-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PMHJ9RVqZ4P00VsDiS7hxVOaR3eztlmQKceg8gDd2g+0PaYbOjWETj9GGdcoIFVX ZqjZdg5a4xewY+b4JpH0wQ== 0000828916-00-000013.txt : 20000320 0000828916-00-000013.hdr.sgml : 20000320 ACCESSION NUMBER: 0000828916-00-000013 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEINGARTEN REALTY INVESTORS /TX/ CENTRAL INDEX KEY: 0000828916 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 741464203 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-09876 FILM NUMBER: 572998 BUSINESS ADDRESS: STREET 1: 2600 CITADEL PLAZA DR STREET 2: SUITE 300 CITY: HOUSTON STATE: TX ZIP: 77292 BUSINESS PHONE: 7138666000 MAIL ADDRESS: STREET 1: P O BOX 924133 STREET 2: P O BOX 924133 CITY: HOUSTON STATE: TX ZIP: 77292-4133 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 1-9876 WEINGARTEN REALTY INVESTORS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1464203 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 2600 Citadel Plaza Drive P.O. Box 924133 Houston, Texas 77292-4133 (Address of principal executive offices) (Zip Code) (713) 866-6000 (Registrant's telephone number) Securities registered pursuant to Section 12(b) of the Act. Title of Each Class Name of each exchange on which registered - ----------------------------------------------------------------- ----------------------------------------- Common Shares of Beneficial Interest, $0.03 par value New York Stock Exchange Series A Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange Series C Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the common shares held by non-affiliates (based upon the closing sale price on the New York Stock Exchange) on February 22, 2000 was approximately $952,676,135. As of February 22, 2000 there were 26,694,953 common shares of beneficial interest, $.03 par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Proxy Statement in connection with its Annual Meeting of Shareholders to be held April 24, 2000 are incorporated by reference in Part III. Exhibit Index beginning on Page 40
TABLE OF CONTENTS ITEM NO. PAGE NO. - -------- -------- PART I 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 13 4. Submission of Matters to a Vote of Shareholders . . . . . . . . . 13 Executive Officers of the Registrant. . . . . . . . . . . . . . . 14 PART II 5. Market for Registrant's Common Shares of Beneficial Interest and Related Shareholder Matters. . . . . . . . . . . . . 15 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . 16 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . 17 7A. Quantitative and Qualitative Disclosure about Market Risk . . . . 20 8. Financial Statements and Supplementary Data . . . . . . . . . . . 21 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . 39 PART III 10. Trust Managers and Executive Officers of the Registrant . . . . . 39 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . 39 12. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 13. Certain Relationships and Related Transactions. . . . . . . . . . 39 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . 39
PART I ITEM 1. BUSINESS General. Weingarten Realty Investors, an unincorporated trust organized under the Texas Real Estate Investment Trust Act, and its predecessor entity began the ownership and development of shopping centers and other commercial real estate in 1948. WRI is self-advised and self-managed. As of December 31, 1999, we owned or operated under long-term leases interests in 239 developed income-producing real estate projects. We owned 187 shopping centers located in the Houston metropolitan area and in other parts of Texas and in Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and Maine. We also owned 50 industrial projects located in Tennessee, Nevada and Houston, Austin and Dallas, Texas. Additionally, we owned one multi-family residential project and one office building, which serves, in part, as WRI's headquarters. Our interests in these projects aggregated approximately 27.8 million square feet of building area and 104.1 million square feet of land area. We also owned interests in 31 parcels of unimproved land under development or held for future development which aggregated approximately 8.2 million square feet. WRI currently employs 203 persons and its principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and its phone number is (713) 866-6000. Location of Properties. Historically, WRI has emphasized investments in properties located primarily in the Houston area. Since 1987, we actively acquired properties outside of Houston. Of our 270 properties which were owned or operated under long-term leases as of December 31, 1999, 100 of our 239 developed properties and 14 of our 31 parcels of unimproved land were located in the Houston metropolitan area. In addition to these properties, we owned 79 developed properties and eight parcels of unimproved land located in other parts of Texas. Because of our investments in the Houston area, as well as in other parts of Texas, the Houston and Texas economies affect, to some degree, the business and operations of WRI. In 1999, the economies of Houston and Texas continued to grow, albeit at a slower pace than 1998, but still exceeding the national average; the economy of the entire southwestern United States, where WRI has its primary operations, also remained strong relative to the national average. The Houston economy, because of its strengths in energy and engineering and construction, has become much more integrated into the international economy and is somewhat affected by the international climate. Thus, while Houston's expansion slowed in 1999, it is expected to continue to expand in 2000 and beyond. A deterioration in the Houston or Texas economies could adversely affect WRI. However, WRI's centers are generally anchored by grocery and drug stores under long-term leases, and these types of stores, which deal in basic necessity-type items, tend to be less affected by economic change. Competition. There are other developers and owner-operators engaged in the development, acquisition and operation of shopping centers and commercial property who compete with us in our trade areas. This results in competition for both acquisitions of existing income-producing properties and also for prime development sites. There is also competition for tenants to occupy the space that WRI and its competitors develop, acquire and manage. We believe that the principal competitive factors in attracting tenants in our market areas are location, price, anchor tenants and maintenance of properties. We also believe that our competitive advantages include the favorable locations of our properties, our ability to provide a retailer with multiple locations with anchor tenants in the Houston area and the practice of continuous maintenance and renovation of our properties. Financial Information. Additional financial information concerning WRI is included in the Consolidated Financial Statements located on pages 22 through 38 herein. ITEM 2. PROPERTIES At December 31, 1999, WRI's real estate properties consisted of 270 locations in fourteen states. A complete listing of these properties, including the name, location, building area and land area (in square feet), as applicable, is set forth below:
SHOPPING CENTERS Building Name and Location Area Land Area - --------------------------------------------------------- --------- --------- HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . 7,647,000 29,720,000 Alabama-Shepherd, S. Shepherd at W. Alabama . . . . . . . . . 28,000 * 88,000 * Almeda Road, Almeda at Southmore. . . . . . . . . . . . . . . 17,000 37,000 Bayshore Plaza, Spencer Hwy. at Burke Rd. . . . . . . . . . . 36,000 196,000 Bellaire Boulevard, Bellaire at S. Rice . . . . . . . . . . . 35,000 137,000 Bellfort, Bellfort at Southbank . . . . . . . . . . . . . . . 48,000 167,000 Bellfort Southwest, Bellfort at Gessner . . . . . . . . . . . 30,000 89,000 Bellwood, Bellaire at Kirkwood. . . . . . . . . . . . . . . . 136,000 655,000 Bingle Square, U.S. Hwy. 290 at Bingle. . . . . . . . . . . . 46,000 168,000 Braeswood Square, N. Braeswood at Chimney Rock. . . . . . . . 103,000 422,000 Centre at Post Oak, Westheimer at Post Oak Blvd.. . . . . . . 184,000 505,000 Champions Village, F.M. 1960 at Champions Forest Dr.. . . . . 408,000 1,391,000 Copperfield Village, Hwy. 6 at F.M. 529 . . . . . . . . . . . 157,000 712,000 Crestview, Bissonnet at Wilcrest. . . . . . . . . . . . . . . 9,000 35,000 Crosby, F.M. 2100 at Kenning Road (61%) . . . . . . . . . . . 36,000 * 124,000 * Cullen Place, Cullen at Reed. . . . . . . . . . . . . . . . . 7,000 30,000 Cullen Plaza, Cullen at Wilmington. . . . . . . . . . . . . . 81,000 318,000 Cypress Pointe, F.M. 1960 at Cypress Station. . . . . . . . . 191,000 737,000 Cypress Village, Louetta at Grant Road. . . . . . . . . . . . 25,000 134,000 Del Sol Market Place, Telephone at Monroe . . . . . . . . . . 21,000 87,000 Eastpark, Mesa Rd. at Tidwell . . . . . . . . . . . . . . . . 140,000 665,000 Edgebrook, Edgebrook at Gulf Fwy. . . . . . . . . . . . . . . 78,000 360,000 Fiesta Village, Quitman at Fulton . . . . . . . . . . . . . . 30,000 80,000 Fondren Southwest Village, Fondren at W. Bellfort . . . . . . 323,000 1,362,000 Fondren/West Airport, Fondren at W. Airport . . . . . . . . . 62,000 223,000 45/York Plaza, I-45 at W. Little York . . . . . . . . . . . . 218,000 840,000 Glenbrook Square, Telephone Road. . . . . . . . . . . . . . . 71,000 320,000 Griggs Road, Griggs at Cullen . . . . . . . . . . . . . . . . 85,000 422,000 Harrisburg Plaza, Harrisburg at Wayside . . . . . . . . . . . 95,000 334,000 Heights Plaza, 20th St. at Yale . . . . . . . . . . . . . . . 72,000 228,000 Humblewood Shopping Plaza, Eastex Fwy. at F.M. 1960 . . . . . 180,000 784,000 I-45/Telephone Rd. Center, I-45 at Maxwell Street . . . . . . 178,000 819,000 Inwood Village, W. Little York at N. Houston-Rosslyn. . . . . 68,000 305,000 Jacinto City, Market at Baca. . . . . . . . . . . . . . . . . 24,000 * 67,000 * Kingwood, Kingwood Dr. at Chestnut Ridge. . . . . . . . . . . 155,000 648,000 Landmark, Gessner at Harwin . . . . . . . . . . . . . . . . . 56,000 228,000 Lawndale, Lawndale at 75th St.. . . . . . . . . . . . . . . . 53,000 177,000 Little York Plaza, Little York at E. Hardy. . . . . . . . . . 118,000 486,000 Long Point, Long Point at Wirt (77%). . . . . . . . . . . . . 58,000 * 257,000 * Lyons Avenue, Lyons at Shotwell . . . . . . . . . . . . . . . 68,000 179,000 Market at Westchase, Westheimer at Wilcrest . . . . . . . . . 84,000 333,000 Miracle Corners, S. Shaver at Southmore . . . . . . . . . . . 87,000 386,000 Northbrook, Northwest Fwy. at W. 34th . . . . . . . . . . . . 204,000 656,000 North Main Square, Pecore at N. Main. . . . . . . . . . . . . 18,000 64,000
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Building Name and Location Area Land Area - -------------------------------------------------------------- --------- ---------- North Oaks, F.M. 1960 at Veterans Memorial . . . . . . . . . . 322,000 1,246,000 North Triangle, I-45 at F.M. 1960. . . . . . . . . . . . . . . 16,000 113,000 Northway, Northwest Fwy. at 34th . . . . . . . . . . . . . . . 212,000 793,000 Northwest Crossing, N.W. Fwy. at Hollister (75%) . . . . . . . 135,000 * 671,000 * Northwest Park Plaza, F.M. 149 at Champions Forest . . . . . . 32,000 268,000 Oak Forest, W. 43rd at Oak Forest. . . . . . . . . . . . . . . 164,000 541,000 Orchard Green, Gulfton at Renwick. . . . . . . . . . . . . . . 74,000 273,000 Randall's/Cypress Station, F.M. 1960 at I-45 . . . . . . . . . 141,000 618,000 Randall's/El Dorado, El Dorado at Hwy. 3 . . . . . . . . . . . 119,000 429,000 Randall's/Kings Crossing, Kingwood Dr. at Lake Houston Pkwy. . 128,000 624,000 Randall's/Norchester, Grant at Jones . . . . . . . . . . . . . 109,000 475,000 Richmond Square, Richmond Ave. at W. Loop 610. . . . . . . . . 33,000 136,000 River Oaks, East, W. Gray at Woodhead. . . . . . . . . . . . . 71,000 206,000 River Oaks, West, W. Gray at S. Shepherd . . . . . . . . . . . 235,000 609,000 Sheldon Forest, North, I-10 at Sheldon . . . . . . . . . . . . 22,000 131,000 Sheldon Forest, South, I-10 at Sheldon . . . . . . . . . . . . 38,000 * 164,000 * Shops at Three Corners, S. Main at Old Spanish Trail (70%) . . 183,000 * 803,000 * Southgate, W. Fuqua at Hiram Clark . . . . . . . . . . . . . . 115,000 533,000 Spring Plaza, Hammerly at Campbell . . . . . . . . . . . . . . 56,000 202,000 Steeplechase, Jones Rd. at F.M. 1960 . . . . . . . . . . . . . 193,000 849,000 Stella Link, North, Stella Link at S. Braeswood (77%). . . . . 40,000 * 156,000 * Stella Link, South, Stella Link at S. Braeswood. . . . . . . . 15,000 56,000 Studemont, Studewood at E. 14th St . . . . . . . . . . . . . . 28,000 91,000 Ten Blalock Square, I-10 at Blalock. . . . . . . . . . . . . . 97,000 321,000 10/Federal, I-10 at Federal. . . . . . . . . . . . . . . . . . 132,000 474,000 University Plaza, Bay Area at Space Center . . . . . . . . . . 96,000 424,000 The Village Arcade, University at Kirby. . . . . . . . . . . . 191,000 414,000 West Junction, Hwy. 6 at Keith Harrow Dr. . . . . . . . . . . 67,000 264,000 Westbury Triangle, Chimney Rock at W. Bellfort . . . . . . . . 67,000 257,000 Westchase, Westheimer at Wilcrest. . . . . . . . . . . . . . . 236,000 766,000 Westhill Village, Westheimer at Hillcroft. . . . . . . . . . . 131,000 480,000 Wilcrest Southwest, Wilcrest at Southwest Fwy. . . . . . . . . 26,000 78,000 TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . 6,246,000 26,820,000 McDermott Commons, McDermott at Custer Rd., Allen. . . . . . . 12,000 72,000 Bell Plaza, 45th Ave. at Bell St., Amarillo. . . . . . . . . . 144,000 682,000 Coronado, S.W. 34th St. at Wimberly Dr., Amarillo. . . . . . . 49,000 201,000 Grand Plaza, Interstate Hwy 40 at Grand Ave., Amarillo . . . . 157,000 637,000 Puckett Plaza, Bell Road, Amarillo . . . . . . . . . . . . . . 133,000 621,000 Spanish Crossroads, Bell St. at Atkinsen St., Amarillo . . . . 72,000 275,000 Wolflin Village, Wolflin Ave. at Georgia St., Amarillo . . . . 191,000 421,000 Brodie Oaks, South Lamar Blvd. at Loop 360, Austin . . . . . . 245,000 1,050,000 Southridge Plaza, William Cannon Dr. at S. 1st St., Austin . . 143,000 565,000 Baywood, State Hwy. 60 at Baywood Dr., Bay City. . . . . . . . 40,000 169,000 Calder, Calder at 24th St., Beaumont . . . . . . . . . . . . . 34,000 129,000 North Park Plaza, Eastex Fwy. at Dowlen, Beaumont. . . . . . . 70,000 * 318,000 * Phelan West, Phelan at 23rd St., Beaumont (67%). . . . . . . . 16,000 * 59,000 * Southgate, Calder Ave. at 6th St., Beaumont. . . . . . . . . . 34,000 118,000 Westmont, Dowlen at Phelan, Beaumont . . . . . . . . . . . . . 95,000 507,000 Bryan Village, Texas at Pease, Bryan . . . . . . . . . . . . . 29,000 98,000 Parkway Square, Southwest Pkwy at Texas Ave., College Station. 158,000 685,000
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Building Name and Location Area Land Area - -------------------------------------------------------------------- --------- --------- Montgomery Plaza, Loop 336 West at I-45, Conroe. . . . . . . . . . . 315,000 1,156,000 River Pointe, I-45 at Loop 336, Conroe . . . . . . . . . . . . . . . 42,000 329,000 Moore Plaza, S. Padre Island Dr. at Staples, Corpus Christi. . . . . 360,000 1,492,000 Portairs, Ayers St. at Horne Rd., Corpus Christi . . . . . . . . . . 121,000 416,000 Dickinson, I-45 at F.M. 517, Dickinson (72%) . . . . . . . . . . . . 55,000 * 225,000 * Coronado Hills, Mesa at Balboa, El Paso. . . . . . . . . . . . . . . 127,000 575,000 Southcliff, I-20 at Grandbury Rd., Ft. Worth . . . . . . . . . . . . 116,000 568,000 Broadway, Broadway at 59th St., Galveston (77%). . . . . . . . . . . 58,000 * 167,000 * Galveston Place, Central City Blvd. at 61st St., Galveston . . . . . 206,000 828,000 Food King Place, 25th St. at Avenue P, Galveston . . . . . . . . . . 28,000 78,000 Fiesta, Belt Line Rd. at Marshall Dr., Grand Prairie . . . . . . . . 32,000 236,000 Cedar Bayou, Bayou Rd., La Marque. . . . . . . . . . . . . . . . . . 15,000 51,000 Corum South, I-45 at F.M. 518, League City . . . . . . . . . . . . . 112,000 680,000 Caprock Center, 50th at Boston Ave., Lubbock . . . . . . . . . . . . 375,000 1,255,000 Central Plaza, Loop 289 at Slide Rd., Lubbock. . . . . . . . . . . . 152,000 529,000 Town & Country, 4th St. at University, Lubbock . . . . . . . . . . . 134,000 339,000 Angelina Village, Hwy. 59 at Loop 287, Lufkin. . . . . . . . . . . . 254,000 1,835,000 Independence Plaza, Town East Blvd., Mesquite. . . . . . . . . . . . 179,000 787,000 McKinney Centre, US Hwy 380 at U.S.Hwy 75, McKinney . . . . . . . . 27,000 145,000 Murphy Crossing, F.M. 544 at Murphy Rd., Murphy. . . . . . . . . . . 8,000 71,000 University Park Plaza, University Dr. at E. Austin St., Nacogdoches. 78,000 283,000 Mid-County, Twin Cities Hwy. at Nederland Ave., Nederland. . . . . . 107,000 611,000 Gillham Circle, Gillham Circle at Thomas, Port Arthur. . . . . . . . 33,000 94,000 Village, 9th Ave. at 25th St., Port Arthur (77%) . . . . . . . . . . 39,000 * 185,000 * Porterwood, Eastex Fwy. at F.M. 1314, Porter . . . . . . . . . . . . 99,000 487,000 Plaza, Ave. H at U.S. Hwy. 90A, Rosenberg. . . . . . . . . . . . . . 41,000 * 135,000 * Rose-Rich, U.S. Hwy. 90A at Lane Dr., Rosenberg. . . . . . . . . . . 104,000 386,000 Bandera Village, Bandera at Hillcrest, San Antonio . . . . . . . . . 57,000 607,000 Oak Park Village, Nacogdoches at New Braunfels, San Antonio. . . . . 65,000 221,000 Parliament Square, W. Ave. at Blanco, San Antonio. . . . . . . . . . 65,000 260,000 San Pedro Court, San Pedro at Hwy. 281N., San Antonio. . . . . . . . 2,000 18,000 Valley View, West Ave. at Blanco Rd., San Antonio. . . . . . . . . . 89,000 341,000 Market at Town Center, Town Center Blvd., Sugar Land . . . . . . . . 392,000 1,732,000 Williams Trace, Hwy. 6 at Williams Trace, Sugar Land . . . . . . . . 263,000 1,187,000 New Boston Road, New Boston at Summerhill, Texarkana . . . . . . . . 97,000 335,000 Island Market Place, 6th St. at 9th Ave., Texas City . . . . . . . . 27,000 90,000 Mainland, Hwy. 1765 at Hwy. 3, Texas City. . . . . . . . . . . . . . 69,000 279,000 Palmer Plaza, F.M. 1764 at 34th St., Texas City. . . . . . . . . . . 97,000 367,000 Broadway, S. Broadway at W. 9th St., Tyler (77%) . . . . . . . . . . 46,000 * 197,000 * Crossroads, I-10 at N. Main, Vidor . . . . . . . . . . . . . . . . . 116,000 516,000 Watauga Towne Center, Hwy. 377 at Bursey Rd., Watauga. . . . . . . . 22,000 120,000 LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,343,000 5,504,000 Park Terrace, U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . 137,000 520,000 Town & Country Plaza, U.S. Hwy. 190 West, Hammond. . . . . . . . . . 215,000 915,000 Westwood Village, W. Congress at Bertrand, Lafayette . . . . . . . . 141,000 942,000 East Town, 3rd Ave. at 1st St., Lake Charles . . . . . . . . . . . . 33,000 * 117,000 * 14/Park Plaza, Hwy. 14 at General Doolittle, Lake Charles. . . . . . 207,000 654,000 Kmart Plaza, Ryan St., Lake Charles. . . . . . . . . . . . . . . . . 105,000 * 406,000 * Southgate, Ryan at Eddy, Lake Charles. . . . . . . . . . . . . . . . 171,000 628,000 Danville Plaza, Louisville at 19th, Monroe . . . . . . . . . . . . . 143,000 539,000
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Building Name and Location Area Land Area - -------------------------------------------------------------------- --------- ---------- LOUISIANA, (CONT'D.) Orleans Station, Paris, Robert E. Lee at Chatham, New Orleans. . . . 5,000 31,000 Southgate, 70th at Mansfield, Shreveport . . . . . . . . . . . . . . 73,000 359,000 Westwood, Jewella at Greenwood, Shreveport . . . . . . . . . . . . . 113,000 393,000 NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,091,000 4,397,000 Francisco Centre, E. Desert Inn Rd. at S. Eastern Ave., Las Vegas. . 116,000 639,000 Mission Center, Flamingo Rd. at Maryland Pkwy, Las Vegas . . . . . . 152,000 570,000 Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas. . . . . . 149,000 536,000 Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas. . . . . 280,000 1,062,000 Rancho Towne & Country, Rancho Dr. at Charleston Blvd., Las Vegas. . 87,000 350,000 Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas . . . . . 143,000 519,000 College Park, E. Lake Mead Blvd. at Civic Ctr. Dr., North Las Vegas. 164,000 721,000 ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058,000 4,733,000 Palmilla Center, Dysart Rd. at McDowell Rd., Avondale. . . . . . . . 6,000 31,000 University Plaza, Plaza Way at Milton Rd., Flagstaff . . . . . . . . 166,000 918,000 Arrowhead Festival, 75th Ave. at W. Bell Rd., Glendale . . . . . . . 26,000 157,000 Camelback Village Square, Camelback at 7th Avenue, Phoenix . . . . . 135,000 543,000 Squaw Peak Plaza, 16th Street at Glendale Ave., Phoenix. . . . . . . 61,000 220,000 Rancho Encanto, 35th Avenue at Greenway Rd., Phoenix . . . . . . . . 71,000 259,000 Fountain Plaza, 77th St. at McDowell, Scottsdale . . . . . . . . . . 112,000 460,000 Broadway Marketplace, Broadway at Rural, Tempe . . . . . . . . . . . 86,000 347,000 Fry's Valley Plaza, S. McClintock at E. Southern, Tempe. . . . . . . 145,000 570,000 Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe . . . . . . . 152,000 769,000 Desert Square Shopping Center, Golf Links at Kolb, Tucson. . . . . . 98,000 459,000 NEW MEXICO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 893,000 3,787,000 Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque. . . . . . . . 111,000 601,000 North Towne Plaza, Academy Rd. at Wyoming Blvd., Albuquerque . . . . 103,000 607,000 Valle del Sol, Isleta Blvd. at Rio Bravo, Albuquerque. . . . . . . . 106,000 475,000 Wyoming Mall, Academy Rd. at Northeastern, Albuquerque . . . . . . . 326,000 1,309,000 DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe . . . . . . . . 247,000 795,000 OKLAHOMA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000 Bryant Square, Bryant Ave. at 2nd St., Edmond. . . . . . . . . . . . 282,000 1,259,000 Market Boulevard, E. Reno Ave. at N. Douglas Ave., Midwest City. . . 36,000 142,000 Town & Country, Reno Ave at North Air Depot, Midwest City. . . . . . 138,000 540,000 Windsor Hills Center, Meridian at Windsor Place, Oklahoma City . . . 246,000 1,232,000 ARKANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 596,000 2,322,000 Evelyn Hills, College Ave. at Abshier, Fayetteville. . . . . . . . . 154,000 750,000 Broadway Plaza, Broadway at W. Roosevelt, Little Rock. . . . . . . . 43,000 148,000 Geyer Springs, Geyer Springs at Baseline, Little Rock. . . . . . . . 153,000 414,000 Markham Square, W. Markham at John Barrow, Little Rock . . . . . . . 134,000 535,000 Markham West, 11400 W. Markham, Little Rock (35%). . . . . . . . . . 62,000 * 269,000 * Westgate, Cantrell at Bryant, Little Rock. . . . . . . . . . . . . . 50,000 206,000
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Building Name and Location Area Land Area - ---------------------------------------------------------------- --------- ---------- KANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 2,231,000 West State Plaza, State Ave. at 78th St., Kansas City. . . . . . 94,000 401,000 Westbrooke Village, Quivira Road at 75th St., Shawnee. . . . . . 237,000 1,269,000 Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee . 135,000 561,000 MISSOURI, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000 Ballwin Plaza, Manchester Rd. at Vlasis Dr., Ballwin . . . . . . 203,000 653,000 PineTree Plaza, U.S. Hwy. 50 at Hwy. 291, Lee's Summit . . . . . 135,000 448,000 FLORIDA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 316,000 1,394,000 Pembroke Commons, University at Pines Blvd., Pembroke Pines. . . 316,000 1,394,000 COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 217,000 902,000 Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs. 127,000 460,000 Academy Place, Academy Blvd. at Union Blvd., Colorado Springs. . 84,000 407,000 Gold Creek Center, Hwy. 86 at Elizabeth St., Elizabeth . . . . . 6,000 * 35,000 * MAINE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000 The Promenade, Essex at Summit, Lewiston . . . . . . . . . . . . 124,000 * 482,000 * ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 93,000 464,000 Lincoln Place Centre, Hwy. 59, Fairview Heights (99%). . . . . . 93,000 * 464,000 * TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . 20,000 84,000 Highland Square, Summer at Highland, Memphis . . . . . . . . . . 20,000 84,000 Building INDUSTRIAL Area Land Area - ---------------------------------------------------------------- --------- ---------- HOUSTON AND HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . 3,330,000 9,537,000 Beltway 8 Business Park, Beltway 8 at Petersham Dr.. . . . . . . 52,000 166,000 Blankenship Building, Kempwood Drive . . . . . . . . . . . . . . 59,000 175,000 Brookhollow Business Center, Dacoma at Directors Row . . . . . . 133,000 405,000 Cannon/So. Loop Business Park, Cannon Street (20%) . . . . . . . 59,000 * 96,000 * Central Park North, W. Hardy Rd. at Kendrick Dr. . . . . . . . . 155,000 466,000 Central Park Northwest VI, Central Pkwy. at Dacoma . . . . . . . 175,000 518,000 Central Park Northwest VII, Central Pkwy. at Dacoma. . . . . . . 103,000 283,000 Claywood Industrial Park, Clay at Hollister. . . . . . . . . . . 330,000 1,761,000 Crosspoint Warehouse, Crosspoint . . . . . . . . . . . . . . . . 73,000 179,000 Jester Plaza, West T.C. Jester . . . . . . . . . . . . . . . . . 101,000 244,000 Kempwood Industrial, Kempwood Dr. at Blankenship Dr. . . . . . . 113,000 327,000 Kempwood Industrial, Kempwood Dr. at Blankenship Dr. (20%) . . . 42,000 * 106,000 * Lathrop Warehouse, Lathrop St. at Larimer St. (20%). . . . . . . 51,000 * 87,000 * Levitz Furniture Warehouse, Loop 610 South . . . . . . . . . . . 184,000 450,000 Little York Mini-Storage, West Little York . . . . . . . . . . . 32,000 * 124,000 * Navigation Business Park, Navigation at N. York (20%). . . . . . 47,000 * 111,000 * Northway Park II, Loop 610 East at Homestead (20%) . . . . . . . 61,000 * 149,000 * Park Southwest, Stancliff at Brooklet. . . . . . . . . . . . . . 52,000 160,000
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Building Name and Location Area Land Area - -------------------------------------------------------------------- --------- ----------- HOUSTON AND HARRIS COUNTY, (CONT'D) Railwood Industrial Park, Mesa at U.S. 90. . . . . . . . . . . . . . 616,000 1,651,000 Railwood Industrial Park, Mesa at U.S. 90 (20%). . . . . . . . . . . 99,000 * 213,000 * South Loop Business Park, S. Loop at Long Dr.. . . . . . . . . . . . 46,000 * 103,000 * Southport Business Park 5, South Loop 610. . . . . . . . . . . . . . 157,000 358,000 Southwest Park II, Rockley Road. . . . . . . . . . . . . . . . . . . 68,000 216,000 Stonecrest Business Center, Wilcrest at Fallstone. . . . . . . . . . 111,000 308,000 West-10 Business Center, Wirt Rd. at I-10. . . . . . . . . . . . . . 141,000 331,000 West-10 Business Center II, Wirt Rd. at I-10 . . . . . . . . . . . . 83,000 149,000 West Loop Commerce Center, W. Loop N. at I-10. . . . . . . . . . . . 34,000 91,000 610 and 11th St. Warehouse, Loop 610 at 11th St. . . . . . . . . . . 105,000 202,000 610 and 11th St. Warehouse, Loop 610 at 11th St. (20%) . . . . . . . 48,000 * 108,000 * TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 2,197,000 5,085,000 Randol Mill Place, Randol Mill Road, Arlington . . . . . . . . . . . 55,000 178,000 Corporate Center I & II, Putnam Dr. at Research Blvd., Austin. . . . 117,000 326,000 Southpoint Service Center, Burleson at Promontory Point Dr., Austin. 54,000 234,000 Walnut Creek Office Park, Cameron Rd., Austin. . . . . . . . . . . . 34,000 122,000 Wells Branch Corporate Center, Wells Branch Pkwy., Austin. . . . . . 60,000 183,000 Midway Business Center, Midway at Boyington, Carrollton. . . . . . . 142,000 309,000 River Pointe Mini-Storage, I-45 at Hwy. 336, Conroe. . . . . . . . . 32,000 * 97,000 * Manana Office Center, I-35 at Manana, Dallas . . . . . . . . . . . . 223,000 473,000 Newkirk Service Center, Newkirk near N.W. Hwy., Dallas . . . . . . . 106,000 223,000 Northaven Business Center, Northaven Rd., Dallas . . . . . . . . . . 151,000 178,000 Northeast Crossing Off/Svc Ctr., East N.W. Hwy. at Shiloh, Dallas. . 79,000 199,000 Northwest Crossing Off/Svc Ctr., N.W. Hwy. at Walton Walker, Dallas. 127,000 290,000 Redbird Distribution Center, Joseph Hardin Drive, Dallas . . . . . . 111,000 234,000 Regal Distribution Center, Leston Avenue, Dallas . . . . . . . . . . 203,000 318,000 Space Center Industrial Park, Pulaski St. at Irving Blvd., Dallas. . 265,000 426,000 Walnut Trails Business Park, Walnut Hill Lane, Dallas. . . . . . . . 103,000 311,000 DFW-Port America, Port America Place, Grapevine. . . . . . . . . . . 45,000 110,000 Jupiter Service Center, Jupiter near Plano Pkwy., Plano. . . . . . . 78,000 234,000 Sherman Plaza Business Park, Sherman at Phillips, Richardson . . . . 100,000 312,000 Nasa One Business Center, Nasa Road One at Hwy. 3, Webster . . . . . 112,000 328,000 TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 679,000 1,470,000 Southwide Warehouse # 2, Federal Compress Ind. Pk., Memphis. . . . . 124,000 302,000 Southwide Warehouse # 3, Federal Compress Ind. Pk., Memphis. . . . . 112,000 209,000 Southwide Warehouse # 4, Federal Compress Ind. Pk., Memphis. . . . . 120,000 220,000 Thomas Street Warehouse, N. Thomas Street, Memphis . . . . . . . . . 164,000 423,000 Crowfarn Drive Warehouse, Crowfarn Dr. at Getwell Rd., Memphis . . . 159,000 316,000 NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 162,000 East Sahara Off/Svc Ctr., E. Sahara Blvd., Las Vegas . . . . . . . . 66,000 162,000
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Building Name and Location Area Land Area - -------------------------------------------------------------------- --------- ---------- OFFICE BUILDING HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 121,000 171,000 Citadel Plaza, N. Loop 610 at Citadel Plaza Dr.. . . . . . . . . . . 121,000 171,000 MULTI-FAMILY RESIDENTIAL TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 236,000 595,000 River Pointe Drive at I-45, Conroe . . . . . . . . . . . . . . . . . 236,000 595,000 UNIMPROVED LAND HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . . . 3,875,000 Beltway 8 at W. Belfort. . . . . . . . . . . . . . . . . . . . . . . 333,000 Bissonnet at Wilcrest. . . . . . . . . . . . . . . . . . . . . . . . 773,000 Citadel Plaza at 610 N. Loop . . . . . . . . . . . . . . . . . . . . 137,000 East Orem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 Kirkwood at Dashwood Dr. . . . . . . . . . . . . . . . . . . . . . . 322,000 Lockwood at Navigation . . . . . . . . . . . . . . . . . . . . . . . 163,000 Mesa Rd. at Tidwell. . . . . . . . . . . . . . . . . . . . . . . . . 901,000 Mowery at Cullen . . . . . . . . . . . . . . . . . . . . . . . . . . 118,000 Northwest Fwy. at Gessner. . . . . . . . . . . . . . . . . . . . . . 484,000 Redman at W. Denham. . . . . . . . . . . . . . . . . . . . . . . . . 17,000 Sheldon at I-10. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000 W. Little York at I-45 . . . . . . . . . . . . . . . . . . . . . . . 322,000 W. Little York at N. Houston-Rosslyn . . . . . . . . . . . . . . . . 19,000 W. Loop N. at I-10 . . . . . . . . . . . . . . . . . . . . . . . . . 145,000 TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . . . 1,657,000 McDermott Drive at Custer Rd., Allen . . . . . . . . . . . . . . . . 297,000 Phelan Blvd., Beaumont . . . . . . . . . . . . . . . . . . . . . . . 63,000 US Hwy 380 (University Drive) and US Hwy 75, McKinney. . . . . . . . 189,000 F.M. 544 at Murphy Rd., Murphy . . . . . . . . . . . . . . . . . . . 293,000 River Pointe Dr. at I-45, Conroe . . . . . . . . . . . . . . . . . . 186,000 Hillcrest, Sunshine at Quill, San Antonio. . . . . . . . . . . . . . 171,000 Hwy. 3 at Hwy. 1765, Texas City. . . . . . . . . . . . . . . . . . . 184,000 Hwy 377 at Bursey Road, Watauga. . . . . . . . . . . . . . . . . . . 274,000 LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,480,000 U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . . . . . . . . 462,000 Ambassador Caffery Pkwy. at Congress St., Lafayette. . . . . . . . . 196,000 Woodland Hwy., Plaquemines Parish (5%) . . . . . . . . . . . . . . . 822,000 *
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Building Name and Location Area Land Area - -------------------------------------------------------------------- --------- ---------- UNIMPROVED LAND (CONT'D.) ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 606,000 Dysart Rd. at McDowell Rd., Avondale . . . . . . . . . . . . . . . . 240,000 Warner Rd. at Val Vista, Gilbert . . . . . . . . . . . . . . . . . . 366,000 COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 507,000 Jordan Rd. at Lincoln Ave., Parker (38%) . . . . . . . . . . . . . . 326,000 * Smokey Hill Rd. at S. Picadilly St. , Aurora . . . . . . . . . . . . 136,000 * Hwy. 86 at Elizabeth St., Elizabeth. . . . . . . . . . . . . . . . . 45,000 * ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000 Lincoln Place Centre, SBI Rt. 159 at Matilda , Fairview Heights (99%) 34,000 *
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Building Name and Location Area Land Area - -------------------------------------------------------------------- ---------- ----------- ALL PROPERTIES-BY LOCATION GRAND TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,779,000 112,293,000 Houston & Harris County. . . . . . . . . . . . . . . . . . . . . . . 11,098,000 43,303,000 Texas (excluding Houston & Harris County). . . . . . . . . . . . . . 8,679,000 34,157,000 Louisiana. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,343,000 6,984,000 Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,157,000 4,559,000 Arizona. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058,000 5,339,000 New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,000 3,787,000 Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000 Tennessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699,000 1,554,000 Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596,000 2,322,000 Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 2,231,000 Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000 Florida. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316,000 1,394,000 Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,000 1,409,000 Maine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000 Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,000 498,000 ALL PROPERTIES-BY CLASSIFICATION GRAND TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,779,000 112,293,000 Shopping Centers . . . . . . . . . . . . . . . . . . . . . . . . . . 21,150,000 87,114,000 Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,272,000 16,254,000 Multi-Family Residential . . . . . . . . . . . . . . . . . . . . . . 236,000 595,000 Office Building. . . . . . . . . . . . . . . . . . . . . . . . . . . 121,000 171,000 Unimproved Land. . . . . . . . . . . . . . . . . . . . . . . . . . . 8,159,000 Note: Total square footage includes 8,041,000 square feet of land leased and 450,000 square feet of building leased from others. * Denotes partial ownership. WRI's interest is 50% except where noted. The square feet figures represent WRI's proportionate ownership of the entire property.
General. In 1999, no single property accounted for more than 2.9% of WRI's total assets or 2.6% of gross revenues. Four properties, in the aggregate, represented approximately 9.27% of our gross revenues for the year ended December 31, 1999; otherwise, none of the remaining properties accounted for more than 1.9% of our gross revenues during the same period. The weighted average occupancy rate for all of our improved properties as of December 31, 1999 was 91.3%. Substantially all of our properties are owned directly by WRI (subject in some cases to mortgages), although our interests in some properties are held indirectly through interests in joint ventures or under long-term leases. In our opinion, our properties are well maintained and in good repair, suitable for their intended uses, and adequately covered by insurance. Shopping Centers. As of December 31, 1999, WRI owned or operated under long-term leases, either directly or through its interests in joint ventures, 187 shopping centers with approximately 21.1 million square feet of building area. The shopping centers were located predominantly in Texas with other locations in Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and Maine. WRI's shopping centers are primarily community shopping centers which range in size from 100,000 to 400,000 square feet, as distinguished from small strip centers which generally contain 5,000 to 25,000 square feet and from large regional enclosed malls which generally contain over 500,000 square feet. Most of the centers do not have climatized common areas but are designed to allow retail customers to park their automobiles in close proximity to any retailer in the center. Our centers are customarily constructed of masonry, steel and glass and all have lighted, paved parking areas which are typically landscaped with berms, trees and shrubs. They are generally located at major intersections in close proximity to neighborhoods which have existing populations sufficient to support retail activities of the types conducted in our centers. We have approximately 4,200 separate leases with 3,300 different tenants, including national and regional supermarket chains, drug stores, discount department stores, junior department stores, other nationally or regionally known stores and a great variety of other regional and local retailers. The large number of locations offered by WRI and the types of traditional anchor tenants help attract prospective new tenants. Some of the national and regional supermarket chains which are tenants in our centers include Albertson's, Fiesta, Smith's, H.E.B., Kroger Company, Randall's Food Markets, Fry's Food Stores and Safeway. In addition to these supermarket chains, WRI's nationally and regionally known retail store tenants include Eckerd, Walgreen and Osco drugstores; Kmart discount stores; Bealls, Palais Royal and Weiner's junior department stores; Marshall's, Office Depot, Office Max, Babies 'R' Us, Ross, Stein Mart and T.J. Maxx off-price specialty stores; Luby's, Piccadilly and Furr's cafeterias; Academy sporting goods; FAO Schwarz toy store; Cost Plus Imports; Linens 'N Things; Barnes & Noble bookstore; Home Depot; CompUSA; and the following restaurant chains: Arby's, Burger King, Champ's, Church's Fried Chicken, Dairy Queen, Domino's, Jack-in-the-Box, CiCi Pizza, Long John Silver's, McDonald's, Olive Garden, Outback Steakhouse, Pizza Hut, Shoney's, Steak & Ale, Taco Bell and Whataburger. We also lease space in 3,000 to 10,000 square foot areas to national chains such as the Limited Store, The Gap, One Price Stores, Eddie Bauer and Radio Shack. WRI's shopping center leases have lease terms generally ranging from three to five years for tenant space under 5,000 square feet and from 10 to 35 years for tenant space over 10,000 square feet. Leases with primary lease terms in excess of 10 years, generally for anchor and out-parcels, frequently contain renewal options which allow the tenant to extend the term of the lease for one or more additional periods, with each of these periods generally being of a shorter duration than the primary lease term. The rental rates paid during a renewal period are generally based upon the rental rate for the primary term, sometimes adjusted for inflation or for the amount of the tenant's sales during the primary term. Most of our leases provide for the monthly payment in advance of fixed minimum rentals, the tenants' pro rata share of ad valorem taxes, insurance (including fire and extended coverage, rent insurance and liability insurance) and common area maintenance for the center (based on estimates of the costs for these items). They also provide for the payment of additional rentals based on a percentage of the tenants' sales. Utilities are generally paid directly by tenants except where common metering exists with respect to a center. In this case, WRI makes the payments for the utilities and is reimbursed by the tenants on a monthly basis. Generally, our leases prohibit the tenant from assigning or subletting its space. They also require the tenant to use its space for the purpose designated in its lease agreement and to operate its business on a continuous basis. Some of the lease agreements with major tenants contain modifications of these basic provisions in view of the financial condition, stability or desirability of those tenants. Where a tenant is granted the right to assign its space, the lease agreement generally provides that the original lessee will remain liable for the payment of the lease obligations under that lease agreement. During 1999, we added approximately 2.8 million square feet to our portfolio of properties through acquisitions and another .4 million square feet of space through development. Regarding the retail portfolio, we purchased three anchored shopping centers in Texas, a supermarket-anchored retail center in Florida and a building adjacent to one of our shopping centers in Houston, Texas. We also purchased our joint venture partner's 77% interest in a shopping center in Santa Fe, New Mexico and executed a lease on a retail center in Ballwin, Missouri, a suburb of St. Louis. These transactions increased our retail portfolio by 1.4 million square feet of building area and represent an investment of $107.3 million. With respect to new development, construction was completed on .1 million square feet of retail space. WRI currently has seven retail centers under development and has investments in three additional retail centers in joint ventures with our Denver-based development partner. Industrial Properties. At December 31, 1999, WRI owned a total of 50 industrial projects. During 1999, we purchased twelve facilities, including seven facilities in the Dallas/Fort Worth metroplex and our first industrial project in Las Vegas, Nevada. We also acquired three buildings in Austin, Texas, and one facility in Houston, Texas. These projects added 1.4 million square feet to the industrial portfolio and represent an investment of $43.2 million. During 1999, WRI completed the development of one 52,500 square foot building of a three-building office/service facility in Houston, Texas. The remaining two buildings are currently under development. In December 1999, WRI sold seven industrial properties totaling 2.0 million square feet of building area to a joint venture in which we retained a 20% ownership interest, with the other 80% purchased by American National Insurance Company. Office Building. We own a seven-story, 121,000 square foot masonry office building with a detached, covered, three-level parking garage situated on 171,000 square feet of land fronting on North Loop 610 West in Houston. The building serves as our headquarters. Other than WRI, the major tenant of the building is Bank of America, which currently occupies 9% of the office space. Multi-family Residential Properties. WRI completed development of a 260-unit luxury apartment complex within a multi-use master-planned project we developed in a suburb north of Houston. An unrelated Houston-based multi-family operator manages the property on our behalf. Unimproved Land. At December 31, 1999, WRI owned, directly or through its interest in a joint venture, 31 parcels of unimproved land aggregating approximately 8.2 million square feet of land area located in Texas, Louisiana, Arizona, Colorado and Illinois. These properties include approximately 2.6 million square feet of land adjacent to certain of our existing developed properties, which may be used for expansion of these developments, as well as approximately 5.6 million square feet of land, which may be used for new development. Almost all of these unimproved properties are served by roads and utilities and are ready for development. Most of these parcels are suitable for development as shopping centers or industrial projects, and WRI intends to emphasize the development of these parcels for such purpose. In December 1999, WRI and WRI Holdings, Inc., an affiliated company, sold 28.5 acres and 102.6 acres, respectively, of undeveloped land to American National Insurance Company with WRI retaining the right to co-develop this land with American National. ITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business or litigation we believe is substantially covered by insurance, to which WRI is a party or to which any of its properties are subject. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS None. EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information with respect to the executive officers of WRI as of February 22, 2000. All executive officers of WRI are elected annually by our Board of Trust Managers and serve until the successors are elected and qualified.
Name Age Position Stanford Alexander. . . . . . . 71 Chairman/Chief Executive Officer Martin Debrovner. . . . . . . . 63 Vice Chairman Andrew M. Alexander . . . . . . 43 President Joseph W. Robertson, Jr.. . . . 52 Executive Vice President/Chief Financial Officer Stephen C. Richter. . . . . . . 45 Senior Vice President/Financial Administration and Treasurer
Mr. S. Alexander is WRI's Chairman and its Chief Executive Officer. He has been employed by WRI since 1955 and has served in his present capacity since January 1, 1993. Prior to becoming Chairman, Mr. Alexander served as President and Chief Executive Officer of WRI since 1962. Mr. Alexander is President, Chief Executive Officer and a Trust Manager of Weingarten Properties Trust. Mr. Debrovner became Vice Chairman of WRI on February 25, 1997. Prior to assuming such position, Mr. Debrovner served as President and Chief Operating Officer since January 1, 1993. Mr. Debrovner served as President of Weingarten Realty Management Company since WRI's reorganization in December 1984. Prior to such time, Mr. Debrovner was an employee of WRI for 17 years, holding the positions of Senior Vice President from 1980 until March 1984 and Executive Vice President until December 1984. As Executive Vice President, Mr. Debrovner was generally responsible for WRI's operations. Mr. Debrovner is also a Trust Manager of Weingarten Properties Trust. Mr. A. Alexander became President of WRI on February 25, 1997. Prior to his present position, Mr. Alexander was Executive Vice President/Asset Management of WRI and President of Weingarten Realty Management Company. Prior to such time, Mr. Alexander was Senior Vice President/Asset Management of the Management Company. He also served as Vice President of the Management Company and, prior to WRI's reorganization in December 1984, was Vice President and an employee of WRI since 1978. Mr. Alexander has been primarily involved with leasing operations at both WRI and the Management Company. Mr. Alexander is also a Trust Manager of Weingarten Properties Trust and a Director of Academy Sports and Outdoors, Inc. Mr. Robertson became Executive Vice President of WRI and its Chief Financial Officer on January 1, 1993. Prior to becoming Executive Vice President, Mr. Robertson served as Senior Vice President and Chief Financial Officer since 1980. He has been with WRI since 1971. Mr. Robertson is also a Trust Manager of Weingarten Properties Trust. Mr. Richter became Senior Vice President/Financial Administration and Treasurer on January 1, 1997. Prior to his present position, Mr. Richter served as Vice President/Financial Administration and Treasurer of WRI since January 1, 1993. For the five years prior to that time, he served as Vice President/Financial Administration and Treasurer of the Management Company. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND RELATED SHAREHOLDER MATTERS WRI's common shares are listed and traded on the New York Stock Exchange under the symbol "WRI". The number of holders of record of our common shares as of February 22, 2000 was 3,324. The high and low sale prices per share of our common shares, as reported on the New York Stock Exchange composite tape, and dividends per share paid for the fiscal quarters indicated were as follows:
HIGH LOW DIVIDENDS --------- --------- --------- 1999: Fourth. . . $ 39 3/8 $ 37 $ 0.71 Third . . . 42 7/16 37 1/4 0.71 Second. . . 43 7/16 38 1/4 0.71 First . . . 45 5/8 38 3/8 0.71 1998: Fourth. . . $ 46 7/8 $ 39 3/4 $ 0.67 Third . . . 43 35 15/16 0.67 Second. . . 44 15/16 40 5/8 0.67 First . . . 45 5/8 43 7/8 0.67
ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected consolidated financial data with respect to WRI and should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," the Consolidated Financial Statements and accompanying Notes in "Item 8. Financial Statements and Supplementary Data" and the financial schedules included elsewhere in this Form 10-K.
(Amounts in thousands, except per share amounts) Years Ended December 31, 1999 1998 1997 1996 1995 ----------- ----------- ----------- --------- --------- Revenues (primarily real estate rentals). $ 230,469 $ 198,467 $ 174,512 $151,123 $134,197 ----------- ----------- ----------- --------- --------- Expenses: Depreciation and amortization . . . . 49,612 41,946 37,976 33,769 30,060 Interest. . . . . . . . . . . . . . . 33,186 33,654 30,009 21,975 16,707 Other . . . . . . . . . . . . . . . . 71,947 61,995 54,888 47,004 42,614 ----------- ----------- ----------- --------- --------- Total. . . . . . . . . . . . . . 154,745 137,595 122,873 102,748 89,381 ----------- ----------- ----------- --------- --------- Income before gain (loss) on sales of property and securities and extraordinary charge. . . . . . . . . . 75,724 60,872 51,639 48,375 44,816 Gain (loss) on sales of property and securities. . . . . . . . . . . . . . . 20,596 885 3,327 5,563 (14) ----------- ----------- ----------- --------- --------- Income before extraordinary charge. . . . 96,320 61,757 54,966 53,938 44,802 Extraordinary charge (early retirement of debt) . . . . . . . . . . . . . . . (190) (1,392) ----------- ----------- ----------- --------- --------- Net income . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966 $ 53,938 $ 44,802 =========== =========== =========== ========= ========= Net income available to common shareholders . . . . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 $ 53,938 $ 44,802 =========== =========== =========== ========= ========= Cash flows from operations . . . . . . . $ 118,476 $ 97,464 $ 89,902 $ 76,299 $ 72,498 =========== =========== =========== ========= ========= Per share data - basic: Income before extraordinary charge . $ 2.88 $ 2.09 $ 2.06 $ 2.03 $ 1.69 Net income . . . . . . . . . . . . . $ 2.87 $ 2.04 $ 2.06 $ 2.03 $ 1.69 Weighted average number of shares. . 26,690 26,667 26,638 26,555 26,464 Per share data - diluted: Income before extraordinary charge . $ 2.86 $ 2.08 $ 2.05 $ 2.03 $ 1.69 Net income . . . . . . . . . . . . . $ 2.85 $ 2.03 $ 2.05 $ 2.03 $ 1.69 Weighted average number of shares. . 26,890 26,869 26,771 26,598 26,493 Cash dividends per common share. . . . . $ 2.84 $ 2.68 $ 2.56 $ 2.48 $ 2.40 Property (at cost) . . . . . . . . . . . $1,514,139 $1,294,632 $1,118,758 $970,418 $849,894 Total assets . . . . . . . . . . . . . . $1,309,396 $1,107,043 $ 946,793 $831,097 $734,824 Debt . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 $ 507,366 $389,225 $289,339 Other data: Funds from operations (1) Net income available to common shareholders. . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 $ 53,938 $ 44,802 Depreciation and amortization. . . 49,256 41,580 37,544 33,414 29,813 (Gain) loss on sales of property and securities. . . . . . . . . . (20,596) (885) (3,327) (5,563) 14 Extraordinary charge (early retirement of debt) . . . . . . . . . . . . . . . 190 1,392 ----------- ----------- ----------- --------- --------- Total . . . . . . . . . . . . . $ 105,387 $ 96,571 $ 89,183 $ 81,789 $ 74,629 =========== =========== =========== ========= ========= (1) Funds from operations does not represent cash flows from operations as defined by generally accepted accounting principles and should not be considered as an alternative to net income as an indicator of WRI's operating performance or to cash flows as a measure of liquidity.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Weingarten Realty Investors owned or operated under long-term leases 187 shopping centers, 50 industrial properties, one multi-family residential project and one office building at December 31, 1999. Of our 239 developed properties, 179 are located in Texas (including 100 in Houston and Harris County). Our remaining properties are located in Louisiana (11), Arizona (11), Nevada (8), Arkansas (6), New Mexico (5), Oklahoma (4), Tennessee (4), Kansas (3), Colorado (3), Missouri (2), Illinois (1), Florida (1) and Maine (1). WRI has nearly 4,200 leases and 3,300 different tenants. Leases for our properties range from less than a year for smaller spaces to over 25 years for larger tenants; leases generally include minimum lease payments and contingent rentals for payment of taxes, insurance and maintenance and for an amount based on a percentage of the tenants' sales. The majority of our anchor tenants are supermarkets, drugstores, value-oriented apparel and discount stores and other retailers, which generally sell basic necessity-type items. CAPITAL RESOURCES AND LIQUIDITY WRI anticipates that cash flows from operating activities will continue to provide adequate capital for all dividend payments in accordance with REIT requirements. Cash on hand, internally-generated cash flow, borrowings under our existing credit facilities, issuance of unsecured debt and the use of project financing, as well as other debt and equity alternatives, will provide the necessary capital to achieve growth. Cash flow from operating activities as reported in the Statements of Consolidated Cash Flows increased to $118.5 million for 1999 from $97.5 million for 1998 and $89.9 million for 1997. Common and preferred dividends increased to $95.4 million in 1999, compared to $77.3 million in 1998 and $68.2 million in 1997. WRI satisfied its REIT requirement of distributing at least 95% of ordinary taxable income for each of the three years ended December 31, 1999, and, accordingly, federal income taxes were not required to be paid in these years. Our dividend payout ratio on common equity for 1999, 1998 and 1997 approximated 71.9%, 74.4% and 76.4%, respectively, based on funds from operations for the applicable year. WRI invested $150.5 million in acquisitions in 1999, adding 2.8 million square feet to its portfolio of properties. Regarding the retail portfolio, we purchased three anchored shopping centers in Texas, a supermarket-anchored retail center in Florida and a building adjacent to one of our shopping centers in Houston, Texas. We also purchased our joint venture partner's 77% interest in a shopping center in Santa Fe, New Mexico and executed a lease on a retail center in Ballwin, Missouri, a suburb of St. Louis. These transactions increased our retail portfolio by 1.4 million square feet of building area and represent an investment of $107.3 million. WRI currently owns a total of 50 industrial projects. During 1999, we purchased twelve properties, including seven facilities in the Dallas/Fort Worth metroplex and our first industrial project in Las Vegas, Nevada. We also acquired three buildings in Austin, Texas, and one facility in Houston, Texas. These projects added 1.4 million square feet to the industrial portfolio and represent an investment of $43.2 million. In December 1999, we sold seven industrial properties totaling 2.0 million square feet to a joint venture in which we retained 20% ownership, with the remainder owned by American National Insurance Company. Additionally, American National purchased 131 acres of undeveloped land in our Railwood Industrial Park. WRI retained the right to co-develop this land with American National. WRI owned 28.5 acres of this land and WRI Holdings, Inc., an affiliated entity, owned 102.6 acres. The proceeds of $8.1 million received by WRI Holdings were remitted to WRI in payment of mortgage bonds and notes. Including the payment received from WRI Holdings, these transactions provided WRI with $21 million of cash and a six-month $33 million note receivable from American National. We have retained the leasing and management of the properties and also contracted to lease and manage an additional 1.4 million square feet of Houston industrial properties owned by American National. With respect to new development, construction was completed on retail and industrial space totaling .2 million square feet. An additional .2 million square feet was added with the completion of a 260-unit luxury apartment complex within a multi-use master-planned project WRI developed in a suburb north of Houston. WRI currently has several other facilities under development, including seven retail centers, an industrial office/service center and three additional retail centers in joint ventures with our Denver-based development partner. The projects under construction or completed in 1999 represent an estimated investment by WRI of approximately $77 million and will add .9 million square feet to our portfolio. Additionally, WRI has an ongoing program for maintaining and renovating its existing portfolio of properties. Capitalized expenditures for acquisitions, new development and additions to the existing portfolio were, in millions, $224.3, $176.5 and $152.6 during 1999, 1998 and 1997, respectively. All of the acquisitions and new development during 1999 were either initially financed under WRI's revolving credit facility, funded with excess cash balances or funded with excess cash flow from our existing portfolio of properties. In January 1999, we issued $115 million of 7.0% Series C cumulative redeemable preferred shares with a liquidation preference of $50 per share and no stated maturity. We can elect to redeem these shares anytime after March 15, 2004. The Series C preferred shares are redeemable by the holder only upon their death and are also redeemable in either cash or common shares at WRI's option. There are limitations on the number of shares per shareholder and in the aggregate that may be redeemed per year. The proceeds of this offering were used to pay down all amounts outstanding under our revolving credit facilities and retire $82 million of variable-rate, unsecured medium term notes, resulting in an extraordinary loss of $.2 million. Any redemption of preferred shares initiated by WRI must be funded with proceeds from an offering of additional common or preferred shares. In July 1999, WRI issued $20 million of ten-year 7.35% fixed-rate, unsecured medium term notes. Including the effect of a loss of $1.2 million on the sale of Treasury locks, which were designated as a hedge against future issuance of fixed-rate notes, the effective interest rate is 8.0%. In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate, unsecured medium term notes. In connection with this debt issuance, we entered into a ten-year interest rate swap agreement with a notional amount of $10.5 million to swap 8.25% fixed-rate interest for floating-rate interest. WRI has a $200 million unsecured revolving credit facility which expires in November of 2000. WRI has an annual option to request a one-year extension of the commitment. Upon expiration, we have an option to convert amounts outstanding under the facility to a term loan payable over a two-year period. Additionally, WRI has an unsecured and uncommitted overnight credit facility totaling $20 million to be used for cash management purposes. WRI will maintain adequate funds available under the $200 million revolving credit facility at all times to cover the outstanding balance under the $20 million facility. WRI has three interest rate swap contracts with an aggregate notional amount of $40 million which fix interest rates on variable-rate debt at 8.1% and expire through 2004. Subsequent to year-end, WRI finalized an additional $100 million revolving credit agreement with a major bank. This one-year facility became effective on March 1, 2000 and is renewable at our option for an additional two-year period. We also filed a new $400 million shelf registration statement in August of this year, all of which was available at year-end. Total debt outstanding increased to $594.2 million at December 31, 1999 from $516.4 million at December 31, 1998, primarily to fund acquisitions and new development. WRI will continue to closely monitor both the debt and equity markets and carefully consider its available alternatives, including both public and private placements. FUNDS FROM OPERATIONS Industry analysts generally consider funds from operations to be an appropriate measure of the performance of an equity REIT since such measure does not recognize depreciation and amortization of real estate assets as operating expenses. Management believes that reductions for these charges are not meaningful in evaluating income-producing real estate, which historically has not depreciated. The National Association of Real Estate Investment Trusts defines funds from operations as net income plus depreciation and amortization of real estate assets, less gains and losses on sales of properties. Funds from operations does not represent cash flows from operations as defined by generally accepted accounting principles and should not be considered as an alternative to net income as an indicator of WRI's operating performance or to cash flows as a measure of liquidity. Funds from operations increased to $105.4 million in 1999, as compared to $96.6 million in 1998 and $89.2 million in 1997. These increases relate primarily to the impact of WRI's acquisitions, new developments and activity at its existing properties. For further information on changes between years, see "Results of Operations" below. RESULTS OF OPERATIONS Rental revenues increased 15.7%, or $30.6 million, from $194.6 million in 1998 to $225.2 million in 1999 and by 15.1%, or $25.6 million, from $169.0 million in 1997. Of these increases, property acquisitions and new development contributed $24.8 million in 1999 and $18.4 million in 1998. The remaining portion of these increases is due to activity at our existing properties. Occupancy of our shopping centers, industrial properties and total portfolio decreased to 91% at December 31, 1999 from 93% at the end of 1998. This is primarily the result of the loss of certain large tenants in the latter half of the year. Among the larger losses were Builders Square, which occupied a 105,000 square foot space in Corpus Christi, Texas, a 91,500 square foot Kmart in Houston, Texas, a 63,000 square foot Service Merchandise in Lake Charles, Louisiana and a 60,000 square foot Pay & Save in Lubbock, Texas. In 1999, we completed 894 renewals or new leases comprising 4.8 million square feet at an average rental rate increase of 9.5%. Net of the amortized portion of capital costs for tenant improvements, the increase averaged 5.9%. Occupancy of our total portfolio increased to 93% at December 31, 1998 from 92% at the end of 1997. In 1998, we completed 830 renewals or new leases comprising 3.4 million square feet at an average rental rate increase of 5.8%. Net of the amortized portion of capital costs for tenant improvements, the increase averaged 3.2%. Interest income totaled $3.1 million in 1999, $2.1 million in 1998 and $2.5 million in 1997. The increase in income in 1999 is due to the funding of loans to our joint venture partners. The decrease from 1997 to 1998 was due to the sale of $12.2 million of marketable debt securities during the first quarter of 1998. Equity in earnings of real estate joint ventures and partnerships totaled $.2 million in 1999, $.3 million in 1998 and $1.0 million in 1997. The decrease in 1999 and 1998 is due to the purchase at December 31, 1997 of our joint venture partner's 85% interest in four shopping centers and the purchase of our joint venture partner's 77% interest in a shopping center in July 1999. Direct costs and expenses of operating our properties (i.e., operating and ad valorem tax expenses) increased to $64.4 million in 1999 from $54.8 million in 1998 and $49.2 million in 1997. These increases are primarily due to property acquired and developed during these periods. Overall, direct operating costs and expenses as a percentage of rental revenues were 29% in 1999, 28% in 1998 and 29% in 1997. Depreciation and amortization have increased to $49.6 million in 1999 from $41.9 million in 1998 and $38.0 million in 1997, also as a result of the properties acquired and developed during these periods. General and administrative expense has increased to $7.5 million in 1999 from $7.1 million in 1998 and $5.6 million in 1997. The increase in 1998 results primarily from the adoption of a new Emerging Issues Task Force consensus decision which required that internal costs of identifying and acquiring operating property incurred subsequent to March 19, 1998 be expensed. WRI realized an increase in expense of $1.1 million in 1998 due to the adoption of this standard. The remainder of the increase in 1998 and the majority of the increase in 1999 are due to normal compensation increases as well as slight increases in staffing. Gross interest costs, before capitalization of interest to development projects, increased from $35.0 million in 1998 to $35.9 million in 1999. This increase in interest cost was due mainly to an increase in the average debt outstanding from $492.2 million for 1998 to $501.6 million for 1999. The weighted-average interest rate increased from 7.11% in 1998 to 7.15% in 1999. Interest expense, net of amounts capitalized, decreased $.5 million from 1998. The amount of interest capitalized increased to $2.7 million in 1999 from $1.4 million in 1998 due to an increase in the amount of development activity during the year. Comparing 1998 to 1997, gross interest costs increased from $30.8 million in 1997 to $35.0 million in 1998. This was due to an increase in the average debt outstanding from $422.9 million in 1997 to $492.2 million in 1998. The weighted-average interest rate decreased between the two periods from 7.27% in 1997 to 7.11% in 1998. Interest expense, net of amounts capitalized, increased $3.6 million from 1997. The amount of interest capitalized increased by $.6 million in 1998 due to an increase in the amount of development activity during the year. Included in interest expense during 1997 was $.7 million related to repurchase agreements collateralized by our investment in marketable debt securities which were sold during the first quarter of 1998. The gain on sale of $20.6 million in 1999 was due primarily to the sale of 28.5 acres of undeveloped land and an 80% interest in certain industrial properties to American National Insurance Company. EFFECTS OF INFLATION The rate of inflation was relatively unchanged in 1999. WRI has structured its leases, however, in such a way as to remain largely unaffected should significant inflation occur. Most of the leases contain percentage rent provisions whereby WRI receives rentals based on the tenants' gross sales. Many leases provide for increasing minimum rentals during the terms of the leases through escalation provisions. In addition, many of WRI's leases are for terms of less than ten years, which allows WRI to adjust rental rates to changing market conditions when the leases expire. Most of WRI's leases require the tenants to pay their proportionate share of operating expenses and ad valorem taxes. As a result of these lease provisions, increases due to inflation, as well as ad valorem tax rate increases, generally do not have a significant adverse effect upon WRI's operating results. NEW ACCOUNTING PRONOUNCEMENTS In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued. This statement requires that an entity recognize all derivatives as either assets or liabilities and measure the instruments at fair value. The accounting for changes in fair value of a derivative depends upon its intended use. WRI will adopt the provisions of this statement in the first quarter of fiscal year 2001. WRI is still evaluating the effects of adopting this statement, however, we do not expect the impact to be material to our operating results or our financial position. In December 1999, the SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" was issued. This bulletin requires that revenue based on a percentage of tenants' sales be recognized only after the tenant exceeds their sales breakpoint. Implementation of this bulletin is expected to reduce revenue by $.6 million in 2000. YEAR 2000 Based on a review of our mission critical and non-mission critical software and hardware, we concluded that our company's systems were Year 2000 compliant. No significant problems related to the Year 2000 were experienced or are expected in the future. Our major tenants, financial institutions and utility companies represented to us that they also were Year 2000 compliant. While we have not been affected by any Year 2000 issues experienced by these third parties, we have no guarantee that these third-party systems will continue to operate as represented. FORWARD-LOOKING STATEMENTS This Annual Report includes certain forward-looking statements reflecting WRI's expectations in the near term that involve a number of risks and uncertainties; however, many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions. Accordingly, there is no assurance that WRI's expectations will be realized. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK WRI uses fixed and floating-rate debt to finance its capital requirements. These transactions expose WRI to market risk related to changes in interest rates. Derivative financial instruments are used to manage a portion of this risk. We do not engage in the trading of derivative financial instruments in the normal course of business. During 1998, we entered into and settled three forward Treasury lock agreements with a total notional amount of $85 million as a hedge against potential changes in interest rates of prospective issuances of fixed-rate debt. Amounts paid or received upon settlement of these contracts are deferred and amortized as an adjustment to interest expense over the life of the fixed-rate debt. At December 31, 1999, WRI had fixed-rate debt of $499.9 million and variable-rate debt of $94.3 million, after adjusting for the effect of interest rate swaps. We also had variable-rate notes receivable totaling $44.8 million at year-end. In the event that interest rates were to increase 100 basis points, the fair value of fixed-rate debt would decrease by $21.8 million and net income, funds from operations and future cash flows would decrease $.5 million based upon the variable-rate debt and notes receivable outstanding at December 31, 1999. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying consolidated balance sheets of Weingarten Realty Investors (the "Company") as of December 31, 1999 and 1998, and the related statements of consolidated income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1999. Our audits also included the financial statement schedules listed in the Index at Item 14. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Weingarten Realty Investors at December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP Houston, Texas February 22, 2000
STATEMENTS OF CONSOLIDATED INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Years Ended December 31, ------------------------------- 1999 1998 1997 --------- --------- --------- Revenues: Rentals . . . . . . . . . . . . . . . . . . . . . $225,244 $194,624 $169,041 Interest: Affiliates. . . . . . . . . . . . . . . . . . . 2,403 1,578 1,434 Securities and Other. . . . . . . . . . . . . . 721 511 1,053 Equity in earnings of real estate joint ventures and partnerships. . . . . . . . . . . . . . . . 213 342 1,003 Other . . . . . . . . . . . . . . . . . . . . . . 1,888 1,412 1,981 --------- --------- --------- Total . . . . . . . . . . . . . . . . . . . 230,469 198,467 174,512 --------- --------- --------- Expenses: Depreciation and amortization . . . . . . . . . . 49,612 41,946 37,976 Operating . . . . . . . . . . . . . . . . . . . . 36,112 30,413 27,131 Interest. . . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009 Ad valorem taxes. . . . . . . . . . . . . . . . . 28,323 24,436 22,110 General and administrative. . . . . . . . . . . . 7,512 7,146 5,647 --------- --------- --------- Total . . . . . . . . . . . . . . . . . . . 154,745 137,595 122,873 --------- --------- --------- Income Before Gain on Sales of Property and Extraordinary Charge. . . . . . . . . . . . . 75,724 60,872 51,639 Gain on Sales of Property . . . . . . . . . . . . . 20,596 885 3,327 --------- --------- --------- Income Before Extraordinary Charge. . . . . . . . . 96,320 61,757 54,966 Extraordinary Charge (early retirement of debt) . . (190) (1,392) --------- --------- --------- Net Income. . . . . . . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966 ========= ========= ========= Net Income Available to Common Shareholders . . . . $ 76,537 $ 54,484 $ 54,966 ========= ========= ========= Net Income Per Common Share - Basic: Income Before Extraordinary Charge. . . . . . . $ 2.88 $ 2.09 $ 2.06 Extraordinary Charge. . . . . . . . . . . . . . (.01) (.05) --------- --------- --------- Net Income. . . . . . . . . . . . . . . . . . . $ 2.87 $ 2.04 $ 2.06 ========= ========= ========= Net Income Per Common Share - Diluted: Income Before Extraordinary Charge. . . . . . . $ 2.86 $ 2.08 $ 2.05 Extraordinary Charge. . . . . . . . . . . . . . (.01) (.05) --------- --------- --------- Net Income. . . . . . . . . . . . . . . . . . . $ 2.85 $ 2.03 $ 2.05 ========= ========= =========
See Notes to Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) December 31, ------------------------ 1999 1998 ----------- ----------- ASSETS Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,514,139 $1,294,632 Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . (328,645) (296,989) ----------- ----------- Property - net. . . . . . . . . . . . . . . . . . . . . . . . . . 1,185,494 997,643 Investment in Real Estate Joint Ventures and Partnerships . . . . . . 2,006 2,741 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,187,500 1,000,384 Mortgage Bonds and Notes Receivable from: Real Estate Joint Ventures and Partnerships . . . . . . . . . . . . 52,824 23,388 Affiliate (net of deferred gain of $3,050 in 1999 and $4,487 in 1998) 3,907 13,444 Marketable Debt Securities. . . . . . . . . . . . . . . . . . . . . . 14,951 Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . . . . . 29,986 25,612 Accrued Rent and Accounts Receivable (net of allowance for doubtful accounts of $908 in 1999 and $888 in 1998). . . . . . . . . . . . . 16,874 15,197 Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . 5,842 1,672 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,463 12,395 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . . . . . . $1,309,396 $1,107,043 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . 57,518 49,269 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,791 8,229 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663,494 573,864 ----------- ----------- Commitments and Contingencies Shareholders' Equity: Preferred Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 10,000 7.44% Series A cumulative redeemable preferred shares of beneficial interest; 3,000 shares issued and outstanding; liquidation preference $25 per share. . . . . . . . . . . . . 90 90 7.125% Series B cumulative redeemable preferred shares of beneficial interest; 3,600 shares issued and outstanding; liquidation preference $25 per share. . . . . . . . . . . . . 108 108 7.0% Series C cumulative redeemable preferred shares of beneficial interest; 2,300 shares issued and 2,297 shares outstanding; liquidation preference $50 per share. . . . . . 69 Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 150,000; shares issued and outstanding: 26,695 in 1999 and 26,673 in 1998 . . . . . . . . . . . . . . . . 801 800 Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 753,030 641,180 Accumulated Dividends in Excess of Net Income . . . . . . . . . . . (108,193) (108,926) Deferred Compensation Obligation. . . . . . . . . . . . . . . . . . (3) (73) ----------- ----------- Shareholders' Equity. . . . . . . . . . . . . . . . . . . . . . 645,902 533,179 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . . . . . . $1,309,396 $1,107,043 =========== ===========
See Notes to Consolidated Financial Statements.
STATEMENTS OF CONSOLIDATED CASH FLOWS (AMOUNTS IN THOUSANDS) Years Ended December 31, --------------------------------- 1999 1998 1997 ---------- ---------- ---------- Cash Flows from Operating Activities: Net income. . . . . . . . . . . . . . . . . . . . . . . $ 96,130 $ 60,365 $ 54,966 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . . 49,612 41,946 37,976 Equity in earnings of real estate joint ventures and partnerships . . . . . . . . . . . . . . . . . . . . (213) (342) (1,003) Gain on sales of property . . . . . . . . . . . . . . (20,596) (885) (3,327) Extraordinary charge (early retirement of debt) . . . 190 1,392 Changes in accrued rent and accounts receivable . . . (1,532) (621) (2,462) Changes in other assets . . . . . . . . . . . . . . . (12,616) (12,662) (6,105) Changes in accounts payable and accrued expenses. . . 6,924 7,614 9,113 Other, net. . . . . . . . . . . . . . . . . . . . . . 577 657 744 ---------- ---------- ---------- Net cash provided by operating activities . . . . 118,476 97,464 89,902 ---------- ---------- ---------- Cash Flows from Investing Activities: Investment in properties. . . . . . . . . . . . . . . . (198,741) (172,470) (136,632) Mortgage bonds and notes receivable: Advances. . . . . . . . . . . . . . . . . . . . . . . (8,187) (12,598) (1,501) Collections . . . . . . . . . . . . . . . . . . . . . 9,719 3,745 2,090 Proceeds from sales and disposition of property . . . . 15,010 1,109 11,741 Purchase of marketable debt securities. . . . . . . . . (14,951) Proceeds from sales of marketable debt securities . . . 15,000 12,229 Real estate joint ventures and partnerships: Investments . . . . . . . . . . . . . . . . . . . . . (1,643) (453) (59) Distributions . . . . . . . . . . . . . . . . . . . . 216 345 808 Other, net. . . . . . . . . . . . . . . . . . . . . . . (4) 241 2,517 ---------- ---------- ---------- Net cash used in investing activities . . . . . . (168,630) (182,803) (121,036) ---------- ---------- ---------- Cash Flows from Financing Activities: Proceeds from issuance of: Debt. . . . . . . . . . . . . . . . . . . . . . . . . 124,100 136,575 104,526 Common shares of beneficial interest. . . . . . . . . 546 301 1,325 Preferred shares of beneficial interest . . . . . . . 111,263 159,552 Principal payments of debt. . . . . . . . . . . . . . . (85,532) (134,443) (3,644) Common and preferred dividends paid . . . . . . . . . . (95,397) (77,347) (68,200) Other, net. . . . . . . . . . . . . . . . . . . . . . . (656) (381) (288) ---------- ---------- ---------- Net cash provided by financing activities . . . . 54,324 84,257 33,719 ---------- ---------- ---------- Net increase (decrease) in cash and cash equivalents. . . 4,170 (1,082) 2,585 Cash and cash equivalents at January 1. . . . . . . . . . 1,672 2,754 169 ---------- ---------- ---------- Cash and cash equivalents at December 31. . . . . . . . . $ 5,842 $ 1,672 $ 2,754 ========== ========== ==========
See Notes to Consolidated Financial Statements.
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY (AMOUNTS IN THOUSANDS) Years Ended December 31, 1999, 1998 and 1997 Preferred Common Accumulated Shares of Shares of Dividends in Deferred Beneficial Beneficial Capital Excess of Compensation Interest Interest Surplus Net Income Obligation ----------- ----------- --------- -------------- -------------- Balance, January 1, 1997 . . . . . . . . . . . . $ 797 $478,911 $ (78,710) Net income . . . . . . . . . . . . . . . . . . 54,966 Shares exchanged for property. . . . . . . . . 1 275 Shares issued under benefit plans. . . . . . . 2 1,733 Dividends declared - common shares . . . . . . (68,200) Other. . . . . . . . . . . . . . . . . . . . . 211 ----------- ----------- --------- -------------- -------------- Balance, December 31, 1997 . . . . . . . . . . . 800 481,130 (91,944) Net income . . . . . . . . . . . . . . . . . . 60,365 Issuance of Series A preferred shares. . . . .$ 90 72,422 Issuance of Series B preferred shares. . . . . 108 86,932 Shares issued under benefit plans. . . . . . . 696 Dividends declared - common shares . . . . . . (71,466) Dividends declared - preferred shares. . . . . (5,881) Adjustment for cumulative effect of adopting accounting for deferred compensation plan: Common shares held in plan . . . . . . . . $ (3,531) Deferred compensation obligation . . . . . 3,458 ----------- ----------- --------- -------------- -------------- Balance, December 31, 1998 . . . . . . . . . . . 198 800 641,180 (108,926) (73) Net income . . . . . . . . . . . . . . . . . . 96,130 Issuance of Series C preferred shares. . . . . 69 111,119 Shares issued under benefit plans. . . . . . . 1 883 Dividends declared - common shares . . . . . . (75,804) Dividends declared - preferred shares. . . . . (19,593) Redemption of Series C preferred shares. . . . (152) Deferred compensation obligation . . . . . . . 70 ----------- ----------- --------- -------------- -------------- Balance, December 31, 1999 . . . . . . . . . . .$ 267 $ 801 $753,030 $ (108,193) $ (3) =========== =========== ========= ============== ==============
See Notes to Consolidated Financial Statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Weingarten Realty Investors, a Texas real estate investment trust, is engaged in the acquisition, development and management of real estate, primarily anchored neighborhood and community shopping centers and, to a lesser extent, industrial properties. Over 74% of WRI's properties are located in Texas, with the remainder located primarily throughout the southwestern part of the United States. WRI's major tenants include supermarkets, drugstores and other retailers who generally sell basic necessity-type commodities. WRI currently operates and intends to operate in the future as a real estate investment trust. Basis of Presentation The consolidated financial statements include the accounts of WRI, its subsidiaries and its interest in joint ventures and partnerships over which WRI exercises control. All significant intercompany balances and transactions have been eliminated. Investments in less than 50%-owned joint ventures and partnerships where WRI does not exercise control are accounted for using the equity method. Revenue Recognition Rental revenue is generally recognized on a straight-line basis over the life of the lease. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Revenue based on a percentage of tenants' sales is estimated and accrued ratably over the year. Beginning January 1, 2000, such revenue will be recognized only after the tenant exceeds their sales breakpoint, in accordance with the SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." Implementation of this bulletin is expected to reduce revenue by $.6 million in 2000. Property Real estate assets are stated at cost less accumulated depreciation, which, in the opinion of management, is not in excess of the individual property's estimated undiscounted future cash flows, including estimated proceeds from disposition. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-50 years for buildings and 10-20 years for parking lot surfacing and equipment. Major replacements are capitalized and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred. Capitalization Carrying charges, principally interest and ad valorem taxes, on land under development and buildings under construction are capitalized as part of land under development and buildings and improvements. WRI had also capitalized the direct internal costs of identifying and acquiring operating property. In March 1998, the Emerging Issues Task Force of the Financial Accounting Standards Board reached a consensus decision on Issue No. 97-11, "Accounting for Internal Costs Relating to Real Estate Property Acquisitions." This consensus requires that internal costs of identifying and acquiring operating property incurred subsequent to March 19, 1998 be expensed. Such amounts capitalized totaled $.2 million and $1.1 million in 1998 and 1997, respectively. Deferred Charges Debt and lease costs are amortized primarily on a straight-line basis over the terms of the debt and over the lives of leases, respectively. Marketable Debt Securities WRI's investment in marketable securities is classified as "available for sale." The securities are carried at market with any unrealized gains or losses included as a component of shareholders' equity. Use of Estimates The preparation of financial statements requires management to make use of estimates and assumptions that affect amounts reported in the financial statements as well as certain disclosures. Actual results could differ from those estimates. Per Share Data Net income per common share - basic is computed using net income available to common shareholders and the weighted average shares outstanding. Net income per common share - diluted includes the effect of potentially dilutive securities for the periods indicated, as follows (in thousands):
1999 1998 1997 ------- ------- ------- Numerator: Net income available to common shareholders - basic. . . . . . $76,537 $54,484 $54,966 Income attributable to operating partnership units . . . . . . 141 37 ------- ------- ------- Net income available to common shareholders - diluted. . . . . $76,678 $54,521 $54,966 ======= ======= ======= Denominator: Weighted average shares outstanding - basic. . . . . . . . . . 26,690 26,667 26,638 Effect of dilutive securities: Share options and awards . . . . . . . . . . . . . . . . . 58 132 132 Operating partnership units. . . . . . . . . . . . . . . . 142 70 1 ------- ------- ------- Weighted average shares outstanding - diluted. . . . . . . . . 26,890 26,869 26,771 ======= ======= =======
Options to purchase 550,200, 13,200 and 800 common shares in 1999, 1998 and 1997, respectively, were not included in the calculation of net income per common share - diluted as the exercise prices were greater than the average market price for the year. Statements of Cash Flows WRI considers all highly liquid investments with original maturities of three months or less as cash equivalents. WRI issued .1 million common shares of beneficial interest in 1997 valued at $.2 million in connection with purchases of property. We assumed debt and/or capital lease obligations totaling $39.1 million, $6.7 million and $17.3 million in connection with purchases of property during 1999, 1998 and 1997, respectively. We issued limited partnership interests in exchange for property valued at $4.0 million and $1.7 million in 1998 and 1997, respectively. In connection with the sale of improved properties in 1999, we received notes receivable totaling $33.1 million. Comprehensive Income WRI adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" in 1998. Net income differs from comprehensive income by less than $50,000 in each year presented. Reclassifications Certain reclassifications of prior years' amounts have been made to conform with the current year presentation, including the classification of "accumulated dividends in excess of net income" as a separate caption on the Consolidated Balance Sheets. NOTE 2. DEBT WRI's debt consists of the following (in thousands):
DECEMBER 31, --------------------- 1999 1998 ---------- --------- Fixed-rate debt payable to 2015 at 6.0% to 10.5% . . . . . . . $ 423,906 $ 404,061 Variable-rate unsecured notes payable. . . . . . . . . . . . . 82,000 Unsecured notes payable under revolving credit agreements. . . 114,000 10,250 Obligations under capital leases . . . . . . . . . . . . . . . 48,467 12,467 Industrial revenue bonds payable to 2015 at 5.6% to 6.4% . . . 6,141 6,262 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,671 1,326 --------- --------- Total. . . . . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 ========= =========
WRI has an unsecured $200 million revolving credit agreement with a syndicate of banks. The agreement expires in November 2000, but WRI has an annual option to request a one-year extension of the agreement. All members of the bank syndicate must agree to the requested extension or the agreement expires on the scheduled date, at which time WRI has the option to convert all amounts outstanding under the credit agreement to a term loan payable over a two-year period. We also have an agreement for an unsecured and uncommitted overnight credit facility totaling $20 million with a bank to be used for cash management purposes. We will maintain adequate funds available under our revolving credit facilities at all times to cover the outstanding balance under the $20 million facility. WRI also has letters of credit totaling $16.0 million outstanding under the $200 million revolving credit facility at December 31, 1999. The revolving credit agreements are subject to normal banking terms and conditions and do not adversely restrict our operations or liquidity. Subsequent to year-end, we finalized an additional $100 million revolving credit agreement with a bank which became effective March 1, 2000. This one-year facility is renewable at our option for an additional two-year period. At December 31, 1999, the variable interest rate for notes payable under the $20 million revolving credit agreement was 5.3%. During 1999, the maximum balance and weighted average balance outstanding under both credit facilities were $114.0 million and $53.2 million, respectively, at an average interest rate of 6.0%. WRI made cash payments for interest on debt, net of amounts capitalized, of $32.3 million in 1999, $32.6 million in 1998 and $27.4 million in 1997. Various leases and properties and current and future rentals from those leases and properties collateralize certain debt. At December 31, 1999 and 1998, the carrying value of such property aggregated $174 million and $177 million, respectively. WRI has three interest rate swap contracts with an aggregate notional amount of $40 million. Such contracts, which expire through 2004, have been outstanding since their purchase in 1992. We intend to hold such contracts through their expiration date and to use them as a means of managing interest rate risk by fixing the interest rate on a portion of our variable-rate debt. The interest rate swaps have an effective interest rate of 8.1%. The difference between the interest received and paid on the interest rate swaps is recognized as interest expense as incurred. The interest rate swaps increased interest expense and decreased net income by $1.0 million in 1999 and $.9 million in both 1998 and 1997. The interest rate swaps increased the average interest rate for our debt by .2% for 1999, 1998 and 1997. WRI could be exposed to credit losses in the event of non-performance by the counterparty; however, the likelihood of such non-performance is remote. In February 1999, WRI retired $82 million of variable-rate, unsecured medium term notes resulting in an extra-ordinary charge to earnings of $.2 million. In July 1999, we issued $20 million of ten-year 7.35% fixed-rate, unsecured medium term notes. Including the effect of a loss of $1.2 million on the sale of Treasury locks which were designated as a hedge against future issuance of fixed-rate notes, the effective interest rate is 8.0%. WRI's debt can be summarized as follows (in thousands):
DECEMBER 31, -------------------- 1999 1998 --------- --------- As to interest rate (including the effects of interest rate swaps): Fixed-rate debt . . . . . . . . . . . . . . . . . $ 499,919 $ 444,060 Variable-rate debt. . . . . . . . . . . . . . . . 94,266 72,306 --------- --------- Total . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 ========= =========
As to collateralization: Unsecured debt. . . . . . . . . . . . . . . . . . $ 482,671 $ 440,433 Secured debt. . . . . . . . . . . . . . . . . . . 111,514 75,933 --------- --------- Total . . . . . . . . . . . . . . . . . . . . $ 594,185 $ 516,366 ========= =========
Scheduled principal payments on our debt (excluding $114.0 million potentially due under our revolving credit agreements and $36 million of capital leases) are due during the following years (in thousands):
2000. . . . . . . . . $ 32,480 2001. . . . . . . . . 30,152 2002. . . . . . . . . 33,636 2003. . . . . . . . . 27,709 2004. . . . . . . . . 51,921 2005 through 2009 . . 237,769 2010 through 2014 . . 29,345 Thereafter. . . . . . 936
In the event our $200 million revolving credit agreement expires in November 2000 and we elect to convert amounts outstanding under the revolver at that time to a term loan, such amounts would be payable as follows; 50% in 2001 and 50% in 2002. Various debt agreements contain restrictive covenants, the most restrictive of which requires WRI to produce annual consolidated distributable cash flow, as defined by the agreements, of not less than 250% of interest payments, to limit total debt to no more than 60% of total assets (as defined) and to maintain uncollateralized assets equal to at least 150% of unsecured debt. Management believes that WRI is in compliance with all restrictive covenants. In the third quarter of 1999, WRI filed a $400 million shelf registration statement with the SEC which allows for the issuance of debt or equity securities or warrants. The shelf registration was totally available at December 31, 1999. In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate, unsecured medium term notes. In connection with this debt issuance, we entered into a ten-year interest rate swap agreement with a notional amount of $10.5 million to swap 8.25% fixed-rate interest for floating-rate interest. NOTE 3. PREFERRED SHARES In February 1998, WRI issued $75 million of 7.44% Series A cumulative redeemable preferred shares with a liquidation preference of $25 per share. The shares are callable at WRI's option any time after March 31, 2003 and have no stated maturity. In October 1998, WRI issued $90 million of 7.125% Series B cumulative redeemable preferred shares with a liquidation preference of $25 per share and no stated maturity. WRI can elect to redeem the shares anytime after October 20, 2003. The Series B shares are redeemable by the holder only upon their death and are also redeemable in either cash or common shares at our option. There are limitations on the number of shares per shareholder and in the aggregate that may be redeemed per year. In January 1999, WRI issued $115 million of 7.0% Series C cumulative redeemable preferred shares with a liquidation preference of $50 per share and no stated maturity. WRI can elect to redeem these shares anytime after March 15, 2004. The redemption rights of the shareholders and the related restrictions are effectively the same as for the Series B preferred shares. The proceeds of these offerings were used to pay down amounts outstanding under WRI's revolving credit facilities, to fund acquisition and new development activity, to retire $35 million of 9.11% secured notes payable and to retire $82 million of variable-rate, medium term notes due in 2000. Any redemption of preferred shares initiated by WRI must be funded with proceeds from an offering of additional common or preferred shares. NOTE 4. PROPERTY WRI's property consists of the following (in thousands):
DECEMBER 31, ---------------------- 1999 1998 ---------- ---------- Land . . . . . . . . . . . . . . $ 279,871 $ 236,221 Land held for development. . . . 24,509 30,156 Land under development . . . . . 12,139 13,024 Buildings and improvements . . . 1,189,687 1,009,166 Construction in-progress . . . . 7,933 6,065 ---------- ---------- Total. . . . . . . . . . . $1,514,139 $1,294,632 ========== ==========
The following carrying charges were capitalized (in thousands):
DECEMBER 31, ---------------------- 1999 1998 1997 ------ ------ ------ Interest . . . . . . . . . . . . $2,722 $1,375 $ 812 Ad valorem taxes . . . . . . . . 333 50 33 ------ ------ ------ Total. . . . . . . . . . . $3,055 $1,425 $ 845 ====== ====== ======
During 1999, WRI purchased five shopping centers and twelve industrial facilities. Additionally, we purchased a building adjacent to a WRI-owned shopping center and purchased our joint venture partner's 77% interest in a shopping center. These transactions added 2.8 million square feet to our portfolio and represent an investment of $150.5 million. We also completed new development totaling $35.4 million, which added .4 million square feet to the portfolio. In December 1999, WRI sold 28.5 acres of undeveloped land and an 80% interest in 2.0 million square feet of industrial properties for $46.4 million, resulting in a gain of $20.6 million. NOTE 5. MARKETABLE DEBT SECURITIES WRI's investment in marketable debt securities at December 31, 1998 consisted of short-term commercial paper that matured January 4, 1999. The proceeds were used to pay down amounts outstanding under our $20 million credit facility. NOTE 6. RELATED PARTY TRANSACTIONS WRI has mortgage bonds and notes receivable from WRI Holdings, Inc. of $3.9 million and $13.4 million, net of deferred gain of $3.0 million and $4.5 million at December 31, 1999 and 1998, respectively. WRI and WRI Holdings share certain directors and are under common management. Unimproved land and an investment in a joint venture which owns and manages a motor hotel collateralize these receivables. The bonds and notes bear interest at rates of 16% and prime plus 1%, respectively. However, due to WRI Holdings' poor financial condition, WRI has limited the recognition of interest income for financial statement purposes to the amount of cash payments received. WRI did not receive any interest payments in 1999 and does not anticipate receiving such payments in the near term. Interest income recognized for financial reporting purposes was $.1 million in 1997. In the second quarter of 1998, WRI purchased 13.7 acres of undeveloped land from WRI Holdings to be used for the development of a luxury apartment complex in Conroe, Texas. The purchase price was $2.2 million and was based upon an independent third party appraisal. WRI Holdings used the proceeds to pay down amounts outstanding under mortgage bonds and notes payable to WRI. In December 1999, undeveloped land from WRI Holdings of 102.6 acres was sold and the net proceeds of $8.1 million were used to pay down amounts outstanding under mortgage bonds and notes payable to WRI. Management of WRI believes that the fair market value of the security collateralizing debt from WRI Holdings approximates the net investment in such debt and that there would not be a charge to operations if WRI were to foreclose on the debt. If foreclosure were required, the net investment in such debt would become WRI's basis of the repossessed assets. WRI's management believes that the net investment in the mortgage bonds and notes receivable from WRI Holdings is not impaired. WRI's unrecorded receivable for interest on the mortgage bonds and notes receivable was $20.9 million and $31.1 million at December 31, 1999 and 1998, respectively. Interest income not recognized by WRI for financial reporting purposes aggregated, in millions, $4.2, $4.8 and $4.0 for 1999, 1998 and 1997, respectively. WRI does not anticipate recovery of the unrecorded receivable in the future. WRI owns interests in several joint ventures and partnerships. Notes receivable from these entities bear interest at 8% to 10.5% at December 31, 1999, are due at various dates through 2028 and are generally secured by real estate assets. WRI recognized interest income on these notes as follows, in millions: $2.3 in 1999; $1.5 in 1998 and $1.4 in 1997. Chase Bank of Texas, National Association is a significant participant in and the agent for the banks that provide WRI's $200 million revolving credit agreement and is a counterparty in three interest rate swap agreements with WRI. An executive officer of Chase serves on the WRI Board of Trustees. NOTE 7. FEDERAL INCOME TAX CONSIDERATIONS Federal income taxes are not provided because WRI believes it qualifies as a REIT under the provisions of the Internal Revenue Code. Shareholders of WRI include their proportionate taxable income in their individual tax returns. As a REIT, we must distribute at least 95% of our ordinary taxable income to our shareholders and meet certain income source and investment restriction requirements. Taxable income differs from net income for financial reporting purposes principally because of differences in the timing of recognition of interest, ad valorem taxes, depreciation, rental revenue, pension expense and installment gains on sales of property. As a result of these differences, the book value of our net assets exceeds the tax basis by $23.3 million at December 31, 1999. For federal income tax purposes, the cash dividends distributed to common shareholders are characterized as follows:
1999 1998 1997 ------ ------ ------ Ordinary income . . . . . . . . . . . . . . . 84.2% 97.0% 95.9% Return of capital (generally non-taxable) . . 4.0 2.1 2.9 Capital gain distributions. . . . . . . . . . 11.8 .9 1.2 ------ ------ ------ Total . . . . . . . . . . . . . . 100.0% 100.0% 100.0% ====== ====== ======
NOTE 8. LEASING OPERATIONS WRI's lease terms range from less than one year for smaller tenant spaces to over twenty-five years for larger tenant spaces. In addition to minimum lease payments, most of the leases provide for contingent rentals (payments for taxes, maintenance and insurance by lessees and for an amount based on a percentage of the tenants' sales). Future minimum rental income from non-cancelable tenant leases at December 31, 1999, in millions, is: $172.4 in 2000; $151.5 in 2001; $127.6 in 2002; $107.9 in 2003; $90.5 in 2004 and $627.5 thereafter. The future minimum rental amounts do not include estimates for contingent rentals. Such contingent rentals, in millions, aggregated $44.4 in 1999, $40.9 in 1998, and $36.8 in 1997. NOTE 9. COMMITMENTS AND CONTINGENCIES WRI leases land and one shopping center from the owners and then subleases these properties to other parties. Future minimum rental payments under these operating leases, in millions, are: $1.8 in 2000; $1.7 in 2001; $1.7 in 2002; $1.6 in 2003; $1.4 in 2004 and $11.7 thereafter. Future minimum rental payments on these leases have not been reduced by future minimum sublease rentals aggregating $22.1 million through 2036 that are due under various non-cancelable subleases. Rental expense (including insignificant amounts for contingent rentals) for operating leases aggregated, in millions: $4.9 in 1999, $2.6 in 1998 and $2.0 in 1997. Sublease rental revenue (excluding amounts for improvements constructed by WRI on the leased land) from these leased properties was as follows, in millions: $2.9 in 1999 and 1998 and $2.4 in 1997. Property under capital leases, consisting of five shopping centers, aggregated $41.1 and $12.3 million, respectively, at December 31, 1999 and 1998 and is included in buildings and improvements. Amortization of property under capital leases is included in depreciation and amortization expense. Future minimum lease payments under these capital leases total $89.6 million, with annual payments due, in millions, of $3.2 in each of 2000 through 2002; $18.3 in 2003; $1.9 in 2004; and $59.8 thereafter. The amount of these total payments representing interest is $41.1 million. Accordingly, the present value of the net minimum lease payments is $48.5 million at December 31, 1999. In 1998 and 1997, WRI formed limited partnerships to acquire certain property. WRI controls the partnerships and consolidates their operations in the accompanying consolidated financial statements. The partnership agreements allow for the outside limited partners to put their interests to the partnership after the second anniversary of the agreement for the original consideration of $4.0 million and $1.7 million in 1998 and 1997, respectively, payable in cash or WRI common shares at the option of WRI. Subsequent to year-end, one limited partner put its interest in a partnership to WRI. We expect to issue common shares or remit cash to the limited partner in early 2000. WRI is involved in various matters of litigation arising in the normal course of business. While WRI is unable to predict with certainty the amounts involved, WRI's management and counsel are of the opinion that, when such litigation is resolved, WRI's resulting liability, if any, will not have a material effect on WRI's consolidated financial statements. NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of WRI's financial instruments was determined using available market information and appropriate valuation methodologies as of December 31, 1999. Unless otherwise described below, all other financial instruments are carried at amounts which approximate their fair values. Based on rates currently available to WRI for debt with similar terms and average maturities, fixed-rate debt with carrying values of $499.9 million and $444.1 million have fair values of approximately $485.6 million and $443.9 million at December 31, 1999 and 1998, respectively. The fair value of WRI's variable-rate debt approximates its carrying values of $94.3 million and $72.3 million at year-end 1999 and 1998, respectively. The fair value of the interest rate swap agreements is based on the estimated amounts WRI would receive or pay to terminate the contracts. If WRI had terminated these agreements at December 31, 1999 and 1998, WRI would have paid $1.1 million and $3.8 million at each year-end, respectively. The fair value of the mortgage bonds and notes receivable from WRI Holdings was not determined because it is not practicable to reasonably assess the credit adjustment that would be applied in the marketplace for such bonds and notes receivable. NOTE 11. SHARE OPTIONS AND AWARDS WRI had an incentive share option plan which provided for the issuance of options and share awards up to a maximum of 700,000 common shares that expired in December 1997. Options granted under this plan become exercisable in equal increments over a three-year period. WRI has an additional share option plan which grants 100 share options to every employee of WRI, excluding officers, upon completion of each five-year interval of service. This plan, which expires in 2002, provides options for a maximum of 100,000 common shares. Options granted under this plan are exercisable immediately. For both of these share option plans, options are granted to employees of WRI at an exercise price equal to the quoted fair market value of the common shares on the date the options are granted and expire upon termination of employment or ten years from the date of grant. In 1999, WRI granted 16,000 share options under a compensatory incentive share plan. This plan, which expires in 2002, provides for the issuance of up to 1,750,000 shares, either in the form of restricted shares or share options. The restricted shares generally vest over a ten-year period, with potential acceleration of vesting due to appreciation in the market value of our common shares. The share options generally vest over a three-year period beginning one year after the date of grant. Share options were granted at the quoted fair market value on the date of grant. Restricted shares are issued at no cost to the employee, and as such we recognized compensation expense relating to restricted shares as follows, in millions: $.3 in 1999, 1998 and 1997. WRI does not recognize compensation cost for share options when the option exercise price equals or exceeds the quoted fair market value on the date of the grant. Had we determined compensation cost for our share option and award plans based on the fair value of the options granted at the grant dates, our proforma net income available to common shareholders would have been as follows, in millions: $75.9, $53.8 and $54.3 in 1999, 1998 and 1997, respectively. Proforma net income per common share - basic would have been $2.84, $2.02 and $2.04 in 1999, 1998 and 1997, respectively. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing method with the following weighted-average assumptions in 1999, 1998 and 1997, respectively: dividend yield of 7.3%, 6.5% and 6.0%; expected volatility of 18.1%, 18.1% and 18.0%; expected lives of 6.9, 6.9 and 6.9 and risk-free interest rates of 6.6%, 4.8% and 6.5%. Following is a summary of the option activity for the three years ended December 31, 1999:
SHARES WEIGHTED UNDER AVERAGE OPTION EXERCISE PRICE ----------- -------------- Outstanding, January 1, 1997 . . . . . . . 687,735 $ 35.40 Granted. . . . . . . . . . . . . . . . . . 558,600 40.25 Canceled . . . . . . . . . . . . . . . . . (9,400) 37.60 Exercised. . . . . . . . . . . . . . . . . (61,910) 32.00 ----------- Outstanding, December 31, 1997 . . . . . . 1,175,025 37.85 Granted. . . . . . . . . . . . . . . . . . 14,900 42.99 Canceled . . . . . . . . . . . . . . . . . (7,802) 40.14 Exercised. . . . . . . . . . . . . . . . . (29,344) 34.01 ----------- Outstanding, December 31, 1998 . . . . . . 1,152,779 37.99 Granted. . . . . . . . . . . . . . . . . . 17,900 41.29 Canceled . . . . . . . . . . . . . . . . . (14,800) 40.23 Exercised. . . . . . . . . . . . . . . . . (39,089) 32.95 ----------- Outstanding, December 31, 1999 . . . . . . 1,116,790 $ 38.19 ===========
The number of share options exercisable at December 31, 1999, 1998 and 1997 was 728,000, 432,000 and 296,000, respectively. Options exercisable at year-end 1999 had a weighted average exercise price of $37.74. The weighted average fair value of share options granted during 1999, 1998 and 1997 was $4.25, $4.05 and $5.35, respectively. Share options outstanding at December 31, 1999 had exercise prices ranging from $25.00 to $45.81 and a weighted average remaining contractual life of 5.7 years. Approximately 89% of the options outstanding at year-end 1999 have exercise prices between $37.00 and $40.25 and a weighted average contractual life of 6.0 years. There were 1,011,000 common shares available for the future grant of options or awards at December 31, 1999. NOTE 12. EMPLOYEE BENEFIT PLANS WRI has a Savings and Investment Plan to which eligible employees may elect to contribute from 1% to 12% of their salaries. Employee contributions are matched by WRI at the rate of $.50 per $1.00 for the first 6% of the employee's salary. The employees vest in the employer contributions ratably over a six-year period. Compensation expense related to the plan was $.3 million in 1999 and 1998 and $.2 million in 1997. Effective April 1, 1999, WRI adopted an Employee Share Purchase Plan under which 250,000 WRI common shares have been authorized. These shares, as well as common shares purchased by WRI on the open market, are made available for sale to employees at a discount of 15%. Shares purchased by the employee under the plan are restricted from being sold for two years from the date of purchase or until termination of employment with WRI. During 1999, a total of 8,028 shares were purchased by employees at an average price of $33.01. WRI has a defined benefit pension plan covering substantially all of its employees. The benefits are based on years of service and the employee's compensation during the last five years of service. Our funding policy is to make annual contributions as required by applicable regulations, however, we have not been required to make contributions for any of the past three years. Reconciliations of the benefit obligation, plan assets at fair value and the funded status of the plan are as follows (in thousands):
1999 1998 -------- -------- Benefit obligation at beginning of year . . . . . . . $10,485 $ 9,318 Service cost. . . . . . . . . . . . . . . . . . . . . 533 457 Interest cost . . . . . . . . . . . . . . . . . . . . 729 663 Actuarial (gain) loss . . . . . . . . . . . . . . . . (841) 245 Benefit payments. . . . . . . . . . . . . . . . . . . (203) (198) -------- -------- Benefit obligation at end of year . . . . . . . . . . $10,703 $10,485 ======== ======== Fair value of plan assets at beginning of year. . . . $10,676 $10,348 Actual return on plan assets. . . . . . . . . . . . . 1,584 526 Benefit payments. . . . . . . . . . . . . . . . . . . (203) (198) -------- -------- Fair value of plan assets at end of year. . . . . . . $12,057 $10,676 ======== ======== Plan assets at fair value less benefit obligation . . $ 1,354 $ 191 Unrecognized prior service cost . . . . . . . . . . . 8 Unrecognized gain . . . . . . . . . . . . . . . . . . (3,096) (1,681) -------- -------- Pension liability . . . . . . . . . . . . . . . . . . $(1,742) $(1,482) ======== ========
The components of net periodic pension cost are as follows (in thousands):
1999 1998 1997 ------ ------ ------ Service cost . . . . . . . . . . . . . . . . . . . $ 533 $ 457 $ 430 Interest cost. . . . . . . . . . . . . . . . . . . 729 663 587 Expected return on plan assets . . . . . . . . . . (950) (923) (703) Amortization of transition asset . . . . . . . . . (54) Prior service cost . . . . . . . . . . . . . . . . 8 47 47 Recognized gains . . . . . . . . . . . . . . . . . (59) (124) (44) ------ ------ ------ Total. . . . . . . . . . . . . . . . . . $ 261 $ 120 $ 263 ====== ====== ======
Assumptions used to develop periodic expense and the actuarial present value of the benefit obligations were:
1999 1998 1997 ------ ------ ------ Weighted average discount rate . . . . . . . . . . 7.5% 6.7% 7.0% Expected long-term rate of return on plan assets . 9.0% 9.0% 9.0% Rate of increase in compensation levels. . . . . . 5.0% 5.0% 5.0%
WRI also has a non-qualified supplemental retirement plan for officers of WRI which provides for benefits in excess of the statutory limits of its defined benefit pension plan. The obligation is funded in a grantor trust with our common shares. We recognized expense as follows, in millions: $.3 in 1999, 1998 and 1997. NOTE 13. SEGMENT INFORMATION The operating segments presented are the segments of WRI for which separate financial information is available and operating performance is evaluated regularly by senior management in deciding how to allocate resources and in assessing performance. WRI evaluates the performance of its operating segments based on net operating income that is defined as total revenues less operating expenses and ad valorem taxes. Management does not consider the effect of gains or losses from the sale of property in evaluating ongoing operating performance. The shopping center segment is engaged in the acquisition, development and management of real estate, primarily anchored neighborhood and community shopping centers located in Texas, Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and Maine. The customer base includes supermarkets, drugstores and other retailers who generally sell basic necessity-type commodities. The industrial segment is engaged in the acquisition, development and management of bulk warehouses and office/service centers. Its properties are located in Texas, Nevada and Tennessee, and the customer base is diverse. Included in "Other" are corporate-related items, insignificant operations and costs that are not allocated to the reportable segments. Information concerning WRI's reportable segments is as follows (in thousands):
SHOPPING CENTER INDUSTRIAL OTHER TOTAL --------- ----------- -------- ------------ 1999: Revenues . . . . . . . . . $ 197,084 $ 28,331 $ 5,054 $ 230,469 Net operating income . . . 140,191 20,127 5,716 166,034 Total assets . . . . . . . 1,025,090 173,502 110,804 1,309,396 Capital expenditures . . . 189,445 56,461 12,777 258,683 1998: Revenues . . . . . . . . . $ 176,269 $ 18,574 $ 3,624 $ 198,467 Net operating income . . . 125,949 13,342 4,327 143,618 Total assets . . . . . . . 898,805 133,379 74,859 1,107,043 Capital expenditures . . . 118,746 54,790 6,051 179,587 1997: Revenues . . . . . . . . . $ 154,979 $ 14,912 $ 4,621 $ 174,512 Net operating income . . . 109,776 10,855 4,640 125,271 Total assets . . . . . . . 816,852 88,091 41,850 946,793 Capital expenditures . . . 138,365 16,908 2,985 158,258
Net operating income reconciles to income before extraordinary charge as shown on the Statements of Consolidated Income as follows (in thousands):
------------------------------- 1999 1998 1997 --------- --------- --------- Total segment net operating income . . $166,034 $143,618 $125,271 Less: Depreciation and amortization. . . 49,612 41,946 37,976 Interest . . . . . . . . . . . . . 33,186 33,654 30,009 General and administrative . . . . 7,512 7,146 5,647 Gain on sales of property. . . . . (20,596) (885) (3,327) --------- --------- --------- Income before extraordinary charge . . $ 96,320 $ 61,757 $ 54,966 ========= ========= =========
Equity in earnings of real estate joint ventures and partnerships as shown on the Statements of Consolidated Income and the corresponding investment balances are included in net operating income of the shopping center segment. NOTE 14. PRO FORMA FINANCIAL INFORMATION (UNAUDITED) During the year ended December 31, 1999, WRI acquired five retail centers, a building adjacent to a WRI-owned shopping center, a joint venture partner's 77% interest in a retail center and twelve industrial projects for a total of $150.5 million. The pro forma financial information for the years ended December 31, 1999 and 1998 is based on the historical statements of WRI after giving effect to the acquisitions as if such acquisitions took place on January 1, 1999 and 1998, respectively. The pro forma financial information shown below is presented for informational purposes only and may not be indicative of results that would have actually occurred if the acquisitions had been in effect at the dates indicated, nor does it purport to be indicative of the results that may be achieved in the future (in thousands, except per share amounts).
DECEMBER 31, ------------------ 1999 1998 -------- -------- Pro forma revenues . . . . . . . . . . . . . . . . . . . . . . $241,091 $219,827 ======== ======== Pro forma net income available to common shareholders. . . . . $ 78,544 $ 57,977 ======== ======== Pro forma net income per common share - basic. . . . . . . . . $ 2.94 $ 2.17 ======== ======== Pro forma net income per common share - diluted. . . . . . . . $ 2.93 $ 2.16 ======== ========
NOTE 15. QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly financial data is as follows (in thousands, except per share amounts):
FIRST SECOND THIRD FOURTH ------- ------- ------- ------- 1999: Revenues . . . . . . . . . . . . . . . . . . . . . $54,764 $56,312 $58,387 $61,006 Net income available to common shareholders. . . . 13,524 14,174 14,562 34,277 (1) Net income per common share - basic. . . . . . . . 0.51 0.53 0.55 1.28 (1) Net income per common share - diluted. . . . . . . 0.50 0.53 0.54 1.28 (1) 1998: Revenues . . . . . . . . . . . . . . . . . . . . . $46,962 $48,808 $49,955 $52,742 Net income available to common shareholders. . . . 12,329 13,682 14,304 14,169 Net income per common share - basic. . . . . . . . 0.46 0.51 0.54 0.53 Net income per common share - diluted. . . . . . . 0.46 0.51 0.53 0.53 (1) Increase is primarily the result of a gain on the sale of property during the quarter.
NOTE 16. PRICE RANGE OF COMMON SHARES (UNAUDITED) The high and low sale prices per share of WRI's common shares, as reported on the New York Stock Exchange composite tape, and dividends per common share paid for the fiscal quarters indicated were as follows:
HIGH LOW DIVIDENDS --------- --------- --------- 1999: Fourth. . . $ 39 3/8 $ 37 $ 0.71 Third . . . 42 7/16 37 1/4 0.71 Second. . . 43 7/16 38 1/4 0.71 First . . . 45 5/8 38 3/8 0.71 1998: Fourth. . . $ 46 7/8 $ 39 3/4 $ 0.67 Third . . . 43 35 15/16 0.67 Second. . . 44 15/16 40 5/8 0.67 First . . . 45 5/8 43 7/8 0.67
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. TRUST MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Information with respect to WRI's Trust Managers is incorporated herein by reference to the "Election of Trust Managers" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2000. ITEM 11. EXECUTIVE COMPENSATION Incorporated herein by reference to the "Executive Compensation" and "Pension Plan" sections of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2000. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated herein by reference to the "Election of Trust Managers" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2000. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated herein by reference to the "Compensation Committee Interlocks and Insider Participation" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 2000. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Financial Statements and Financial Statement Schedules: PAGE ---- (1) (A) Independent Auditors' Report . . . . . . . . . . . . . . 21 (B) Financial Statements (i) Statements of Consolidated Income for the years ended December 31, 1999, 1998 and 1997. . . . . . 22 (ii) Consolidated Balance Sheets as of December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . 23 (iii) Statements of Consolidated Cash Flows for the years ended December 31, 1999, 1998 and 1997. . . 24 (iv) Statements of Consolidated Shareholders' Equity for the years ended December 31, 1999, 1998 and 1997.. . . . . . . . . . . . . . . . . 25 (v) Notes to Consolidated Financial Statements. . . . . 26 (2) Financial Statement Schedules: SCHEDULE PAGE -------- ---- II Valuation and Qualifying Accounts . . . . . . . . . . 45 III Real Estate and Accumulated Depreciation. . . . . . 46 IV Mortgage Loans on Real Estate . . . . . . . . . . . 48 All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and notes hereto. (b) No reports on Form 8-K were filed during the last quarter of the period covered by this annual report. (c) Exhibits:
3.1 - Restated Declaration of Trust (filed as Exhibit 3.1 to WRI's Registration Statement on Form S-3 (No. 33-49206) and incorporated herein by reference). 3.2 - Amendment of the Restated Declaration of Trust (filed as Exhibit 3.2 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.3 - Second Amendment of the Restated Declaration of Trust (filed as Exhibit 3.3 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.4 - Third Amendment of the Restated Declaration of Trust (filed as Exhibit 3.4 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.5 - Amended and Restated Bylaws of WRI (filed as Exhibit 3.2 to WRI's Registration Statement on Form S-3 (No. 33-49206) and incorporated herein by reference). 4.1 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28, 1984, payable to WRI in the original principal amount of $16,682,000 (filed as Exhibit 10.10 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.2 - 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. dated December 28, 1984, payable to WRI in the original principal amount of $3,150,000 (filed as Exhibit 10.8 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.2.1* - Sixth Bonds Renewal and Extension Agreement, effective December 28, 2000, for the 16% Mortgage Bonds of WRI Holdings, Inc., payable to WRI in the original principal amount of 3,150,000. 4.3 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. in the original principal amount of $3,150,000 (filed as Exhibit 10.9 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.3.1 - Supplemental Indenture of Trust, dated February 22, 1995, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) relating to the 16% Mortgage Bonds due December 28, 1994 of WRI Holdings, Inc. in the original principal amount of $3,150,000 (filed as Exhibit 10.4.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). 4.4* - Sixth Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Trust Company of New York), as Trustee, amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. in the original principal amount of $3,150,000. 4.5 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount of $16,682,000 (filed as Exhibit 10.11 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference).
4.5.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Trust Company of New York), as Trustee, amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount of $16,682,000 (filed as Exhibit 10.7.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference). 4.6 - Third Amended Promissory Note, as restated, effective as of January 1, 1992, executed by WRI Holdings, Inc., pursuant to which it may borrow up to the principal sum of $40,000,000 from WRI (filed as Exhibit 10.8 to WRI's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 4.7 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28, 1984, payable to WRI in the original principal amount of $7,000,000 (filed as Exhibit 10.13 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.8 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount of $7,000,000 (filed as Exhibit 10.14 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.8.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Trust Company of New York), as Trustee, amending Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Trustee, relating to the 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount of $7,000,000 (filed as Exhibit 10.10.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference). 4.9 - Agreement Correcting Trust Indenture, dated February 11, 1985, relating to 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount of $7,000,000 (filed as Exhibit 10.15 to WRI's Registration Statement on Form S-4 (No. 33-19730) and incorporated herein by reference). 4.10 - Amendment to Note Purchase Agreement, dated March 31, 1991, amending loan agreement, dated August 6, 1987, Life and Accident Insurance Company for $5,000,000, American General Life Insurance Company of Delaware for $5,000,000, Republic National Life Insurance Company for $3,000,000 and American Amicable Life Insurance Company of Texas for 2,000,000 (filed as Exhibit 10.15.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 4.11 - Promissory Note in the amount of $12,000,000 between WRI, as payee, and Plaza Construction, Inc., as maker (filed as Exhibit 10.23 to WRI's Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference). 4.11.1* - Eleventh Renewal and Extension of Promissory Note in the amount of $12,000,000, effective as of December 1, 2000, between WRI, as payee, and Plaza Construction, Inc., as maker. 4.12 - Amended and Restated Master Swap Agreement dated as of January 29, 1992, between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 10.24 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 4.12.1 - Rate Swap Transaction, dated as of May 15, 1992, between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 10.24.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 4.12.2 - Rate Swap Transaction, dated as of June 24, 1992, between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 10.24.2 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 4.12.3 - Rate Swap Transaction, dated as of July 2, 1992, between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 10.24.3 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference).
4.13 - Amended and Restated Credit Agreement dated as of November 21, 1996 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as Agent, and individually as a Bank, and the Banks defined therein (filed as Exhibit 10.17 to WRI's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 4.13.1 - First, Second and Third Amendments to the Amended and Restated Credit Agreement dated November 21, 1996 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 10.17.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 4.14 - Note Purchase Agreement, dated April 1, 1994, between The Variable Annuity Life Insurance Company, American General Life Insurance Company and WRI in the amount of $30,000,000 (filed as Exhibit 10.25 to WRI's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). 4.15 - Master Promissory Note in the amount of $20,000,000 between WRI, as payee, and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as maker, effective December 30, 1998 (filed as Exhibit 4.15 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.16 - Distribution Agreement among WRI and the Agents dated November 15, 1996 relating to the Medium Term Notes (filed as Exhibit 1.1 to WRI's Current Report of Form 8-K dated November 15, 1996 and incorporated herein by reference). 4.17 - Senior Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as trustee (filed as Exhibit 4(a) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by reference). 4.18 - Subordinated Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 4(b) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by reference). 4.19 - Form of Fixed Rate Senior Medium Term Note (filed as Exhibit 4.19 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.20 - Form of Floating Rate Senior Medium Term Note (filed as Exhibit 4.20 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.21 - Form of Fixed Rate Subordinated Medium Term Note (filed as Exhibit 4.21 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.22 - Form of Floating Rate Subordinated Medium Term Note (filed as Exhibit 4.22 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.23 - Statement of Designation of 7.44% Series A Cumulative Redeemable Preferred Shares (filed as Exhibit 99 to WRI's Current Report on Form 8-A dated February 18, 1998 and incorporated herein by reference). 4.24 - Statement of Designation of 7.125% Series B Cumulative Redeemable Preferred Shares (filed as Exhibit 4.2 to WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated herein by reference). 4.25 - Statement of Designation of 7.00% Series C Cumulative Redeemable Preferred Shares (filed as Exhibit 4.1 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 4.26 - 7.44% Series A Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4 to WRI's Current Report on Form 8-K dated February 23, 1998 and incorporated herein by reference). 4.27 - 7.125% Series B Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.1 to WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated herein by reference). 4.28 - 7.00% Series C Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.2 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference).
4.29 - Distribution Agreement among WRI and the Agents dated August 10, 1998 relating to the Medium Term Notes (filed as Exhibit 1.1 to WRI's current report on Form 8-K dated August 12, 1998 and incorporated herein by reference). 4.30* - Credit Agreement, dated January 6, 2000, between WRI and Bank of America, N.A. 4.30.1* - First Amendment to Credit Agreement, dated February 24, 2000, between WRI and Bank of America, N.A. 4.31* - Promissory Note in the amount of $100,000,000, or aggregate principal amount outstanding under Credit Agreement, between WRI, as payee, and Bank of America, N.A., as maker, dated January 6, 2000. 10.1** - 1988 Share Option Plan of WRI, as amended (filed as Exhibit 10.1 to WRI's Annual Report on Form 10-K for the year ended December 31, 1990 and incorporated herein by reference). 10.2** - Weingarten Realty Investors Supplemental Retirement Account Plan, as amended and restated (filed as Exhibit 10.26 to WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 10.3** - The Savings and Investment Plan for Employees of WRI, as amended (filed as Exhibit 4.1 to WRI's Registration Statement on Form S-8 (No. 33-25581) and incorporated herein by reference). 10.4** - The Fifth Amendment to Savings and Investment Plan for Employees of WRI (filed as Exhibit 4.1.1 to WRI's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (No. 33-25581) and incorporated herein by reference). 10.5** - The 1993 Incentive Share Plan of WRI (filed as Exhibit 4.1 to WRI's Registration Statement on Form S-8 (No. 33-52473) and incorporated herein by reference). 10.6*** - 1999 WRI Employee Share Purchase Plan 12.1* - Computation of Fixed Charges Ratios. 21.1* - Subsidiaries of the Registrant. 23.1* - Consent of Deloitte & Touche LLP. 27.1* - Financial Data Schedule. * Filed with this report. ** Management contract or compensatory plan or arrangement.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WEINGARTEN REALTY INVESTORS By: Stanford Alexander --------------------------------- Stanford Alexander Chairman/Chief Executive Officer
Date: March 17, 2000 Pursuant to the requirement of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: SIGNATURE TITLE DATE --------- ----- ----
By: Stanford Alexander Chairman and Trust Manager March 17, 2000 ------------------------ Stanford Alexander (Chief Executive Officer) By: Andrew M. Alexander President March 17, 2000 ------------------------ Andrew M. Alexander and Trust Manager By: Robert J. Cruikshank Trust Manager March 17, 2000 ------------------------ Robert J. Cruikshank By: Martin Debrovner Vice Chairman March 17, 2000 ------------------------ Martin Debrovner and Trust Manager By: Melvin Dow Trust Manager March 17, 2000 ------------------------ Melvin Dow By: Stephen A. Lasher Trust Manager March 17, 2000 ------------------------ Stephen A. Lasher By: Joseph W. Robertson, Jr. Executive Vice President and March 17, 2000 ------------------------ Joseph W. Robertson, Jr. Trust Manager (Chief Financial Officer) By: Douglas W. Schnitzer Trust Manager March 17, 2000 ------------------------ Douglas W. Schnitzer By: Marc J. Shapiro Trust Manager March 17, 2000 ------------------------ Marc J. Shapiro By: J.T. Trotter Trust Manager March 17, 2000 ------------------------ J.T. Trotter By: Stephen C. Richter Senior Vice President/ March 17, 2000 ------------------------ Stephen C. Richter Financial Administration and Treasurer (Principal Accounting Officer)
SCHEDULE II
WEINGARTEN REALTY INVESTORS VALUATION AND QUALIFYING ACCOUNTS DECEMBER 31, 1999, 1998 AND 1997 (AMOUNTS IN THOUSANDS) CHARGED BALANCE AT TO COSTS CHARGED BALANCE BEGINNING AND TO OTHER DEDUCTIONS AT END OF DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (A) PERIOD - ----------------------------------- ----------- --------- -------- ----------- ---------- 1999: Allowance for Doubtful Accounts. . . $ 888 $ 1,047 $ 1,027 $ 908 1998: Allowance for Doubtful Accounts. . . $ 1,000 $ 683 $ 795 $ 888 1997: Allowance for Doubtful Accounts. . . $ 1,236 $ 877 $ 1,113 $ 1,000
_________ Note A - Write-offs of accounts receivable previously reserved.
SCHEDULE III WEINGARTEN REALTY INVESTORS REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) Total Cost ------------------------------------- Buildings Projects and Under Total Accumulated Encumbrances Land Improvements Development Cost Depreciation (A) -------- ------------- ------------ ---------- ------------- -------------- SHOPPING CENTERS: Texas . . . . . . . . . . .$167,757 $ 659,682 $ 827,439 $ 230,568 $ 11,709 Other States. . . . . . . . 78,388 316,309 394,697 61,746 23,948 -------- ------------- ------------ ---------- ------------- -------------- Total Shopping Centers. . 246,145 975,991 1,222,136 292,314 35,657 INDUSTRIAL: Texas . . . . . . . . . . . 28,404 133,564 161,968 20,234 3,974 Other States. . . . . . . . 2,512 10,665 13,177 317 -------- ------------- ------------ ---------- ------------- -------------- Total Industrial. . . . . 30,916 144,229 175,145 20,551 3,974 OFFICE BUILDING: Texas . . . . . . . . . . . 534 15,650 16,184 10,782 -------- ------------- ------------ ---------- ------------- -------------- MULTI-FAMILY RESIDENTIAL: Texas . . . . . . . . . . . 2,276 12,724 15,000 215 -------- ------------- ------------ ---------- ------------- -------------- Total Improved Properties . . . . . . . 279,871 1,148,594 1,428,465 323,862 39,631 -------- ------------- ------------ ---------- ------------- -------------- LAND UNDER DEVELOPMENT OR HELD FOR DEVELOPMENT: Texas . . . . . . . . . . . $ 29,544 29,544 Other States. . . . . . . . 7,104 7,104 -------- ------------- ------------ ---------- ------------- -------------- Total Land Under Development or Held for Development. . . . . 36,648 36,648 -------- ------------- ------------ ---------- ------------- -------------- LEASED PROPERTY (SHOPPING CENTER) UNDER CAPITAL LEASE: Other States. . . . . . . . 41,093 41,093 4,783 5,857 -------- ------------- ------------ ---------- ------------- -------------- CONSTRUCTION IN PROGRESS: Texas . . . . . . . . . . . 5,240 5,240 Other States. . . . . . . . 2,693 2,693 -------- ------------- ------------ ---------- ------------- -------------- Total Construction in Progress . . . . . . . . 7,933 7,933 -------- ------------- ------------ ---------- ------------- -------------- TOTAL OF ALL PROPERTIES. . . . . . . . . .$279,871 $ 1,189,687 $ 44,581 $1,514,139 $ 328,645 $ 45,488 ======== ============= ============ ========== ============= ============== ____________ Note A - Encumbrances do not include $24.9 million outstanding under a $30 million 20-year term loan, payable to a group of insurance companies secured by a property collateral pool including all or part of three shopping centers.
SCHEDULE III (CONTINUED) The changes in total cost of the properties for the years ended December 31, 1999, 1998 and 1997 were as follows:
1999 1998 1997 ----------- ----------- ----------- Balance at beginning of year. . . . . . . $1,294,632 $1,118,758 $ 970,418 Additions at cost . . . . . . . . . . . . 258,683 179,587 158,258 Retirements or sales. . . . . . . . . . . (39,176) (3,713) (9,918) ----------- ----------- ----------- Balance at end of year. . . . . . . . . . $1,514,139 $1,294,632 $1,118,758 =========== =========== ===========
The changes in accumulated depreciation for the years ended December 31, 1999, 1998 and 1997 were as follows:
1999 1998 1997 ----------- ----------- ----------- Balance at beginning of year. . . . . . . $ 296,989 $ 262,551 $ 233,514 Additions at cost . . . . . . . . . . . . 43,930 35,678 32,226 Retirements or sales. . . . . . . . . . . (12,274) (1,240) (3,189) ----------- ----------- ----------- Balance at end of year. . . . . . . . . . $ 328,645 $ 296,989 $ 262,551 =========== =========== ===========
SCHEDULE IV
WEINGARTEN REALTY INVESTORS MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) FINAL PERIODIC FACE CARRYING INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF RATE DATE TERMS MORTGAGES MORTGAGES(A) -------- -------- --------- --------- ------------ SHOPPING CENTERS: FIRST MORTGAGES: Eastex Venture Beaumont, TX (Note B). . . 8% 10-31-09 $335 $ 2,300 $ 2,288 Annual P & I Main/O.S.T., Ltd. Houston, TX. . . . . . . . 9.3% 02-01-20 $476 4,800 4,524 Annual P & I ($1,241 balloon) INDUSTRIAL: FIRST MORTGAGES: River Pointe, Conroe,TX (Note C) . . . . . . . . . Prime 11-30-03 Varying 2,133 1,891 +2% Little York, Houston, TX (Note C) . . . . . . . . . Prime 12-31-03 Varying 1,922 1,760 +2% AN/WRI Partnership, Ltd. Houston, TX. . . . . . . . Libor 06-05-00 Varying 33,149 33,149 +2% South Loop Business Park Houston, TX. . . . . . . . 9.25% 11-01-07 $74 439 410 Annual P & I
Schedule continued on next page SCHEDULE IV (CONTINUED)
WEINGARTEN REALTY INVESTORS MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) FINAL PERIODIC FACE CARRYING INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF RATE DATE TERMS MORTGAGES MORTGAGES(A) -------- -------- --------- --------- ------------ UNIMPROVED LAND: SECOND MORTGAGE: River Pointe Conroe, TX . . . . . . . . Prime 12-01-00 Varying $ 12,000 $ 3,806 +1% ($3,806 balloon) --------- ------------ TOTAL MORTGAGE LOANS ON REAL ESTATE (Note D) . . . . $ 56,743 $ 47,828 ========= ============ Note A - The aggregate cost at December 31, 1999 for federal income tax purposes is $47,828. Note B - The periodic payment terms were 6% interest only through October 31, 1999 and 8% interest and principal commencing November 1, 1999 through the maturity date. Note C - Principal payments are due monthly to the extent of cash flow generated by the underlying property. Note D - Changes in mortgage loans for the years ended December 31, 1999, 1998 and 1997 are summarized below:
--------- --------- --------- 1999 1998 1997 --------- --------- --------- Balance, Beginning of Year . . . . $ 28,359 $ 25,653 $ 27,157 New Mortgage Loans. . . . . . . . . 33,588 3,116 Additions to Existing Loans . . . . 1,773 1,560 589 Collections of Principal. . . . . . (15,892) (1,970) (2,093) --------- --------- --------- Balance, End of Year . . . . . . . $ 47,828 $ 28,359 $ 25,653 ========= ========= =========
EX-4.2.1 2 SIXTH BONDS RENEWAL SIXTH BONDS RENEWAL AND EXTENSION AGREEMENT This SIXTH BONDS RENEWAL AND EXTENSION AGREEMENT (this "Sixth Renewal") is executed this 1st day of March, 2000 (the "Execution Date"), but effective as of December 28, 1999, by and between WRI HOLDINGS, INC. ("Maker"), a Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee"), a Texas real estate investment trust. W I T N E S S E T H: ---------------------------- WHEREAS, the Payee is the sole legal owner and holder of those certain 16% Mortgage Bonds Due 1994, dated December 28, 1984 (the "Original Bonds"), in the face principal sum of THREE MILLION ONE HUNDRED FIFTY THOUSAND and NO/100 DOLLARS ($3,150,000.00) executed by Maker payable to the order of Weingarten Realty, Inc. ("WRI"), a Texas corporation, payable as therein provided, which Bonds are secured by (i) that certain Trust Indenture, dated December 28, 1984 (the "Original Trust Indenture") executed by Maker and Texas Commerce Bank National Association, a national banking association (now known as Chase Bank of Texas, N.A.) ("Trustee"); (ii) that certain River Pointe Negative Pledge Agreement, dated December 28, 1984 (the "Original Negative Pledge") executed by Maker, WRI, and Plaza Construction, Inc. ("Plaza"); and (iii) such other documents, instruments, and agreements executed in connection with, as security for, or as evidence of the obligations evidenced by the Original Bonds (collectively, the Original Trust Indenture, the Original Negative Pledge, and such other documents, instruments, and agreements being herein called the "Original Security Instruments"); and WHEREAS, WRI assigned and conveyed all of its property, both real and personal, including, without limitation, the Original Bonds, to Payee, as evidenced by that certain Master Deed and General Conveyance dated April 5, 1988 from WRI to Payee; and WHEREAS, effective as of December 28, 1994, Maker and Payee renewed and extended the maturity date of the Original Bonds to December 28, 1995 pursuant to the terms of that certain Bonds Renewal and Extension Agreement, dated as of December 28, 1994 ("First Renewal"); and WHEREAS, effective as of December 28, 1995, Maker and Payee renewed and extended the maturity date of the Original Bonds to December 28, 1996 pursuant to the terms of that certain Bonds Second Renewal and Extension Agreement dated as of December 28, 1995 ("Second Renewal"); and WHEREAS, effective as of December 28, 1996, Maker and Payee renewed and extended the maturity date of the Original Bonds to December 28, 1997 pursuant to the terms of that certain Third Bonds Renewal and Extension Agreement, dated as of December 28, 1996 ("Third Renewal"); and WHEREAS, effective as of December 28, 1997, Maker and Payee renewed and extended the maturity date of the Original Bonds to December 28, 1998 pursuant to the terms of that certain Fourth Bonds Renewal and Extension Agreement, dated as of December 28, 1997 ("Fourth Renewal"); and WHEREAS, effective as of December 28, 1998, Maker and Payee renewed and extended the maturity date of the Original Bonds to December 28, 1999 pursuant to the terms of that certain Fifth Bonds Renewal and Extension Agreement, dated as of December 28, 1998 ("Fifth Renewal") (the Original Bonds, Original Negative Pledge, and Original Security Instruments, each as modified, renewed, and extended by the First Renewal, Second Renewal, Third Renewal, Fourth Renewal, and Fifth Renewal, being herein called the "Bonds," the "Negative Pledge," and the "Security Instruments," respectively); and WHEREAS, Maker and Payee amended and supplemented the terms of the Original Trust Indenture to reflect the renewal and extension of the Bonds, as provided in the First Renewal, Second Renewal, Third Renewal, Fourth Renewal, and Fifth Renewal, such amendments being evidenced by (i) that certain Supplemental Trust Indenture dated as of December 28, 1994 among Maker, Trustee, and Payee, (ii) that certain Second Supplemental Trust Indenture dated as of December 28, 1995, among Maker, Trustee, and Payee, (iii) that certain Third Supplemental Trust Indenture dated as of December 28, 1996, among Maker, Trustee, and Payee, (iv) that certain Fourth Supplemental Trust Indenture dated as of December 28, 1997, among Maker, Trustee, and Payee, and (v) that certain Fifth Supplemental Trust Indenture dated as of December 28, 1998, among Maker, Trustee, and Payee; and WHEREAS, of even date herewith, Maker, Trustee, and Payee have further amended and supplemented the terms of the Trust Indenture pursuant to that certain Sixth Supplemental Trust Indenture (the Original Trust Indenture, as amended and supplemented by the Supplemental Trust Indenture, the Second Supplemental Trust Indenture, the Third Supplemental Trust Indenture, the Fourth Supplemental Trust Indenture, the Fifth Supplemental Trust Indenture, and the Sixth Supplemental Trust Indenture, being called the "Trust Indenture"); and WHEREAS, the Bonds mature on December 28, 1999, and Maker and Payee now propose to renew and extend the maturity date of the Bonds and to continue the liens and priority of the Security Instruments as security for the payment of the Bonds, as set forth more particularly herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Maker and Payee hereby agree as follows: 1. The Maker reaffirms its promise to pay to the order of the Payee, at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas 77008, the principal balance due and owing on the Bonds, with interest accrued thereon, as provided in the Bonds, except that the maturity date of the Bonds is hereby renewed and extended to December 28, 2000, at which time the unpaid principal balance of the Bonds, plus all accrued and unpaid interest thereon, shall be due and payable. All liens, pledges, and security interests securing the payment of the Bonds, including, but not limited to, the liens, pledges and security interests granted in the Trust Indenture and the Negative Pledge, are hereby renewed, extended and carried forward to secure payment of the Bonds, as hereby amended, and the Security Instruments are hereby amended to reflect that the maturity date of the Bonds is December 28, 2000. 2. Maker hereby represents and warrants to Payee that (a) Maker is the sole legal and beneficial owner of the Trust Estate (as that term is defined in the Trust Indenture); (b) Maker has the full power and authority to make the agreements contained in this Sixth Renewal without joinder and consent of any other party; and (c) the execution, delivery and performance of this Sixth Renewal will not contravene or constitute an event which itself or which with the passing of time or giving of notice or both would constitute a default under any trust deed, deed of trust, loan agreement, indenture or other agreement to which Maker is a party or by which Maker or any of its property is bound. Maker hereby agrees to indemnify and hold harmless Payee against any loss, claim, damage, liability or expense (including, without limitation, attorneys' fees) incurred as a result of any representation or warranty made by Maker in this Section 2 proving to be untrue in any material respect. 3. To the extent that the Bonds are inconsistent with the terms of this Sixth Renewal, the Bonds are hereby modified and amended to conform with this Sixth Renewal. Except as modified, renewed and extended by this Sixth Renewal, the Bonds remain unchanged and continue unabated and in full force and effect as the valid and binding obligation of the Maker. 4. In conjunction with the extension and renewal of the Bonds and the Security Instruments, Maker hereby extends and renews the liens, pledges, and security interests as created and granted in the Security Instruments until the indebtedness secured thereby, as so extended and renewed, has been fully paid, and agrees that such extension and renewal shall, in no manner, affect or impair the Bonds or the liens, pledges, and security interests securing same, and that said liens, pledges, and security interests shall not in any manner be waived. The purpose of this Sixth Renewal is simply to extend the time of payment of the obligation evidenced by the Bonds and any indebtedness secured by the Security Instruments, as modified by this Sixth Renewal, and to carry forward all liens, pledges, and security interests securing the same, which are acknowledged by Maker to be valid and subsisting. 5. Maker covenants and warrants that the Payee is not in default under the Bonds or the Security Instruments, or this Sixth Renewal (collectively referred to as the "Loan Instruments"), that there are no defenses, counterclaims or offsets to such Loan Instruments; and that all of the provisions of the Loan Instruments, as amended hereby, are in full force and effect. 6. Maker agrees to pay all costs incurred in connection with the execution and consummation of this Sixth Renewal, including but not limited to, all recording costs and the reasonable fees and expenses of Payee's counsel. 7. If any covenant, condition, or provision herein contained is held to be invalid by final judgment of any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not in any way affect any other covenant, condition, or provision herein contained. 8. Payee is the sole owner and holder of the Bonds. Maker and Payee acknowledge and agree that the outstanding principal balance of the Bonds as of December 28, 1999 is $3,150,000.00. 9. Payee is an unincorporated trust organized under the Texas Real Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust Managers, officers, employees, or other agents shall be personally, corporately, or individually liable, in any manner whatsoever, for any debt, act, omission, or obligation of Payee, and all persons having claims of any kind whatsoever against Payee shall look solely to the property of Payee for the enforcement of their rights (whether monetary or non-monetary) against Payee. EXECUTED this day and year first above written, but effective for all purposes as of December 28, 1999. WRI HOLDINGS, INC., a Texas corporation By:___________________________________________ Martin Debrovner, Vice President "Maker" WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust By:__________________________________________ Bill Robertson, Jr., Executive Vice President "Payee" STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on this ______ day of ______________, 2000, by Martin Debrovner, Vice President of WRI HOLDINGS, INC., a Texas corporation, on behalf of said corporation. _________________________________ Notary Public, State of Texas STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on this ______ day of ______________, 2000, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real estate investment trust. _________________________________ Notary Public, State of Texas EX-4.4 3 SIXTH SUPPLEMENTAL INDENTURE OF TRUST SIXTH SUPPLEMENTAL TRUST INDENTURE This SIXTH SUPPLEMENTAL TRUST INDENTURE (this "Sixth Supplemental Indenture") is executed this 1st day of March, 2000 (the "Execution Date"), but effective as of December 28, 1999, by and between WRI HOLDINGS, INC. (the "Company"), a Texas corporation, and CHASE BANK OF TEXAS, N.A. (formerly known as TEXAS COMMERCE BANK NATIONAL ASSOCIATION) (the "Trustee"), a national banking association. W I T N E S S E T H: ---------------------------- WHEREAS, the Company and the Trustee executed that certain Trust Indenture dated December 28, 1984 (the "Original Trust Indenture") to secure the performance of the Company under the terms of that certain 16% Mortgage Bonds Due 1994 (the "Original Bonds") executed by the Company payable to the order of Weingarten Realty, Inc. ("WRI") dated December 28, 1984 in the face principal amount of THREE MILLION ONE HUNDRED FIFTY THOUSAND and NO/100 DOLLARS ($3,150,000.00), payable as therein provided; and WHEREAS, WRI assigned and conveyed all of its property, both real and personal, including, without limitation, the Original Bonds, to Weingarten Realty Investors ("Weingarten"), a Texas real estate investment trust, as evidenced by that certain Master Deed and General Conveyance dated April 5, 1988, from WRI to Weingarten; and WHEREAS, effective as of December 28, 1994, the Company and Weingarten renewed and extended the maturity date of the Original Bonds to December 28, 1995 pursuant to the terms of that certain Bonds Renewal and Extension Agreement dated as of December 28, 1994 ("First Renewal"); and WHEREAS, effective as of December 28, 1995, the Company and Weingarten again renewed and extended the maturity date of the Original Bonds to December 28, 1996 pursuant to the terms of that certain Bonds Second Renewal and Extension Agreement dated as of December 28, 1995 ("Second Renewal"); and WHEREAS, effective as of December 28, 1996, the Company and Weingarten again renewed and extended the maturity date of the Original Bonds to December 28, 1997 pursuant to the terms of that certain Third Bonds Renewal and Extension Agreement dated as of December 28, 1996 ("Third Renewal"); and WHEREAS, effective as of December 28, 1997, the Company and Weingarten again renewed and extended the maturity date of the Original Bonds to December 28, 1998 pursuant to the terms of that certain Fourth Bonds Renewal and Extension Agreement dated as of December 28, 1997 ("Fourth Renewal"); WHEREAS, effective as of December 28, 1998, the Company and Weingarten again renewed and extended the maturity date of the Original Bonds to December 28, 1999 pursuant to the terms of that certain Fifth Bonds Renewal and Extension Agreement dated as of December 28, 1998 ("Fifth Renewal") (the Original Bonds, as renewed and extended by the First Renewal, Second Renewal, Third Renewal, Fourth Renewal, and Fifth Renewal being herein called the "Bonds"); and WHEREAS, the Company and Weingarten amended and supplemented the terms of the Original Trust Indenture to reflect the renewal and extension of the Bonds as provided in the First Renewal, Second Renewal, Third Renewal, Fourth Renewal, and Fifth Renewal, such amendments being evidenced by (i) that certain Supplemental Trust Indenture dated as of December 28, 1994 among the Company, the Trustee, and Weingarten, (ii) that certain Second Supplemental Trust Indenture dated as of December 28, 1995, among the Company, the Trustee, and Weingarten, (iii) that certain Third Supplemental Trust Indenture dated as of December 28, 1996 among the Company, the Trustee, and Weingarten, (iv) that certain Fourth Supplemental Trust Indenture dated as of December 28, 1997, among the Company, the Trustee, and Weingarten, and (v) that certain Fifth Supplemental Trust Indenture dated as of December 28, 1998, among the Company, the Trustee, and Weingarten (the Original Trust Indenture, as amended and supplemented by the Supplemental Trust Indenture, Second Supplemental Trust Indenture, Third Supplemental Trust Indenture, Fourth Supplemental Trust Indenture, and Fifth Supplemental Trust Indenture being herein called the "Trust Indenture"); and WHEREAS, the Bonds mature on December 28, 1999, and the Company and Weingarten have agreed to renew and extend the maturity date of the Bonds and to continue the liens, pledges, and security interests securing the payment of the Bonds, as set forth in that certain Sixth Bonds Renewal and Extension Agreement ("Sixth Renewal") dated effective as of December 28, 1999, executed by the Company and Weingarten, Weingarten being the sole legal owner and holder of the Bonds; and WHEREAS, the Company and the Trustee desire to amend and supplement the Trust Indenture to reflect the renewal and extension of the maturity date of the Bonds to December 28, 2000. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Trustee hereby agree as follows: 1. Except as otherwise provided in this Sixth Supplemental Indenture, all capitalized terms used in this Sixth Supplemental Indenture shall have the meanings ascribed to those terms in the Trust Indenture. 2. The Company and the Trustee acknowledge that the Company has re-affirmed its promise to pay to the order of the Payee, at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas 77008, the principal balance due and owing on the Bonds, with interest accrued thereon, as provided in the Bonds, except that the maturity date of the Bonds has been renewed and extended to December 28, 2000, at which time the unpaid principal balance of the Bonds, plus all accrued and unpaid interest thereon, shall be due and payable. All liens, pledges, and security interests securing the Bonds granted under the terms of the Trust Indenture, are hereby renewed, extended and carried forward to secure payment of the Bonds, as hereby amended, and the Trust Indenture is hereby amended to reflect that the maturity date of the Bonds is December 28, 2000. 3. The Company hereby represents and warrants to the Trustee that (a) the Company is the sole legal and beneficial owner of the Trust Estate; (b) the Company has the full power and authority to make the agreements contained in this Sixth Supplemental Indenture without joinder and consent of any other party; and (c) the execution, delivery and performance of this Sixth Supplemental Indenture will not contravene or constitute an event which itself or which with the passing of time or giving of notice or both would constitute a default under any trust deed, deed of trust, loan agreement, indenture or other agreement to which the Company is a party or by which the Company or any of its property is bound. The Company hereby agrees to indemnify and hold harmless the Trustee against any loss, claim, damage, liability or expense (including, without limitation, attorneys' fees) incurred as a result of any representation or warranty made by the Company in this Section 3 proving to be untrue in any material respect. 4. To the extent that the Trust Indenture is inconsistent with the terms of this Sixth Supplemental Indenture, the Trust Indenture is hereby modified and amended to conform with this Sixth Supplemental Indenture. Except as modified, renewed and supplemented by this Sixth Supplemental Indenture, the Trust Indenture remains unchanged and continues unabated and in full force and effect as the valid and binding obligation of the Company. 5. The Company covenants and warrants that the Trustee is not in default under the Trust Indenture, as supplemented by this Sixth Supplemental Indenture (collectively referred to as the "Indenture"), that there are no defenses, counterclaims or offsets to the Bonds or the Indenture, and that all of the provisions of the Bonds and the Indenture are in full force and effect. 6. The Company agrees to pay all costs incurred in connection with the execution and consummation of this Sixth Supplemental Indenture, including but not limited to, all recording costs and the reasonable fees and expenses of Trustee's counsel. 7. If any covenant, condition, or provision herein contained is held to be invalid by final judgment of any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not in any way affect any other covenant, condition, or provision herein contained. 8. The Company acknowledges and agrees that the outstanding principal balance of the Bonds as of December 28, 1999 is $3,150,000.00. 9. Weingarten joins herein to consent to the amendment and supplement of the terms of the Trust Indenture, as set forth in this Sixth Supplemental Indenture and to acknowledge and represent that Weingarten is the sole owner and holder of the Bonds. Weingarten is an unincorporated trust organized under the Texas Real Estate Investment Trust Act. Neither the shareholders of Weingarten, nor its Trust Managers, officers, employees, or other agents shall be personally, corporately, or individually liable, in any manner whatsoever, for any debt, act, omission, or obligation of Weingarten, and all persons having claims of any kind whatsoever against Weingarten shall look solely to the property of Weingarten for the enforcement of their rights (whether monetary or non-monetary) against Weingarten. EXECUTED this day and year first above written, but effective for all purposes as of December 28, 1999. WRI HOLDINGS, INC. By:__________________________________________ Martin Debrovner, Vice President "COMPANY" CHASE BANK OF TEXAS, N.A. By:__________________________________________ Rhonda L. Parman, Trust Officer "TRUSTEE" WEINGARTEN REALTY INVESTORS By:__________________________________________ Bill Robertson, Jr., Executive Vice President "WEINGARTEN" STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on this ______ day of _____________, 2000, by Martin Debrovner, Vice President of WRI HOLDINGS, INC., a Texas corporation, on behalf of said corporation. _________________________________ Notary Public, State of Texas STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on this ______ day of _____________, 2000, by Rhonda L. Parman, Trust Officer of CHASE BANK OF TEXAS, N.A., a national banking association, on behalf of said national banking association. _________________________________ Notary Public, State of Texas STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on this ______ day of _________, 2000, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real estate investment trust. _________________________________ Notary Public, State of Texas EX-4.11.1 4 11TH RENEWAL & EXT. OF PROM. NOTE ELEVENTH RENEWAL AND EXTENSION AGREEMENT THE STATE OF TEXAS COUNTY OF MONTGOMERY This ELEVENTH RENEWAL AND EXTENSION AGREEMENT (the "Eleventh Renewal") is executed this 1st day of March, 2000 (the "Execution Date"), but effective as of December 1, 1999, by and between PLAZA CONSTRUCTION, INC. ("Maker"), a Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee"), a Texas real estate investment trust. W I T N E S S E T H: ---------------------------- WHEREAS, the Payee is the present legal owner and holder of that certain Promissory Note dated November 29, 1982 (the "Original Note"), in the original principal sum of Twelve Million and No/100 Dollars ($12,000,000.00) executed by River Pointe Venture I ("River Pointe"), a Texas joint venture, payable to the order of Weingarten Realty, Inc. ("WRI"), a Texas corporation, payable as therein provided, which Note is secured by (i) a Deed of Trust and Security Agreement dated November 29, 1982 (the "Original Deed of Trust"), executed by River Pointe to Melvin A. Dow, Trustee, filed under Clerk's File No. 8254156 and under Film Code Reference No. ###-##-#### in the Real Property Records of Montgomery County, Texas, covering and affecting certain property situated in Montgomery County, Texas, more particularly described therein (the "Property"), and (ii) any and all other liens, security instruments, and documents executed by River Pointe and/or Maker, securing or governing the payment of the Original Note including, but not limited to, that certain Loan Agreement dated November 29, 1982 ("Original Loan Agreement"), executed by WRI and River Pointe; and WHEREAS, by that certain River Pointe Venture I Assignment of Interest and Dissolution, dated October 16, 1987, filed on October 19, 1987, under Clerk's File No. 8747284, in the Real Property Records of Montgomery County, Texas, River Pointe was dissolved and Maker assumed all of the debts and obligations of River Pointe, and obtained ownership of all of the assets of River Pointe, including, but not limited to, the Property; and WHEREAS, on April 5, 1988, WRI assigned and conveyed all of its property, both real and personal, including, without limitation, the Original Note, to Payee, as evidenced by that certain Master Deed and General Conveyance, from WRI to Payee, a counterpart of which was filed under Clerk's File No. 8815730 and under Film Code Reference No. ###-##-####, in the Real Property Records of Montgomery County, Texas; and WHEREAS, by instrument entitled Renewal and Extension Agreement, entered into as of November 1, 1989 (the "First Renewal"), executed by Maker and Payee, the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing the payment of the Original Note were renewed and extended; and WHEREAS, by instrument entitled Second Renewal and Extension Agreement dated March 12, 1991, but effective as of December 1, 1990 (the "Second Renewal"), filed on March 21, 1991, under Clerk's File No. 9111519 and under Film Code Reference No. ###-##-#### in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing or securing payment of the Original Note; and WHEREAS, by instrument entitled Third Renewal and Extension Agreement dated February 28, 1992, but effective as of December 1, 1991 (the "Third Renewal"), filed on May 14, 1992, under Clerk's File No. 9222962, and under Film Code Reference No. ###-##-#### in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing or securing payment of the Original Note; and WHEREAS, by instrument entitled Fourth Renewal and Extension Agreement dated February 19, 1993, but effective as of December 1, 1992 (the "Fourth Renewal"), Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing or securing payment of the Original Note; and WHEREAS, by instrument entitled Fifth Renewal and Extension Agreement dated March 9, 1994, but effective as of December 1, 1993 (the "Fifth Renewal"), filed on March 18, 1994 under Clerk's File No. 9415326 and under Film Code Reference No. ###-##-#### in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, by instrument entitled Sixth Renewal and Extension Agreement dated February 22, 1995, but effective as of December 1, 1994 (the "Sixth Renewal"), filed on March 1, 1995 under Clerk's File No. 09511049 and under Film Code Reference No. 046-00-0785 in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, by instrument entitled Seventh Renewal and Extension Agreement dated February 7, 1996, but effective December 1, 1995 (the "Seventh Renewal"), filed on February 23, 1996 under Clerk's File No. 9611331 and under Film Code Reference No. 135-00-0887 in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, by instrument entitled Eighth Renewal and Extension Agreement dated February 21, 1997, but effective December 1, 1996 (the "Eighth Renewal") filed on Nov. 5, 1997, under Clerk=s File No. 9771746 and under Film Code Reference No. 316-00-0327, in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, by instrument entitled Ninth Renewal and Extension Agreement dated December 15, 1998, but effective December 1, 1997 (the "Ninth Renewal") filed on March 22, 1999, under Clerk=s File No. 99021470 and under Film Code Reference No. 509-00-0781, in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, by instrument entitled Tenth Renewal and Extension Agreement dated January 7, 1999, but effective December 1, 1998 (the "Tenth Renewal") filed on March 22, 1999, under Clerk=s File No. 99021471 and under Film Code Reference No. 509-00-0786, in the Official Public Records of Real Property of Montgomery County, Texas, Maker and Payee further modified and extended the Original Note, Original Deed of Trust, Original Loan Agreement, and all other documents evidencing, governing, or securing payment of the Original Note; and WHEREAS, the Original Note, the Original Deed of Trust, and Original Loan Agreement, together with any and all other liens, security interests and documents evidencing, securing or governing payment of the Original Note, as modified by the First Renewal, Second Renewal, Third Renewal, Fourth Renewal, Fifth Renewal, Sixth Renewal, Seventh Renewal, Eighth Renewal, Ninth Renewal, and Tenth Renewal are herein referred to as the "Note" and "Security Instruments," respectively; and WHEREAS, Maker and Payee now propose to modify the Note in certain respects and to continue the lien and priority of the Security Instruments as security for the payment of the Note, as set forth more particularly herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Maker and Payee hereby agree as follows: 1. The Maker re-affirms its promise to pay to the order of the Payee, at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas 77008, the principal balance due and owing on the Note, with accrued interest thereon, as provided in the Note, except that the maturity date of the Note is hereby amended and extended until December 1, 2000, at which time the unpaid principal balance of the Note, together with all accrued but unpaid interest, shall be due and payable. All liens securing the Note, including, but not limited to, the lien created by the Original Deed of Trust, are hereby renewed, extended and carried forward to secure payment of the Note, as hereby amended, and the Original Deed of Trust is hereby amended to reflect that the maturity date of the Note is December 1, 2000. All other Security Instruments including, but not limited to, the Original Loan Agreement, are likewise hereby modified and amended to reflect the renewal and extension of the maturity date of the Note to December 1, 2000. 2. Maker hereby represents and warrants to Payee that (a) Maker is the sole legal and beneficial owner of the Property (b) Maker has the full power and authority to make the agreements contained in this Eleventh Renewal, without joinder and consent of any other party; and (c) the execution, delivery and performance of this Eleventh Renewal will not contravene or constitute an event which itself or which, with the passing of time, or giving of notice, or both, would constitute a default under any trust deed, deed of trust, loan agreement, indenture or other agreement to which Maker is a party or by which Maker or any of its property is bound. Maker hereby agrees to indemnify and hold harmless Payee against any loss, claim, damage, liability or expense (including, without limitation, attorneys' fees) incurred as a result of any representation or warranty made by Maker in this Section 2 proving to be untrue in any material respect. 3. To the extent that the Note is inconsistent with the terms of this Eleventh Renewal, the Note is hereby modified and amended to conform with this Eleventh Renewal. Except as modified, renewed and extended by this Eleventh Renewal, the Note and the Security Instruments remain unchanged and continue unabated and in full force and effect as the valid and binding obligation of the Maker. 4. In conjunction with the extension, renewal and modification of the Note and the Security Instruments, Maker hereby extends and renews the liens, security interests, and assignments created and granted in the Security Instruments until the indebtedness secured thereby, as so extended, renewed and modified, has been fully paid, and agrees that such extension, renewal and modification shall in no manner affect or impair the Note, the liens or security interests securing same, and that said liens, security interests, and assignments shall not in any manner be waived. The purpose of this Eleventh Renewal is simply to extend the time of payment of the loan evidenced by the Note and any indebtedness secured by the Security Instruments, as modified by this Eleventh Renewal, and to carry forward all liens and security interests securing the same, which are acknowledged by Maker to be valid and subsisting. 5. Maker covenants and warrants that the Payee is not in default under the Note or Security Instruments, each as modified by this Eleventh Renewal (collectively referred to as the "Loan Instruments"), that there are no defenses, counterclaims or offsets to such Loan Instruments; and that all of the provisions of the Loan Instruments, as amended hereby, are in full force and effect. 6. Maker agrees to pay all costs incurred in connection with the execution and consummation of this Eleventh Renewal, including but not limited to, all recording costs, the premium for an endorsement to the Mortgagee Policy of Title Insurance insuring the validity and priority of the Original Deed of Trust, in form satisfactory to Payee, and the reasonable fees and expenses of Payee's counsel. 7. If any covenant, condition, or provision herein contained is held to be invalid by final judgment of any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not in any way affect any other covenant, condition, or provision herein contained. 8. Payee is an unincorporated trust organized under the Texas Real Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust Managers, officers, employees, or other agents shall be personally, corporately, or individually liable, in any manner whatsoever, for any debt, act, omission, or obligation of Payee, and all persons having claims of any kind whatsoever against Payee shall look solely to the property of Payee for the enforcement of their rights (whether monetary or non-monetary) against Payee. EXECUTED this day and year first above written, but effective for all purposes as of December 1, 1999. PLAZA CONSTRUCTION, INC., a Texas corporation By:_______________________________________________ Martin Debrovner, Vice President "MAKER" WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust By:_______________________________________________ Bill Robertson, Jr., Executive Vice President "PAYEE" THE STATE OF TEXAS COUNTY OF MONTGOMERY This instrument was acknowledged before me on this ______ day of ____________, 2000, by Martin Debrovner, Vice President of PLAZA CONSTRUCTION, INC., a Texas corporation, on behalf of said corporation. _________________________________ Notary Public, State of Texas THE STATE OF TEXAS COUNTY OF MONTGOMERY This instrument was acknowledged before me on this ______ day of ______________, 2000, by Bill Robertson, Jr., Executive Vice President of WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust, on behalf of said real estate investment trust. _________________________________ Notary Public, State of Texas EX-4.30 5 CREDIT AGREEMENT CREDIT AGREEMENT ---------------- This Credit Agreement is executed by the parties hereto on ___________________, but is effective as of the Effective Date (as hereinafter defined). Weingarten Realty Investors, a Texas real estate investment trust (the "Borrower"), Bank of America, N.A., a national banking association (in its individual capacity "BOA") and any bank that may hereafter become a party hereto in accordance with the provisions hereof (each individually, a "Bank" and collectively, the "Banks"), and BOA as Agent hereunder (in such capacity, the "Agent") for the Banks hereunder, hereby agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION I.1. Certain Defined Terms. As used in this Credit Agreement (the --------------------- "Agreement"), the following terms shall have the following meanings (such --------- meanings to be equally applicable to both the singular and plural forms of the terms defined): "Act" shall have the meaning specified in Section 5.01. --- "Adjusted Net Proceeds" has the meaning specified in Section 7.04. ----------------------- "Adjusted Tangible Net Worth" means, as of any date, (a) Net Worth, less ------------------------------ ---- (b) the aggregate book value of Intangible Assets shown on the balance sheet of the Borrower prepared in accordance with GAAP, plus (c) accumulated depreciation ---- shown on the balance sheet of the Borrower prepared in accordance with GAAP. "Advance" means the Advances under the Revolving Credit Loan provided for ------- in Section 2.01 hereof. "Affiliate" means any Person which, directly or indirectly, controls or is --------- controlled by or is under common control with another Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or by contract or otherwise. "Annual Service Charge" means, for any Calculation Period, the sum of (i) ----------------------- the amount accrued during such period in respect of interest (including the interest component of Capitalized Lease obligations) and original issue discount of Debt of the Borrower and its Subsidiaries, plus (ii) amounts accrued by the ---- Borrower and its Subsidiaries in respect of Disqualified Stock (including, without limitation, dividends payable thereon). "Annual Service Charge Coverage Ratio" has the meaning specified in Section ------------------------------------ 7.07(a). "Applicable Margin" shall mean with respect to any LIBOR Rate Advance, a ------------------ rate per annum equal to fifty-five one hundredths of one percent (.55%). "Assignee" has the meaning specified in Section 10.08(a) hereof. -------- "Assignment and Acceptance" has the meaning specified in Section 10.08(a) --------------------------- hereof. "Bell Plaza" has the meaning specified in Section 6.10 hereof. ----------- "Bell Plaza Shopping Center" has the meaning specified in Section 6.10 ----------------------------- hereof. "Borrowing" means a revolving credit loan borrowing under Section 2.01 --------- hereof consisting of one Advance from each Bank, of the same Type made on the same day. "Business Day" means a day of the year on which banks are not required or ------------- authorized to close in Dallas, Texas and, if the applicable Business Day relates to any LIBOR Rate Advances, on which dealings are carried on in the London interbank market. "Calculation Period" shall mean the applicable period specified in this ------------------- Agreement for the particular test or other calculation required hereunder. "Capital Shares" means, with respect to any Person, any capital stock or --------------- capital shares (including without limitation, preferred stock or shares), interests, participations or other ownership interests (however designated) of such Person, and any rights, warrants, or options to purchase any thereof. "Capitalized Lease" means any lease of any property (whether real, personal ----------------- or mixed) which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of the lessee. "Cash Equivalents" means (a) marketable direct obligations issued or ----------------- unconditionally guaranteed by the United States Government or issued by an agency thereof or by the Federal National Mortgage Association; (b) commercial paper maturing no more than ninety (90) days after the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 or P-1 from either S&P or Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, then the highest rating from such other nationally recognized rating services acceptable to the Agent); (c) investments in repurchase agreements backed by securities described in clause (a) hereof; and (d) domestic and eurodollar certificates of deposit or bankers' acceptances maturing within ninety (90) days after the date of acquisition thereof issued by any Bank or any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having capital of not less than $100,000,000. "Central Plaza" has the meaning specified in Section 6.09 hereof. -------------- "Central Plaza Shopping Center" has the meaning specified in Section 6.09 ------------------------------- hereof. "Closing Date" means the date the Agreement becomes effective in accordance ------------ with Article IV. "Code" means the Internal Revenue Code of 1986, as amended from time to ---- time, and any successor statute. "Commitment" means, as to any Bank, such Bank's Pro Rata Percentage of ---------- $100,000,000, as such amount is set forth on the signature pages hereof with respect to each Bank on and as of the Closing Date, and as it may be reduced from time to time in accordance with Section 2.05, and includes its commitment in respect of the Revolving Credit Loan as described in Section 2.01, and "Commitments" means, collectively, the Commitments for all the Banks. ------ "Commitment Fee" means, the $75,000 nonrefundable Commitment Fee, to be --------------- paid to Agent in consideration of the commitment of Agent to make the proceeds of the Revolving Loan available to the Borrower from time to time during the term of, and as provided in, this Agreement. The Borrower and Agent acknowledge and agree that the Commitment Fee is a bona fide commitment fee and is intended as reasonable compensation to Agent for committing to make funds available to the Borrower as described herein and for no other purpose. "Compliance Certificate" has the meaning specified in Section 6.01(c). ----------------------- "Debt"of the Borrower or any Subsidiary means any indebtedness of the ---- Borrower, or any Subsidiary, whether or not contingent, in respect of (without duplication): (i) borrowed money, or obligations evidenced by bonds, notes, debentures or similar instruments, (ii) the portion of indebtedness secured by any Lien existing on property owned by the Borrower or any Subsidiary, (iii) the reimbursement obligations, contingent or otherwise, in connection with any letters of credit or similar instruments issued or confirmed by banks or other financial institutions for the account of the Borrower or any Subsidiary, (iv) amounts representing the balance deferred and unpaid of the purchase price of any property or services (except any such balance that constitutes trade payables) or conditional sale obligations or obligations under any title retention agreement, (v) the principal amount of all obligations of the Borrower or any Subsidiary with respect to redemption, repayment or other repurchase of any Disqualified Stock, (vi) Guaranties, or (vii) obligations of the Borrower or any Subsidiary as lessee under a Capitalized Lease; provided that the items of indebtedness under (i), (ii), (iii) and (iv) above shall be deemed to be Debt only to the extent that any such items (other than obligations in respect of letters of credit) would appear as a quantified liability on the Borrower's consolidated balance sheet in accordance with GAAP (as distinguished from being referred to in the notes to such Financial Statement). The term "Debt" shall not include (x) contingent liabilities relating to deposit and/or endorsement of checks in the ordinary course of business of the Borrower or any Subsidiary; or (y) guaranties or contingent liabilities under leases customarily undertaken or incurred by the Borrower or any Subsidiary in the ordinary course of business as either landlord or tenant. The term "Debt" includes the Borrower's and Subsidiaries' share of debt of partnerships and joint ventures (other than debt that is non-recourse to the Borrower or its Subsidiaries) which are accounted for on the Borrower's Financial Statements under the equity method of accounting. "Debtor Laws" means all applicable liquidation, conservatorship, ------------ bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization or ---- similar laws or general equitable principles from time to time in effect affecting the rights of creditors generally. "Default" means any event which, with the lapse of time or giving of ------- notice, or both, would constitute an Event of Default. "Disqualified Stock" means, with respect to any Person, any Capital Shares ------------------- of such Person, which by the terms thereof (or by the terms of any security or instrument into which such Capital Shares are convertible or for which such Capital Shares are exchangeable or exercisable) upon the happening of any event or otherwise, (i) mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii) are convertible into or exchangeable or exercisable for Debt or Disqualified Stock, or (iii) are redeemable at the option of the holder thereof, in whole or in part, in each case on a date prior to the stated maturity of the Notes. "Effective Date" shall mean the earlier to occur of (i) Borrower's giving --------------- Agent written notice designating an effective date (which designated date shall be no earlier than 3 Business Days following the giving of such notice), or (ii) March 1, 2000, provided, in either case, that Borrower has wire transferred to Agent the Commitment Fee. "Eligible Assignee" means any of (i) a commercial bank organized under the ------------------ laws of the United States, or any State thereof or the District of Columbia; and (ii) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, provided, however, that no institution described in clause (i) or (ii) above shall be an ------ Eligible Assignee unless it has total assets in excess of $20 billion and unless debt obligations issued by such financial institution (or by a parent entity owning beneficially all of the capital stock of such financial institution) are rated "Baa2" or higher by Moody's or "BBB" or higher by S & P. "ERISA" means the Employee Retirement Income Security Act of 1974, as ----- amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Subsidiary or trade or business (whether or not --------------- incorporated) which is a member of a group of which the Borrower is a member and which is under common control within the meaning of Section 414 of the Code and the rules and regulations thereunder. "ERISA Event" means any of the following events: (a) a "Reportable Event" ------------ described in Section 4043 of ERISA and the regulations issued thereunder (other than a "Reportable Event" not subject to the provisions for the 30-day notice to the PBGC under such regulations), (b) the withdrawal of the Borrower from a PBGC Plan during a plan year in which it was a Asubstantial employer" as defined in Section 4001 (a)(2) of ERISA or the incurrence of liability by the Borrower under Section 4064 of ERISA, (c) the distribution of a notice of intent to terminate a PBGC Plan pursuant to Section 4041 (c) of ERISA or the treatment of a PBGC Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate a PBGC Plan by the PBGC, or (e) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any PBGC Plan. "Eurocurrency Liabilities" has the meaning assigned to that term in ------------------------- Regulation D of the Board of Governors of the Federal Reserve System, as in - effect from time to time. "Events of Default" has the meaning specified in Section 8.01. ------------------- "Financial Statements" shall mean statements of the financial condition of --------------------- the Borrower and its Subsidiaries on a consolidated basis as set forth in the Borrower's Annual Report on Form 10K for each calendar year, or in the Borrower's Quarterly Report on Form 10-Q for each quarterly accounting period, and filed with the Securities and Exchange Commission, or if such filing is not permitted or required at any time, financial statements in such form of the Borrower and its Subsidiaries on a consolidated basis, delivered to the Agent and, in such event, for quarterly financial statements, certified by a Responsible Officer as presenting fairly the consolidated financial position of the Borrower and its Subsidiaries as of the date indicated and the results of their operations for the period indicated in conformity with GAAP, consistently applied, subject to changes resulting from year-end adjustments, and for year-end financial statements together with the unqualified opinion of Deloitte & Touche, or other independent public accountants of recognized national standing selected by the Borrower, stating that such financial statements fairly present the consolidated financial position of the Borrower and its Subsidiaries as of the date indicated and the consolidated results of their operations and changes in financial position for the period indicated in conformity with GAAP, consistently applied. "Fixed Charge" means, for any Calculation Period, the sum of (i) the amount ------------ accrued during such period in respect of interest (including the interest component of Capitalized Lease Obligations) and original issue discount of Debt of the Borrower and its Subsidiaries, plus (ii) principal payments on Debt ---- scheduled to be paid during such period (excluding any balloon payment on notes or other obligations which are normally refinanced) plus (iii) amounts accrued ---- by the Borrower and its Subsidiaries in respect of Borrower's (and its Subsidiaries') outstanding preferred stock (including, without limitation, dividends payable thereon). "Fixed Charge Coverage Ratio" has the meaning specified in Section 7.07(b). --------------------------- "Funds from Operations" means for any Calculation Period, net income of the --------------------- Borrower and its Subsidiaries plus (i) each of the following, to the extent ---- actually deducted in arriving at such net income during such period: (A) depreciation and amortization expenses, (B) the amount accrued during such period in respect of interest (including the interest component of Capitalized Lease obligations) and original issue discount of Debt of the Borrower and its Subsidiaries, and (C) extraordinary charges plus (ii) the excess, if any, of the ---- share of distributable funds allowable under any joint venture or partnership which is not a Guarantor over net income from such joint venture or partnership, minus (iii) each of the following to the extent actually included in arriving at - ----- such net income during such period: (x) gains on the sale or disposition of properties and investment securities of the Borrower and its Subsidiaries, and (y) the excess, if any, of net income from any joint venture or partnership which is not a Guarantor, over the share of distributable funds allowable under the applicable joint venture or partnership agreement. "GAAP" means generally accepted accounting principles set forth in the ---- opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial Accounting Standards Board. "Governmental Authority" means any (domestic or foreign) federal, state, ----------------------- county, municipal, parish, provincial, or other government, or any department, commission, board, court, agency (including, without limitation, the Environmental Protection Agency), or any other instrumentality of any of them or any other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of, or pertaining to, government, including, without limitation, any arbitration panel, any court, or any commission. "Governmental Requirement" means any order, permit, law, statute ------------------------- (including, without limitation, any statute enacted in connection with or relating to the protection or regulation of the environment), code, ordinance, rule, regulation, certificate, or other direction or requirement of any Governmental Authority. "Guarantor" means each Subsidiary which is a corporation, 100% of the --------- capital stock of which is owned by the Borrower, or a Subsidiary, and that has executed or will execute a Guaranty Agreement, including without limitation, each Guaranty Agreement executed in accordance with Section 6.06 herein. "Guaranty" or "Guarantees" has the meaning specified in Section 7.12, and -------- ---------- does not include a "Guaranty Agreement", executed in favor of the Banks in connection with this Agreement. "Guaranty Agreement" means a Guaranty Agreement executed by each ------------------- Guarantor substantially in the form of Exhibit 1.01-A, attached hereto. "Highest Lawful Rate" means, with respect to each Bank, the maximum --------------------- nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged, or received with respect to any Note or on other amounts, if any, due to such Bank pursuant to this Agreement or any other Loan Document under laws applicable to such Bank which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect. "Intangible Assets" means those assets of the Borrower which are (a) ------------------ deferred assets, other than prepaid insurance and prepaid taxes, (b) patents, copyrights, trademarks, tradenames, franchises, goodwill, experimental expenses and other similar assets which would be classified as intangible assets on a balance sheet of the Borrower, prepared in accordance with GAAP, and (c) unamortized debt discount and expenses. "Interest Period" means, for each LIBOR Rate Advance comprising part of ---------------- the same Borrowing, the period commencing on the date of such Advance or the date of the conversion of any Advance into such an Advance and ending on the last day of the period elected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be seven (7) days or one, two or three months, as the Borrower may, upon notice received by the Agent have selected in accordance with Section 2.02; provided however, that: (i) the duration of any Interest Period which commences before any principal repayment date required hereunder and would otherwise end (but for this provision) after such date shall end on such date; and (ii) whenever the last day of any Interest Period would otherwise (but for this provision) occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day. "Interest Rate Agreements" shall have the meaning specified in Section -------------------------- 8.01(i). "Investment" of any Person means any investment so classified under GAAP, ---------- and, whether or not so classified, includes (a) any direct or indirect loan or advance made by it to any other Person, whether by means of stock purchase, loan, advance or otherwise, (b) any capital contribution to any other Person, and (c) any ownership or similar interest in any other Person. "LIBOR Rate" means, for any Interest Period for each LIBOR Rate Advance, an ---------- interest rate per annum determined by the Agent to be the average (rounded, if necessary, to the nearest whole multiple of one thirty-second of one percent (1/32%) if such average is not a multiple thereof) of the rate per annum at which deposits in U.S. dollars are offered to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days prior to the commencement of such Interest Period, in an amount substantially equal to such LIBOR Rate Advance and for a period equal to such Interest Period. "LIBOR Rate Advance" means an Advance which bears interest at the LIBOR -------------------- Rate as provided in Section 2.06(a). "LIBOR Rate Reserve Percentage" of any Bank for any Interest Period for any ----------------------------- LIBOR Rate Advance means the reserve percentage, if any, applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement, expressed as a percentage per annum) for such Bank with respect to liabilities or assets consisting of or including eurocurrency liabilities having a term equal to such Interest Period. "Lien" means any claim, mortgage, deed of trust, pledge, security interest, ---- encumbrance, lien, or charge of any kind (including, without limitation, any agreement to give any of the foregoing), any conditional sale or other title retention agreement, or the interest of the lessor under any Capitalized Lease (but otherwise excluding leases). "Loan Documents" means this Agreement, the Notes, the Guaranty Agreements, --------------- and any document or instrument executed in connection with the foregoing. "Majority Banks means at any time Banks holding at least 66 2/3% of the --------------- then aggregate unpaid principal amount of the Notes held by Banks, or, if no such principal amount is then outstanding, Banks having at least 66 2/3% of the Commitments. "Margin Stock" shall have the meaning assigned to such term in any of ------------- Regulation T, U or X. "Moody's" means Moody's Investors Service, Inc. ------- "Morgan Loan (Series 1995)" has the meaning specified in Section 6.09 ---------------------------- hereof. "Morgan Loan (Series 1996)" has the meaning specified in Section 6.10 ---------------------------- hereof. "Multiemployer Plan" means a Amultiemployer plan" as defined in Section ------------------- 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing or has made or accrued an obligation to make contributions. "Net Proceeds" means with respect to the disposition of Real Property of ------------- the Borrower permitted by Section 7.04 hereof, all proceeds realized from such disposition after deducting: (i) any withholding taxes arising from the disposition of assets located outside of the United States; (ii) the ordinary and customary out-of-pocket costs of such disposition; and (iii) amounts applied to the repayment of Debt secured by Liens on such Real Property, to the extent such Liens were not prohibited hereunder. "Net Proceeds" shall also include proceeds of insurance with respect to an actual or constructive loss of such property, an agreed or compromised loss of such property or the taking of any such property under the power of eminent domain and condemnation awards and awards in lieu of condemnation for the taking of property under the power of eminent domain. "Net Worth" means, as of any date, Assets (which term, for the purposes ---------- hereof, means Assets as shown on a balance sheet prepared in accordance with GAAP) minus Liabilities (which term, for the purposes hereof, means Liabilities as shown on a balance sheet prepared in accordance with GAAP). "Non-Recourse Debt" of any Person means Debt of such Person in respect of ------------------ which (other than with respect to agreements in respect of such Debt regarding the occurrence of certain wrongful acts or misapplication of funds) (i) the recourse of the holder of such Debt, whether direct or indirect and whether contingent or otherwise, is effectively limited to the assets directly securing such Debt; and (ii) such holder may not collect by levy of execution against assets of such Person generally (other than the assets directly securing such Debt) if such Person fails to pay such Debt when due and the holder obtains a judgment with respect thereto. "Note" or "Notes" has the meaning specified in Section 2.02(c). ---- ----- "Notice of Borrowing" has the meaning specified in Section 2.02(a). --------------------- "Notice of Interest Conversion" has the meaning specified in Section 2.09. ------------------------------ "Obligations" means all of the obligations of the Borrower and its ----------- Subsidiaries now or hereafter existing under the Loan Documents to which it is a -- party, whether for principal, interest, fees, expenses, indemnification or otherwise. "Organizational Document" has the meaning set forth in Section 4.01(d). ------------------------ "PBGC" means the Pension Benefit Guaranty Corporation. ---- "Permitted Debt" means Debt which does not exceed the limits specified in --------------- Section 7.02. "Permitted Liens" means: ---------------- (a) non-consensual Liens imposed by operation of law including, without limitation, Liens for taxes not yet delinquent, landlord Liens for rent not yet due and payable, and Liens for materialmen, mechanics, warehousemen, carriers, employees, workmen, repairmen, current wages, or accounts payable not yet delinquent and arising in the ordinary course of business; provided, however, that any right to seizure, levy, attachment, sequestration, foreclosure, or garnishment with respect to Property of the Borrower or any Subsidiary by reason of such Lien has not matured, or has been, and continues to be, effectively enjoined or stayed; (b) easements, rights-of-way, restrictions, and other similar Liens or imperfections to title which do not materially interfere with the occupation, use, and enjoyment by the Borrower or any Subsidiary of the Property encumbered thereby or materially impair the value of such Property subject thereto for its intended purpose; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers' compensation, unemployment insurance and other types of social security, or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, performance or payment bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property; and (d) UCC protective filings with respect to personal property leased to the Borrower or any Subsidiary. "Person" means an individual, partnership, corporation (including a ------ business trust), joint stock company, trust, unincorporated association, joint - venture or other entity, or a Governmental Authority. "Plan" means any employee benefit plan within the meaning of Section 3(3) ---- of ERISA, other than a Multiemployer Plan, maintained by the Borrower or any ERISA Affiliate. "Prime Rate" shall mean for each Prime Rate Portion the rate per annum most ---------- recently established by Agent as its Aprime rate". Without notice to the Borrower or any other Person, the Prime Rate shall change automatically from time to time as and in the amount by which such prime rate shall fluctuate, with each such change to be effective as of the date of each change in such prime rate. The Prime Rate is set by Agent as a general reference rate of interest, taking into account such factors as Agent may deem appropriate, it being understood that it is not necessarily the lowest or best rate actually charged to any customer or a favored rate, that it may not correspond to any future increases or decreases of interest rates charged by other lenders, or market rates in general, and Agent may make various commercial or other loans at rates of interest having no relationship to such rate. "Prime Rate Advance" means an Advance which bears interest at the Prime -------------------- Rate. "Property" means any interest or right in any kind of property or asset, -------- whether real, personal, or mixed, owned or leased, tangible or intangible, and whether now held or hereafter acquired. "Pro Rata Percentage" or Aratably" means as to any Bank a fraction --------------------- (expressed as a percentage) the numerator of which shall be the aggregate -- original principal amount of such Bank's Note and the denominator of which shall be $100,000,000. "Rating Certificate" has the meaning specified in Section 6.01(h). ------------------- "Real Property" means all of the land, buildings, improvements and projects ------------- under construction owned by the Borrower or any Subsidiary, including without limitation all improvements thereon, fixtures, and any leasehold or other interest in such property owned or held by the Borrower or any Subsidiary, but excluding Property under direct financing leases (as reflected on the balance sheet of the Borrower). "Register" has the meaning specified in subsection 10.08(c) hereof. -------- "Regulation T" "Regulation U" and "Regulation X" means Regulation T, U or ---------------------------------------------- aX,s the case may be, of the Board of Governors of the Federal Reserve System, or any successor or other regulation hereafter promulgated by said Board to replace the prior Regulation T, U or X and having substantially the same function. "Responsible Officer"means the chief financial officer or the chief -------------------- accounting officer of the Borrower. - "Revolving Credit Loan" or "Revolving Loan" means the revolving credit loan --------------------- -------------- to be made under Section 2.01 hereof. "Revolving Credit Termination Date" means the earlier of (i) three hundred ---------------------------------- sixty-four (364) days from the Effective Date of this Agreement or (ii) the date (x) the Commitments have been terminated in accordance with this Agreement (including, without limitation, under Section 8.01 hereof) and (y) all amounts due and owing under the Notes have been paid in full. "S&P" means Standard & Poor's Rating Service, a division of The McGraw Hill --- Companies. "Subsidiary" shall mean (i) a corporation of which a sufficient number of ---------- shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors of such corporation are owned directly or indirectly by the Borrower, or (ii) any partnership or other business entity, with respect to which the Borrower or a Guarantor owns an equity interest sufficient to exercise majority voting power over management decisions. For purposes of clause (ii) aforesaid, neither the Borrower nor a Guarantor shall be deemed to own an equity interest sufficient to exercise Amajority voting power over management decisions" if certain major decisions of such partnership or other business entity (e.g., a decision to sell property) require consent of Persons other than the Borrower or Guarantor. For purposes of this definition, Weingarten Properties Trust, a Texas real estate investment trust, shall not be deemed to be a Subsidiary. "Total Assets" as of any date means the sum of (i) the Undepreciated Real ------------- Estate Assets, and (ii) the aggregate book value of all other assets of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP (after deducting therefrom assets classified as Aintangible assets" in accordance with GAAP.) "Total Commitment" shall mean the sum of the Commitments in effect under ----------------- this Agreement from time to time. "Type" refers to the determination whether an Advance is a Prime Rate ---- Advance or a LIBOR Rate Advance (or a Borrowing comprised of such Advances). "Undepreciated Real Estate Assets" as of any date means the aggregate book --------------------------------- value, before deduction for depreciation and amortization, of Real Property assets of the Borrower and the Subsidiaries, determined on a consolidated basis in accordance with GAAP. "Unimproved Real Property" shall mean Land Held For Development, as -------------------------- reflected on the Financial Statements. - SECTION I.2. Accounting Terms. All accounting terms not specifically ----------------- defined herein shall be construed in accordance with GAAP consistent with those applied in the preparation of the financial statements referred to in Section 5.02. ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES SECTION II.1. The Revolving Credit Loan. Each Bank severally agrees, on -------------------------- the terms and conditions hereinafter set forth, to make Advances on a revolving credit basis to the Borrower from time to time on any Business Day during the period on and after the Effective Date hereof until the Revolving Credit Termination Date, in an aggregate amount not to exceed at any time outstanding an amount equal to such Bank's Commitment. Each Borrowing shall be in an aggregate amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Advances of the same Type made on the same day by the Banks ratably according to their respective Commitments. Within the limits set forth herein, until, and including, the Revolving Credit Termination Date, the Borrower may borrow, prepay pursuant to Sections 3.02 and 3.03 and reborrow under this Section 2.01. The principal amount outstanding of all Advances shall mature and, together with accrued and unpaid interest thereon, shall be due and payable on the Revolving Credit Termination Date. SECTION II.2. Making the Advances on the Revolving Credit Loan. ------------------------------------------------------- (a) Each Borrowing shall be made on the Borrower's written notice in the form set forth as Exhibit 2.02(a), attached hereto ("Notice of Borrowing") ------------------- or oral notice (containing the information required in a Notice of Borrowing) given by the Borrower to the Agent not later than 10:00 A.M. (Dallas, Texas time) (i) on the third Business Day prior to the date of the proposed Borrowing in the case of a LIBOR Rate Advance, and (ii) on the same Business Day of the proposed Borrowing in the case of a Prime Rate Advance (to the extent permitted under Section 2.06(b)). With respect to any oral Notice of Borrowing, the Borrower shall promptly thereafter confirm such notice in writing. Each Notice of Borrowing shall specify therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing comprised of LIBOR Rate Advances, the initial Interest Period for each such Advance; provided that, there shall not be more than three (3) Interest Periods for a period of seven (7) days in effect at any one time with respect to any Note, and no more than seven (7) Interest Periods in effect in the aggregate at any one time with respect to any Note. The Agent shall promptly deliver a copy of each Notice of Borrowing to each Bank. Each Bank shall, before 11:00 A.M. (Dallas time) on the date of such Borrowing, make available to the Agent at its address referred to in Section 10.02, in immediately available funds, such Bank's ratable portion of such Borrowing. After the Agent's receipt from the Banks of such funds (and not prior thereto), and upon fulfillment of the applicable conditions set forth in Article IV, the Agent will promptly make such funds available to the Borrower at the Agent's aforesaid address. Each Notice of Borrowing shall be irrevocable and binding on the Borrower. (b) The failure of any Bank to make an Advance to be made by it as part of any Borrowing shall not relieve any other Bank of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Bank shall be responsible for the failure of any other Bank to make the Advance to be made by such other Bank on the date of any Borrowing. (c) The Borrower shall execute and deliver for each Bank to evidence the Advances made or to be made by such Bank pursuant to Section 2.01 hereof, a promissory note (each such note a "Note" and more than one Note, the "Notes"), ---- ----- dated as of the Closing Date, in the amount of such Bank's Commitment. Each Note shall be substantially in the form of Exhibit 2.02(c) with the blanks appropriately filled, and shall mature on the Revolving Credit Termination Date. SECTION II.3. INTENTIONALLY DELETED. ---------------------- SECTION II.4. INTENTIONALLY DELETED. ---------------------- SECTION II.5. Reduction of the Commitments. The Borrower shall have the ------------------------------ right, upon at least three (3) Business Days' notice to the Agent, to terminate in whole or reduce ratably in part the unused portions of the Commitments of the Banks, provided that each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple thereafter of $1,000,000. Any termination or reduction pursuant to this Section 2.05 shall be a permanent termination or reduction of the Commitments. SECTION II.6. Interest. Each Advance shall bear interest at the rates set -------- forth below, and the Borrower shall pay interest on the unpaid principal amount of each Advance made by each Bank from the date of such Advance until such principal amount shall be paid in full, at the times and at the rates per annum set forth below: (a) LIBOR Rate Advances. During such periods as such Advance is a LIBOR ------------------- Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the lesser of (i) the sum of the LIBOR Rate for such Interest Period for such Advance plus the Applicable Margin, together with additional interest due under Section 2.07 hereof, if any, and (ii) the Highest Lawful Rate, payable quarterly in arrears on the first day of each calendar quarter, commencing with the calendar quarter following the calendar quarter in which the Effective Date of this Agreement occurs, and on the Revolving Credit Termination Date. (b) Prime Rate Advances. During such periods as such Advance is a Prime ------------------- Rate Advance, a rate per annum equal at all times to the lesser of (i) the Prime Rate and (ii) the Highest Lawful Rate, payable quarterly in arrears on the first day of each calendar quarter, commencing with the calendar quarter following the calendar quarter in which the Effective Date of this Agreement occurs, and on the Revolving Credit Termination Date. (c) Interest Computations. All computations of interest hereunder at ---------------------- the Prime Rate pursuant to this Article II shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest hereunder at the LIBOR Rate (plus the Applicable Margin) pursuant to this Article II shall be made by the Agent on the basis of a year of 360 days (but if a 360 day calculation would result in a rate in excess of the Highest Lawful Rate, then based on a year of 365 or 366 days, as the case may be), in each case (whether for a LIBOR Rate Advance or a Prime Rate Advance) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error. (d) Past Due Rate. Any amount of principal which is not paid when due -------------- (whether at stated maturity, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to the lesser of (i) two percent (2%) per annum above the Prime Rate in effect from time to time and (ii) the Highest Lawful Rate. SECTION II.7. Additional Interest on LIBOR Rate Advances. Subject to ----------------------------------------------- Section 10.09 hereof, the Borrower shall pay to each Bank, at such time as and so long as such Bank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Advance of such Bank during such periods as such Advance is a LIBOR Rate Advance, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum, equal at all times to the remainder obtained by subtracting (a) the LIBOR Rate for such Interest Period for such LIBOR Rate Advance from (b) the rate obtained by dividing such LIBOR Rate by a percentage equal to 100% minus the LIBOR Rate Reserve Percentage of such Bank for such Interest Period, payable on each date on which interest is payable on such LIBOR Rate Advance pursuant to Section 2.06(a) hereof. Such additional interest shall be determined by such Bank (subject to Section 10.09) and notified to the Borrower through the Agent, and each such notification shall be conclusive absent manifest error. SECTION II.8. Interest Rate Determination and Protection. (a) The rate of ------------------------------------------ interest for each LIBOR Rate Advance specified in a Notice of Borrowing or a Notice of Interest Conversion, shall be determined by the Agent two (2) Business Days before the first day of the Interest Period applicable for such Advance. The Agent shall give prompt notice to the Borrower and the Banks of the applicable interest rate determined by the Agent for purposes of Section 2.06(a) hereof, and each such determination by the Agent shall be conclusive, absent manifest error. (b) If, with respect to any LIBOR Rate Advances, the Majority Banks notify the Agent that the LIBOR Rate (plus the Applicable Margin) for any Interest Period for such Advances will not adequately reflect the cost to such Majority Banks of making, funding or maintaining their respective LIBOR Rate Advances for such Interest Period, the Agent shall forthwith promptly so notify the Borrower and the Banks, whereupon; (i) each LIBOR Rate Advance, which has been effected, will automatically, on the last day of the then existing Interest Period therefor, convert into a Prime Rate Advance; and (ii) the obligation of the Banks to make, or to convert Advances into, LIBOR Rate Advances shall be suspended until the Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist. (c) If the Borrower shall fail to deliver to the Agent a Notice of Interest Conversion in accordance with Section 2.09 hereof or to select the duration of any subsequent Interest Period for the principal amount outstanding under any LIBOR Rate Advance prior to the last day of the Interest Period applicable to such Advance, the Agent will forthwith so notify the Borrower and the Banks, and such Advances will automatically, on the last day of the then existing Interest Period therefor, convert into LIBOR Rate Advances at the LIBOR Rate in effect two Business Days prior to such date for an Interest Period of one month, plus the Applicable Margin. (d) Notwithstanding any other provision of this Agreement, if any Bank shall notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Bank to perform its obligations hereunder to make LIBOR Rate Advances or to fund or maintain LIBOR Rate Advances hereunder, (i) the obligation of such Bank to make, or to convert Advances into, LIBOR Rate Advances shall be suspended until such Bank shall notify the Borrower and the Agent that the circumstances causing such suspension no longer exist and (ii) the Borrower shall forthwith prepay in full all LIBOR Rate Advances of such affected Bank then outstanding, unless the Borrower, within two (2) Business Days of notice from the Agent, converts all LIBOR Rate Advances of such Bank then outstanding into Prime Rate Advances in accordance with Section 2.09. SECTION II.9. Voluntary Interest Conversion of Advances. The Borrower may ----------------------------------------- on any Business Day prior to the Revolving Credit Termination Date, upon the Borrower's written notice in the form set forth as Exhibit 2.09 attached hereto ("Notice of Interest Conversion"), or oral notice (containing the information requested in a Notice of Interest Conversion) given to the Agent not later than 10:00 A.M. (Dallas, Texas time) on the third (3rd) Business Day prior to the date of the proposed interest conversion in the case of a LIBOR Rate Advance, (i) convert all such LIBOR Rate Advances into Prime Rate Advances, (ii) convert all LIBOR Rate Advances for a specified Interest Period into LIBOR Rate Advances for a different Interest Period or (iii) convert all Prime Rate Advances into LIBOR Rate Advances; provided however, with respect to any oral Notice of Interest Conversion, the Borrower shall promptly confirm such notice in writing; provided further that, any conversion of any LIBOR Rate Advances into a Prime Rate Advance or a different Interest Period shall be made on, and only on, the last day of an Interest Period for such LIBOR Rate Advances (unless the provisions of Sections 2.07, 2.08(d) or 3.04 apply). Each such Notice of Interest Conversion shall specify therein (i) the requested date of such interest conversion, (ii) the Advances to be converted and (iii) if such interest conversion is into Advances constituting LIBOR Rate Advances, the duration of the Interest Period for each such Advance. The Agent shall promptly deliver a copy of each Notice of Interest Conversion to each Bank. Each Notice of Interest Conversion shall be irrevocable and binding on the Borrower. SECTION II.10. Funding Losses Relating to LIBOR Rate Advances. (a) If any ---------------------------------------------- payment of principal of, or interest conversion of, any LIBOR Rate Advance is made other than on the last day of an Interest Period relating to such Advance, as a result of a conversion pursuant to Section 2.09, or a payment pursuant to Sections 3.02, 3.03, or acceleration of the maturity of any Note in accordance with the terms hereof, or for any other reason, the Borrower shall, upon demand by the Agent or any Bank (with a copy of such demand to the Agent), pay to the Agent for the account of such Bank any amounts required to compensate such Bank for any additional losses, costs, or expenses which it may reasonably incur as a result of such payment or interest conversion, including, without limitation, any loss, cost, or expense incurred by reason of the liquidation or reemployment of the amounts so prepaid or of deposits or other funds acquired by such Bank to fund or maintain such Advance. Each Bank requesting compensation under this Section 2. 10 shall deliver to the Borrower (with a copy to the Agent) a certificate of such Bank setting forth the calculation of such amounts with reasonable specificity and such certificate shall be conclusive, absent manifest error. (b) IN THE CASE OF ANY BORROWING, THE BORROWER SHALL INDEMNIFY EACH BANK AGAINST ANY LOSS, COST, OR EXPENSE INCURRED BY SUCH BANK AS A RESULT OF ANY FAILURE OF THE BORROWER TO FULFILL ON OR BEFORE THE DATE SPECIFIED IN A NOTICE OF BORROWING THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE IV, INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST, OR EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF THE AMOUNTS SO PREPAID OR OF DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND THE ADVANCE TO BE MADE BY SUCH BANK AS PART OF SUCH BORROWING WHEN SUCH ADVANCE, AS A RESULT OF SUCH FAILURE, IS NOT MADE ON SUCH DATE. (c) Any Bank demanding payment under this Section 2.10 shall deliver to the Borrower and the Agent a statement reasonably setting forth the amount and manner of determining such loss, cost, or expense, which statement shall be conclusive and binding for all purposes, absent manifest error. ARTICLE III PAYMENTS, PREPAYMENTS, INCREASED COSTS AND TAXES SECTION III.1. Payments and Computations. (a) The Borrower shall ---------------------------- make each payment under this Agreement and under the Notes not later than 10:00 A.M. (Dallas time) on the day when due in U.S. dollars to the Agent at its address referred to in Section 10.02 in immediately available funds. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or commitment fees (to the extent received by the Agent) ratably to the Banks, and like funds relating to the payment of any other amount payable to any Bank (to the extent received by the Agent) to such Bank in each case to be applied in accordance with the terms of this Agreement. (b) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fee, as the case may be; provided however, if such extension would cause payment of interest on or principal of LIBOR Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day; further provided that, the foregoing shall not obligate the Borrower to pay amounts under Section 2.10. (c) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the lesser of (i) the Prime Rate or (ii) the Highest Lawful Rate. SECTION III.2. Voluntary Prepayments. Subject to Section 2.10, the Borrower ---------------------- may, upon notice delivered to the Agent prior to 11:00 A.M. (Dallas, Texas time) on any Business Day prior to the Revolving Credit Termination Date stating the aggregate principal amount of the prepayment and the Advances to be prepaid, prepay the outstanding principal amounts of such Advances comprising part of the same Borrowing in whole or ratably in part, provided however, that all such -------- prepayments shall be made without premium or penalty thereon; and provided -------- further that, losses incurred by any Bank under Section 2.10 shall be payable with respect to each such prepayment. Such notice shall be irrevocable and the payment amount specified in such notice shall be due and payable on the prepayment date described in such notice. Partial prepayments with respect to any Advance shall be in an aggregate principal amount equal to the lesser of (a) $1,000,000 or in greater integral multiples of $1,000,000, or (b) the aggregate principal amount of Advances of such Banks outstanding. In the event that the Borrower fails to notify the Agent as to which Advance is to be prepaid, the partial prepayments shall be applied in the order of the next succeeding expiration of outstanding Interest Periods. SECTION III.3. Mandatory Prepayments. Within the time period specified in --------------------- Section 7.04, the Borrower shall deliver to the Agent, as a prepayment on the Notes, an amount equal to the Adjusted Net Proceeds of a disposition of Real Property of the Borrower or any Subsidiary permitted under Section 7.04; provided, however, such delivery of the Adjusted Net Proceeds shall only be required to the extent of any Adjusted Net Proceeds not delivered pursuant to that certain Amended and Restated Credit Agreement dated November 21, 1996, by and among the Borrower, Chase Bank of Texas, N.A., as Agent for itself and the other banks named thereon. Upon receipt of such amount, the Agent shall promptly deliver to each Bank, to the extent required under Section 7.04, its Pro Rata Percentage of such prepayment. Upon the date on which a prepayment is required under Section 7.04, the Commitment of each Bank shall be permanently reduced in an amount equal to such Bank's Pro Rata Percentage of such Adjusted Net Proceeds. SECTION III.4. Increased Costs Capital Adequacy. (a) If, due to either (i) -------------------------------- the introduction of or any change (other than any change by way of imposition or increase of reserve requirements, in the case of LIBOR Rate Advances, included in the LIBOR Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Bank of agreeing to make or making, funding or maintaining LIBOR Rate Advances (without duplication of payments made under Section 3.05 or any other provision of this Agreement), then the Borrower shall from time to time, upon demand by such Bank (with a copy of such demand to the Agent), pay to the Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost; provided that the Borrower shall only be liable for such additional costs incurred by such Bank for the period commencing thirty (30) days after the date of notice from such Bank to the Borrower of such additional amounts; and provided further, that subject to Section 2. 10, the Borrower may elect to convert outstanding LIBOR Rate Advances into Prime Rate Advances, in accordance with Section 2.09. (b) If any Bank determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority, enacted after the date of this Agreement, or any new interpretation of an existing law, regulation, guideline or request (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Bank or any corporation controlling such Bank and that the amount of such capital is increased by or based upon the existence of such Bank's Commitment to lend hereunder and other commitments of this type, then, upon demand by such Bank (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the account of such Bank, from time to time as specified by such Bank, additional amounts sufficient to compensate such Bank or such corporation in the light of such circumstances for such increased capital requirement; provided that the Borrower shall only be liable for such additional costs incurred by such Bank for the period commencing thirty (30) days after the date of notice from such Bank to the Borrower of such additional amounts; and provided further, that subject to Section 2.10, the Borrower may elect to convert outstanding LIBOR Rate Advances into Prime Rate Advances in accordance with Section 2.09. SECTION III.5. Taxes (a) Any and all payments by the Borrower hereunder ----- or under the Notes shall be made, in accordance with Section 3.01, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Bank, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Bank or any political subdivision thereof. If the Borrower shall be required by law to deduct any such amounts from or in respect of any sum payable hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.05) such Bank or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. The Borrower further agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or the Notes. (b) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 3.05 shall survive the payment in full of principal and interest hereunder and under the Notes. SECTION III.6. Certificate of Bank. Any Bank demanding compensation under --------------------- Section 3.04 or 3.05 shall deliver to the Borrower and the Agent a statement reasonably setting forth the amount and manner of determining such loss, cost or expense, which statement shall be conclusive and binding for all purposes, absent manifest error. ARTICLE IV CONDITIONS OF LENDING SECTION IV.1. Conditions Precedent to Initial Advances. The obligation of ---------------------------------------- each Bank to make its initial Advance on or after the date of this Agreement is subject to the condition precedent that the Agent shall have received (or the actions described below shall have occurred, as the case may be), the following, in form and substance satisfactory to the Agent and (except for the Notes) in sufficient copies for each Bank: (a) The Notes, duly executed by the Borrower and payable to the order of the Banks, respectively. (b) This Agreement, duly executed by the Borrower. (c) A Guaranty Agreement duly executed by each Guarantor. (d) A certificate of the Secretary of the Borrower certifying (i) the names and true signatures of the officers of the Borrower authorized to sign each Loan Document to which the Borrower is a party and the notices and other documents to be delivered by the Borrower pursuant to any-such Loan Document; (ii) the Restated Declaration of Trust dated March 23, 1988, together with any amendments thereto, (the "Organizational Documents") of the Borrower as in effect on the ------------------------- date of such certification; and (iii) the resolutions of the Board of Trust Managers of the Borrower approving and authorizing the execution, delivery, and performance by the Borrower of each Loan Document to which the Borrower is a party, the notices and other documents to be delivered by the Borrower pursuant to any such Loan Document, and the transactions contemplated thereunder. (e) A certificate of the Secretary of each Guarantor certifying (i) the names and true signatures of the officers of such Guarantor authorized to sign each Loan Document to which such Guarantor is a party and the notices and other documents to be delivered by such Guarantor pursuant to any such Loan Document; (ii) the By-laws and Articles of Incorporation of such Guarantor as in effect on the date of such certification; and (iii) the resolutions of the Board of Directors of such Guarantor approving and authorizing the execution, delivery, and performance by such Guarantor of each Loan Document to which each such Guarantor is a party, the notices and other documents to be delivered by such Guarantor pursuant to any such Loan Document, and ihe transactions contemplated thereunder. (f) Subject to Section 6.08, certificates of appropriate officials as to the existence and good standing of each of the Borrower and each Guarantor in its jurisdiction of organization or incorporation, and any and all other jurisdictions where the Property owned or the business transacted by each of the Borrower and each Guarantor requires each of the Borrower and each Guarantor to be qualified therein and where the failure to be so qualified would have a material adverse effect on the business operations or financial condition of the Borrower and the Guarantors, taken as a whole. (g) A favorable opinion of Dow, Cogburn & Friedman, P.C., counsel for the Borrower and the Guarantors, in form and substance satisfactory to the Banks. (h) Payment to the Agent of all fees and expenses payable at Closing, including, without limitation, fees of counsel to the Agent and the Banks payable under Section 10.04. (i) Such other documents and instruments with respect to the transactions contemplated hereby as the Agent may reasonably request. SECTION IV.2. Conditions Precedent to Each Borrowing. The obligation of each ---------------------------------------- Bank to make an Advance under the Revolving Credit Loan on the occasion of each Borrowing (including the initial Borrowing) shall be subject to the further conditions precedent that on the date of such Borrowing (a) the Agent shall have received a Notice of Borrowing in accordance with the terms of this Agreement and (b) the following statements shall be true and correct (and each of the giving of the applicable Notice of Borrowing, and the acceptance by the Borrower of the proceeds of such Borrowing, shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true and correct): (a) The representations and warranties contained in Article V of this Agreement are true and correct in all material respects on and as of the date of such Borrowing, before and after giving effect to such Borrowing, and to the application of the proceeds therefrom, as though made on and as of such date, and (b) No event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, which constitutes (or would constitute) a Default or an Event of Default. ARTICLE V REPRESENTATIONS AND WARRANTIES In order to induce the Banks to enter into this Agreement, the Borrower represents and warrants to the Banks (which representations and warranties will survive the delivery of any Note and the making of any Advance that: SECTION V.1. Existence. The Borrower (a) is a real estate investment trust --------- duly organized under the Texas Real Estate Investment Trust Act, Tex. Rev. Civ. Stat. Ann. art. 6138A (Vernon 1986) (the "Act'), and in good standing under the Act and the laws of the State of Texas, (b) has the power to own its Property and to carry on its business as now conducted, and (c) is duly qualified to do business and is in good standing in every jurisdiction where such qualification is necessary. Each Subsidiary of the Borrower (x) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, (y) has the power to own its property and carry on its business as now conducted, and (z) is duly qualified to do business and is in good standing in every jurisdiction in which such qualification is necessary, and where the failure to be so qualified or in good standing would have a material adverse effect on the business operations or financial condition of the Borrower and its Subsidiaries, taken as a whole. The Subsidiaries of the Borrower, and the jurisdiction of organization of each such Subsidiary, are set forth on Exhibit ------- 5.01, hereto. --- SECTION V.2. Financial Condition. The Borrower has furnished the Bank with -------------------- consolidated financial statements as at and for the twelve-month period ended December 31, 1998, accompanied by the opinion of Deloitte & Touche, and quarterly unaudited consolidated financial statements as at and for the three-month periods ending March 31, 1999, June 30, 1999, and September 30, 1999. These statements are true and correct and have been prepared in conformity with GAAP consistently followed throughout the periods involved. They fully and accurately reflect the financial condition of the Borrower and its Subsidiaries and the results of their operations as at the date and for the period indicated. SECTION V.3. Use of Proceeds Margin Stock. Neither the Borrower nor any -------------------------------- Subsidiary owns any Margin Stock. The proceeds of the Loans shall be used for general trust purposes. None of the proceeds of Borrowings hereunder will be used for the purpose of purchasing or carrying any Margin Stock or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry a Margin Stock or for any other purpose which might constitute this transaction a Apurpose" credit within the meaning of said Regulation U, as now in effect or as it may hereafter be amended. Neither the Borrower nor any Subsidiary nor any agent acting on its or their behalf has taken or will take any action which might cause this Agreement or any Advance to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as in effect now or as the same may hereafter be in effect on the date of any Borrowing hereunder. SECTION V.4. Binding Obligations. The Borrower has the power and authority ------------------- under the Act to make and carry out this Agreement, to make the borrowings provided for herein, to execute and deliver the Notes, and to perform its obligations hereunder and under the Notes; and all such action has been duly authorized by all necessary proceedings on its part. Each Subsidiary which is a party to a Guaranty Agreement has the power and authority to perform its obligations in accordance with the terms and conditions of the Guaranty Agreement to which it is a party, and all such action has been duly authorized by all necessary proceedings on its part. Each of this Agreement and the Notes have been duly and validly executed and delivered by the Borrower and constitute a valid and legally binding obligation of the Borrower enforceable in accordance with its terms, and the Guaranty Agreements have been duly executed and delivered by the Guarantors and constitute valid and legally binding obligations of each such Guarantor enforceable in accordance with the respective terms thereof and of this Agreement, except as limited by Debtor Laws. SECTION V.5. No Conflict or Resultant Lien. The execution, delivery, and --------------------------------- performance by the Borrower and each Subsidiary of each Loan Document to which it is a party, the Borrowings hereunder by the Borrower as contemplated herein, and the effectuation of the transactions contemplated by any Loan Document, do not and will not violate any provision of, or result in a default under, the Borrower's Organizational Documents, or the Articles of Incorporation or other charter documents or by-laws of any Subsidiary, or any material agreement to which the Borrower or such Subsidiary is a party, or Governmental Requirement to which the Borrower or such Subsidiary is subject, or result in the creation or imposition of any Lien upon any Property of the Borrower or such Subsidiary. SECTION V.6. Compliance with Other Agreements. Neither the Borrower nor any ----------------------------------- Subsidiary is in default in any material respect under any Governmental Requirement. Neither the Borrower nor any Subsidiary is in default under any other agreement, which default could have a material adverse effect on the business, operations or financial condition of the Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower or any Guarantor to perform its obligations under this Agreement or any other Loan Document to which it is a party. SECTION V.7. No Consent. No authorization or approval or other action by, and no ---------- notice to or filing with, any Person or any Governmental Authority is required for the due execution, delivery, and performance by each of the Borrower or any Subsidiary of any Loan Document to which it is a party or the Borrowings hereunder, in each case as contemplated herein, or the effectuation of the transactions contemplated under any Loan Document. SECTION V.8. Litigation. Except as described on Exhibit 5.08, attached hereto or ---------- as disclosed in any Compliance Certificate, there are no material actions, suits, or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Subsidiary, or the Properties of the Borrower or any Subsidiary. SECTION V.9. Taxes; Governmental Charges. The Borrower and each Subsidiary has ---------------------------- filed or caused to be filed all federal, state, and foreign income tax returns which are required to be filed, and has paid or caused to be paid all taxes as shown on such returns or on any assessment received by it to the extent that such taxes have become due and payable, except for such taxes and assessments as are being contested in good faith in appropriate proceedings and reserved for in accordance with GAAP in the manner required by Section 6.04. SECTION V.10. Full Disclosure. All information furnished by or on behalf of --------------- the Borrower or any Subsidiary to the Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is true and accurate in all material respects and not incomplete by omitting to state any material fact necessary to make such information not misleading. There is no material fact relevant to this Agreement or the transactions contemplated by this Agreement known to the Borrower which has not been disclosed herein or in such other written documents, information or certificates furnished to the Agent and the Banks for use in connection with the transactions contemplated hereby. SECTION V.11. Investment Company Act. Neither the Borrower nor any Subsidiary is ---------------------- an Ainvestment company" or a company Acontrolled" by an Ainvestment company", within the meaning of the Investment Company Act of 1940, as amended. SECTION V.12. Compliance with Law. Except as disclosed in any Compliance --------------------- Certificate and approved by the Banks, the business and operations of the Borrower and each Subsidiary as conducted at all times have been and are in compliance in all material respects with all applicable Governmental Requirements. SECTION V.13. ERISA. Each of the Borrower and each Subsidiary is in compliance ----- in all material respects with all applicable provisions of ERISA and the Code with respect to each Plan, including the fiduciary provisions thereof, and each Plan is, and has been, maintained in material compliance with ERISA and, where applicable, the Code. Full payment when due has been made of all material amounts which the Borrower or any Subsidiary is required under the terms of each Plan or applicable law to have paid as contributions to such Plan as of the date hereof. For purposes of this Section 5.13, the term Amaterial" shall mean a liability in excess of $10,000,000. SECTION V.14. No Default or Event of Default. No Default or Event of Default -------------------------------- hereunder has occurred and is continuing. SECTION V.15. Permits and Licenses. All material permits, licenses and other ---------------------- governmental authorizations necessary for the Borrower or any Subsidiary to carry on its business have been obtained and are in full force and effect and neither the Borrower nor any Subsidiary is in breach of the foregoing. Each of the Borrower and each Subsidiary owns or possesses adequate licenses or other valid rights to use United States trademarks, trade names, service marks, copyrights, patents and applications therefor which are necessary for the conduct of the business, operations or financial condition of the Borrower or such Subsidiary. SECTION V.16. Insurance. Each of the Borrower and each Subsidiary maintains --------- insurance of such types as is usually carried by companies of established reputation engaged in the same or similar business and which are similarly situated with financially sound and reputable insurance companies and associations acceptable to the Agent, with a rating of at least A-, financial size category, Class VI as set forth in Best's Key Rating Guide, published by A.M. Best Company, Inc., and in such amounts as such insurance is usually carried by similar businesses, and in any event, in compliance with the requirements of Section 6.03. If the rating of any insurance company or association is or becomes below the aforesaid minimum requirements, then Borrower and its Subsidiaries shall have 45 days to secure (i) an appropriate reinsurance or other endorsement which will satisfy the aforesaid minimum standards, or (ii) secure replacement insurance coverage satisfying the aforesaid minimum standards. All representations and warranties in each Loan Document shall survive the delivery of the Notes and shall continue for 366 days after the repayment of the Notes; any investigation at any time made by or on behalf of the Agent or any Bank shall not diminish any Bank's right to rely thereon. ARTICLE VI AFFIRMATIVE COVENANTS OF THE BORROWER So long as any Note shall remain unpaid or any Bank shall have any Commitment hereunder, the Borrower covenants and agrees that: SECTION VI.1. Reporting and Notice Requirements. The Borrower will furnish to --------------------------------- each Bank, with respect to items described in Subsections (a), (b), (c) and (f), and to the Agent for delivery to the Banks, with respect to all other items: (a) Quarterly Financial Statements. As soon as available and in any -------------------------------- event within forty-five (45) days after the end of each fiscal quarter of the Borrower (excluding the fourth quarter), Financial Statements of the Borrower and its Subsidiaries as of the end of such quarter. (b) Annual Financial Statements. As soon as available and in any event ----------------------------- within ninety (90) days after the end of each fiscal year of the Borrower, Financial Statements of the Borrower and its Subsidiaries for such fiscal year. (c) Compliance Certificate. Together with and at the time of the delivery of ---------------------- any information required by Subsection (a) and Subsection (b) of this Section 6.01, a certificate (a "Compliance Certificate") substantially in the form of Exhibit 6.01(c), attached hereto, signed by a Responsible Officer, (i) stating that there exists no Event of Default or Default, or if any Event of Default or Default exists, specifying the nature thereof, the period of existence thereof, and what action the Borrower proposes to take with respect thereto; (ii) setting forth the credit rating assigned to the Borrower's senior-unsecured, long-term debt by S&P as of the date of the Compliance Certificate, and as of the date of delivery of such Financial Statements; and (iii) setting forth with reasonable specificity such schedules, computations and other information as may be required to demonstrate that the Borrower is in compliance with its covenants in Sections 7.02, 7.03, 7.04, 7.07, 7.10, 7.13, 7.15 and 7.17 hereof. (d) Notice of Default. Promptly after any Responsible Officer of the ------------------- Borrower knows or has reason to know that any Default or Event of Default has occurred, a written statement of a Responsible Officer of the Borrower setting forth the details of such Default or Event of Default and the action which the Borrower has taken or proposes to take with respect thereto. (e) Notice of Litigation. Together with and at the time of the delivery -------------------- of information required by Subsection (a) or (b), notice of any litigation, legal, administrative, or arbitral proceeding, investigation, or other action of any nature which involves a claim (or a series of related claims in the aggregate) for an amount equal to or exceeding $5,000,000, or, promptly after any Responsible Officer of the Borrower or any Subsidiary obtaining knowledge of the commencement thereof, notice of any litigation, legal, administrative or arbitral proceeding, investigation or other action of any nature which involves the reasonable possibility, if adversely determined, in the judgment of the Borrower, of a judgment in excess of $1,000,000 which has not been stayed, or other liability, in each case which could have a material adverse effect on the business, operations or financial condition of the Borrower and its Subsidiaries, taken as a whole, or on the ability of the Borrower or any Subsidiary to perform its obligations under this Agreement or any other Loan Document to which it is a party, and upon request by the Agent or any Bank, details regarding such litigation which are satisfactory to the Agent or such Bank. (f) Securities Filings. Promptly after the sending or filing thereof and in ------------------- any event within fifteen (15) days thereof, copies of all reports which the Borrower sends to any of its security holders, and copies of all reports (including each regular and periodic report, but without duplication of Financial Statements provided in accordance with Sections 6.01 (a) and (b)) and each registration statement or prospectus which the Borrower or any Subsidiary files with the Securities and Exchange Commission or any national securities exchange. (g) ERISA Notices. The Borrower will and will cause its ERISA Affiliates to -------------- obtain and deliver to the Agent, as soon as possible and in any event within 10 days from receipt, or if applicable, filing, copies of any reports, notices or filings which the Borrower or an ERISA Affiliate files with the Internal Revenue Service, PBGC or the United States Department of Labor with respect to an ERISA Event or which the Borrower or an ERISA Affiliate receives from such Governmental Authority relating to an ERISA Event, and copies of any notice, complaint or other documentation of any pending or threatened lawsuit or claim relating to any Plan or Multiemployer Plan which may have a material adverse effect on the Borrower or an ERISA Affiliate, taken as a whole. (h) Rating Certificate. Promptly upon the Borrower's knowledge of or ------------------- notification (i) by S&P or Moody's that the credit rating assigned to senior-unsecured, long-term debt of the Borrower by S&P or Moody's, as the case may be, has changed from the rating set forth in the most recent Compliance Certificate delivered in accordance with Section 6.01(c), or (ii) by any other nationally recognized rating agency that the Borrower's senior unsecured, long-term debt has been assigned a credit rating, or that subsequent to such assignment, such credit rating has been changed, the Borrower will notify the Agent in writing of the occurrence of such event, and if a notice has been received by the Borrower from S&P, Moody's or such other rating agency, shall provide to the Agent a copy of such notice (each such notice provided hereunder, a "Rating Certificate"). (i) Other Information. Such other information respecting the condition ------------------ or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Bank through the Agent may from time to time reasonably request. SECTION VI.2. Maintenance. The Borrower will, and will cause each of its ----------- Subsidiaries to, (a) at all times do or cause to be done all things necessary to maintain, preserve and renew its existence as a real estate investment trust under the Act or its corporate existence, as the case may be, and its rights and franchises, and comply with all governmental laws, rules, regulations or rulings with respect thereto; provided, however, that nothing contained in this Section 6.02 or any other provision of this Agreement shall (i) require the Borrower or any of its Subsidiaries to comply with any such governmental laws, rules, regulations or rulings, so long as the validity or applicability thereof shall be contested in good faith by appropriate proceedings and any such failure to comply could not reasonably be anticipated to have a material adverse effect on the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole on a consolidated basis, or the ability of the Borrower or such Subsidiary to perform its obligations under this Agreement or any other Loan Document; or (ii) require the Borrower or any of its Subsidiaries to maintain, preserve or renew any right or franchise not necessary or desirable in the conduct of its business as determined in good faith by Borrower's Trust Managers or Board of Directors, as the case may be, and (b) except for planned demolition of Real Property or Property subject to a direct financing lease (as reflected on the Financial Statements), for the purpose of increasing its ultimate value, at all times maintain, preserve, protect and keep or cause to be maintained, preserved, protected and kept its Property in good repair, working order and condition (ordinary wear and tear excepted) and, from time to time, will make or cause to be made all repairs, renewals, replacements, extensions, additions, betterments and improvements to its Property as are appropriate, so that (i) each of the Borrower and its Subsidiaries maintains its current line of business and (ii) the business carried on in connection therewith may be conducted properly and efficiently at all times. SECTION VI.3. Insurance. The Borrower will, and will cause each of its --------- Subsidiaries to, keep its Property insured against loss or damage by fire and other hazards with extended coverage and as is otherwise usually carried by companies of established reputation engaged in the same or similar business which are similarly situated, and in such amounts as such insurance is usually carried by such similar businesses. Such policy or policies shall be satisfactory in form and substance to the Banks, with the premiums thereon fully paid in advance, issued by and binding upon financially sound and reputable insurance companies and associations acceptable to the Agent, with a rating of at least A-, financial size category, Class VI as set forth in Best's Key Rating Guide, published by A.M. Best Company, Inc., and providing for at least fifteen (15) days written notice to the Agent of cancellation, failure to renew or other material change in such policy or policies. If the rating of any insurance company or association is or becomes below the aforesaid minimum requirements, then Borrower and its Subsidiaries shall have 45 days to secure (i) an appropriate reinsurance or other endorsement which will satisfy the aforesaid minimum standards, or (ii) secure replacement insurance coverage satisfying the aforesaid minimum standards. SECTION VI.4. Taxes and Other Claims. The Borrower will, and will cause ------------------------ each of its Subsidiaries to, duly pay and discharge, as the same become due and payable, all of its taxes (including without limitation all federal and state income taxes, ad valorem taxes, sales taxes, use taxes, occupational taxes, franchise taxes, withholding taxes, severance taxes, excise taxes and manufacturing taxes) and assessments, and all claims and charges of any Governmental Authority or any other Person levied or imposed, or which if unpaid might become a Lien or charge, upon the franchises, assets, earnings or businesses of the Borrower or any of its Subsidiaries, as the case may be; provided, however, that nothing contained in this Section 6.04 shall require the Borrower or any of its Subsidiaries to pay any such tax, assessment, charge or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and the Borrower or any such Subsidiary shall set aside on its books adequate reserves with respect thereto if required by GAAP. SECTION VI.5. Rights of Inspection. From time to time upon reasonable notice to -------------------- the Borrower, the Borrower will, and will cause each Subsidiary to, permit any officer, or employee of, or agent designated by, the Agent or any Bank to visit and inspect any of the Properties of the Borrower or any Subsidiary, examine the Borrower's or such Subsidiary's corporate books or financial records, take copies and extracts therefrom, and discuss the affairs, finances, and accounts of the Borrower or any Subsidiary with the Borrower's or such Subsidiary's officers or certified public accountants, all as often as the Agent or any Bank may reasonably desire. SECTION VI.6. Guarantees of Subsidiaries. In the event that the Borrower shall -------------------------- at any time acquire or create a new Subsidiary all of the stock of which is 100% owned by the Borrower, the Borrower shall immediately cause such Subsidiary to provide to the Agent for the benefit of the Banks a guaranty of the obligations of the Borrower under this Agreement which shall be in the form attached hereto as Exhibit 1.01-A; provided that, it shall not constitute a Default hereunder if -------------- such new Subsidiary does not provide such Guaranty Agreement until the date required for delivery of the Compliance Certificate in accordance with Section 6.01(c); and provided further compliance of the Borrower with the provisions of this Section 6.06 are hereby waived with respect to the requirements (i) of a guaranty to be executed by Central Plaza for the period from the Effective Date and the date on which the Morgan Loan (Series 1995) is paid in full; and (ii) of a guaranty to be executed by Bell Plaza for the period from the Effective Date and the date on which the Morgan Loan (Series 1996) is paid in full. It is agreed and understood that the obligation of the Borrower under this Section 6.06 to cause any such Subsidiary to provide to the Agent for the benefit of the Banks a guaranty is a condition precedent to the making of the Advances pursuant to this Agreement and that the entry into this Agreement by the Banks constitutes good and adequate consideration for the provision of such guaranty. SECTION VI.7. Compliance with Law. The Borrower will, and will cause each of its ------------------- Subsidiaries to, comply in all material respects with all laws, rules, regulations and rulings of all Govemmental Authority having jurisdiction in respect of the conduct of its business and the ownership of its Property. SECTION VI.8. Delivery of Certain Certificates. The Borrower agrees that to the -------------------------------- extent it was unable to provide certificates required under Section 4.01(e) and Section 4.01(f) on or before the Closing Date for any Subsidiary, after using its best efforts to obtain the same, all such certificates shall be provided to the Agent, on behalf of the Banks, on or before the forty-fifth (45th) day after the Closing Date. SECTION VI.9. Payment of Net Income of Central Plaza to the Borrower. ---------------------------------------------------------- Notwithstanding anything herein to the contrary, the Borrower shall cause WRI/Central Plaza, Inc., a Texas corporation and a wholly-owned Subsidiary of the Borrower ("Central Plaza"), to dividend or otherwise transfer all net income of Central Plaza to the Borrower to the extent not prohibited under the documents as in effect on March 6, 1998 evidencing, securing, guaranteeing or otherwise related to the mortgage loan assumed by Central Plaza in connection with the acquisition of the shopping center (the "Central Plaza Shopping Center") located at the intersection of Slide Road and Loop 259 in Lubbock, Texas, which mortgage loan was in the original principal amount of $4,200,000, is held as part of a collateralized mortgage pool with the current holder being State Street Bank & Trust as trustee for JP Morgan Commercial Mortgage Finance Corp. Mortgage Pass-Through Certificates, Series 1995-C1 and matures January 2, 2002 (the "Morgan Loan (Series 1995)"). SECTION VI.10. Payment of Net Income of Bell Plaza to the Borrower. ------------------------------------------------------------ Notwithstanding anything herein to the contrary, the Borrower shall cause WRI/Bell Plaza, Inc., a Texas corporation and a wholly-owned Subsidiary of the Borrower ("Bell Plaza"), to dividend or otherwise transfer all net income of Bell Plaza to the Borrower to the extent not prohibited under the documents as in effect on June 14, 1999 evidencing, securing, guaranteeing or otherwise related to the mortgage loan assumed by Bell Plaza in connection with the acquisition of the shopping center (the "Bell Plaza Shopping Center") located at the intersection of 45th and Bell in Amarillo, Texas, which mortgage loan was in the original principal amount of $3,300,000, is held as part of a collateralized mortgage pool with the current holder being State Street Bank & Trust as trustee for JP Morgan Commercial Mortgage Finance Corp. Mortgage Pass-Through Certificates, Series 1996-C2 and matures July 1, 2002 (the "Morgan Loan (Series 1996)"). ARTICLE VII NEGATIVE COVENANTS So long as any Note shall remain unpaid or any Bank shall have any Commitment hereunder, the Borrower covenants and agrees that: SECTION VII.1. Liens, Etc. The Borrower will not grant, permit, create or suffer ---------- to exist, and will not permit any Subsidiary to grant, permit create or suffer to exist, any Lien, upon or with respect to any of its Properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, in each case to secure or provide for the payment of any Debt of any Person, other than: (a) Permitted Liens; or (b) Liens which do not violate the covenants contained in Section 7.02(b) hereof. SECTION VII.2. Limitation on Incurrence of Debt. (a) The Borrower will not, -------------------------------- and will not permit any Subsidiary to, incur any Debt if prior to incurrence of such Debt, but after giving effect to the incurrence of such Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Debt of the Borrower and its Subsidiaries is greater than 55% of the Total Assets, determined as at the last day of the most recent preceding calendar year or calendar quarter, as the case may be, as reflected in the Financial Statements of the Borrower most recently provided under Sections 6.01 (a) or (b). (b) The Borrower will not, and will not permit any Subsidiary to, incur any Debt secured by any Lien upon any Property of the Borrower or any Subsidiary if, prior to occurrence of such Debt, but after giving effect to the incurrence of such Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Debt of the Borrower and its Subsidiaries which is secured by a Lien on Property of the Borrower or any Subsidiary is greater than 40% of Total Assets, determined as at the last day of the most recent preceding calendar year or calendar quarter, as the case may be, as reflected in Financial Statements of the Borrower most recently provided under Sections 6.01 (a) or (b). (c) For purposes of this Section 7.02, the term (i) "Total Assets" does not include securities issued or unconditionally guaranteed by the United States government or an agency thereof or by the Federal National Mortgage Association which secure a repurchase agreement with a financial institution, entered into in the ordinary course of business by the Borrower or any Subsidiary, and (ii) "Debt" does not include obligations under any such repurchase agreement or indebtedness of the Borrower or any Subsidiary owed to a financial institution, which is secured by governmental securities described in clause (i) hereof, owned by the Borrower or such Subsidiary, entered into in the ordinary course of business (a Areverse repurchase agreement") provided that in the case of transactions described in clauses (i) and (ii) hereof, the market value of such governmental securities is at all times equal at least to the principal amount of such repurchase agreement or reverse repurchase agreement. SECTION VII.3. Unimproved Real Property. The Borrower will not permit Unimproved ------------------------- Real Property to exceed 12.5% of Undepreciated Real Estate Assets. SECTION VII.4. Sale or Other Disposition of Real Property. The Borrower will not ------------------------------------------ and will not permit its Subsidiaries to, sell, dispose of or otherwise transfer (including, without limitation, a sale-leaseback) (a) Real Property of the Borrower or any Subsidiary with an aggregate book value in any twelve-month period, ending on the last day of the month in which such disposition occurs (or if shorter, for the period from the Closing Date to such day), for all such dispositions (after giving effect to such disposition), greater than 10% of the Undepreciated Real Estate Assets as of the last day of the preceding calendar quarter, or (b) Real Property of the Borrower or any Subsidiary with a cumulative aggregate book value in any thirty-six month period, ending on the last day of the month in which such disposition occurs (or if shorter, for the period from the Closing Date to such day), for all such dispositions (after giving effect to such disposition) greater than 15% of the Undepreciated Real Estate Assets as of the last day of the preceding calendar quarter, unless, on the date on which the next Compliance Certificate is required to be delivered in accordance with Section 6.01(c), the Borrower shall have delivered to the Agent the excess of Net Proceeds of such disposition over such applicable percentage amounts of the Undepreciated Real Estate Assets, respectively (herein referred to as the "Adjusted Net Proceeds") as a prepayment on the Notes, in accordance with Section 3.03. For purposes of this Section 7.04, neither a lease of property (nor the existence of a financing lease) nor creation of a Lien on such property in the ordinary course of business, shall be deemed to be a disposition of such property. SECTION VII.5. Mergers: Consolidation. Except as permitted under Section ----------------------- 7.06(f), the Borrower will not, and will not permit any Subsidiary to, merge or consolidate with or into any other Person, or convey, transfer or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired); provided that (a) subject to the limitations of Section 7.06(f), the Borrower --- may merge or consolidate with or into, or acquire all or substantially all of the assets or capital stock of any other Person, so long as the Borrower is the survivor thereof, and (b) any Subsidiary may merge or consolidate with or into, or acquire all or substantially all of the assets or capital stock of, (i) any other Subsidiary, so long as, if either such Subsidiary is a Guarantor, a Guarantor is the survivor thereof, and (ii) subject to the limitations of Section 7.06(f), any other Person (other than the Borrower), so long as a Subsidiary is the survivor thereof, and (c) any Subsidiary may merge into or transfer all or substantially all of its assets to the Borrower, so long as the Borrower is the survivor thereof, if prior to and after giving effect thereto, in the case of clauses (a), (b) and (c) no Default or Event of Default has occurred or would exist (expressly including, without limitation, under Section 7.06(f)). SECTION VII.6. Investments, Loans, and Advances. Without the consent of the ----------------------------------- Banks, the Borrower will not, and will not permit any Subsidiary to, make or permit to remain outstanding any Investment, endorse, or otherwise be or become contingently liable, directly or indirectly, in connection with the stock or other securities of, or purchase, or acquire any stock or securities of, or any other interest in, any Person, except that: (a) the Borrower or any Subsidiary may permit to remain outstanding Investments existing on the date hereof; (b) the Borrower or any Subsidiary may acquire and own capital stock, obligations, or securities received in settlement of debts (created in the ordinary course of business) owing to the Borrower or any Subsidiary; (c) the Borrower or any Subsidiary may own, purchase, or acquire Cash Equivalents; (d) the Borrower and any Subsidiary may make intercompany loans and advances which are permitted under Section 7.08 hereof, and (subject to Section 6.06) may form Subsidiaries, the capital stock of which is 100% owned by the Borrower or a Guarantor; (e) the transactions permitted under Subsection (a), (b) and (c) of Section 7.05 are permissible; (f) the Borrower or any Subsidiary may (i) acquire the capital stock of a Person without the consent of the Banks, so long as (A) the aggregate purchase price, or cost, of such stock received in exchange for Capital Shares or any asset of the Borrower or a Subsidiary (measured by the value of such Capital Shares or asset of the Borrower or such Subsidiary given in exchange therefor) does not exceed in the aggregate for any successive twelve (12) month period for all such transactions (or series of related transactions) an amount equal to one-third (33 1/3%) of Total Assets, determined as of the last day of the preceding calendar quarter, or (B) if all or a part of such purchase price is paid in cash, the cash portion of the purchase price does not exceed, in the aggregate for any successive twelve (12) month period for all such transactions (or series of related tramctions) an amount equal to ten percent (10%) of the Total Assets, determined as of the last day of the preceding calendar quarter, and (ii) acquire other Investments, (in addition to Investments permitted under subsections (a) through (e), or (f)(i), or (g), of this Section 7.06) so long as the aggregate purchase price, or cost, of such acquisition (measured by the value of such Capital Shares or any assets or promissory note of the Borrower or such Subsidiary, if any, given in exchange therefor, plus the cash portion thereof) does not exceed in the aggregate for any successive twelve (12) month period for all such transactions (or series of related transactions) an amount equal to ten percent (10%) of Total Assets, determined as of the last day of the preceding calendar quarter, and in the case of each of clause (i) or (ii), (w) such action does not result in the income of the Borrower being primarily attributable to loans secured by mortgages on Real Property, (x) if the acquisition results in ownership by the Borrower or any Subsidiary (whether beneficial or of record) of a majority of the voting stock of such Person or results in a merger or consolidation with the Borrower or such Subsidiary, then the board of directors of such Person shall have approved such transaction and such transaction shall not constitute a Ahostile" acquisition with respect to such Person, (y) (except for Investments described under clause (ii) hereof) the business of such Person is substantially similar to the business conducted by the Borrower or such Subsidiary, or is primarily to hold Real Property, and such purchase or acquisition is made in the ordinary course of business, and (z) in any event, prior to and after giving effect to such purchase or dequisition, no Default or Event of Default has occurred or would exist; and (g) the Borrower and any Subsidiary may purchase or acquire directly or indirectly, through partnerships, joint ventures or otherwise, title to Real Property (expressly including, for purposes of this Section 7.06, without limitation, Adirect financing leases," reflected as such on the Financial Statements). SECTION VII.7. Coverage Ratios. (a) The Borrower will not permit the --------------- ratio of (i) Funds From Operations, to (ii) the Annual Service Charge, determined as of the last day of each fiscal quarter for the four (4) successive quarterly accounting periods ending on such date (the "nnual Service Charge Coverage Ratio") to be less than 2.5 to 1.0. (b) The Borrower will not permit the ratio of (i) Funds From Operations, to (ii) the Fixed Charge, determined as of the last day of each fiscal quarter for the four (4) successive quarterly accounting periods ending on such date (the "Fixed Charge Coverage Ratio") to be less than 2.0 to 1.0. SECTION VII.8. Transactions with Affiliates. The Borrower will not, and ------------------------------ will not permit any Subsidiary to, directly or indirectly, enter into any transaction, or modify any existing transaction, with any Affiliate (including, without limitation, any transaction involving the payment of management fees or directors' fees to any Affiliate), except for transactions (including any loans or advances by or to any Affiliate otherwise in compliance under this Agreement) in good faith, the terms of which are fair and reasonable to the Borrower or such Subsidiary, and are at least as favorable as the terms which could be obtained by the Borrower or such Subsidiary in a comparable transaction made on an arm's-length basis between unaffiliated parties. SECTION VII.9. Change of Business. The Borrower will not, and will not permit ------------------- any Subsidiary to, make any material change in the nature of the business conducted by the Borrower and its Subsidiaries taken as a whole and will at all times qualify for taxation as a Real Estate Investment Trust under the Code. SECTION VII.10. Minimum Adjusted Tangible Net Worth. The Borrower shall not -------------------------------------- permit the Minimum Adjusted Tangible Net Worth to be less than $850,000,000. SECTION VII.11. Amendment of Organizational Documents. The Borrower will not, -------------------------------------- and will not permit any of its Subsidiaries to, without the prior written consent of the Banks, amend, alter or modify its Organizational Documents or articles of incorporation or other charter'or bylaws, as the case may be, in such a manner as to (a) change its purpose or (b) restrict its powers in any manner. SECTION VII.12. Guarantees. "Guaranty" shall mean all obligations not otherwise ---------- reflected on the balance sheet of the Borrower or any Subsidiary whereby the Borrower or such Subsidiary guarantees the performance of any joint venture or partnership or the payment or performance of any indebtedness, dividend or other obligation of any other Person (for purposes of this Section 7.12, the "Primary Obligor") in any manner, whether directly or indirectly, including obligations incurred through an agreement or covenant, contingent or otherwise: (i) to purchase such indebtedness or obligation or any Property or assets constituting security therefor, (ii) to advance or supply funds (A) for the purchase or payment of such indebtedness or obligation, or (B) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; (iii) to lease Property or to purchase securities or other Property or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of the Primary Obligor to make payment of the indebtedness or obligation; (iv) to assure the owner of the indebtedness or obligation of the Primary Obligor against loss in respect thereof; or (v) in connection with the creation of a trust or other existing fund for the purpose of securitizing assets of the Borrower or any Subsidiary. Notwithstanding the above, and in any event, except for (i) Guaranties by the Borrower of indebtedness or obligations of any Subsidiary, or (ii) Guaranties of any Subsidiary of indebtedness or obligations of the Borrower, or (iii) the Guaranty by the Borrower of the obligations of the Dugas Partnership in Commendam in respect of the Series 1995 Lafayette Bonds and the special letter of credit issued in connection therewith, neither the Borrower nor any Subsidiary shall enter into any Guaranty (other than checks deposited and/or endorsed in the ordinary course of business of the Borrower or any Subsidiary) unless (A) liability incurred by the Borrower or such Subsidiary under such Guaranty is secured and is for a Primary Obligor's indebtedness or other obligation, and (B) upon payment by the Borrower or such Subsidiary on account of (or in connection with) its obligations under the Guaranty or, after compliance with applicable foreclosure proceedings specified by law or otherwise agreed upon, the Borrower or such Subsidiary will become subrogated to the right, title and interests of the beneficiary of the Guaranty or of the Primary Obligor, to all Property securing such liability. By way of illustration, but not limitation: (x) in the case of a Guaranty of the obligations of a venturer or partner, the Guaranty shall be deemed secured if the Borrower or such Subsidiary is entitled (after compliance with applicable foreclosure proceedings specified by law or otherwise agreed upon) to such defaulting party's venture or partnership interest in case of a default of such venturer or partner; (y) in the case of the Guaranty of a lease, the Guaranty shall be deemed secured if the Borrower or such Subsidiary is entitled (after compliance with applicable foreclosure proceedings specified by law or otherwise agreed upon) to the leasehold estate in case of default by the tenant under such lease; and (z) in the case of the Guaranty of a secured promissory note, a Guaranty shall be deemed secured if the Borrower or such Subsidiary is entitled to purchase the note and the lien securing same, and to become subrogated to the rights of the previous payee on the Note in the case of default of the maker on such default. SECTION VII.13. Assets Retained. The Borrower will not permit the portion --------------- of Undepreciated Real Estate Assets which is subject to no Lien (other than a Permitted Lien) to be less than 150% of the aggregate principal amount outstanding at any time of Debt which is not secured by a Lien on Property of the Borrower or any Subsidiary. SECTION VII.14. Transfer of Assets to Central Plaza. Notwithstanding anything ----------------------------------- herein to the contrary, the Borrower shall not transfer or convey any of its assets or make any capital contributions, loans or other distributions to Central Plaza, except (i) the capital contribution in the approximate amount of $4,500,000 made by the Borrower to Central Plaza in connection with the acquisition of the Central Plaza Shopping Center and (ii) loans or advances to Central Plaza not to exceed $500,000 at any one time outstanding. SECTION VII.15. Limitations on Central Plaza's Incurrence of Debt. ------------------------------------------------------- Notwithstanding anything herein to the contrary, the Borrower shall not permit Central Plaza to incur any Debt (secured or unsecured) other than (i) the Morgan Loan (Series 1995); (ii) trade and operational Debt incurred in the ordinary course of business with trade creditors, in amounts as are normal and customary and (iii) loans from the Borrower; provided that the Debt permitted under clauses (ii) and (iii) shall not exceed an aggregate amount of $500,000. SECTION VII.16. Transfer of Assets to Bell Plaza. Notwithstanding anything -------------------------------- herein to the contrary, the Borrower shall not transfer or convey any of its assets or make any capital contributions, loans or other distributions to Bell Plaza, except (i) the capital contribution in the approximate amount of $3,350,000 made by the Borrower to Bell Plaza in connection with the acquisition of the Bell Plaza Shopping Center and (ii) loans or advances to Bell Plaza not to exceed $1,200,000 at any one time outstanding. SECTION VII.17. Limitations on Bell Plaza's Incurrence of Debt. Notwithstanding ---------------------------------------------- anything herein to the contrary, the Borrower shall not permit Bell Plaza to incur any Debt (secured or unsecured) other than (i) the Morgan Loan (Series 1996), (ii) trade and operational Debt incurred in the ordinary course of business with trade creditors, in amounts as are normal and customary and (iii) loans from the Borrower; provided that the Debt permitted under clauses (ii) and (iii) shall not exceed an aggregate amount of $1,200,000. ARTICLE VIII EVENTS OF DEFAULT SECTION VIII.1. Events of Default. If any of the following events ("Events ----------------- ------ of Default") shall occur: - ----------- (a The Borrower shall fail to pay principal of or interest on any Note or fees or other amounts due under any Note or this Agreement when the same becomes due and payable; or (b Any representation or warranty made by the Borrower (or any of its Responsible Officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made or deemed made; or (c The Borrower shall fail to perform or observe any term, covenant or agreement contained in Sections 6.01 (d), 6.06 or in Article VII; or (d The Borrower shall fail to perform or observe any term, covenant or agreement contained in any Loan Document (other than those set forth in (a), (b) and (c) above) on its part to be performed or observed if such failure shall remain unremedied for thirty (30) days after the occurrence of such event; or (e The Borrower shall fail to pay any principal of or premium or interest on any Debt (other than Non-Recourse Debt) which is outstanding in a principal amount greater thari $10,000,000 in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or any other event constituting a default (however defined) shall occur or condition shall exist under any agreement or instrument relating to any such Debt outstanding in a principal amount greater than $10,000,000 (other than Non-Recourse Debt) and shall continue after the applicable grace period, if any, specified in such agreement or instrument; or (f The Borrower or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any Debtor Laws, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its Property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its Property) shall occur; or the Borrower or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or (g Any final judgment or order for the payment of money which, individually or the aggregate, shall be in excess of $1,000,000 at any time, shall be rendered against the Borrower or any of its Subsidiaries and remains unpaid for a period of 15 days, and a stay of execution thereof (whether by supersedeas bond or otherwise) shall not be in effect after entry thereof; or (h With respect to any Plan, Multiemployer Plan or any other employee benefit plan within the meaning of Section 3(3) of ERISA, the Borrower or any ERISA Affiliate has incurred and fails to pay (or fund, as applicable) within the maximum time period permitted by law, a liability in excess of $10,000,000; or (i An Event of Default (however defined) in any interest rate swap agreement, or any other interest rate protection agreement to which the Borrower or any Subsidiary is a party (the "Interest Rate Agreements"), shall have occurred at any time during which the Agent or any Bank is a counterparty thereunder; or (j The Borrower shall be or become, in the reasonable judgment of the Agent or any Bank, a liquidating trust under the Internal Revenue Code of 1986, as amended; then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrower, declare the Commitment of each Bank to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Banks by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided however, that in the event of an entry of an order for relief with respect to the Borrower or any of its Subsidiaries under the United States Bankruptcy Code, (A) the obligation of each Bank to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. ARTICLE IX THE AGENT SECTION IX.1. Authorization and Action. Each Bank hereby appoints and -------------------------- authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; provided -------- however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The Agent agrees to give to each Bank prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. SECTION IX.2. Agent's Reliance, Etc. Neither the Agent nor any of its directors, --------------------- officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent: (i) may, subject to the provisions of Section 10.08 hereof, treat the payee of any Note as the holder thereof until the Agent receives written notice of the assignment or transfer thereof signed by such payee and including the agreement of the assignee or transferee to be bound hereby as it would have been if it had been an original Bank party hereto, in form satisfactory to the Agent; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document ftirnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION IX.3. BOA and Affiliates. With respect to its Commitment, the -------------------- Advances made by it and the Note issued to it, BOA shall have the same rights and powers under this Agreement as any other Bank and may exercise the same as though it were not the Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include BOA in its individual capacity. BOA and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if BOA were not the Agent and without any duty to account therefor to the Banks. SECTION IX.4. Bank Credit Decision. Each Bank acknowledges that it has, ---------------------- independently and without reliance upon the Agent or any other Bank and based on the financial statements referred to in Sections 5.02 and 6.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under each Loan Document. The Agent shall not be required to keep itself informed as to the performance or observance by the Borrower of any Loan Document or to inspect the Properties or books of the Borrower or any Subsidiary. Except for notices, reports, and other documents and information expressly required to be furnished to the Banks by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition, or business of the Borrower or any Subsidiary (or any of their Affiliates) which may come into the possession of the Agent or any of its Affiliates. SECTION IX.5. Indemnification. Notwithstanding anything to the contrary --------------- herein contained, the Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be indemnified to its satisfaction by the Banks against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of its taking or continuing to take any action. EACH BANK AGREES TO INDEMNUY THE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), ACCORDING TO SUCH BANK'S PRO RATA PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER ANY LOAN DOCUMENT IN ITS CAPACITY AS AGENT, PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON BEING INDEMNIFIED; AND PROVIDED FURTHER, THAT IT IS THE INTENTION OF EACH BANK TO INDEMNIFY THE AGENT AGAINST THE CONSEQUENCES OF THE AGENT'S OWN NEGLIGENCE WHEN ACTING IN ITS CAPACITY AS AGENT, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, ACTIVE OR PASSIVE. WITHOUT LIMITATION OF THE FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT, PROMPTLY UPON DEMAND FOR ITS PRO RATA PERCENTAGE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS'FEES) INCURRED BY THE AGENT IN ITS CAPACITY AS AGENT IN CONNECTION WITH THE PREPARATION, ADMINISTRATION, OR ENFORCEMENT OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, ANY LOAN DOCUMENT, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER. SECTION IX.6. Successor Agent. The Agent may resign at any time by giving ---------------- written notice thereof to the Banks and the Borrower and may be removed at any time with cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within thirty (30) days after the retiring Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having capital of at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. SECTION IX.7. Agent's Reliance. The Borrower shall notify the Agent in writing ---------------- of the names of its officers and employees authorized to request an Advance on behalf of the Borrower and shall provide the Agent with a specimen signature of each such officer or employee. The Agent shall be entitled to rely conclusively on such officer's or employee's authority to request an Advance on behalf of the Borrower until the Agent receives written notice from the Borrower to the contrary. The Agent shall have no duty to verify the authenticity of the signature appearing on any Notice of Borrowing, and, with respect to any oral request for an Advance, the Agent shall have no duty to verify the identity of any Person representing himself as one of the officers or employees authorized to make such request on behalf of the Borrower. Neither the Agent nor any Bank shall incur any liability to the Borrower in acting upon any telephonic notice referred to above which the Agent or such Bank believes in good faith to have been given by a duly authorized officer or other Person authorized to borrow on behalf of the Borrower or for otherwise acting in good faith. SECTION IX.8. Defaults. The Agent shall not be deemed to have knowledge of -------- the occurrence of a Default (other than the nonpayment of principal of or interest hereunder or of any fees payable hereunder) unless the Agent has received notice from a Bank or the Borrower specifying such Default. In the event that the Agent receives such a notice of the occurrence of a Default, the Agent shall give prompt notice thereof to the Banks and to the Borrower (and shall give each Bank prompt notice of each such nonpayment); provided that, failure of the Agent to give notice to the Borrower hereunder shall in no event diminish the obligations of the Borrower hereunder. The Agent shall (subject to Section 8.01 and 9.01) take such action as may be expressly required hereunder with respect to such Default; provided that, unless and until the Agent shall have received the directions referred to in Section 8.01, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable and in the best interest of the Banks. ARTICLE X MISCELLANEOUS SECTION X.1. Amendments, Etc. No amendment or waiver of any provision of ---------------- this Agreement or the Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Majority Banks, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided however, that no amendment, waiver or consent -------- shall, unless in writing and signed by all the Banks, do any of the following: (a) waive any of the conditions specified in Section 4.02, (b) increase the Commitments of the Banks or subject the Banks to any additional obligations, (c) reduce the principal of, or interest on, the Notes, (d) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (e) change the definition of "Pro Rata Percentage," the percentage of the Commitments or the aggregate unpaid principal amount of the Notes, or the number or percentage of Banks, which shall be required for the Banks or any of them to take any action hereunder, (f) amend this Section 10.01, (g) alter any Guaranty Agreement or Section 6.06 hereof, or (h) amend Article VII hereof, and provided, further, that no amendment, waiver or consent shall, -------- unless in writing and signed by the Agent in addition to the Banks required above to take such action, affect the rights or duties of the Agent under this Agreement or any Note. SECTION X.2. Notices, Etc. All notices and other communications provided ------------- for hereunder shall be in writing (including by telex or telefacsimile transmission) and shall be effective when actually delivered, or in the case of telex notice, when sent, and answerback is received, or in the case of telefacsimile transmission, when received and telephonically confirmed, addressed as follows: if to the Borrower, at its address at 2600 Citadel Plaza Drive, Houston, Texas 77018, Attention: Chief Executive Officer, with a copy to Dow, Cogbum & Friedman, P.C., 9 Greenway Plaza, Suite 2300, Houston, Texas 77046, Attention: Mr. Melvin Dow; if to any Bank, at its address specified opposite its name on the signature page hereof; and if to the Agent, at its address at 700 Louisiana, 5th Floor, Houston, Texas 77002, Attention: Cynthia C. Sanford; with a copy to 901 Main Street, 51st Floor, Dallas, Texas 75202, Attention: Joone Choe; or as to the Borrower, any Bank or the Agent, at such other address as shall be designated by such party in a written notice to the other parties. SECTION X.3. No Waiver; Remedies. No failure on the part of any Bank or the --------------------- Agent to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION X.4. Costs, Expenses and Taxes. The Borrower agrees to pay on ---------------------------- demand all costs and expenses in connection with the preparation, execution, delivery, modification, waiver, and amendment of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent and each Bank with respect thereto and with respect to advising the Agent and each Bank as to its rights and responsibilities under the Loan Documents; provided that, fees of counsel for the Agent and the Banks for work performed in connection with the preparation, execution and delivery of this Agreement and the other Loan Documents on the Closing Date and all other work described in this sentence performed on or prior to the Closing Date (together with routine post-closing matters, such as preparation and delivery of closing packages), shall not exceed $25,000.00, plus expenses of such counsel incurred in connection therewith. In the event of the occurrence of a Default, the Borrower further agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, reasonable counsel fees and expenses in connection with the enforcement of rights under this Section 10.04. SECTION X.5. Right of Set-off. Upon (i) the occurrence and during the ------------------- continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 8.01 to authorize the Agent to declare the Notes due and payable pursuant to the provisions of Section 8.01, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under any Loan Document, whether or not such Bank shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Bank agrees promptly to notify the Borrower after any such set-off and application made by such Bank, provided that the failure to -------- give such notice shall not affect the validity of such set-off and application. The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may have. SECTION X.6. Sharing of Payments, Etc. If any Bank shall obtain any payment --------------------------- (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Advance made by it (other than pursuant to Sections 2.07, 2.10, 3.04 or 3.05) in excess of its Pro Rata Percentage of payments on account of the Advances, such Bank shall forthwith purchase from the other Banks such participations in the Advances made by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them, provided however, that if all or any portion of such excess -------- payment is thereafter recovered from such purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the purchasing Bank the purchase price to the extent of such recovery together with an amount equal to such Bank's ratable share (according to the proportion of (i) the amount of such Bank's required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. SECTION X.7. Binding Effect. This Agreement shall become effective when it -------------- shall have been executed by the Borrower, the Agent and the Banks (and a counterpart original has been delivered to the Agent, for itself and each Bank, and to the Borrower) when the Agent shall have been notified by each Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Bank and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Banks. SECTION X.8. Assignments and Participations. (a) Each Bank may assign all or ------------------------------ a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments and the Note held by it to any financial institution (the "ssignee"); provided however, (i) prior to the -------- -------- occurrence of an Event of Default, BOA shall not assign its rights and obligations hereunder without the consent of the Borrower, which will not be unreasonably withheld, if, the assignment is made to an Eligible Assignee and, after giving effect to such assignment, the Commitment of BOA would not be reduced to less than $25,000,000, (ii) each assignment made hereunder shall equal or exceed the lesser of (A) $10,000,000 or (B) the remaining Commitment held by the assigning Bank, and (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register (with a copy to the Borrower), an Assignment and Acceptance Agreement in the form of Exhibit 10.08, attached hereto (the "Assignment and Acceptance"), ------------------------- together with any Note subject to such assignment. Upon such execution, delivery, acceptance, and recordation by the Agent of such Assignment and Acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the date on which such Assignment and Acceptance is accepted by the Agent, (A) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Bank under the Loan Documents, and (B) the Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Bank's rights and obligations under the Loan Documents, such Bank shall cease to be a party thereto). (b By executing and delivering an Assignment and Acceptance, the Bank assignor thereunder and the Assignee confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any other Subsidiary or the performance or observance by the Borrower or any other Subsidiary of any of its respective obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such Assignee confirms that it has received a copy of the Loan Documents, together with copies of the Financial Statements referred to in Section 5.02 and ------------ Section 6.01, and such other documents and information as it has deemed - ------------- appropriate to make its own credit analysis and decision to enter into such - -------- Assignment and Acceptance; (iv) such Assignee, independently and without - ---- reliance upon the Agent such assigning Bank, or any Bank and based on such - ---- documents and information as it shall deem appropriate at the time, will - ---- continue to make its own credit decisions in taking or not taking action under - ---- this Agreement; (v) such Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under any Loan Document as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (vi) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of any Loan Document are required to be performed by it as a Bank. (c The Agent shall maintain at its address referred to in Section 10.02 a ------------- copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount of the Borrowings owing to, each Bank from time to time (the "Register"). The entries in the Register shall be conclusive -------- and binding for all purposes, absent manifest error, and the Borrower, the Agent, and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of the Loan Documents. The Register shall be available for inspection by the Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice. (d Upon its receipt of an Assignment and Acceptance executed by an assigning Bank, together with any Note subject to such assignment, the Agent, if such Assignment and Acceptance has been completed and otherwise complies with Section 10.08(a), shall (i) accept such Assignment and Acceptance; (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Borrower. Simultaneously upon its receipt of such notice, the Borrower at its own expense, shall execute and deliver to the Agent in exchange for each surrendered Note a new Note to the order of such Assignee in an amount equal to the Conumitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Bank has retained Commitments hereunder, new Notes to the order of the assigning Bank in an amount equal to the Commitments retained by it hereunder. The new Notes shall be in an aggregate principal amount equal to the aggregate principal amount of the surrendered Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit 2.02(c). Upon receipt by the --------------- Agent of each such new Note conforming to the requirements set forth in the preceding sentences, the Agent shall return to the Borrower each such surrendered Note marked to show that each such surrendered Note has been replaced, renewed, and extended by such new Note. (e Each Bank may sell participations to one or more financial institutions in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments and the Notes held by it), and no such sale of a participation shall reduce such Bank's obligations to the Borrower hereunder. SECTION X.9. Limitation on Agreements. (a) All agreements between the ------------------------ Borrower, the Agent, or any Bank, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand being made in respect of an amount due under any Loan Document or otherwise, shall the amount paid, or agreed to be paid, to the Agent or any Bank for the use, forbearance, or detention of the money to be loaned under this Agreement, the Notes or any other Loan Document or otherwise or for the payment or performance of any covenant or obligation contained herein or in any other Loan Document exceed the Highest Lawful Rate. If, as a result of any circumstance whatsoever, fulfillment of or compliance with any provision hereof or of any of such documents at the time performance of such provision shall be due or at, any other time shall involve exceeding the amount permitted to be contracted for, taken, reserved, charged or received by the Agent or any Bank under applicable usury law, then, ipso facto, ---- ----- the obligation to be fulfilled or complied with shall be reduced to the limit prescribed by such applicable usury law, and if, from any such circumstance, the Agent or any Bank shall ever receive interest or anything which might be deemed interest under applicable law which would exceed the Highest Lawful Rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account of such Bank's Note or the amounts owing on other obligations of the Borrower to the Agent or any Bank under any Loan Document and not to the payment of interest, or if such excessive, interest exceeds the unpaid principal balance of any Note and the amounts owing on other obligations of the Borrower to the Agent or any Bank under any Loan Document, as the case may be, such excess shall be refunded to the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for the use, forbearance, or detention of the indebtedness of the Borrower to the Agent or any Bank shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full term of such indebtedness until payment in full of the principal (including the period of any renewal or extension thereof) so that the interest on account of such indebtedness shall not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary contained in any Loan Document, it is understood and agreed that if at any time the rate of interest which accrues on the outstanding principal balance of any Note shall exceed the Highest Lawful Rate, the rate of interest which accrues on the outstanding principal balance of any Note shall be limited to the Highest Lawful Rate, but any subsequent reductions in the rate of interest which accrues on the outstanding principal balance of any Note shall not reduce the rate of interest which accrues on the outstanding principal balance of any Note below the Highest Lawful Rate until the total amount of interest accrued on the outstanding principal balance of any Note equals the amount of interest which would have accrued if such interest rate had at all times been in effect. The terms and provisions of this Section 10.09 shall control and supersede every other -------------- provision of all Loan Documents. (b The Banks and the Borrower agree that (i) if Chapter 303 of the Texas Finance Code, as amended, is applicable to the determination of the Highest Lawful Rate, the weekly ceiling computed from time to time pursuant to Section (a) of such Article shall apply, provided that, to the extent permitted by such -------- Article, the Agent may from time to time by notice to the Borrower revise the election of such interest rate ceiling as such ceiling affects the then current or future balances of the Advances; and (ii) the provisions of Chapter 346 of the Texas Finance Code, as amended, shall not apply to this Agreement or any Note. SECTION X.10. Severability. In case any one or more of the provisions contained ------------ in any Loan Document to which the Borrower is a party or in any instrument contemplated thereby, or any application thereof, shall be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein, and any other application thereof, shall not in any way be affected or impaired thereby. Each covenant contained in any Loan Document to which the Borrower is a party shall be construed (absent an express contrary provision herein) as being independent of each other covenant contained therein, and compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with one or more other covenants. SECTION X.11. Governing Law. This Agreement and the Notes shall be governed ------------- by, and construed in accordance with, the laws of the State of Texas. SECTION X.12. SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER IRREVOCABLY AND ----------------------------------- UNCONDITIONALLY: (a SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND APPELLATE COURTS FROM ANY THEREOF; (b WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT IN HARRIS COUNTY, TEXAS, OR THAT SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY REGISTERED OR CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, POSTAGE PREPAID) TO ITS ADDRESS SET FORTH IN SECTION 10.02 HEREOF OR TO SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING BY THE BORROWER PURSUANT TO SECTION 10.02. SECTION X.13. Execution in Counterparts. This Agreement may be executed in any ------------------------- number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION X.14. Liability of Borrower. With respect to the incurrence of certain --------------------- liabilities hereunder and the making of certain agreements by the Borrower as herein stated, such incurrence of liabilities and such agreements shall be binding upon the Borrower only as a trust formed under the Texas Real Estate Investment Trust Act pursuant to that certain Restated Declaration of Trust dated March 23, 1988 (as it is amended from time to time), and only upon the assets of such Borrower. No Trust Manager or officer or holder of any beneficial interest in the Borrower shall have any personal liability for the payment of any indebtedness or other liabilities incurred by the Borrower hereunder or for the performance of any agreements made by the Borrower hereunder, nor for any other act, omission or obligation incurred by the Borrower or the Trust Managers except, in the case of a Trust Manager, any liability arising from his own willful misfeasance or malfeasance or gross negligence. SECTION X.15. FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE GUARANTY, AND ---------------- THE NOTES REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. [REMAINDER OF PAGE INTENTIONALLY BLANK - SEE SIGNATURES ON FOLLOWING PAGE] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be Executed by their respective officers thereunto duly authorized, as of the date first above written. WEINGARTEN REALTY INVESTORS, Borrower By:_____________________________________ Name:___________________________________ Title:__________________________________ BANK OF AMERICA, N.A., in its individual capacity and as Agent Address: - ------- 700 Louisiana, 5th Floor Houston, Texas 77002 Attention: Cynthia C.Sanford By:_____________________________________ Name:___________________________________ Commitment: $100,000,000 Title:__________________________________ - ---------- EX-4.30.1 6 1ST AMEND. TO CREDIT AGREEMENT FIRST AMENDMENT TO CREDIT AGREEMENT --------------------------------------- THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of --------- ____________, 2000, is by and among Weingarten Realty Investors, a Texas real estate investment trust ("Borrower") and Bank of America, N.A., a national -------- banking association, in its capacities as Agent and a lender ("Bank of ------- America"). WHEREAS, Borrower and Bank of America have entered into that certain Credit Agreement dated January 6, 1999 ("Loan Agreement"); --------------- WHEREAS, Borrower has requested that Bank of America add a provision to the Loan Agreement which would grant Borrower an option to renew the Loan Agreement for a period of two additional years; and WHEREAS, Bank of America has agreed, subject to the terms and conditions stated herein, to provide terms for such renewal. NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, Borrower and Bank of America hereby covenant and agree as follows: ARTICLE I - RENEWAL OPTION ------------------------------ 1.1 Definitions. Any capitalized terms used herein and not otherwise ----------- defined shall have the meaning ascribed to such term in the Loan Agreement. The following definitions are applicable to this Amendment and are hereby added to the Loan Agreement. (a) "Adjusted EBIDA for Unencumbered Property" means, for any period, Funds ----------------------------------------- From Operations from all Unencumbered Property less the Capital Improvement Reserve for such period. (b) "Capital Expenditures" means expenditures by Borrower or any of its --------------------- Subsidiaries for fixed or capital assets, including without limitation expenditures for maintenance and repairs. (c) "Capital Improvement Reserve" means, for any period, a reserve for ----------------------------- Capital Expenditures in an amount equal to the product obtained by multiplying $.30 times the weighted average square feet of all Unencumbered Property owned by Borrower and its Subsidiaries during such period. (d) "Extended Revolving Credit Termination Date" means a date two (2) years ------------------------------------------- after the Revolving Credit Termination Date. (e) "Facility Fee" is defined in Section 1.2 of this Amendment. ------------- ------------ (f) "Renewal Option" is defined in Section 1.2 of this Amendment. --------------- ------------ (g) "Renewal Period" means the two year period commencing on the first day --------------- following the Revolving Credit Termination Date and terminating on the Extended Revolving Credit Termination Date. (h) "Secured Indebtedness" means Debt of Borrower and its Subsidiaries that --------------------- is directly or indirectly secured by a Lien on any Real Property. (i) "Total Unsecured Debt" means Debt excluding all Secured Indebtedness. ---------------------- (j) "Unencumbered Property" means all Real Property which is subject to no ---------------------- Liens other than Permitted Liens. 1.2 Terms of Renewal Option. The Agent and Banks hereby grant to -------------------------- Borrower the option (the "Renewal Option") to extend the Revolving Credit --------------- Termination Date for an additional two year period on the following terms and conditions: (a) At the time of the exercise of such Renewal Option and on the first day of the Renewal Period, there shall then exist no Default or Event of Default. (b) Borrower shall submit to Agent such financial statements and other information as Agent may reasonably request in connection with the proposed renewal, regarding Borrower and Guarantor. In Agent=s reasonable judgment, there shall not have occurred a material adverse change in the financial position of Borrower and Guarantor, taken as a whole, from the date hereof, as reflected in the then most recent financial and operating statements submitted to Agent pursuant to the Loan Agreement. (c) All terms and conditions of the Loan Documents pertaining to the Revolving Loan shall continue to apply during the Renewal Period except as modified by this Amendment. (d) Borrower and Guarantor shall have executed and delivered to Agent a modification and extension agreement, providing for (i) the extension of the Revolving Credit Termination Date, (ii) the reaffirmation by each of Borrower and Guarantor of their respective obligations under the Loan Documents and the Guaranty Agreement, respectively, and (iii) confirmation by Borrower and Guarantor that neither Borrower nor Guarantor have any defenses, claims, counterclaims, or rights of offset in respect of the Obligations. (e) The request for extension must be made to Agent in writing not more than one hundred twenty (120) days, and not less than ninety (90) days prior to, the Revolving Credit Termination Date. (f) On or before the first day of the Renewal Period, Borrower shall have paid to Agent as a condition to such renewal all fees required pursuant to that certain Side Letter Agreement of even date herewith executed by Agent and Borrower (the "Side Letter Agreement"). ----------------------- (g) Borrower shall be in compliance with the following covenants: (i) For the twelve (12) month period ending on the last day of the fiscal quarter ending prior to the Renewal Period and as of the last day of each fiscal quarter for the four (4) successive quarterly accounting periods ending on such date during the Renewal Period, Borrower shall not permit the ratio of (i) Total Unsecured Debt to (ii) Adjusted EBIDA for Unencumbered Property to exceed 6.66 to 1.00. (ii) As of the first day of the Renewal Period and during the Renewal Period, Borrower shall not permit the Adjusted Tangible Net Worth to be less than an amount equal to the sum of (i) $850,000,000, and (ii) eighty percent (80%) of the net proceeds (i.e. gross proceeds less actual and customary transaction costs) received by Borrower from all equity offerings made by Borrower after December 31, 1999. (iii) Except to the extent required by applicable tax laws or regulations to maintain its REIT status, during any fiscal year of Borrower during the Renewal Period, Borrower shall not, nor shall Borrower permit any Subsidiary (other than to Borrower or another Subsidiary) to, declare or pay any dividends or make any distributions on its Capital Shares (other than dividends payable in its own Capital Shares) or redeem, repurchase or otherwise acquire or retire any of its Capital Shares at any time outstanding, in excess of an amount equal to ninety-five percent (95%) of the Funds From Operations during such fiscal year. (h) As of the first day of the Renewal Period and during the Renewal Period, the definition of "Applicable Margin" in the Loan Agreement shall mean, with respect to any LIBOR Rate Advance, the rate per annum for any LIBOR Rate Advance indicated below for the credit rating assigned to (or in respect of) long-term senior unsecured Debt of Borrower by S&P, as reflected on the most recent Compliance Certificate of Borrower delivered in accordance with Section 6.01(c), --------------- or the most recent Rating Certificate delivered in accordance with Section ------- 6.01(h), as the case may be: -- CREDIT RATING APPLICABLE MARGIN FOR LIBOR RATE ADVANCE -------------- --------------------------------------------- A- or better .60% BBB+ .70% BBB .90% BBB- or below 1.20% (i) During the Renewal Period, Borrower agrees to pay to Agent, a commitment fee (the "Facility Fee") on the average daily unused portion of the aggregate Commitment under the Revolving Loan outstanding during the applicable period, at a rate per annum equal to the rate per annum indicated below for the credit rating assigned to long-term, senior unsecured Debt of Borrower by S&P, as reflected on the most recent Compliance Certificate of Borrower delivered in accordance with Section 6.01(c) of the Loan Agreement, or the most recent Rating --------------- Certificate delivered in accordance with Section 6.01(h), as the case may be. --------------- The Facility Fee shall be payable quarterly in arrears on the first day of each calendar quarter for the prior calendar quarter commencing on the first day of the first calendar quarter occurring after commencement of the Renewal Period, and continuing until the Extended Revolving Credit Termination Date. CREDIT RATING FACILITY FEE - -------------- ------------- A- or better .15% BBB+ .20% BBB .25% BBB- or below .35% Agent shall be entitled to allocate the Facility Fee among the Banks as Agent considers appropriate in its sole discretion. 1.3 Compliance Certificate. As of the first day of the Renewal Period ----------------------- and during the Renewal Period, together with and at the time of the delivery of any information required by Section 6.01 (a) and (b) of the Loan Agreement, ------------------------- Borrower shall deliver to Agent, a Compliance Certificate substantially in the form of Exhibit A attached hereto. ---------- ARTICLE II - MISCELLANEOUS ----------------------------- 2.1 Conditions Precedent. As conditions precedent to closing this --------------------- Amendment, Borrower shall have executed, or caused to be executed, and delivered to Agent (a) this Amendment and (b) the Side Letter Agreement. 2.2 Representations of Borrower. Borrower hereby represents to the ----------------------------- Banks the following: (a) All of the representations and warranties contained in Article V of the Loan Agreement are true and correct on and as of the date hereof and will be true and correct after giving effect to this Amendment. (b) No event which constitutes a Default or an Event of Default under the Loan Agreement has occurred and is continuing, or would result from the execution and delivery of this Amendment. (c) Borrower has the power and authority under the Governmental Requirements and the Organizational Documents to execute and deliver this Amendment and to exercise the Renewal Option if it elects to do so; and the execution, delivery and performance by Borrower of this Amendment has been duly authorized by all necessary proceedings on the part of Borrower and each Guarantor. 2.3 Ratification. The Loan Agreement, as hereby amended, is in all respects ------------ ratified and confirmed, and all other rights and powers created thereby or thereunder shall be and remain in full force and effect. 2.4 Counterparts. This Amendment may be executed in several counterparts, ------------ and each counterpart, when so executed and delivered, shall constitute an original instrument, and all such separate counterparts shall constitute but one and the same instrument. 2.5 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN -------------- ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS. 2.6 PRIOR AGREEMENTS. THE LOAN AGREEMENT, THIS AMENDMENT AND THE OTHER LOAN ---------------- DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. WEINGARTEN REALTY INVESTORS, By:_______________________________________ Name:_____________________________________ Title:______________________________________ BANK OF AMERICA, N.A., in its individual capacity and as Agent By:_______________________________________ Name:_____________________________________ Title:______________________________________ EXHIBIT A ---------- COMPLIANCE CERTIFICATE ----------------------- 1. Borrower certifies that the credit rating assigned to the Borrower=s senior-unsecured, long-term debt by S&P as of the date of this Compliance Certificate, and as of the date of delivery of its Financial Statements is _______________. 2. Financial Covenants Limit Actual In Compliance ----- ------ ------------- 1. Total Debt - ---- Not greater than 55% ----------------------- 2. Secured Debt - ---- Not greater than 40% ----------------------- 3. Limitation of Unimproved Real Property - ---- Not greater than 12.5% ------------------------- 4. Limitation on Sale or Other Disposition of Real Property - ---- See Schedule A (attached hereto) ------------------ 5. Annual Service Charge Coverage Ratio - ---- 2.5 or more ------------- 6. Fixed Charge Coverage Ratio - ---- 2.0 or more ------------- 7. Minimum Adjusted Tangible Net Worth - ---- --------------------------------------- Not less than $850,000,000, plus 80% of equity offerings made by ---------------------------------------------------------------------- Borrower after 12/31/99 -------------------- 8. Assets Retained - ---- Not less than 150% --------------------- 9. Limitation on Central Plaza=s Incurrence of Debt - ---- ------------------------------------------------------ Not more than $500,000 ------------------------- 10. Limitation on Bell Plaza=s Incurrence of Debt - ----- --------------------------------------------------- Not more than $1,200,000 --------------------------- Total Unsecured Debt to Adjusted EBIDA for 11. Unencumbered Property - ----- ---------------------- 6.66 to 1.0 or less -------- 12. Dividends - ----- --------- 95% of Funds from Operations -------------------------------- 3. Certification The undersigned hereby further certifies and warrants to the Banks that, as of the date set forth above, (i) no default under the Credit Agreement dated _______________, ______ by and among the Borrower, Bank of America, N.A., as Agent, and the Banks named therein as modified or amended (the "Credit ------ Agreement") has occurred, and no event has occurred, which, but for the passage of time, would constitute a default (except for any default which may have been expressly waived in writing by the Banks), (ii) each representation and warranty of the Borrower contained in the Credit Agreement is still true and correct on and as of the date set forth above, as though made on and as of such date, and (iii) the undersigned is the duly elected, qualified and acting Chief Financial Officer (or Chief Accounting Officer) of the Borrower, and as such, is authorized to execute this Report on its behalf. The undersigned hereby further certifies and warrants to the Banks that, as of the date set forth above, (i) no default under the Credit Agreement has occurred, and no event has occurred, which, but for the passage of time, would constitute a default (except for any default which may have been expressly waived in writing by the Banks) except as noted on the attachment, (ii) each representation and warranty of the Borrower contained in the Credit Agreement is still true and correct on and as of the date set forth above, as though made on and as of such date, except as noted on the attachment, and (iii) the undersigned is the duly elected, qualified and acting Chief Financial Officer or Chief Accounting Officer of the Borrower, and as such, is authorized to execute this Report on its behalf. 4. In accordance with Section 6.01(e) of the Credit Agreement, attached hereto is a description of each litigation, legal, administrative, or arbitral proceeding, investigation or other action of any nature not previously reported which involves a claim equal to or exceeding $5,000,000 against the Borrower or any Subsidiary, or which involves the reasonable possibility, if adversely determined, in the judgment of the Borrower, of a judgment in excess of $1,000,000 which has not been stayed (whether by supersedas bond or otherwise), or other liability, in each case, which could have a material adverse effect on the business, operations or financial conditions of the Borrower and its Subsidiaries, taken as a whole or otherwise required to be reported pursuant to said Section 6.01(e). 5. Each Subsidiary newly formed or acquired since the Closing Date (all of the stock of which is owned by the Borrower) has executed and delivered to the Agent a Guaranty Agreement in accordance with Section 6.06 of the Credit Agreement. A Guaranty Agreement from the Subsidiary(ies) listed on the attachment is enclosed herewith. 6. Attached is Schedule A, computations and other information relevant in connection with this Compliance Certificate. By: Name: Title: SCHEDULE A ----------- Debt - ---- Calculation of "Limitations on Incurrence of Debt" as defined for purposes of Section 7.02(a). Calculations as of __________________: 1. Components of Debt: ---- --------------------- 2. Debt ---- ---- 3. Total Assets ---- ------------- 4. Debt/Total Assets (Line (ii) divided by Line (iii)) ---- ---------------------------------------------------------- "Debt" and "Total Assets" are defined terms in the Credit Agreement. Secured Debt - ------------- Calculation of "Limitations on Incurrence of Debt" as defined for purposes of Section 7.02(b). Calculation as of _________________: 5. Components of Secured Debt: ---- ------------------------------ 6. Secured Debt ---- ------------- 7. Total Assets ---- ------------- 8. Secured Debt/Total Assets (Line (ii) divided by Line (iii)) ---- ------------------------------------------------------------------ "Debt" and "Total Assets" are defined terms in the Credit Agreement. "Secured Debt" means Debt described in Section 7.02(b) and (c) of the Credit Agreement. Limitation of Unimproved Real Property - ------------------------------------------ Calculation of "Unimproved Real Property" as defined for purposes of Section 7.03. Calculation as of _________________: 9. Unimproved Real Property ---- -------------------------- 10. Undepreciated Real Estate Assets ----- ----------------------------------- Unimproved Real Property/ 11. Undepreciated Real Estate Assets (Line (i) divided by Line (ii)) ----- ----------------------------------------------------------------- "Unimproved Real Property" and "Undepreciated Real Estate Assets" are defined terms in the Loan Agreement Limitation on Sale or Other Disposition of Real Property - ---------------------------------------------------------------- (1) Calculation of "Sale or Other Disposition of Real Property" as defined for purposes of Section 7.04(a). Calculation as of ____________________: (1) i. Month 1 -- -------- Month 2 -------- Month 3 -------- Month 4 -------- Month 5 -------- Month 6 -------- Month 7 -------- Month 8 -------- Month 9 -------- Month 10 --------- Month 11 --------- Month 12 (month of current disposition) -------------------------------------------- 12. Total Dispositions for last 12 calendar months (or if shorter, ----- ----------------------------------------------------------------- for the period from January 6, 2000, to such date). ---------------------------------------------------------- 13. Total Dispositions/Undepreciated Real Estate Assets ----- ------------------------------------------------------- Undepreciated Real Estate Assets 14. (as of last day of preceding quarter) ----- ------------------------------------------- 15. Ten Percent (10%) of line (iv) ----- ----------------------------------- Excess of line (ii) over line (v) - 16. Amount of Adjusted Net Proceeds ----- ----------------------------------- "Adjusted Net Proceeds" is a defined term in the Credit Agreement. Limitation on Sale or Other Disposition of Real Property - ---------------------------------------------------------------- - ------ Section 7.04 - ------------- (1) Calculation of "Sale or Other Disposition of Real Property" as defined for purposes of Section 7.04(b). Calculation as of __________________: i. Month 1 -- -------- Month 2 -------- Month 3 -------- Month 4 -------- Month 5 -------- Month 6 -------- Month 7 -------- Month 8 -------- Month 9 -------- Month 10 --------- Month 11 --------- Month 12 --------- Month 13 --------- Month 14 --------- Month 15 --------- Month 16 --------- Month 17 --------- Month 18 --------- Month 19 --------- Month 20 --------- Month 21 --------- Month 22 --------- Month 23 --------- Month 24 --------- Month 25 --------- Month 26 --------- Month 27 --------- Month 28 --------- Month 29 --------- Month 30 --------- Month 31 --------- Month 32 --------- Month 33 --------- Month 34 --------- Month 35 --------- Month 36 (month of current disposition) -------------------------------------------- 17. Total Dispositions for last 36 months (or if shorter, for the ----- ----------------------------------------------------------------- period from January 6, 2000, to such date). ----------------------------------------------- 18. Total Dispositions/Undepreciated Real Estate Assets ----- ------------------------------------------------------- Undepreciated Real Estate Assets 19. (as of last day of preceding quarter) ----- ------------------------------------------- 20. Fifteen Percent (15%) of line (iv) ----- --------------------------------------- Excess of line (ii) over line (v) - 21. Amount of Adjusted Net Proceeds ----- ----------------------------------- "Adjusted Net Proceeds" is a defined term in the Credit Agreement. Annual Service Charge Coverage Ratio - ---------------------------------------- Calculation of "Annual Service Charge Coverage Ratio" as defined for purposes of Section 7.07(a). Calculation as of _________________ for the period _____________ through __________________.: 22. Funds from Operations ----- ----------------------- 23. Net Income ----- ----------- 24. Plus: ----- ----- 25. Depreciation and Amortization ----- ------------------------------- 26. Interest/Original Issue Discount ----- ---------------------------------- 27. Extraordinary Charges ----- ---------------------- 28. Excess Distributable Funds ----- ---------------------------- 29. Minus: ----- ------ 30. Gains on Sale of Properties and investment securities ----- ------------------------------------------------------------ 31. Excess Net income ----- ------------------- 32. Total (Sum of Lines (ii) - (vii) minus Lines (ix) and (x)) ----- ----------------------------------------------------------------- 33. Annual Service Charge ----- 34. Interest/Original Issue Discount ----- 35. Amount accrued in respect of Disqualified Stock ----- 36. Total (Line (xiii) plus Line (xiv)) ----- Funds from Operations/ 37. Annual Service Charge (Line (xi) divided by Line (xv)) ----- FEX4_30_1.DOC "Funds from Operations" and "Annual Service Charge" are defined terms in the Credit Agreement. Fixed Charge Coverage Ratio - ------------------------------ Calculation of "Fixed Charge Coverage Ratio" as defined for purposes of Section 7.07(b). Calculation as of __________________ for the period __________ through __________: 38. Funds from Operations; ----- 39. Net Income ----- ----------- 40. Plus: ----- ----- 41. Depreciation and Amortization ----- ------------------------------------ 42. Interest/Original Issue Discount ----- --------------------------------------- 43. Extraordinary Charges ----- --------------------------- 44. Excess Distributable Funds ----- --------------------------------- 45. Minus: ----- ------ 46. Gains on Sale of Properties and investment securities ----- ----------------------------------------------------------------- 47. Excess Net Income ----- ------------------- 48. Total (sums of Lines (ii) - (vii) minus Lines (ix) and (x)) ----- ----------------------------------------------------------------- Interest/Original Issue Discount ---------------------------------- 49. Fixed Charge: ----- -------------- 50. Interest/Original Issue Discount ----- --------------------------------------- 51. Principal payments on Debt ----- ---------------------------------- 52. Amounts accrued in respect of preferred stock ----- ----------------------------------------------------------------- 53. Total (Sum of Line (xiii), Line (xiv) and Line xv)) ----- ------------------------------------------------------------ 54. Funds from Operations/Fixed Charge (Line (xi) divided by Line ----- ----------------------------------------------------------------- (xvi)) --- "Funds from Operations" and "Fixed Charge" are defined terms in the Credit - -------------------------------------------------------------------------------- Agreement. - ---------- Minimum Adjusted Tangible Net Worth - --------------------------------------- Calculation of Adjusted Tangible Net Worth 55. Net Worth ----- ---------- 56. Aggregate Book Value of Intangible Assets of the Borrower ----- ----------------------------------------------------------------- 57. Difference between Line (i) and Line (ii) ----- ----------------------------------------------- 58. Accumulated Depreciation ----- ------------------------- 59. Total (Sum of Line (iii) and Line (iv)) ----- ---------------------------------------------- Assets Retained - ---------------- Calculation of Undepreciated Real Estate Assets subject to no lien to Unsecured Debt for purposes of Section 7.13. 60. Undepreciated Real Estate Assets subject to no lien (other than ----- ----------------------------------------------------------------- Permitted Liens) ---------------- 61. Principal outstanding of unsecured debt ----- ------------------------------------------- 62. 150% of line (ii) ----- -------------------- 63. Excess of line (i) over line (iii) ----- ---------------------------------------- Total Unsecured Indebtedness to Adjusted EBIDA for Unencumbered Property. - -------------------------------------------------------------------------------- Calculation as of _________________ for the period _________ through __________. i0 Total Unsecured Debt: -- ----------------------- ii0 Debt --- ---- iii0 Minus: Secured Indebtedness ---- ----------------------------- iv0 Total (Line 2 minus Line 3) --- -------------------------------- v0 Adjusted EBIDA for Unencumbered Property -- -------------------------------------------- Funds from Operation: vi0 (components limited to Unencumbered Property) --- ------------------------------------------------- vii0 Net Income ---- ----------- viii0 Plus: ----- ----- ix0 Depreciation and Amortization --- ------------------------------- x0 Interest/Original Issue Discount -- ---------------------------------- xi0 Extraordinary Charges --- ---------------------- xii0 Excess Distributable Funds ---- ---------------------------- xiii0 Minus: ----- ------ xiv0 Gains on Sale of Properties and Investment Securities ---- ------------------------------------------------------------ xv0 Excess Net Income --- ------------------- xvi0 Total (Sums of Lines (vii) - (xii) minus Lines (xiv) and (xv)) ---- ------------------------------------------------------------------ Minus: xvii0 Capital Improvement Reserve ----- ----------------------------- xviii0 Adjusted EBIDA for Unencumbered Property (Line (xvi) minus Line ------ ---------------------------------------------------------------- (xvii)) - ------- xix0 Total Unsecured Indebtedness/Adjusted EBIDA for Unencumbered ---- ----------------------------------------------------------------- Property (Line (iv) divided by Line (xviii)) ---------------------------------------------- February __, 2000 Weingarten Realty Investors 2600 Citadel Plaza Drive Houston, Texas 77018 Attention: Bill Robertson Re: First Amendment to Credit Agreement dated as of February __, 2000 (the "Amendment") by and between Weingarten Realty Investors, a Texas real estate investment trust ("Borrower"), and Bank of America, N.A., a national banking association in its capacities as agent and a bank ("Bank of America") Gentlemen: This letter is delivered to you in connection with the Amendment. Unless otherwise defined herein, capitalized terms shall have the meanings set forth in the Loan Agreement and in the Amendment. In connection with, and in consideration of the agreements contained in the Amendment, Borrower agrees with Agent as follows: Administrative Fee. On the first day of the Renewal Period, and on the - ------------------- anniversary of such date each year during the Renewal Period, Borrower will pay - -------- an administrative fee in the amount of $75,000 to Agent for its own account for administrating the Loan during the following twelve (12) month period. Renewal Fee. On the first day of the Renewal Period, Borrower shall pay to - ------------ Agent a renewal fee in an amount equal to 50 bps on the entire commitment of - ---- the Banks under the Revolving Loan on such date. Borrower acknowledges and - -- agrees that the renewal fee is a bona fide commitment fee and is intended as - -- reasonable compensation to Banks for committing to make funds available to - -- Borrower and for no other purpose. Agent shall be entitled to allocate the - -- Renewal Fee among the Banks as Agent considers appropriate in its sole - -- discretion, but without prejudice to Borrower=s refund rights hereinafter - -- specified. - -- Subject to Borrower=s rights hereinafter specified, the fees payable above shall be fully-earned upon becoming due and payable, shall be non-refundable for any reason whatsoever and shall be in addition to any other fee, cost or expense payable pursuant to the Loan Agreement. Weingarten Realty Investors February __, 2000 Page 23 Borrower acknowledges that Bank of America desires that it be able to sell down the Revolving Loan during the Renewal Period to the lesser of (a) $35,000,000, or (b) 35% of Bank of America=s current commitment (the "Target ------ Hold Position"). Therefor, Borrower agrees that it shall consider actions which ----------- are reasonably requested by Bank of America in order to enable Bank of America to sell down the Revolving Loan to the Target Hold Position, including but not limited to, modifying the Loan Documents to increase the price spread, increase the renewal fee, revise financial covenants or make other structural changes to the Loan Documents. If Borrower notifies Bank of America that Borrower elects the Renewal Option (the date of such notice being called the "Notice Date"), Bank of America will endeavor to notify Borrower within fifteen (15) days after the Notice Date of what changes (the "Anticipated Changes"), if any, need to be made to the price spread, or any other part of the Revolving Loan, in order for Bank of America to reach the Target Hold Position. Borrower shall then have seven (7) days to elect by notice in writing to Bank of America to either (a) accept the proposed modifications to the Revolving Loan, or (b) pay off the Revolving Loan in full within sixty (60) days after expiration of the aforesaid seven (7) day period. If Borrower accepts the Anticipated Changes, but, thereafter, Bank of America determines that changes to the Anticipated Changes or other changes (the "Actual Changes") are necessary to enable Bank of America to reach the Target Hold Position, Bank of America shall give written notice to Borrower of the Actual Changes and Borrower shall have another seven (7) day period to either accept (a) the Actual Changes or (b) elects to pay off the Revolving Loan within sixty (60) days after expiration of the aforesaid seven (7) day period: (x) because the all-in pricing, including, without limitation, interest rate, price spread and fees, suggested by Bank of America in order to achieve the Target Hold Position is such that Borrower would be required to pay interest (including fees) at a rate greater than the highest applicable interest rate in effect under this credit facility (as amended by the Amendment) or under any other senior credit facility of Borrower (but limited to bank revolving credit facilities) then outstanding or which was outstanding during the twelve month period prior to the Renewal Period (herein collectively referred to as the "Existing Senior Facilities"), or (y) because the revisions to the financial covenants or the other structural changes to the Loan Documents suggested by Bank of America in order to achieve the Target Hold Position are such that the proposed new loan is materially less favorable than any of the Existing Senior Facilities. For purposes of comparing the highest applicable interest rate in effect on any of the Existing Senior Facilities with that under the loan suggested by Bank of America, all fees shall be amortized, prorated, allocated, and spread throughout the term of the Indebtedness. If (i) Bank of America notifies Borrower in writing of the Actual Changes to the Revolving Loan, and (ii) Borrower elects, for one or more of the reasons specified in (x) and (y) above, to pay off the Revolving Loan in full within sixty (60) days, then the Administrative Fee and Renewal Fee shall be refunded at the time the Loan is completely paid off in the following manner: The refund of the Administrative Fee shall be equal to the Administrative Fee paid by Borrower multiplied by the quotient of (a) the number of days of the Renewal Period which have not lapsed prior to Borrower=s paying off the Revolving Loan, divided by (b) three hundred sixty-five (365). The refund of the Renewal Fee shall be equal to the Renewal Fee paid by Borrower multiplied by the quotient of (i) the number of days of the Renewal Period which have not lapsed prior to Borrower=s paying off the Revolving Loan, divided by (b) seven hundred thirty (730). If the foregoing is in accordance with your understanding, please execute and return this letter to us. Very truly yours, BANK OF AMERICA, N.A., as Agent and a Bank By: Name: Title: Accepted and Agreed to as of February __, 2000: WEINGARTEN REALTY INVESTORS By: Name: Title: EX-4.31 7 PROMISSORY NOTE PROMISSORY NOTE (WEINGARTEN REALTY INVESTORS) ------------------------------------------------- $100,000,000.00 _________________, 2000 FOR VALUE RECEIVED, the undersigned, Weingarten Realty Investors, a Texas real estate investment trust, hereby promises to pay to the order of BANK OF AMERICA, N.A., a national association (the "Bank") the principal sum of ONE ---- HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00) or the aggregate principal amount of Advances made pursuant to the Credit Agreement hereinafter mentioned and outstanding as of the maturity hereof, whether by acceleration or otherwise, whichever may be the lesser, on or before the Revolving Credit Termination Date, together with interest on any and all amounts remaining unpaid hereon from time to time from the date hereof until maturity, payable as described in the Credit Agreement, and at maturity, in the manner and at the rates per annum as set forth in the Credit Agreement dated as of even date herewith, between the undersigned, the Bank in its own capacity and as Agent, and the other banks which are party thereto, as amended from time to time (the "Credit Agreement"). Capitalized terms used but not otherwise defined herein shall have the same respective meanings ascribed to them as in the Credit Agreement. If any payment of principal or interest on this Note shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding business day, and such extension of time shall in such case be considered in computing interest in connection with such payment Payments of both principal and interest are to be made in immediately available funds at the office of the Agent, 901 Main Street, 51st Floor, Dallas, Texas, 75202, or such other place as the holder shall designate in writing to the maker. If default is made in the payment of this Note and it is placed in the hands of an attorney for collection, or collected through bankruptcy proceedings, or if suit is brought on this Note, the maker agrees to pay reasonable attorneys' fees in addition to all other amounts owing hereunder. This Note is the Note provided for in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments of principal hereof prior to the maturity hereof upon terms and conditions therein specified and, for payments of principal of and interest on this Note in the manner and at the times and under the terms and conditions of the Credit Agreement, and to the effect that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of the Highest Lawful Rate, It is contemplated that by reason of prepayments hereon there may be times when no indebtedness is owing hereunder; but notwithstanding such occurrences this Note shall remain valid and shall be in full force and effect as to Advances made pursuant to the Credit Agreement subsequent to each such occurrence. Except as expressly provided in the Credit Agreement, the maker and any and all endorsers, guarantors and sureties severally waive grace, notice of intent to accelerate, notice of acceleration, demand, presentment for payment, notice of dishonor or default, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security herefor, in whole or in part, with or without notice, before or after maturity. With respect to the incurrence of certain liabilities hereunder and the making of certain agreements by the Borrower as herein stated, such incurrence of liabilities and such agreements shall be binding upon the Borrower only as a trust formed under the Texas Real Estate Investment Trust Act pursuant to that certain Restated Declaration of Trust dated March 23, 1988, and only upon the assets of such Borrower. No Trust Manager or officer or other holder of any beneficial interest in the Borrower shall have any personal liability for the payment of any indebtedness or other liabilities incurred by the Borrower hereunder or for the performance of any agreements made by the Borrower hereunder, nor for any other act, omission or obligation incurred by the Borrower or by the Trust Managers except, in the case of a Trust Manager, any liability arising from his own wilful misfeasance or malfeasance or negligence. WEINGARTEN REALTY INVESTORS By: Name: Title: EX-10.6 8 1999 EMPLOYEE SHARE PURCHASE PLAN WEINGARTEN REALTY INVESTORS 1999 EMPLOYEE SHARE PURCHASE PLAN 1. Purpose ------- The primary purpose of this Plan is to encourage Share ownership by each Eligible Employee and each Eligible Trust Manager in the belief that such Share ownership will increase his or her interest in the success of Weingarten Realty Investors, a Texas real estate investment trust (the "Company"). 2. Definitions ----------- 2.1. The term "Account" shall mean the separate bookkeeping account established and maintained by the Plan Administrator for each Participant for each Purchase Period to record the contributions made on his or her behalf to purchase Shares under this Plan. 2.2. The term "Beneficiary" shall mean the person designated as such in accordance with Section 8. 2.3. The term "Board" shall mean the Board of Trust Managers of the Company. 2.4. The term "Closing Price" (a) for the first business day of any Purchase Period shall mean the closing price for a share of Share as reported for such day in The Wall Street Journal or in any successor to The Wall Street Journal or, if there is no such successor, in any publication selected by the Committee or, if no such closing price is so reported for such day, the first such closing price which is so reported after such day or, if no such closing price is so reported during the two week period which begins on the first day of such Purchase Period, the fair market value of a Share as determined on the first day of such Purchase Period by the Committee and (b) for the last business day of a Purchase Period shall mean the closing price for a Share as reported for such day in The Wall Street Journal or in any successor to The Wall Street Journal or, if there is no such successor, in any publication selected by the Committee or, if no such closing price is so reported for such day, the last such closing price which is so reported before such day or, if no such closing price is so reported during the two week period which ends on the last day of such Purchase Period, the fair market value of a Share as determined as of the last day of such Purchase Period by the Committee. 2.5. The term "Committee" shall mean the Compensation Committee of the Board. 2.6. The term "Company" shall mean Weingarten Realty Investors, a Texas real estate investment trust. 2.7. The term "Election Form" shall mean the form which an Eligible Employee or Eligible Trust Manager shall be required to properly complete in writing and timely file at least 15 days prior to the commencement of any Purchase Period in order to make any of the elections available to an Eligible Employee or Eligible Trust Manager under this Plan. 2.8. The term "Eligible Trust Manager" shall mean a person who is a member of the Board. 2.9. The term "Eligible Employee" shall mean each officer or employee of a Participating Employer who is shown on the payroll records of a Participating Employer as a "benefits eligible" employee. 2.10. The term "Participant" shall mean (a) for each Purchase Period an Eligible Employee or Eligible Trust Manager who has elected to purchase Shares in accordance with Section 4 in such Purchase Period and (b) any person for whom Shares are held pending delivery under Section 7. 2.11. The term "Participating Employer" shall mean the Company and any affiliated entity which is designated as such by the Committee. 2.12. The term "Pay" means (i) in the case of an Eligible Employee, all cash compensation paid to him or her for services to the Participating Employer, including regular straight time earnings or draw, overtime, commissions and bonuses, but excluding amounts paid as living allowance or reimbursement of expenses and other similar payments; and (ii) in the case of an Eligible Trust Manager, all retainers and meeting and other service fees paid to him or her by the Participating Employer. 2.13. The term "Pay Day" means the day as of which Pay is paid to a Participant. 2.14. The term "Plan" shall mean this Weingarten Realty Investors 1999 Share Purchase Plan, effective as of April 1, 1999, and as thereafter amended from time to time. 2.15. The term "Plan Administrator" shall mean the Company or the Company's delegate. 2.16. The term "Purchase Period" shall mean a period set by the Committee. Unless changed by the Committee, each Purchase Period shall begin on the first day of a calendar quarter and end on the last day of such calendar quarter. The first Purchase Period shall commence on January 1, 1999 and terminate on March 31, 1999. 2.17. The term "Purchase Price" for each Purchase Period shall mean 85% of the lesser of: (a) the Closing Price for a Share on the last day of such Purchase Period and (b) the greater of: (i) the Closing Price for a Share on the first day of such Purchase Period and (ii) the average Closing Price for a Share for all of the business days in the Purchase Period. 2.18. The term "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended, or any successor to such rule. 2.19. The term "Share" shall mean the common shares of beneficial interest, par value $.03 per share, of the Company. The aggregate number of Shares available for grant under this Plan shall not exceed 250,000 subject to adjustment pursuant to Section 17 hereof plus any Shares acquired by the Plan Administrator in the open market for the Accounts of the Participants. Shares subject to the Plan may be either authorized but unissued Shares, or Shares hereafter acquired by the Company. 3. Administration Except for the exercise of those powers expressly granted to the Committee to determine the Closing Price, who is a Participating Employer and to set the Purchase Period, the Plan Administrator shall be responsible for the administration of this Plan and shall have the power in connection with such administration to interpret the Plan and to take such other action in connection with such administration as the Plan Administrator deems necessary or equitable under the circumstances. The Plan Administrator also shall have the power to delegate the duty to perform such administrative functions as the Plan Administrator deems appropriate under the circumstances. Any person to whom the duty to perform an administrative function is delegated shall act on behalf of and shall be responsible to the Plan Administrator for such function. Any action or inaction by or on behalf of the Plan Administrator under this Plan shall be final and binding on each Eligible Employee, each Eligible Trust Manager, each Participant and on each other person who makes a claim under this Plan based on the rights, if any, of such Eligible Employee, Eligible Trust Manager or Participant under this Plan. 4. Participation 4.1. Each person who is an Eligible Employee or an Eligible Trust Manager shall be a Participant in this Plan for the related Purchase Period if he or she properly completes and timely files an Election Form with the Plan Administrator to elect to participate in this Plan. An Election Form may require an Eligible Employee or Eligible Trust Manager to provide such information and to agree to take such action (in addition to the action required under Section 5) as the Plan Administrator deems necessary or appropriate in light of the purpose of this Plan or for the orderly administration of this Plan. 4.2. Notwithstanding anything herein to the contrary, no person shall be deemed to be an Eligible Employee or an Eligible Trust Manager: (a) if immediately after such participation, Participant would own Shares, and/or hold outstanding options to purchase Shares, possessing 5% or more of the total combined voting power or value of all classes of Shares of the Company (for purposes of this paragraph, the rules of Section 424(d) of the Internal Revenue Code of 1986, as amended, shall apply in determining Share ownership of any Participant); or (b) if such Participant's rights to purchase Shares under all employee share purchase plans of the Company accrues at a rate which exceeds $25,000 in fair market value of the Shares (determined at the time of Plan enrollment) for each calendar year in which such purchase right is outstanding. 5. Contributions ------------- 5.1. Each Participant's Election Form under Section 4 shall specify the contributions that he or she proposes to make for the related Purchase Period. Such contributions shall be expressed as a specific dollar amount that Participant proposes to contribute in cash or a percentage of the Participant's Pay that his or her Participant Employer is authorized to deduct from his or her Pay each Pay Day during the Purchase Period (or as a combination of such cash and such payroll deduction contributions); provided, however: (a) the minimum payroll deduction for a Participant for each Pay Day for purposes under this Plan shall be $10.00, and (b) the maximum contribution which a Participant may make for purposes under this Plan for any calendar year shall be $25,000. 5.2. A Participant shall have the right to amend his or her Election Form at any time to reduce or to stop his or her contributions, and such election shall be effective immediately for cash contributions and as soon as practicable after the Plan Administrator actually receives such amended Election Form for payroll deductions. A withdrawal shall be deducted from the participant's Account as of the date the Plan Administrator receives such amended Election Form, and the actual withdrawal shall be effected by the Plan Administrator as soon as practicable after such date. Participants who stop or withhold contributions for any Purchase Period may not participate again for at least six months. 5.3. All payroll deductions made for a Participant shall be credited to his or her Account as of the Pay Day as of which the deduction is made. All contributions made by a Participant under this Plan, whether in cash or through payroll deductions, shall be held by the Company or by such Participant's Participating Employer, as agent for the Company. All such contributions shall be held as part of the general assets of the Company and shall not be held in trust or otherwise segregated from the Company's general assets. No interest shall be paid or accrued on any such contributions. Each Participant's right to the contributions credited to his or her Account shall be that of a general and unsecured creditor of the Company. Each Participating Employer shall have the right to make such provisions as it deems necessary or appropriate to satisfy any tax laws with respect to purchases of Shares made under this Plan. 5.4. The balance credited to the Account of an Eligible Employee automatically shall be refunded in full (without interest) if his or her status as an employee of all Participating Employers terminates for any reason whatsoever during a Purchase Period and the balance credited to the Account of an Eligible Trust Manager automatically shall be refunded in full (without interest) if his or her status as a member of the Board terminates for any reason whatsoever during a Purchase Period. Such refunds shall be made as soon as practicable after the Plan Administrator has actual notice of any such termination. 6. Purchase of Shares -------------------- 6.1. If a Participant is an Eligible Employee or an Eligible Trust Manager through the end of a Purchase Period, the balance which remains credited to his or her Account at the end of such Purchase Period automatically shall be applied to purchase Shares at the Purchase Price for such Shares for such Purchase Period. Such Shares shall be purchased on behalf of the Participant by operation of this Plan in whole and fractional Shares. 6.2. Except as specifically provided herein, the Participants shall have the same rights and privileges under the Plan. All rules and determinations of the Board in the administration of the Plan shall be uniformly and consistently applied to all persons in similar circumstances. 6.3. If the total Shares to be purchased on any date in accordance with Section 6(a) exceeds the Shares then available under the Plan (after deduction of all Shares that have been purchased under Section 6(a)), the Plan Administrator shall make a pro rata allocation of the Shares remaining available in as neatly a uniform manner as shall be practical and as it shall determine to be equitable. 7. Delivery -------- A book-entry record of the Shares purchased by each Participant shall be maintained by the Company's transfer agent and no certificates shall be issued for such Shares except to the extent that a Participant specifically so requests. Notwithstanding the foregoing, when a refund is made to a participant pursuant to Section 5.4, certificates shall be delivered to him or her for all Shares then held for the Participant under the Plan. A Share certificate delivered to a Participant shall be registered in his or her name or, if the Participant so elects and is permissible under applicable law, in the names of the Participant and one such other person as may be designated by the Participant, as joint tenants with rights of survivorship. However, (a) no Share certificate representing a fractional share of Share shall be delivered to a Participant or to a Participant and any other person, (b) cash which the Plan Administrator deems representative of the value of a Participant's fractional share shall be distributed (when a participant requests a distribution of certificates for all of the shares of Share held for him or her) in lieu of such fractional share unless a Participant in light of Rule 16b-3 waives his or her right to such cash payment and (c) the Plan Administrator shall have the right to charge a participant for registering Share in the name of the Participant and any other person. No Participant (or any person who makes a claim for, on behalf of or in place of a participant) shall have any interest in any Share under this Plan until they have been reflected in the book-entry record maintained by the transfer agent or the certificate for such Share has been delivered to such person. 8. Designation of Beneficiary ---------------------------- A Participant may designate on his or her Election Form a Beneficiary (a) who shall receive the balance credited to his or her Account if the Participant dies before the end of a Purchase Period and (b) who shall receive the Share, if any, purchased for the Participant under this Plan if the Participant dies after the end of a Purchase Period but before either the certificate representing such Shares has been delivered to the Participant or before such Shares have been credited to a brokerage account maintained for the Participant. Such designation may be revised in writing at any time by the Participant by filing an amended Election Form, and his or her revised designation shall be effective at such time as the Plan Administrator receives such amended Election Form. If a deceased Participant fails to designate a Beneficiary or, if no person so designated survives a Participant or, if after checking his or her last known mailing address, the whereabouts of the person so designated survives a Participant or, if after checking his or her last known mailing address, the whereabouts of the person so designated are unknown, then the Participant's estate shall be treated as his or her designated Beneficiary under this Section 8. 9. Transferability and Dispositions ---------------------------------- 9.1. Neither the balance credited to a Participant's Account nor any rights to receive Shares under this Plan may be assigned, encumbered, alienated, transferred, pledged or otherwise disposed of in any way by a Participant during his or her lifetime or by his or her Beneficiary or by any other person during his or her lifetime, and any attempt to do so shall be without effect. 9.2. Except as provided in the last sentence of this Section 9.2 or in Section 7, no sale, transfer or other disposition may be made of any Shares purchased under the Plan until the second anniversary of such purchase. If a Participant violates the foregoing restriction, he or she shall remit to the Company an amount of cash equal to the difference between the amount he or she paid for such Shares and the Closing price of such Shares on the date they were purchased. The amount to be remitted for purposes of the foregoing shall be computed by the Plan Administrator, in its discretion, using a last-in-first-out basis of accounting in the event that Shares for more than one Purchase Period are involved. Notwithstanding the foregoing, if a Participant who owns Shares subject to the foregoing restriction is determined by the Plan Administrator in its discretion to have a serious financial need for the proceeds of the sale of such Shares, then upon application made by the Participant, the Plan Administrator shall consent to a sale of such Shares to the extent necessary to satisfy the serious financial need, and the Participant will not be required to make the remittance to the Company described in this Section 9.2. 10. Securities Registration ------------------------ If the Company shall deem it necessary to register under the Securities Act of 1933, as amended, or any other applicable statute any Shares purchased under this Plan or to qualify any such Shares for an exemption from any such statutes, the Company shall take such action at its own expense. If Shares are listed on any national securities exchange at the time any Shares are purchased hereunder, the Company shall make prompt application for the listing on such national securities exchange of such Shares, at its own expense. Purchases of Shares hereunder shall be postponed as necessary pending any such action. 11. Compliance with Rule 16b-3 ----------------------------- All elections and transactions under this Plan by persons subject to Rule 16b-3 are intended to comply with at least one of the exemptive conditions under Rule 16b-3. The Plan Administrator shall establish such administrative guidelines to facilitate compliance with at least one such exemptive condition under Rule 16b-3 as the Plan Administrator may deem necessary or appropriate. If any provision of this Plan or such administrative guidelines or any act or omission with respect to this Plan (including any act or omission by an Eligible Employee or an Eligible Trust Manager) fails to satisfy such exemptive condition under Rule 16b-3 or otherwise is inconsistent with such condition, such provision, guidelines or act or omission shall be deemed null and void. 12. Amendment or Termination -------------------------- This Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate, and any such amendment shall be subject to the approval of the Company's shareholders to the extent such approval is required under the laws of the State of Texas, federal tax laws or to the extent such approval is required to meet the security holder approval requirements under Rule 16b-3; provided, however, no amendment shall be retroactive unless the Board in its discretion determines that such amendment is in the best interest of the Company or such amendment is required by applicable law to be retroactive. The Board also may terminate this Plan and any Purchase Period at any time (together with any related contribution election) or may terminate any Purchase Period (together with any related contribution elections) at any time; provided, however, no such termination shall be retroactive unless the Board determines that applicable law requires a retroactive termination. 13. Notices ------- All Election Forms and other communications from a Participant to the Plan Administrator under, or in connection with, this Plan shall be deemed to have been filed with the Plan Administrator when actually received in the form specified by the Plan Administrator at the location, or by the person, designated by the Plan Administrator for the receipt of any such Election Form and communications. 14. Employment ---------- The right to elect to participate in this Plan shall not constitute an offer of employment or membership on the Board, and no election to participate in this Plan shall constitute an employment agreement for an Eligible Employee or an agreement with respect to Board membership for an Eligible Trust Manager. Any such right or election shall have no bearing whatsoever on the employment relationship between an Eligible Employee and any other person or on an Eligible Trust Manager's status as a member of the Board. Finally, no Eligible Employee shall be induced to participate in this Plan, or shall participate in this Plan, with the expectation that such participation will lead to employment or continued employment, and no Eligible Trust Manager shall be induced to participate in this Plan, or shall participate in this Plan, with the expectation that such participation will lead to continued membership on the Board. 15. Changes in Capital Structure ------------------------------- 15.1. In the event that the outstanding Shares of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of Shares or other securities of the Company or of another corporation, by reason of any reorganization, merger, consolidation, recapitalization, reclassification, Share split-up, combination of Shares or dividend payable in Shares, appropriate adjustment shall be made by the Board in the number or kind of Shares as to which a right granted under this Plan shall be exercisable, to the end that the right holder's proportionate interest shall be maintained as before the occurrence of such event. Any such adjustment made by the Board shall be conclusive. 15.2. If the Company is not the surviving or resulting corporation in any reorganization, merger, consolidation or recapitalization, this Plan, and the Company's rights, duties and obligations hereunder, shall be assumed by the surviving or resulting corporation and the rights of a Participant to purchase Shares shall continue in full force and effect. 16. Headings, References and Construction ---------------------------------------- The headings to sections in this Plan have been included for convenience of reference only. This Plan shall be interpreted and construed in accordance with the laws of the State of Texas. 17. Shareholder Approval --------------------- 17.1. This Plan is intended to be a "Qualified Plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended. Accordingly, the Company will seek shareholder approval of the Plan at the next annual meeting of the Company's shareholders. If shareholder approval is not obtained, the Board of Trust Managers may terminate the Plan in its sole discretion. EX-12.1 9 COMPUTATION OF FIXED CHARGES RATIOS EXHIBIT 12.1
WEINGARTEN REALTY INVESTORS COMPUTATION OF RATIOS OF EARNINGS AND FUNDS FROM OPERATIONS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS (AMOUNTS IN THOUSANDS) Years Ended December 31, ---------------------------------- 1999 1998 1997 ---------- ---------- ---------- Net income available to common shareholders . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 Add: Portion of rents representative of the interest factor. . . . . 1,281 882 667 Interest on indebtedness. . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009 Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881 Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432 ---------- ---------- ---------- Net income as adjusted. . . . . . . . . . . . . . . . . . . $ 130,953 $ 95,267 $ 86,074 ========== ========== ========== Fixed charges: Interest on indebtedness. . . . . . . . . . . . . . . . . . . . $ 33,186 $ 33,654 $ 30,009 Capitalized interest. . . . . . . . . . . . . . . . . . . . . . 2,722 1,375 812 Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881 Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432 Portion of rents representative of the interest factor. . . . . 1,281 882 667 ---------- ---------- ---------- Fixed charges . . . . . . . . . . . . . . . . . . . . . . . $ 57,138 $ 42,158 $ 31,920 ========== ========== ========== RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . . . . . 2.29 2.26 2.70 ========== ========== ========== Net income available to common shareholders . . . . . . . . . . $ 76,537 $ 54,484 $ 54,966 Depreciation and amortization . . . . . . . . . . . . . . . . . 49,256 41,580 37,544 Gain on sales of property and securities. . . . . . . . . . . . (20,596) (885) (3,327) Extraordinary charge (early retirement of debt) . . . . . . . . 190 1,392 ---------- ---------- ---------- Funds from operations . . . . . . . . . . . . . . . . . . . 105,387 96,571 89,183 Add: Portion of rents representative of the interest factor. . . . . 1,281 882 667 Preferred dividends . . . . . . . . . . . . . . . . . . . . . . 19,593 5,881 Interest on indebtedness. . . . . . . . . . . . . . . . . . . . 33,186 33,654 30,009 Amortization of debt cost . . . . . . . . . . . . . . . . . . . 356 366 432 ---------- ---------- ---------- Funds from operations as adjusted . . . . . . . . . . . . . $ 159,803 $ 137,354 $ 120,291 ========== ========== ========== RATIO OF FUNDS FROM OPERATIONS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . . 2.80 3.26 3.77 ========== ========== ==========
EX-21.1 10 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21.1
WEINGARTEN REALTY INVESTORS LIST OF SUBSIDIARIES OF THE REGISTRANT STATE OF SUBSIDIARY INCORPORATION - -------------------------------------- ------------- Weingarten Realty Management Company . . . . . . Texas Weingarten/Nostat, Inc.. . . . . . . . . . . . . Texas Weingarten/Lufkin, Inc.. . . . . . . . . . . . . Texas WRI/Post Oak, Inc. . . . . . . . . . . . . . . . Texas A.T.D.N.L., Inc. . . . . . . . . . . . . . . . . Texas WRI/Central Plaza, Inc.. . . . . . . . . . . . . Texas WRI/7080 Express Lane, Inc.. . . . . . . . . . . Texas Weingarten Properties Trust. . . . . . . . . . . Texas Main/O.S.T., Ltd.. . . . . . . . . . . . . . . . Texas Phelan Boulevard Venture . . . . . . . . . . . . Texas Northwest Hollister Venture. . . . . . . . . . . Texas East Town Lake Charles Co. . . . . . . . . . . . Louisiana Alabama-Shepherd Shopping Center . . . . . . . . Texas Sheldon Center, Ltd. . . . . . . . . . . . . . . Texas Jacinto City, Ltd. . . . . . . . . . . . . . . . Texas Weingarten/Finger Venture. . . . . . . . . . . . Texas Rosenberg, Ltd.. . . . . . . . . . . . . . . . . Texas Eastex Venture . . . . . . . . . . . . . . . . . Texas GJR/Weingarten River Pointe Venture. . . . . . . Texas GJR/Weingarten Little York Venture . . . . . . . Texas South Loop Long Wayside Company. . . . . . . . . Texas Lisbon St. Shopping Trust. . . . . . . . . . . . Maine WRI/Crosby . . . . . . . . . . . . . . . . . . . Texas WRI/Dickinson. . . . . . . . . . . . . . . . . . Texas Market at Town Center-Sugarland. . . . . . . . . Texas Lincoln Place Limited Partnership. . . . . . . . Delaware Markham West Shopping Center L. P. . . . . . . . Delaware South Padre Drive L. P.. . . . . . . . . . . . . Texas AN/WRI Partnership, Ltd. . . . . . . . . . . . . Texas Bridges at Smoky Hills, LLC. . . . . . . . . . . Texas Miller Elizabeth, LLC. . . . . . . . . . . . . . Texas Miller/Weingarten Realty LLC . . . . . . . . . . Colorado Weingarten/Colorado, Inc.. . . . . . . . . . . . Texas Weingarten/Investments, Inc. . . . . . . . . . . Texas Miller/Fiest, LLC. . . . . . . . . . . . . . . . Texas Weingarten-Murphy, Ltd.. . . . . . . . . . . . . Texas WRI/Bell Plaza, Inc. . . . . . . . . . . . . . . Texas WRI/Pembroke, Ltd. . . . . . . . . . . . . . . . Texas WRI/Shopping Centers I, Inc. . . . . . . . . . . Texas Nano Corp. Inc.. . . . . . . . . . . . . . . . . Texas WRI/Interest, Inc. . . . . . . . . . . . . . . . Texas
EX-23.1 11 CONSENT OF DELOITTE & TOUCHE EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statements No. 33-20964, No. 33-24364, No. 33-41604, No. 33-52473, No. 33-54402, No. 33-54404 and No. 333-94945 of Weingarten Realty Investors on Form S-8, in Post-Effective Amendment No. 1 to Registration Statement No. 33-25581 of Weingarten Realty Investors on Form S-8 and in Registration Statement No. 333-85967 of Weingarten Realty Investors on Form S-3 of our report dated February 22, 2000, appearing in this Annual Report on Form 10-K of Weingarten Realty Investors for the year ended December 31, 1999. DELOITTE & TOUCHE LLP Houston, Texas March 17, 2000 EX-27.1 12 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WEINGARTEN REALTY INVESTORS' ANNUAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 1999. 1000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 5842 0 17782 908 0 0 1514139 328645 1309396 0 0 0 267 801 644834 1309396 0 230469 0 64435 57124 0 33186 96320 0 96320 0 190 0 96130 2.87 2.85
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