costs and
real estate tax expenses including specifically tenant contributions for
unbilled real estate taxes with respect to the period prior to the Closing
which are to be paid after the Proration Date (collectively, "Expense
Contributions") shall be considered receipts to be prorated hereunder but
shall be allocated ratably over the period to which they apply on a PER
DIEM basis for the expenses to which they apply.
Payments under Tenant Leases that are received subsequent to the
Proration Date shall be allocated: (i) first, to any rental obligations or
Expense Contributions due Buyer for the period subsequent to the Proration
Date which are then due and payable; and (ii) second, to any rental
obligations or Expense Contributions for the period prior to the Proration
Date and remaining unpaid as of the Proration Date; PROVIDED that to the
extent a tenant designates the period or item for which such payment is to
be made then the payment shall be applied as so designated. At Closing,
Seller shall deliver to Buyer a written certification identifying any
arrearages in the payment of rent as of the Closing Date. Seller
<PAGE>
shall not bring any suit or other proceeding against any tenant under
the Tenant Leases after the Closing Date on account of rental
delinquencies. Buyer assumes no obligation to collect or enforce the
payment of any such moneys which may be owing to Seller.
7.2.3 PERCENTAGE RENT. Percentage rents actually received from
tenants under the Tenant Leases allocable to a lease year (as defined in
each lease) ending prior to the Proration Date shall be considered property
of the Seller. Percentage rents actually received from tenants under the
Tenant Leases in existence prior to the Proration Date allocable to a lease
year which began before the Proration Date and ends after the Proration
Date but no later than December 31, 1997 shall be allocated on a pro-rata
basis, with the pro rata portion being equal to the product of (i) the
amount of such percentage rent actually received, and (ii) a fraction, the
numerator of which is the number of days in such lease year prior to and
including the Proration Date and the denominator of which is 365.
7.2.4 TENANT ALLOWANCE, ETC. Buyer shall receive a credit against
the Purchase Price for the pro rata share of all unpaid tenant allowances
(which are not reimbursable by the tenant), leasing commissions and capital
expenditures, which are contracted for and relate to the Tenant Leases.
7.2.5 CALCULATION AND FINAL ADJUSTMENT. Seller and Buyer shall
use reasonable efforts to accurately estimate the pro-rations hereunder at
the Closing Date and the parties shall make appropriate payments at
Closing. If the amount of the current general real estate taxes is not
then ascertainable, the estimate thereof shall be predicated upon the most
recent ascertainable taxes. No more than sixty (60) days after the
Closing Date, Buyer shall provide to Seller a schedule prepared by a
national accounting firm reasonably acceptable to Seller (which accounting
firm shall not be the firm that prepares the consolidated financial
statements for Westfield America, Inc. without Seller's approval in its
sole discretion) of the pro-rations hereunder based on actual financial
data. On or before March 1, 1998 and June 1, 1998, Buyer shall provide to
Seller an updated report on the prorations. In the event any such report
indicates an underpayment the parties shall make appropriate adjustment
within twenty (20) days of receipt by Seller of such report. Buyer and
Seller shall have no obligation to remit to the other party any sums under
this Section 7.2 after the later of (x) June 30, 1998 or (y) three
months after the Partnership has distributed to tenants of the Shopping
Center the reconciliation of the common area maintenance charges for
calendar year 1997.
7.3 Closing Costs. Seller and Buyer shall split equally all realty
transfer taxes due with respect to the conveyance of the Real Property, the
costs of an updated ALTA survey of the Real Property and the Title Insurance
Policy and endorsements to be delivered under Section 6.2(b).
<PAGE>
8. OPERATIONS PRIOR TO CLOSING.
Between the date of the execution of this Agreement and Closing:
8.1 Operation and Management. Seller shall operate and manage the Real
Property in the same manner as it has been operated and managed prior to the
date of this Agreement and in accordance with applicable law.
8.2 Compliance. Seller shall comply with all of the obligations of Seller
under the Tenant Leases, the REA, the Service Agreements and all other
agreements and contractual arrangements by which Seller and/or the Real Property
are bound or affected.
8.3 New Contracts. Seller shall not, without first obtaining the prior
written approval of Buyer: enter into any contract for or on behalf or
affecting the Real Property; modify, cancel or terminate any Service Agreement
which Buyer will assume at Closing; enter into any new Service Agreement;
modify, cancel or terminate the REA or any Tenant Leases; accept any advance
rental under any of the Tenant Leases; or enter into any new lease for all or
any portion of the Real Property.
8.4 Buyer's Access. (a) Buyer, its attorneys, accountants, architects,
engineers and other representatives shall be afforded access to the Real
Property and to all books, records and files relating thereto from time to time
prior to Closing for the purposes of inspections, preparation of plans, making
of surveys, making of appraisals, and generally for the ascertainment of the
condition of the Real Property, including but not limited to the physical and
financial condition of the Real Property; and there shall be furnished to Buyer
all plans and specifications, engineering reports, feasibility studies,
operating statements, governmental permits and approvals, contracts, leases,
surveys, title information and other documentation concerning the Real Property
in the possession of Seller and/or Seller's managing agent for the Real Property
which Buyer, its attorneys, accountants, architects, engineers and other
representatives shall reasonably request. Buyer, its attorneys, accountants and
other representatives, shall be permitted to make and are authorized to make any
searches of governmental records as they deem necessary with respect to the Real
Property; and Seller agrees fully to cooperate with Buyer and its attorneys and
other representatives in this regard and to issue any consents or authorizations
required therefor.
(b) In connection with any entry by Buyer, or its agents, employees
or contractors onto the Real Property, Buyer shall give Seller reasonable
advance notice of such entry and shall conduct such entry and any inspections in
connection therewith so as to minimize, to the greatest extent possible,
interference with Seller's business and the business of Seller's tenants.
Without limiting the foregoing, prior to any entry to perform any on-site
testing, Buyer shall give Seller written notice thereof (facsimile is
acceptable), including the identity of the company or persons who will perform
such testing and the proposed scope of the testing and obtain Seller's approval
to any intrusive testing. Seller
<PAGE>
shall approve or disapprove the scope and methodology of such proposed
intrusive testing within two (2) business days after receipt of such notice,
such approval not to be unreasonably withheld. Seller or its representative
may be present to observe any testing or other inspection performed on the
Real Property. Buyer shall promptly deliver to Seller copies of any reports
relating to any testing or other inspection of the Real Property performed by
Buyer or its agents, employees or contractors. Buyer shall maintain, and
shall assure that its contractors maintain, public liability and property
damage insurance in amounts and in form and substance reasonably adequate to
insure against all liability of Buyer, its agents, employees or contractors,
arising out of any entry or inspections of the Real Property pursuant to the
provisions hereof, and Buyer shall provide Seller with evidence of such
insurance coverage upon request by Seller. Buyer shall indemnify, defend and
hold Seller harmless from and against any costs, damages, liabilities,
losses, expenses, lien or claims (including, without limitation, reasonable
attorney's fees) arising out of or relating to any damage to the Real
Property by Buyer, its agents, employees or contractors in the course of
performing the inspections, testings or inquiries provided for in this
Agreement. The foregoing indemnify shall survive the termination or
expiration of this Agreement.
8.5 Delivery of Notices. Promptly after receipt thereof by Seller, Seller
shall deliver to Buyer the following:
(i) a copy of any notice of default given or received under
any of the Tenant Leases or the REA;
(ii) a copy of any tax bill, notice or statement of value, or
notice of change in a tax rate affecting or relating to the Real Property;
(iii) a copy of any notice of an actual or alleged Violation; and
(iv) a copy of any notice of Taking or a Casualty.
9. ENVIRONMENTAL MATTERS.
9.1. Representations and Warranties. Seller represents and warrants to
Buyer that:
(a) Except as set forth on EXHIBIT M hereto, Seller has not
received written notice of any violation of federal, state and local
environmental statutes, ordinances, regulations, orders and requirements of
common law with respect to the Real Property or the activities and
conditions at the Real Property, including, without limitation; the
discharge, emission or release of any Contaminant (hereinafter defined) to
the air, soil, surface water or ground water; the discharge of any dredge
or fill material to a wetland or other water of the United States (as
hereinafter defined); the storage, treatment, disposal or handling of any
<PAGE>
Contaminant; or the construction, operation, maintenance or repair of
aboveground or underground storage tanks (collectively, "Environmental
Laws").
(b) Except as set forth on EXHIBIT M hereto, to the best of Seller's
knowledge, no Contaminant that may require remediation under any
Environmental Law is present on, over or under or is migrating from the
Real Property on, over or under any premises adjacent to the Real Property.
The term "Contaminant" shall mean any "hazardous substance", "pollutant or
contaminant" as defined pursuant to Environmental Laws, "petroleum" as
defined pursuant to any Environmental Laws or any material containing
petroleum or hydro-carbons, any polychlorinated biphenyls ("PCBs") or
substances containing PCBs, any urea formaldehyde foam, or any asbestos or
materials containing asbestos.
(c) Except as set forth on EXHIBIT M hereto, Seller has not, nor to
the best of Seller's knowledge has anyone else, generated, stored, treated,
disposed of, discharged, released, emitted or otherwise handled any
Contaminant on, over, under, from or in any manner affecting the Real
Property or any premises adjacent to the Real Property in violation of any
applicable Environmental Law.
(d) Except as set forth on EXHIBIT M hereto, to the best of
Seller's knowledge, no underground or above ground storage tanks are
present at the Real Property.
(e) Seller has provided or made available to Buyer copies of all:
(A) permits, licenses, certificates, registrations, approvals, and any
amendments thereto required for the Real Property and for the conduct of
Seller's activities at the Real Property pursuant to or necessary for
compliance with Environmental Laws; (B) applications, reports or other
materials submitted to any governmental agency in connection with any
Environmental Law; (C) records or manifests required to be maintained
pursuant to Environmental Laws or which are relevant to the issue of
compliance with Environmental Laws; (D) correspondence, notices of
violation, summonses, orders, administrative, civil or criminal complaints,
requests for information or other documents received by Seller or its
agents pertaining to compliance with Environmental Laws or the generation,
storage, treatment, handling, discharge, emission, release or migration of
any Contaminant on, over, under, from or affecting the Real Property; and
(E) records and analyses of any environmental tests pertaining to the Real
Property, including, without limitation, the results of any air, water or
soil analyses or tank integrity testing, which are in the possession of
Seller or its managing agent for the Real Property or the existence of
which is known to Seller.
(f) No civil, criminal or administrative proceeding is, to the best
of Seller's knowledge, pending or threatened relating to Environmental Laws
or Contaminants on, over, under, from or affecting the Real Property;
neither Seller nor any of its agents has received any notice of violation
or potential liability
<PAGE>
regarding the Real Property or activities thereon relating to
Environmental Law or Contaminants on, over, under, from or affecting the
Real Property and Seller has no reason to believe such notices will be
received and has no reason to know of circumstances that would give rise
to such notices or proceedings in the future; Seller has not entered
into any consent order, consent decree, administrative order, judicial
order or settlement relating to Environmental Laws or Contaminants on,
over, under, migrating from or affecting the Real Property.
9.2 Environmental Notices. Seller will assist Buyer in giving notice to
applicable government agencies and in transferring or reissuing to Buyer any
permit, license, certificate, registration or other approval necessary to
continue operations at the Real Property, or in obtaining for Buyer any new
permit, license, certificate, registration or approval required of Buyer under
any Environmental Law.
10. CASUALTY.
10.1 Occurrence of Casualty. If at any time prior to the Closing Date any
portion of the Shopping Center or the Real Property is destroyed or damaged as a
result of fire or any other casualty ("Casualty"), Seller shall promptly give
written notice thereof to Buyer. If the Shopping Center on the Real Property is
the subject of a Casualty, Buyer shall have the right, at its sole option, of
terminating this Agreement or closing the transactions contemplated hereby with
an assignment of all of Seller's right, title and interest in any insurance
proceeds arising from such Casualty.
10.2 Occurrence of Condemnation. If at any time prior to the Closing Date
any portion of the Shopping Center or the Real Property shall be taken in, or
shall become the subject of, a condemnation proceeding, Seller shall promptly
give written notice thereof to Buyer. If the Shopping Center or Real Property
or any portion thereof shall be taken in, or shall become the subject of, a
condemnation proceeding, Buyer shall have the right, at its sole option, of
terminating this Agreement or closing the transactions contemplated hereby with
an assignment of all of Seller's right, title and interest in any condemnation
awards arising from such condemnation.
11. MISCELLANEOUS.
11.1 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sent by a recognized private courier
company, or by United States mail, registered or certified mail, postage
prepaid, return receipt requested, and addressed as follows:
<PAGE>
If to Seller:
RREEF USA Fund-III/Annapolis, Inc.
55 East 52nd Street
31st Floor
New York, New York
Attention: Tom Caputo
with copy to:
D'Ancona & Pflaum
30 North LaSalle Street, Suite 2900
Chicago, Illinois 60602
Attention: Kelly Bufton, Esq.
If to Buyer:
Westfield America of Annapolis, Inc.
c/o Westfield Corporation, Inc.
11601 Wilshire Blvd., 12th Floor
Los Angeles, California 90025-1748
Attention: Chief Financial Officer
with copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Peter R. Schwartz, Esq.
or such other address as a party may from time to time specify in writing to the
others in the manner aforesaid. Notices delivered by telecopier shall be deemed
delivered upon confirmation of receipt by recipient. All other notices shall be
deemed delivered upon delivery or refusal to accept delivery as indicated in the
U.S. Postal Service return receipt or similar advice from the courier company.
Buyer and Seller shall each have the right to change the address to which
notices, demands, requests, or other communications hereunder shall be given to
the other parties by notice of such change to the other party as set forth
herein.
11.2 Continuing Obligation. Buyer agrees to provide Seller with all
required information in a timely fashion required by Seller to complete all tax
filings and tax returns including, but not limited to the type of data and
documents supplied by Buyer to Seller in the ordinary course of business prior
to the Closing Date. For tax reporting purposes, the Partnership year, as to
Seller's Partnership Interest, shall close as
<PAGE>
of the Closing Date, and the final form K-1 provided to Seller shall report
consistent therewith.
11.3 Brokers and Finders. In the event of a claim for broker's fee,
finder's fee, commission or other similar compensation in connection herewith,
Buyer, if such claim is based upon any agreement alleged to have been made by
Buyer, hereby agrees to indemnify Seller against and hold Seller harmless from
any and all damages, liabilities, costs, expenses and losses (including, without
limitation, reasonable attorneys' fees and costs) which Seller may sustain or
incur by reason of such claim, and Seller, if such claim is based upon any
agreement alleged to have been made by Seller, hereby agrees to indemnify Buyer
against and hold Buyer harmless from any and all damages, liabilities, costs,
expenses and losses (including, without limitation, reasonable attorneys' fees
and costs) which Buyer may sustain or incur by reason of such claim. The
provisions of this Section 11.3 shall survive the termination of this Agreement
or the Closing.
11.4 Successors and Assigns. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns; PROVIDED, HOWEVER, that prior to Closing
neither Seller's nor Buyer's interest under this Agreement may be assigned,
encumbered or otherwise transferred, whether voluntarily, involuntarily, by
operation of law or otherwise, without the prior written consent of the other
party, except for a transfer by Buyer to Westfield America, Inc. or its wholly-
owned subsidiary.
11.5 Amendments. This Agreement may be amended or modified only by a
written instrument executed by the party asserted to be bound thereby.
11.6 Interpretation. Words used in the singular number shall include
the plural, and vice-versa, and any gender shall be deemed to include each other
gender. The captions and headings of the Sections of this Agreement are for
convenience of reference only, and shall not be deemed to define or limit the
provisions hereof.
11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
11.8 Merger of Prior Agreements. This Agreement and the Closing
Documents constitute the entire agreement between the parties with respect to
the purchase and sale of the Partnership Interest and the Real Property and
supersede all prior and contemporaneous agreements and understandings between
the parties hereto relating to the subject matter thereof.
11.9 No Waiver. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
<PAGE>
11.10 Agreement Not to Benefit Third Parties. This Agreement is made
for the sole benefit of Seller and Buyer and no other person shall be deemed to
have any privity of contract under this Agreement nor any right to rely on this
Agreement to any extent for any purpose whatsoever, nor have any right of action
of any kind on this Agreement nor be deemed to be a third party beneficiary
under this Agreement.
11.11 Facsimile Signatures. Buyer and Seller each (i) has agreed to
permit the use, from time to time and where appropriate, of telecopied
signatures in order to expedite the transaction contemplated by this Agreement,
(ii) intends to be bound by its respective telecopied signature, (iii) is aware
that the other will rely on the telecopied signature, and (iv) acknowledges such
reliance and waives any defenses to the enforcement of the documents effecting
the transaction contemplated by this Agreement based on the fact that a
signature was sent by telecopy.
11.12 Indemnification. Seller shall indemnify, defend and hold
Buyer harmless in respect of all demands, claims, actions or causes of action,
assessment, losses, damages, costs, expenses, liabilities, judgments, awards,
fines, sanctions, penalties, charges and amounts paid in settlement incurred by
Buyer by reason of (i) a breach of any of Seller's representations and
warranties set forth herein, or (ii) the ownership of the Partnership Interest
or the Real Property with respect to the period prior to the Closing Date.
Buyer shall indemnify, defend and hold Seller harmless in respect of all
demands, claims, actions or causes of action, assessment, losses, damages,
costs, expenses, liabilities, judgments, awards, fines, sanctions, penalties,
charges and amounts paid in settlement incurred by Seller by reason of (x) a
breach of any of Buyer's representations and warranties set forth herein, or (y)
the ownership of the Partnership Interest or the Real Property with respect to
the period from and after the Closing Date.
11.13 Counterpart Execution. This Agreement and any amendments to
this Agreement may be executed in counterparts, each of which shall be fully
effective and all of which together shall constitute one and the same
instrument.
11.14 Further Acts. In addition to the actions set forth in this
Agreement to be taken by the parties, the parties agree to take or cause to be
taken all such further actions as may be reasonably necessary to consummate this
transaction which is the subject of this Agreement.
<PAGE>
11.15 Exhibits. All references to Exhibits contained herein are
references to the Exhibits attached hereto, all of which are made a part hereof.
11.16 Tax Termination. Notwithstanding anything to the contrary
contained in the Partnership Agreement, including, without limitation, Section
12.9 thereof, Seller shall not have any liability to Buyer by reason of the
transfer of 50% or more of the interests in the Partnership to Buyer in
accordance with the terms of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Seller:
RREEF USA FUND-III/ANNAPOLIS, INC.,
a Delaware corporation
By: /s/ GERALD E. EGAN
---------------------
Name: Gerald E. Egan
Title: Vice President
Buyer:
WESTFIELD AMERICA OF ANNAPOLIS, INC.,
a Delaware corporation
By: /s/ PETER S. LOWY
--------------------
Name: Peter S. Lowy
Title: Co-President
<PAGE>
EXHIBIT A
PARTNERSHIP DOCUMENTS
1. Limited Partnership Agreement, dated September 1, 1978, by May Centers of
Annapolis, Inc. ("May Centers"), Provident Life and Accident Insurance
Company ("Provident"), Jerome B. Trout, Jr. ("Trout"), Milton Fox, Jr.
("Fox") and William P. Beatson, Jr. ("Beatson")
2. Certificate of Limited Partnership, dated May 2, 1979, by May Centers,
Provident, Trout, Fox and Beatson.
3. First Amendment to Limited Partnership Agreement for Annapolis Mall Limited
Partnership, dated September 2, 1986, among May Centers, Provident, Trout,
Fox and Beatson.
4. Amended and Restated Certificate of Limited Partnership of Annapolis Mall
Limited Partnership, dated September 2, 1986, among May Centers, Provident,
Trout, Fox and Beatson.
5. Second Amendment to Limited Partnership Agreement for Annapolis Mall
Limited Partnership, dated as of December 23, 1986, between May Centers and
RREEF USA Fund-III/Annapolis, Inc. ("RREEF").
6. First Certificate of Amendment to Amended and Restated Certificate of
Limited Partnership, dated as of December 23, 1986, among May Centers,
RREEF, Provident, Trout, Fox and Beatson.
7. Second Certificate of Amendment to Amended and Restated Certificate of
Limited Partnership, dated as of December 24, 1986, between May Centers and
RREEF.
<PAGE>
EXHIBIT B
DESCRIPTION OF LAND
<PAGE>
EXHIBIT C
TENANT LEASES
1. Lease, dated February 18, 1972, between Annapolis Mall Shopping Center Co.,
and Montgomery Ward & Co., Incorporated, as amended by the First Supplement
to Lease, dated January 26, 1973 and the Amendment to Lease, dated December
28, 1979, and a Second Amendment to Lease, dated September 18, 1984.
2. Lease, dated July 30, 1971, between Equitable Trust Company and Annapolis
Mall Shopping Center, as amended by Lease Amendment Agreement, dated
January 29, 1973 and Second Amendment to Lease, dated June 17, 1993.
<PAGE>
EXHIBIT D
REA
1. Amended and Restated Construction, Operation and Reciprocal Easement
Agreement, dated September 18, 1984, between Annapolis Mall Limited
Partnership, The May Department Stores Company, Inc., Annapolis Mall
Shopping Center Co. and J.C. Penney Properties, Inc., as amended by First
Supplement to Amended REA, dated September 18, 1984, and Second Supplement
to Amended REA, dated September 18, 1984.
<PAGE>
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP
INTEREST
THIS ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP INTEREST (the
"Agreement") is dated as of June ___, 1997, by and between WESTFIELD AMERICA
OF ANNAPOLIS, INC., a Delaware corporation ("Buyer"), and RREEF USA
FUND-III/ANNAPOLIS, INC., a Delaware corporation ("Seller").
RECITALS
A. Seller and Buyer are each partners in Annapolis Mall Limited
Partnership, a Maryland limited partnership, ("the Partnership") pursuant to the
documents described on Exhibit A hereto ("the Partnership Documents").
B. Seller owns a fifty percent (50%) general partnership interest and
a twenty percent (20%) limited partnership interest in the Partnership, all as
set forth in the Partnership Documents (collectively, "Partnership Interest").
C. Buyer desires to buy from Seller and Seller desires to sell to
Buyer the Partnership Interest on the terms and conditions set forth in the
Agreement For Purchase and Sale of Partnership Interest and Real Property
("Purchase Agreement"), dated as of June __, 1997, by and between Seller and
Buyer.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, and other valuable consideration, the receipt of
which is hereby acknowledged, Seller and Buyer agree as follows:
1. Any capitalized terms not otherwise defined herein shall have
the same meaning as in the Purchase Agreement.
2. Seller hereby assigns, delegates, sets over, and transfers
to Buyer all of Seller's right, title and interest in and to the Partnership
Interest. Buyer accepts the assignment and delegation by Seller and agrees to
be bound by the terms of the Partnership Documents, and undertakes, assumes and
agrees at Buyer's sole cost and expense, punctually and faithfully to perform,
pay or discharge when due and otherwise in accordance with their respective
terms, all agreements, covenants, conditions, obligations and liabilities of
Seller as a general partner in the Partnership with respect to the Partnership
Interest arising solely on or after the date hereof, except as expressly
provided otherwise herein.
<PAGE>
3. The Purchase Agreement is hereby incorporated herein by this
reference.
4. If any provision of this Agreement or its application to any
person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provisions to other
persons or circumstances, other than those to which it is held invalid, shall
not be affected thereby and shall be enforced to the furthest extent permitted
by law; provided that the invalidity of such provision does not materially
adversely affect the benefits accruing to any party hereunder.
5. This Agreement and the rights and obligations of the parties
hereunder shall in all respects be governed by, and construed and enforced in
accordance with the laws of the State of Maryland.
6. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
7. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sent as set forth in the Purchase
Agreement.
8. This Agreement may be amended or modified only by a written
instrument executed by the party asserted to be bound thereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Seller:
RREEF USA FUND-III/ANNAPOLIS, INC., a Delaware
corporation
By:_________________________________
Buyer:
WESTFIELD AMERICA OF ANNAPOLIS, INC.,
a Delaware corporation
By:_________________________________
Seller:
<PAGE>
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a transferee
(Buyer) of a U.S. real property interest must withhold tax if the transferor
(Seller) is a foreign person. To inform the transferee (Buyer) that withholding
of tax is not required upon the disposition of a U.S. real property interest by
RREEF USA Fund-III/Annapolis, Inc., a Delaware corporation ("Seller"), the
undersigned hereby swears, affirms, and certifies the following on behalf of the
Seller:
1. Seller is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations); and
2. Seller's U.S. employer I.D. number is 94-3040164; and
3. Seller's address is: 875 North Michigan Avenue, 41st Floor,
Chicago, Illinois 60611-1901.
Seller understands that this certification may be disclosed to the
Internal Revenue Service by the transferee (Buyer) and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have the authority to sign this
document on behalf of Seller.
Executed as of the __ day of __________, 1997, at _________________.
RREEF USA FUND-III/ANNAPOLIS, INC.,
a Delaware corporation
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION
OF TENANT LEASES
ASSIGNMENT AND ASSUMPTION OF TENANT LEASES, dated as of June __,
1997, between RREEF USA FUND-III/ANNAPOLIS, INC. ("Assignor") and WESTFIELD
AMERICA OF ANNAPOLIS, INC. ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor has this day sold and conveyed to Assignee the real
property more particularly described in SCHEDULE "1" annexed hereto and made a
part hereof (the "Property"), pursuant to the terms of that certain Agreement
for Purchase and Sale of Partnership Interest and Real Property ("Agreement"),
dated as of June __, 1997, by and between Assignor and Assignee.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00)
and other good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns, transfers and conveys to Assignee all of Assignor's right, title and
interest, as landlord in and to the Tenant Leases (as defined in the Agreement),
as set forth on SCHEDULE "2" annexed hereto and made a part hereof.
Assignee hereby accepts the foregoing assignment and assumes and
agrees to perform all of the obligations of Assignor under the Tenant Leases
first arising from and after the date hereof.
Except as expressly set forth in the Agreement, this Assignment and
Assumption of Tenant Leases is made without any warranty or representation by
Assignor.
<PAGE>
IN WITNESS WHEREOF, this Assignment and Assumption of Tenant Leases
has been duly executed on the date and year first above written.
ASSIGNOR:
RREEF USA FUND-II/ANNAPOLIS, INC.
By: _____________________________
Name:
Title:
ASSIGNEE:
WESTFIELD AMERICA OF
ANNAPOLIS, INC.
By: _____________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Description of Property
<PAGE>
SCHEDULE 2
Leases
<PAGE>
EXHIBIT H
ASSIGNMENT OF REA
ASSIGNMENT OF REA, dated as of June __, 1997, between RREEF USA FUND-
III/ANNAPOLIS, INC. ("Assignor") and WESTFIELD AMERICA OF ANNAPOLIS, INC.
("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor has this day sold and conveyed to Assignee the real
property more particularly described in SCHEDULE "1" annexed hereto and made a
part hereof (the "Property") pursuant to the terms of that certain Agreement for
Purchase and Sale of Partnership Interest and Real Property ("Agreement"), dated
as of June __, 1997, by and between Assignor and Assignee.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00)
and other good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to the REA (as defined in the Agreement), as set forth SCHEDULE
"2" annexed hereto and made a part hereof.
Assignee hereby accepts the foregoing assignment and assumes and
agrees to perform all of the obligations of Assignor under the REA first arising
from and after the date hereof.
Except as expressly set forth in the Agreement, this Assignment is
made without any warranty or representation by Assignor.
<PAGE>
IN WITNESS WHEREOF, this Assignment of REA has been executed on the
date and year first above written.
ASSIGNOR:
RREEF USA FUND-III/ANNAPOLIS, INC.
By: _________________________________
Name:
Title:
ASSIGNEE:
WESTFIELD AMERICA OF
ANNAPOLIS, INC.
By: _________________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Description of Property
<PAGE>
SCHEDULE 2
REA
<PAGE>
EXHIBIT I
GENERAL ASSIGNMENT
GENERAL ASSIGNMENT, dated as of June __, 1997, between RREEF USA
FUND-III/ANNAPOLIS, INC. ("Assignor") and WESTFIELD AMERICA OF ANNAPOLIS, INC.
("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor has this day sold and conveyed to Assignee the real
property more particularly described in SCHEDULE "1" annexed hereto and made a
part hereof (the "Property") pursuant to the terms of that certain Agreement for
Purchase and Sale of Partnership Interest and Real Property ("Agreement"), dated
as of June __, 1997, by and between Assignor and Assignee.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00)
and other good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to all permanent certificates of occupancy and all other
licenses, permits, authorizations, consents, certificates and approvals required
by all governmental authorities having jurisdiction over the Property; all
certificates issued by the local Board of Fire Underwriters (or other body
exercising similar functions); all plans, specifications and project manuals for
the Property; and all guarantees, bonds and warranties with respect to the
Property (together with original counterparts of such instruments), as set forth
on SCHEDULE "2" annexed hereto and made a part hereof (collectively, the
"Licenses").
Assignee hereby accepts the foregoing assignment and assumes all
obligations, duties, responsibilities and liabilities owing to third parties
with respect to the Licenses first arising from and after the date hereof.
<PAGE>
Except as expressly set forth in the Agreement, this General
Assignment is made without any warranty or representation by Assignor.
IN WITNESS WHEREOF, this General Assignment has been duly executed on
the date and year first above written.
ASSIGNOR:
RREEF USA FUND-III/ANNAPOLIS, INC.
By: _________________________________
Name:
Title:
ASSIGNEE:
WESTFIELD AMERICA OF
ANNAPOLIS, INC.
By: _________________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Description of Property
<PAGE>
SCHEDULE 2
Licenses
<PAGE>
EXHIBIT J
TITLE ENDORSEMENT
[Intentionally omitted]
<PAGE>
EXHIBIT K
ESTOPPEL CERTIFICATE
To: Westfield America, Inc.
c/o Westfield Corporation, Inc.
12th Floor
11601 Wilshire Boulevard
Los Angeles, California 90025
Re: Annapolis Mall Shopping Center
Annapolis, Maryland (the "Property")
Tenant Name: NationsBank, N.A.
Gentlemen:
Westfield America, Inc. has entered into an agreement to purchase the
above-referenced premises from RREEF USA Fund III/Annapolis, Inc. ("Seller").
In connection therewith, the undersigned hereby certifies to Westfield America,
Inc. and Seller the following as of the date hereof:
1. Tenant is the tenant under a lease dated __________ with Seller
together with all amendments, modifications, supplements, and/or extensions
thereto as herein referred to as the "Lease", as follows:
______________________________________________________________________________
______________________________________________________________________________
2. The term of the Lease, exclusive of any unexercised renewal options
contained in the Lease and identified herein, expires on
________________________.
3. Tenant has no remaining options to renew the term.
4. The Lease is in full force and effect.
5. The Leased Premises consists of ___________ square feet.
6. Tenant does not pay Percentage Rent.
7. The total current Monthly Minimum Rental payable under the Lease
(exclusive of future escalation's or future increases in rent provided for in
the Lease) is $ .
8. Tenant is responsible for and is currently paying the Seller its full
pro-rata share, a fixed amount or an estimate for the following charges:
Common Area Maintenance Escrow $ per month
Real Estate Tax Recovery $ per month
Real Estate Tax Escrow $ per month
HVAC $ per month
Merchant Association $ per month
<PAGE>
Storage Rent $ per month
Food Court Common Area Maintenance Escrow $ per month
HVAC $ per month
Other Rent $ per month
9. Tenant is responsible for all utility charges (whether supplied by
Owner or the utility company).
10. All improvements, if any, required by the terms of the Lease to be
made by the Owner have been completed as required under the Lease and any
payments, credits, allowances, inducements or abatements required to be made or
given by Owner to Tenant in connection with the Lease have been made or given.
11. As of the date hereof no installment of rent or other charges under
the Lease other than current monthly rent has been paid more than 30 days in
advance of its due date nor are any installments of rent or other charges past
due.
12. Tenant has accepted and is in sole possession of the Leased Premises
and except as noted in Paragraph 1 above, the Lease has not been assigned by
operation of law or otherwise or by Tenant and no sublease, concession agreement
or license, covering the Leased Premises, or any portion thereof has been
entered into by Tenant.
13. Owner is not in default under the Lease and no event has occurred
which, with the giving of notice or passage of time, or both, could result in a
default by Owner thereunder.
14. Tenant is paying rent and other charges due under the Lease, and is
currently performing all of the other obligations of Tenant under the Lease and
Tenant has no existing defenses, counterclaims, offsets, liens, claims or
credits against the rentals or otherwise which presently exist or have accrued
under the Lease or against the enforcement of the Lease by Owner.
15. Except as specifically noted in Paragraph 1 above or in the Lease,
Tenant has not been granted (a) any option to extend the term of the Lease, (b)
any option to terminate the term of the Lease as of a date earlier than that
specified in said Paragraph 1, (c) any option to expand the Leased Premises, (d)
any right of first refusal on any other space in the Property, or (e) any option
or right of first refusal to purchase the Leased Premises or the Property.
16. Tenant has made a security deposit under the Lease in the amount of
$0.00. Owner is under no obligation to pay any interest on, or to segregate the
security deposit.
17. Tenant has not received any notice of any present violation of any
federal, state, county or municipal laws, regulations, ordinances, orders or
directives relating to the use or condition of the Leased Premises or the
Property.
18. Tenant does not currently engage in or permit, and has not in the past
engaged in or permitted, within or upon the Leased Premises or the Property, any
handling, storage, generation, discharge or disposal of any toxic or hazardous
substances, materials or wastes which are regulated under any federal, state,
county or municipal laws, regulations, ordinances, orders or directives.
19. There are no actions, whether voluntary or otherwise, pending against
the undersigned or any guarantor of the undersigned's obligations under the
Lease pursuant to the bankruptcy or insolvency laws of the United States or any
state thereof.
<PAGE>
20. Tenant acknowledges that Seller, Westfield America, Inc. and their
respective partners, beneficiaries, successors, assigns and designees and the
holder of any mortgage encumbering the Property now or at any time after the
date of this Estoppel Certificate, will rely on this Estoppel Certificate and
agrees that such parties shall have the right to rely on this Estoppel
Certificate.
21. The undersigned and the person(s) executing this Certificate on behalf
of the undersigned have the power and authority to render this Certificate.
Dated this ______ day of May, 1997
NATIONSBANK, N.A.
By:
Title:
<PAGE>
ESTOPPEL CERTIFICATE
TO: Westfield America, Inc.
11601 Wilshire Boulevard, 12th Floor
Los Angeles, CA 90025 ("Landlord")
DATE: May ___, 1997
RE: Annapolis Mall Shopping Center
Annapolis, Maryland (the "Property")
Gentlemen:
The undersigned, Tenant, under that certain Lease, made with _________________
____________, as Landlord, as more particularly described on Exhibit A attached
hereto, hereby certifies:
i) The Lease is in full force and effect.
ii) The Lease has not been modified, supplemented or amended in any way,
except as shown on Exhibit A and constitutes the entire agreement
between the parties.
iii) To the best of our knowledge there is no default under the Lease.
iv) The term of the Lease expires on __________________.
Montgomery Ward Development Corporation
By: ____________________________
Name: _________________________
Title: __________________________
<PAGE>
EXHIBIT L
PERMITTED EXCEPTIONS
<PAGE>
EXHIBIT M
ENVIRONMENTAL MATTERS
<PAGE>
EXHIBIT 99.1
REPORT OF INDEPENDENT AUDITORS
_______
To the Board of Directors
of Westfield America, Inc.
We have audited the accompanying statement of revenues and certain expenses
of Annapolis Mall for the year ended December 31, 1996. The above mentioned
statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on the above mentioned statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the above mentioned statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the above mentioned
statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall above mentioned statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the registration statement on Form S-11
of Westfield America, Inc. (formerly CenterMark Properties, Inc.). As
described in the Note 1 to the statement of revenues and certain expenses,
certain expenses that would not be comparable to those resulting from the
proposed future operations of Annapolis Mall are excluded, and the above
mentioned statement is not intended to be a complete presentation of the
revenues and expenses of the property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the revenues and certain expenses for the year ended
December 31, 1996 in conformity with generally accepted accounting principles.
Ernst & Young, LLP
Los Angeles, California
January 30, 1997
F-1
<PAGE>
ANNAPOLIS MALL
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(In Thousands)
Year
Ended
December 31,
1996
------------
REVENUES:
Minimum rents $14,216
Tenant recoveries 5,219
Percentage rents 171
-------
Total revenues 19,606
-------
OPERATING EXPENSES
Operating -- recoverable 4,414
Other operating 274
-------
Total operating expenses 4,688
-------
Excess of revenue over certain operating expenses $14,918
-------
-------
Interest in excess of revenue over certain
operating expenses being acquired $10,443
-------
-------
See accompanying notes
F-2
<PAGE>
ANNAPOLIS MALL
NOTES TO THE STATEMENT OF REVENUES
AND CERTAIN EXPENSES
(In Thousands)
_______
1. ORGANIZATION AND BASIS OF PRESENTATION:
The accompanying statement of revenues and certain expenses includes the
accounts of a regional shopping center which is owned by Annapolis Mall
Limited Partnership (the "Partnership"). The Partnership consists of
Centennial Properties of Annapolis, Inc. ("CMPA"), a 30% general partner,
and RREEF USA Fund-III/Annapolis, Inc. ("RREEF"), which is both a 50%
general and a 20% limited partner. CMPA is a wholly-owned subsidiary of
Westfield America, Inc. (WEA), formerly CenterMark Properties, Inc.
In the proposed transaction WEA is proposing to acquire a 70% interest in
Annapolis Mall.
Interest income, depreciation expense and management fee expense (see Note
4) are not comparable to the proposed operations of the Partnership and
have been excluded from the accompanying statement of revenues and certain
expenses.
Income taxes are not reflected in the statement of revenues and certain
expenses as Annapolis Mall is currently owned by the Partnership and income
of the Partnership is included in the partners' respective tax returns.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
REVENUE RECOGNITION:
Shopping center space is generally leased to specialty retail tenants under
leases which are accounted for as operating leases. Minimum rent revenues
are recognized on a straight-line basis over the respective lease term.
Percentage rents are recognized on an accrual basis as earned. Recoveries
from tenants, which include an administrative fee, are recognized as income
in the period the applicable costs are accrued.
F-3
<PAGE>
ANNAPOLIS MALL
NOTES TO THE STATEMENT OF REVENUES
AND CERTAIN EXPENSES (Continued)
(In Thousands)
_______
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
BAD DEBTS:
Management periodically evaluates amounts billed to tenants and accrued
recoveries from tenants and adjusts the allowance for doubtful accounts to
reflect the amounts estimated to be uncollectible. Amounts determined to
be uncollectible are included in other operating expenses.
LEASE TERMINATIONS:
Lump sum payments received from tenants to terminate their lease are
deferred and amortized as minimum rental revenue over the remaining life of
the lease unless the space is re-leased to a new tenant, at which time the
remaining deferred income is recognized.
USE OF ESTIMATES:
The preparation of the statement of revenues and certain expenses in
accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of revenue and certain expenses during the reporting periods.
Actual results could differ from those estimates.
F-4
<PAGE>
ANNAPOLIS MALL
NOTES TO THE STATEMENT OF REVENUES
AND CERTAIN EXPENSES (Continued)
(In Thousands)
_______
3. PROPERTY RENTALS:
Future Minimum rental revenues under noncancelable operating leases as of
December 31, 1996 are as follows:
1997 $ 13,119
1998 13,413
1999 13,329
2000 12,894
2001 11,986
Thereafter 44,321
--------
$109,062
--------
--------
These amounts do not include percentage rentals that may be received under
certain leases on the basis of tenant sales in excess of stipulated
minimums.
4. TRANSACTIONS WITH RELATED PARTIES:
During 1996 the property was managed by an affiliate WEA. The management
fee is not reflected in the accompanying statement of revenue and certain
expenses since it is not comparable to the proposed operations of Annapolis
Mall. In addition, the affiliate is reimbursed for mall related overhead
and payroll costs recoverable from tenants in accordance with their leases.
Reimbursements of recoverable overhead and payroll costs for the year ended
December 31, 1996 totaled $1,073.
F-5
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(UNAUDITED)
(IN THOUSANDS)
The unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as
if the net proceeds of Westfield America, Inc.'s (the "Company") initial public
offering of 18,000 shares of common stock par value $.01 per share (the "Common
Stock"), the sale of 270 shares of Series B Preferred Shares and the proceeds
from the Company's sale of the 1997 WAT Warrants were applied as described in
"Use of Proceeds" as of March 31, 1997, assuming for this purpose that (i) the
Outside Partner's interest in Annapolis Mall is acquired for $133,000, (ii) the
Wheaton Acquisition is made for $52,500, (iii) the Garden State Plaza Loan in
the amount of $145,000 is made, (iv) options to purchase ordinary shares are
purchased from Westfield Holdings Limited, an affiliate, for $15,300 (Aus. $19.6
million), (v) $74,977 is borrowed under the Company's unsecured line of credit,
(vi) the Common Stock is sold in the Offerings at an assumed price of $15.00 per
share, and the over-allotment options for the Offerings are not exercised, the
Series B Preferred Shares are issued and the 1997 WAT Warrants are sold and
(vii) the Company is recapitalized and the Acquired Properties are acquired as
of March 31, 1997 as described in Notes 1 and 9 to the Consolidated Financial
Statements.
The unaudited Pro Forma Condensed Consolidated Balance Sheet should be read
in conjunction with the Consolidated Financial Statements of Westfield America,
Inc. and Subsidiaries and Notes thereto included elsewhere herein. In the
Company's opinion, all adjustments necessary to reflect the effects of the
consummation of the Offerings, the application of the net proceeds therefrom and
from the concurrent transactions have been made.
The unaudited Pro Forma Condensed Consolidated Balance Sheet is not
necessarily indicative of what the actual financial position of the Company
would have been at March 31, 1997, nor does it purport to present the future
financial position of the Company.
F-6
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, 1997
---------------------------------------
PRO FORMA PRO FORMA
HISTORICAL(a) ADJUSTMENTS CONSOLIDATED
------------ ----------- ------------
<S> <C> <C> <C>
ASSETS:
Net investment in real estate....................................... $ 1,305,462 $ 330,500(b) $1,635,962
Cash and cash equivalents........................................... 2,647 -- 2,647
Tenant accounts receivable.......................................... 21,768 -- 21,768
Deferred expenses and other assets, net............................. 9,125 15,300(c) 24,425
----------- ----------- ------------
Total assets.................................................... $ 1,339,002 $ 345,800 $1,684,802
----------- ----------- ------------
----------- ----------- ------------
LIABILITIES:
Mortgage notes payable.............................................. $ 783,285 $ 74,977(d) $ 858,262
Accounts payable, accrued expenses and other liabilities............ 29,681 -- 29,681
Distribution payable................................................ 1,952 -- 1,952
Minority interest................................................... -- -- --
----------- ----------- ------------
Total liabilities 814,918 74,977 889,895
----------- ----------- ------------
SHAREHOLDERS' EQUITY:
Common stock........................................................ 529 180(e) 709
Preferred stock..................................................... 94,000 27,000(e) 121,000
Paid-in-capital..................................................... 424,001 243,643(e) 667,644
Retained earnings................................................... 5,554 -- 5,554
----------- ----------- ------------
Total equity........................................................ 524,084 270,823 794,907
----------- ----------- ------------
Total liabilities and shareholders' equity...................... $ 1,339,002 $ 345,800 $1,684,802
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
NOTES (IN THOUSANDS)
(a) Reflects the Westfield America, Inc. and Subsidiaries Consolidated Balance
Sheet at March 31, 1997.
(b) Increase reflects
Garden State Plaza Loan....................................... $ 145,000
Annapolis Acquisition......................................... 133,000
Wheaton Acquisition........................................... 52,500
---------
$ 330,500
---------
---------
(c) Increase reflects investment in Westfield Holdings Warrants.
(d) Increase reflects additional borrowing under the unsecured corporate line of
credit.
(e) Increase reflects the issuance of 18,000 shares of Common Stock, the 1997
WAT Warrant and 270 shares of Series B Preferred Shares (at its liquidation
amount) offset by $26,177 of estimated underwriting costs and other
expenses.
F-7
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS)
The unaudited Pro Forma Condensed Consolidated Statements of Income are
presented as if the net proceeds of Westfield America, Inc.'s (the "Company")
initial public offering of 18,000 shares of common stock par value $0.01 per
share (the "Common Stock"), the sale of 270.0 shares of Series B Preferred
Shares and the proceeds from the Company's sale of the 1997 WAT Warrants were
applied as described in "Use of Proceeds" as of the beginning of the period
presented, assuming for this purpose that (i) the Outside Partner's interest in
Annapolis Mall is acquired for $133,000 (ii) the Wheaton Acquisition is made for
$52,500, (iii) the Garden State Plaza Loan in the amount of $145,000 is made,
(iv) options to purchase ordinary shares are purchased from Westfield Holdings
Limited, an affiliate, for $15,300 (Aus $19.6 million) (v) $74,977 is borrowed
under the Company's unsecured line of credit (vi) the Common Stock is sold in
the Offerings at an assumed price of $15.00 per share, and the over-allotment
option for the Offerings is not exercised, the Series B Preferred Shares and the
1997 WAT Warrants are sold and (vii) the Company is recapitalized and the
Acquired Properties are acquired as of January 1, 1996, as described in Notes 1
and 9 to the Consolidated Financial Statements.
The unaudited Pro Forma Condensed Consolidated Statement of Income should be
read in conjunction with the Consolidated Financial Statements of Westfield
America, Inc. and Subsidiaries and Notes thereto included elsewhere herein. In
the Company's opinion, all adjustments necessary to reflect the effects of the
consummation of the Offerings, the application of the net proceeds therefrom and
from the concurrent transactions, have been made.
The unaudited Pro Forma Condensed Consolidated Statement of Income is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Offering and related application of net Offering
proceeds had been consummated as of the beginning of the year presented, nor do
they purport to present the future operations of the Company.
F-8
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997
---------------------------------------
PRO FORMA PRO FORMA
HISTORICAL(a) ADJUSTMENTS CONSOLIDATED
------------ ----------- ------------
<S> <C> <C> <C>
REVENUES:
Minimum rents and percentage rents.................................. $ 32,728 $ 6,899(b) $ 39,627
Tenant recoveries and service fee income............................ 14,175 2,232(b) 16,407
------------ ----------- ------------
Total revenue..................................................... 46,903 9,131 56,034
EXPENSES:
Operating........................................................... 14,763 2,337(b) 17,100
Management fees..................................................... 928 345(b) 1,273
Advisory fee (not payable) (c)...................................... -- -- (c) --
General and administrative.......................................... 236 -- 236
Depreciation and amortization....................................... 11,539 1,289(b) 12,828
------------ ----------- ------------
OPERATING INCOME...................................................... 19,437 5,160 24,597
Interest expense, net............................................... (12,860) (1,312)(d) (14,172)
Equity in income of unconsolidated real estate partnerships......... 1,293 (792)(e) 501
Interest and other income........................................... 312 3,325(f) 3,637
------------ ----------- ------------
Income before minority interest..................................... 8,182 6,381 14,563
Minority interest in earnings of unconsolidated real estate
partnerships...................................................... (218) (713)(g) (931)
------------ ----------- ------------
NET INCOME............................................................ $ 7,964 $ 5,668 $ 13,632
------------ ----------- ------------
------------ ----------- ------------
Income allocable to preferred shares................................ $ 1,998 $ 2,571
Income allocable to common shares................................... 5,966 11,061
------------ ------------
$ 7,964 $ 13,632
------------ ------------
------------ ------------
EARNINGS PER SHARE (h)................................................ $ 0.11 $ 0.16
------------ ------------
------------ ------------
</TABLE>
F-9
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------
PRO FORMA PRO FORMA
HISTORICAL(a) ADJUSTMENTS CONSOLIDATED
------------ ----------- ------------
<S> <C> <C> <C>
REVENUES:
Minimum rents and percentage rents.................................. $ 110,384 $ 45,534(b) $ 155,918
Tenant recoveries and service fee income............................ 45,705 18,449(b) 64,154
------------ ----------- ------------
Total revenue..................................................... 156,089 63,983 220,072
EXPENSES:
Operating........................................................... 49,000 22,783(b) 71,783
Management fees..................................................... 3,495 2,067(b) 5,562
Advisory fee (not payable) (c)...................................... 2,600 (2,600)(c) --
General and administrative.......................................... 808 -- 808
Depreciation and amortization....................................... 38,033 10,254(b) 48,287
------------ ----------- ------------
OPERATING INCOME...................................................... 62,153 31,479 93,632
Interest expense, net............................................... (40,233) (15,232)(d) (55,465)
Equity in income of unconsolidated real estate partnerships......... 3,063 (3,008)(e) 55
Interest and other income........................................... 776 12,736(f) 13,512
------------ ----------- ------------
Income before minority interest..................................... 25,759 25,975 51,734
Minority interest in earnings of unconsolidated real estate
partnerships...................................................... (1,063) (1,943)(g) (3,006)
------------ ----------- ------------
NET INCOME............................................................ $ 24,696 $ 24,032 $ 48,728
------------ ----------- ------------
------------ ----------- ------------
Income allocable to preferred shares................................ $ 4,264 $ 10,285
Income allocable to common shares................................... 20,432 38,443
------------ ------------
$ 24,696 $ 48,728
------------ ------------
------------ ------------
EARNINGS PER SHARE (h)................................................ $ 0.42 $ 0.54
------------ ------------
------------ ------------
</TABLE>
F-10
<PAGE>
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND
YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
NOTES (IN THOUSANDS EXCEPT PER SHARE AMOUNTS):
(a) Reflects the Westfield America, Inc. and Subsidiaries Consolidated Statement
of Income for the three months ended March 31, 1997 and the year ended
December 31, 1996.
(b) Reflects the operations of (i) Acquired Properties, which were acquired on
July 1, 1996, for the period January 1, 1996 through June 30, 1996, and (ii)
the operations of Annapolis Mall and Wheaton Acquisition as if these
properties were acquired at the beginning of each period presented as
follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Revenues:
Minimum rents and percentage rents...................... $ 6,899 $ 45,534
Tenant recoveries....................................... 2,232 18,449
Expenses:
Operating............................................... 2,337 22,783
</TABLE>
Additionally, management fees were adjusted to reflect a payment equal to 5%
of the minimum rent and percentage rent, and depreciation expense was
adjusted to reflect the new basis of the properties based on purchase price.
(c) Effective July 1996, in conjunction with a reorganization of the Company, a
separate Advisory Agreement was entered into between the Company and the
Advisor which provided for an Advisory Fee. The Advisory Fee was calculated
as 55 basis points of the Company's net assets and was waived for the period
July 1, 1996 through December 31, 1997. In connection with the Offerings,
the Advisory Agreement will be amended and the Advisory Fee will be modified
to be the lower of (i) 55 basis points of the Company's net assets or (ii) a
base amount of 25% of the Company's FFO, as defined, in excess of $111.5
million. Since the Company's pro forma FFO are below the $111.5 million base
amount, no Advisory Fee was earned on a pro forma basis.
(d) Reflects the increase in interest expense resulting from the following:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Additional interest expense related to adjusted debt
balances of Acquired Properties......................... $ -- $ (9,984)
Increase in interest expense resulting from borrowings
under the unsecured corporate line of credit at 7%...... (1,312) (5,248)
------- --------
Net increase in interest expense........................ $ (1,312) $ (15,232)
------- --------
------- --------
(e) Reflects reduction in equity in income of unconsolidated real estate
partnerships due to consolidation of Annapolis Mall.
(f) Reflects interest and other income from:
Garden State Plaza Loan...................;;............... $ 3,082 $ 12,325
Annapolis Mall and Wheaton Acquisition..................... 243 411
------- --------
$ 3,325 $ 12,736
------- --------
------- --------
</TABLE>
F-11
<PAGE>
(g) Represent increase in minority interest in earnings of unconsolidated real
estate partnerships related to 30% interest in the Wheaton Acquisition not
owned by the Company.
(h) Earnings per share are computed assuming the Offerings and the
Recapitalization of the Company were effective at the beginning of each
period presented. Weighted average number of shares outstanding during the
three months ended March 31, 1997 and the year ended December 31, 1996 for
the purpose of computing pro forma earnings per share were 70,930 shares.
F-12
<PAGE>
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
6/4/97
[LOGO]
For more information, contact:
Randall J. Smith (310) 445-6822
WESTFIELD AMERICA (WEA - NYSE) ANNOUNCES MAJOR ACQUISITIONS
IN THE WASHINGTON D.C. MARKET, AND NEW $600
MILLION CREDIT FACILITY.
Los Angeles, CA, June 4, 1997 - Westfield America, Inc. (WEA - NYSE) announced
today that it has completed the $184 million purchase of two super regional
shopping centers, Wheaton Plaza, Wheaton, MD and Annapolis Mall, Annapolis, MD.
With the acquisition of Wheaton Plaza and Annapolis Mall, Westfield America now
owns three major super regional centers in the greater Washington D.C. market:
Montgomery Mall in Bethesda, MD, Wheaton Plaza in Wheaton, MD and Annapolis Mall
in Annapolis, MD.
Wheaton Plaza is located in Wheaton, Montgomery County, Maryland. The enclosed
center has approximately 1.1 million square feet with 120 specialty stores. The
center is anchored by three department stores: Hecht's, JCPenney, and Montgomery
Ward. The 80 acre site also includes two free standing office buildings.
Westfield is acquiring a 68% general partnership interest in the property for
$51.0 million and will be the sole general partner. The partners include Ms.
Arlene G. Kaufman who controls approximately 24.5% of the partnership.
"Wheaton Plaza is a tremendous redevelopment opportunity for Westfield. The
center has strong anchors and demographics, and we plan on renovating and
expanding the center to reposition it in the Montgomery County market" stated
Peter Lowy, Co-President of Westfield America.
Westfield has also purchased the interest in Annapolis Mall, Annapolis, MD that
it did not currently own (70%) for $133.0 million. Annapolis Mall is a one
level super regional shopping center with 1 million square feet, four anchors
and 150 specialty stores. The center is anchored by Nordstrom, Hecht's,
JCPenney and Montgomery Ward. "We are pleased to own 100% of Annapolis Mall.
It's an
<PAGE>
excellent center in a growing market, and we believe the center has expansion
potential," stated Richard E. Green, Co-President of Westfield America.
In addition to these purchases, Westfield America announced last week the
redevelopment and expansion of West County Center in St. Louis, MO with the
addition of Nordstrom and The May Department Stores Company's Lord & Taylor.
Famous-Barr will replace its existing West County store with another brand new
St. Louis flagship store, and JCPenney will completely remodel its existing
store at the center. The new center will nearly double in size to approximately
1.1 million square feet of leasable space with more than 150 specialty stores.
In conjunction with the recently completed initial public offering of Westfield
America, the company has completed a new $600 million credit agreement with
National Australia Bank Limited, Commonwealth Bank of Australia, Australia and
New Zealand Banking Group and Union Bank of Switzerland. The proceeds will be
used to refinance existing mortgage loans, as a revolving working capital
facility and to fund redevelopments and acquisitions.
Westfield America, Inc., a real estate investment trust which completed it
initial public offering on May 21, 1997, is one of the nation's leading owners
of regional centers. The company owns 23 major shopping centers in 10
metropolitan areas in the states of California, Colorado, Connecticut, Maryland,
Missouri, New York and Washington.
