<PAGE>
Rule No. 424(b)(5)
Registration Statement No. 33-53311
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED MARCH 23, 1995
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 23, 1995)
$100,000,000
LOGO NEW PLAN REALTY TRUST
% SENIOR NOTES DUE APRIL , 200_
----------------
The % Senior Notes Due April , 200_ (the "Notes") offered hereby are
being issued by New Plan Realty Trust, an equity real estate investment trust
("New Plan" or the "Trust"), in an aggregate principal amount equal to
$100,000,000.
Interest on the Notes will be payable semiannually in arrears on and
, commencing , 1995. The Notes may not be redeemed at the option of the
Trust prior to maturity. The Notes will mature on April , 200_.
The Notes will be represented by a single fully-registered Note in book-entry
form (the "Global Security") registered in the name of a nominee of The
Depository Trust Company ("DTC"). Beneficial interests in the Global Security
will be shown on, and transfers thereof will be effected only through, records
maintained by DTC (with respect to beneficial interests of participants) or by
participants or persons that hold interests through participants (with respect
to beneficial interests of beneficial owners). Owners of beneficial interests
in the Global Security will be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective beneficial
interests only under the limited circumstances described under "Description of
the Notes--Book-Entry System." Settlement for the Notes will be made in
immediately available funds. The Notes will trade in DTC's Same-Day Funds
Settlement System until maturity or earlier redemption, as the case may be, or
until the Notes are issued in certificated form, and secondary market trading
activity in the Notes will therefore settle in immediately available funds. All
payments of principal and interest in respect of the Notes will be made by the
Trust in immediately available funds. See "Description of the Notes--Same-Day
Settlement and Payment."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) TRUST(1)(3)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note..................................... % % %
--------------------------------------------------------------------------------
Total........................................ $ $ $
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from , 1995.
(2) The Trust has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting estimated expenses of $275,000 payable by the Trust.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
----------------
The Notes are offered by the Underwriters, subject to prior sale, when, as
and if issued by the Trust and delivered to and accepted by the Underwriters,
subject to approval of certain legal matters by counsel for the Underwriters.
The Underwriters reserve the right to withdraw, cancel or modify such offer and
to reject orders in whole or in part. It is expected that delivery of the Notes
offered hereby will be made in New York, New York on or about April , 1995.
----------------
MERRILL LYNCH & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
----------------
The date of this Prospectus Supplement is March , 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>
THE TRUST
New Plan Realty Trust, one of the largest publicly traded real estate
investment trusts in the United States based on the aggregate market value of
its outstanding common shares of beneficial interest (the "Common Shares"), is
a self-administered and self-managed equity real estate investment trust
("REIT") which primarily owns shopping centers. The Trust's present equity
investments consist principally of 99 shopping centers, with approximately
12,652,000 gross rentable square feet, five factory outlet centers with
approximately 1,559,000 gross rentable square feet and 20 garden apartment
complexes containing 3,940 apartment units. These properties are located in 19
states. See "Business."
Since the organization of the corporate predecessor of the Trust in 1962, the
Trust and its predecessor have been directed by members of the Newman family,
who own or control 3,131,259 Common Shares, or approximately 6% of the
currently outstanding Common Shares, and are the Trust's largest group of non-
institutional shareholders. The Newman family has been active in real estate
ownership and management since 1926. William Newman serves as Chairman of the
Board and Chief Executive Officer of the Trust.
The Trust's primary investment strategy is to identify and purchase well-
located income-producing shopping centers and garden apartment complexes at a
discount to replacement cost. The Trust also purchases selected factory outlet
centers. The Trust also seeks to achieve income growth through a program of
expansion, renovation, leasing, re-leasing and improving the tenant mix of its
shopping centers and factory outlet centers. The Trust minimizes development
risks by generally purchasing existing income-producing properties.
The Trust generally has acquired properties for cash. It is management's
belief that its ability to purchase available properties for cash enhances its
negotiating position in obtaining attractive purchase prices. During the fiscal
year ended July 31, 1994, New Plan acquired 15 shopping centers and three
factory outlet centers aggregating approximately 3,281,000 gross rentable
square feet and seven garden apartment complexes containing 1,748 apartment
units for an aggregate purchase price of approximately $209 million. In a few
instances properties have been acquired subject to existing non-recourse long-
term mortgages. Long-term debt of the Trust at January 31, 1995 consisted of
approximately $33.4 million of mortgage loans. As of March 20, 1995, the Trust
had outstanding borrowings of approximately $55 million under its $100 million
line of credit with The Bank of New York, Fleet National Bank and CoreStates
Bank N.A. (the "Line of Credit"), the proceeds of which were used to make
property acquisitions, to finance property expansions and renovations and for
general trust purposes. The Trust intends to repay all or most of the
outstanding borrowings under the Line of Credit with the net proceeds of this
offering. See "Use of Proceeds." Management anticipates that, shortly after
applying the proceeds from this offering as contemplated herein, additional
drawings will be made under the Line of Credit to fund property acquisitions
and for other trust purposes.
The Trust, a Massachusetts business trust, maintains its executive offices at
1120 Avenue of the Americas, New York, New York 10036, and its telephone number
is (212) 869-3000. The Trust employs approximately 315 individuals, including
executive, administrative and field personnel. Trust personnel lease, manage
and maintain or supervise the maintenance of all of the Trust's properties.
RECENT DEVELOPMENTS
Since August 1, 1994, the Trust has acquired seven shopping centers with
approximately 806,000 gross rentable square feet and one garden apartment
complex containing 164 apartment units for an aggregate purchase price of
approximately $42 million.
The Trust has recently entered into two contracts to purchase and expects to
enter into a third contract to purchase garden apartment complexes containing
884 apartment units for an aggregate purchase price of
S-3
<PAGE>
approximately $21 million. The purchase of the three garden apartment complexes
will increase the number of apartment units in the Trust's portfolio to 4,824.
The Trust is presently conducting its due diligence review with respect to
these properties and there can be no assurance that these properties will be
purchased. The three garden apartment complexes are Governour's Place located
in Harrisburg, Pennsylvania, The Club located in Birmingham, Alabama, and
Saddlebrook located in Lexington, Kentucky. Governour's Place contains 130
apartment units and was built in 1974. The Club contains 299 apartment units
and was built in 1970. Saddlebrook contains 455 apartment units and was built
in 1970. All of these garden apartment complexes have landscaped grounds,
swimming pools and other amenities.
In the six-month period ended January 31, 1995, net income totaled $31.1
million (or $.59 per Common Share) on revenues of $62 million. Set forth below
is certain selected financial data of the Trust which should be read in
conjunction with the financial statements of the Trust and related notes
thereto incorporated herein by reference.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JANUARY 31,
-----------------------------
1994 1995
-------------- --------------
(UNAUDITED)
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Income Statement Data:
Revenues....................................... $ 46,766 $ 62,023
Net income..................................... 25,005 31,106
Net income per common share.................... .51 .59
Other Data:
Funds from operations(1)....................... $ 29,232 $ 38,235
Balance Sheet Data:
Total assets................................... $540,541 $677,730
Shareholders' equity........................... 501,140 567,850
</TABLE>
--------
(1) Net income plus depreciation and amortization of properties, adjusted for
gains and losses from the sale of assets. Industry analysts generally
consider funds from operations to be an appropriate measure of the
performance of an equity REIT. Funds from operations does not represent
cash generated from operating activities in accordance with generally
accepted accounting principles and should not be considered as an
alternative to net income as an indicator of the Trust's operating
performance or as an alternative to cash flow as a measure of liquidity.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Trust for the periods indicated:
<TABLE>
<CAPTION>
SIX
MONTHS
YEAR ENDED JULY 31, ENDED
-------------------------------------------------------------- JANUARY
31,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
16.3 19.0 28.5 23.6 17.0 11.7
</TABLE>
To date, the Trust has not issued any preferred shares of beneficial
interest; therefore, the ratios of earnings to combined fixed charges and
preferred share dividends are unchanged from the ratios presented in this
section. For purposes of computing these ratios, earnings have been calculated
by adding fixed charges (excluding capitalized interest) to income (loss)
before income taxes and extraordinary items. Fixed charges consist of interest
costs, whether expensed or capitalized, the interest component of rental
expense, if any, and amortization of debt discounts and issue costs, whether
expensed or capitalized.
S-4
<PAGE>
USE OF PROCEEDS
The net proceeds to the Trust from the sale of the Notes offered hereby are
estimated at approximately $99 million. Up to $55 million of the proceeds will
be used to repay borrowings outstanding under the Line of Credit. The
borrowings outstanding under the Line of Credit presently bear interest at a
weighted average rate of 6.62% and are due and payable on November 30, 1995.
Approximately $2.75 million will be used to pay off an existing mortgage note
that bears interest at the prime rate and matures on July 22, 1998 and
approximately $9.31 million will be used to pay off an existing mortgage note
that bears interest at the prime rate plus .75% and matures on February 16,
1996. The balance of the net proceeds will be used to make future property
acquisitions, to finance property expansions and renovations underway and
planned, and for general trust purposes. Pending such uses, the net proceeds
may be invested in short-term income producing investments such as investments
in commercial paper, government securities or money market funds that invest in
government securities.
CAPITALIZATION
The following table sets forth the capitalization of the Trust as of January
31, 1995 and as adjusted to give effect to this offering and the anticipated
use of the proceeds thereof as described under "Use of Proceeds."
<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable(1)....................................... $ 55,000 $ --
======== ========
Long-term debt:
Mortgage notes payable(2).............................. 33,353 21,294
Notes.................................................. -- 100,000
-------- --------
$ 33,353 $121,294
======== ========
Shareholders' equity:
Common Shares of Beneficial Interest, without par value,
unlimited Common Shares authorized; 52,944,762 Common
Shares outstanding(3).................................. 615,973 615,973
-------- --------
Total shareholders' equity.............................. 567,850 567,850
-------- --------
Total capitalization(4)................................. $601,203 $689,144
======== ========
</TABLE>
--------
(1) As of January 31, 1995, short-term notes payable under the Line of Credit
were approximately $63 million. As of March 20, 1995, short-term notes
payable under the Line of Credit were approximately $55 million. The "As
Adjusted" column above assumes repayment of these notes from the proceeds
of this offering.
(2) Includes current portion of long-term debt. The rates of interest on
outstanding mortgage indebtedness range from 7.25% to 10.75%; the weighted
average interest rate of the mortgages was 10.12% at March 20, 1995.
(3) Does not include 354,800 Common Shares reserved for issuance under the
Trust's 1985 Incentive Stock Option Plan, 1,000,000 Common Shares reserved
for issuance under the Trust's 1991 Stock Option Plan, 1,300,000 Common
Shares reserved for issuance under the Trust's March 1991 Stock Option
Plan, and 5,000 Common Shares reserved for issuance under the Trust's Non-
Incentive Stock Option Plan.
(4) Does not include short-term notes payable under the Line of Credit.
S-5
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial data for the Trust and
should be read in conjunction with the financial statements of the Trust and
related notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues
Rental income.......... $19,662 $21,879 $26,164 $ 28,463 $ 33,763 $ 38,041 $ 41,395 $ 47,595 $ 65,308 $ 96,384
Interest and dividends. 6,564 9,523 9,235 8,857 9,778 16,082 15,988 17,097 11,001 4,570
Other revenues......... 75 881 460 -- -- -- -- -- -- --
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
26,301 32,283 35,859 37,320 43,541 54,123 57,383 64,692 76,309 100,954
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
Operating expenses
Property operating
costs................. 7,538 8,411 9,772 9,871 11,547 14,916 14,133 16,163 22,440 33,283
Interest on mortgages &
notes(1).............. 4,104 5,673 5,713 2,035 1,933 1,901 1,935 1,527 1,386 2,289
Depreciation and
amortization.......... 1,725 2,057 2,406 2,569 3,164 3,563 4,205 5,051 7,574 11,342
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
13,367 16,141 17,891 14,475 16,644 20,380 20,273 22,741 31,400 46,914
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
Operating income........ 12,934 16,142 17,968 22,845 26,897 33,743 37,110 41,951 44,909 54,040
Other income............ -- 701 1,454 2,223 2,153 3,262 4,789 10,064 940 990
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
12,934 16,843 19,422 25,068 29,050 37,005 41,899 52,015 45,849 55,030
Other deductions(1)..... 1,153 1,225 1,456 1,618 1,939 1,958 2,021 2,569 2,620 2,713
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
Net income.............. $11,781 $15,618 $17,966 $ 23,450 $ 27,111 $ 35,047 $ 39,878 $ 49,446 $ 43,229 $ 52,317
======= ======= ======= ======== ======== ======== ======== ======== ======== ========
Net income per Common
Share(2)............... .70 .78 .80 .88 .95 1.01 1.05 1.08 .89 1.06
OTHER DATA:
Funds from
operations(1)(3)...... $13,506 $16,974 $20,413 $ 23,796 $ 28,123 $ 35,347 $ 39,294 $ 44,433 $ 49,863 $ 62,669
Distributions paid..... 11,003 14,747 18,257 23,780 28,148 36,557 43,640 55,173 61,963 64,693
Distributions paid per
Common Share(2)....... .65 .73 .81 .89 .97 1.05 1.13 1.21 1.275 1.315
Weighted average number
of Common Shares
outstanding(2)........ 16,890 20,033 22,585 26,734 28,620 34,844 38,138 45,971 48,838 49,502
<CAPTION>
JULY 31,
--------------------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------- ------- ------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Real estate (at cost)... $58,208 $82,042 $92,867 $107,310 $137,081 $168,601 $180,361 $301,136 $388,228 $621,342
Total assets............ 111,153 190,740 189,280 187,319 301,282 307,678 461,913 530,827 534,248 616,993
Long-term debt(4)....... 44,317 96,273 26,714 22,748 22,971 22,938 18,868 17,831 23,321 28,060
Shareholders' equity.... 63,103 90,884 159,368 161,866 274,199 279,490 437,206 506,339 500,571 565,493
</TABLE>
--------
(1) Certain amounts prior to 1993 have been reclassified to conform to the 1993
and 1994 presentations.
(2) Adjusted to give effect to the 3-for-2 share split on April 1, 1986.
(3) Net income plus depreciation and amortization of properties, adjusted for
gains and losses from the sale of assets and a non-cash accounting charge
of $1,495,000 in 1987. Industry analysts generally consider funds from
operations to be an appropriate measure of the performance of an equity
REIT. Funds from operations does not represent cash generated from
operating activities in accordance with generally accepted accounting
principles and should not be considered as an alternative to net income as
an indicator of the Trust's operating performance or as an alternative to
cash flow as a measure of liquidity.
(4) Includes current installments on mortgage notes and bonds payable.
S-6
<PAGE>
BUSINESS
The Trust presently owns or has leasehold interests in 99 shopping centers
containing an aggregate of approximately 12,652,000 gross rentable square feet.
Substantially all of the shopping centers are community and neighborhood
centers. Twenty-one of the shopping centers are located in New York, 16 in
Georgia, 15 in Ohio, nine in Pennsylvania, six each in Kentucky and Virginia,
five in North Carolina, four each in Indiana, Tennessee and New Jersey, three
in West Virginia, two each in Delaware and Michigan and one each in Maryland
and Alabama. The Trust also owns five factory outlet centers aggregating
approximately 1,559,000 gross rentable square feet. Two of the centers are
located in Missouri and one center is located in each of California, Florida
and Virginia. The Trust also owns 20 garden apartment complexes with an
aggregate of 3,940 apartment units. Five of the apartment complexes are located
in Tennessee, four in Kentucky, three in Alabama, two each in Delaware, New
York and Ohio, and one each in Florida and South Carolina. Approximately 70% of
the apartment units have two or more bedrooms. The Trust believes that all of
its properties are adequately covered by insurance.
The Trust intends to continue to invest in well-located income-producing real
estate, with a primary emphasis on shopping centers and garden apartment
complexes. The Trust may also continue to invest in selected factory outlet
centers. An important part of the Trust's investment strategy is to enhance the
cash flow potential of its properties through a program of expansion,
renovation, leasing, re-leasing and improving the tenant mix of its shopping
centers and factory outlet centers.
The Trust often seeks properties located in small cities. Currently, none of
the Trust's shopping centers are enclosed malls. Many of the centers feature
supermarket and drug store tenants and some of the centers include discount
department stores. Supermarkets and drug stores historically have been less
susceptible to economic downturns. The Trust attempts to acquire each shopping
center and apartment complex at a discount to replacement cost. Properties
purchased substantially below replacement cost generally have low rent which
may allow for significant increases upon renewal or future leasing. By
primarily purchasing completed income-producing properties rather than building
them, the Trust has avoided development risks.
Recently, the Trust has purchased newer and more modern shopping centers at
below replacement cost. The average size of the supermarkets in these centers
exceeds 44,000 square feet, representing current food store designs. The Trust
believes that such newer, high-quality centers will continue to be available
below replacement cost.
The Trust's revenue base is diversified from both an individual tenant and
property perspective. Kmart, the Trust's largest tenant, currently accounts for
approximately 6% of revenues. No other single tenant or chain of tenants
currently accounts for more than 2% of the Trust's revenues. Seventeen of the
Trust's 18 Kmarts represent the newer and larger prototype Kmart stores,
fifteen of which have been built or renovated within the last seven years. The
average size of all the Trust's Kmart stores is approximately 90,000 square
feet. In addition, no single Trust property accounts for more than
approximately 6.5% of the Trust's total revenues. For a complete listing of the
Trust's properties, see the "Schedule of Properties" below.
The Trust generally seeks to acquire properties in those states in which it
already owns property or in an adjacent state to allow for efficient
management. The Trust also attempts to acquire shopping centers which provide
opportunities for expansion or would benefit from renovation. See "Renovations,
Expansions and Development."
A substantial portion of the Trust's shopping center income consists of rents
received under long-term leases. Most of these shopping center leases provide
for payment by tenants of an annual minimum rent and additional rent calculated
generally as a percentage of gross sales in excess of a specified amount
("percentage rent"), and many leases also have cost of living escalation
clauses. Upon renewal of a shopping center lease, the annual minimum rent of a
tenant is generally increased to an amount which approaches or exceeds the sum
of the former annual minimum rent plus the most recent annual percentage rent
received from the tenant. The Trust's apartments are generally rented on a one-
year basis.
S-7
<PAGE>
The Trust's shopping center leases usually provide that the Trust, as
landlord, must repair and maintain building exteriors (including roofs,
canopies and external utilities) and common areas, including parking lots. Most
of the shopping center leases also contain provisions for the full pro rata
contribution by tenants to the cost of maintaining common areas and payment of
real estate taxes.
In order to protect and enhance its investments, the Trust incurs
unreimbursed costs for renovation of its properties. The Trust also seeks to
commit tenants to make improvements to their premises, including sign
installation and store modernization. The management of the Trust believes that
because such renovations and improvements enhance the appearance of the
shopping centers, customer traffic may increase. To the extent that additional
customer traffic results in higher sales, percentage rents received by the
Trust with respect to that shopping center may increase. As a result, the Trust
is in a better position to receive higher minimum rents upon the expiration of
leases from existing tenants or new leases.
In addition to the real estate properties described above, the Trust holds
two purchase money first mortgages at per annum interest rates of 9.375% and
9.875%, two second mortgages at per annum interest rates of 10% and 10.5%, a
leasehold mortgage at a per annum interest rate of 12% and a note receivable at
a per annum interest rate of 11.5%. The mortgages and note receivable, all of
which are presently current, totalled $22.9 million at January 31, 1995. The
mortgages are collateralized by shopping centers located in New York and
Pennsylvania. These shopping centers contain an aggregate of approximately
536,000 gross rentable square feet. The Trust also owns minor interests in
several publicly traded real estate entities, consisting of convertible
debentures and shares of beneficial interest.
Under various Federal, state and local laws, ordinances and regulations, an
owner of real estate or interests therein may be liable for the costs of
removal or remediation of certain hazardous substances on or in such property.
Such enactments often impose such liability without regard to whether the owner
knew of, or was responsible for, the presence of such hazardous substances. The
cost of any required remediation and the owner's liability therefor as to any
property is generally not limited under such enactments and could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may also
adversely affect the owner's ability to sell or rent such property or to borrow
using such property as collateral.
The Trust's management is not aware of any environmental liability that it
believes could have a material adverse effect on the Trust's financial
condition or results of operations. In addition, since 1989, the Trust has
typically conducted Phase I environmental audits (which generally involve
inspection without soil sampling or ground water analysis) in connection with
property acquisitions and none of these audits has revealed the existence of
any environmental conditions that the Trust's management believes could have a
material adverse effect on the Trust's financial condition or results of
operations. No assurance, however, can be given that these audits reveal all
environmental liabilities, that environmental liabilities may not have
developed since such audits were conducted or that no material adverse
environmental condition exists that is not known to the Trust.
The success of the Trust depends, among other factors, upon the trends of the
economy, including interest rates, construction costs, income tax laws and
increases or decreases in operating expenses, governmental regulations and
legislation, including environmental requirements, real estate fluctuations,
retailing trends, population trends, zoning laws, the financial condition and
stability of tenants, the availability of financing and capital on satisfactory
terms and the ability of the Trust to compete with others for tenants and keep
its properties leased at profitable levels. The Trust competes for properties
with an indeterminate number of investors, including domestic and foreign
corporations and financial institutions, and an increasing number of real
estate investment trusts, life insurance companies, pension funds and trust
funds. The Trust regularly reviews its portfolio and from time to time
considers the sale of certain of its properties.
S-8
<PAGE>
RENOVATIONS, EXPANSIONS AND DEVELOPMENT
The Trust is continuously engaged in a major program of renovation or
expansion of its existing properties. Renovations and expansions are currently
underway or are planned at several of the Trust's properties, the estimated
short term aggregate cost of which is approximately $12.6 million.
The Trust has announced plans to develop a new factory outlet center in
Jackson Township, New Jersey. To be called Six Flags Factory Outlets, the
factory outlet center will be located within one mile of the Six Flags Great
Adventure Theme Park, on property owned by the Trust for approximately 25
years. The Trust has entered into an agreement with Six Flags Theme Parks, Inc.
(a Time Warner Inc. unit) for the joint advertising, marketing and promotion of
the outlet center and the theme park. The Trust has projected a cost of
approximately $18 million for the development and construction of this center.
LIQUIDITY AND CAPITAL RESOURCES
As a qualified REIT, the Trust distributes a substantial portion of its cash
flow to its shareholders. Consequently, new acquisitions, property renovations
and expansions, major capital improvements and debt payments are funded by a
variety of primarily external sources including bank borrowings, the issuance
of equity and debt in public and private transactions, proceeds from the
Trust's dividend reinvestment program and, to a much lesser extent, property
sales and mortgage financings.
On January 31, 1995, the Trust had approximately $15 million in available
cash, cash equivalents and marketable securities. The Trust's dividend
reinvestment program provided $6.88 million during the six month period ended
January 31, 1995. On September 20, 1994, the Trust amended its unsecured Line
of Credit to increase the amount available from $65 million to $100 million.
The Line of Credit expires on November 30, 1995 and is renewable annually upon
mutual agreement between the parties.
Funds from operations (net income plus depreciation and amortization of
properties, adjusted for gains and losses from the sale of assets) for the six
months ended January 31, 1995 increased approximately $9 million to $38.24
million from $29.23 million in the prior year's six month period.
During the six month period ended January 31, 1995, the Trust paid
approximately $36.4 million to acquire seven shopping centers (approximately
806,000 gross rentable square feet) and one apartment complex (164 units). In
addition, the Trust made dividend distributions to shareholders of $35.43
million and spent approximately $22.56 million on expansions and improvements
to properties.
Debt at January 31, 1995 consisted of $33.35 million of mortgages payable and
short term notes payable of $63 million. The short term notes payable were
issued in connection with borrowings under the Trust's Line of Credit which was
established in December 1993.
Management believes the Trust's liquidity and sources of funds are more than
adequate to meet the Trust's cash requirements for the foreseeable future.
S-9
<PAGE>
SCHEDULE OF PROPERTIES
The Trust owns or has a leasehold interest in 99 shopping centers and five
factory outlet centers containing an aggregate of approximately 14,211,000
gross rentable square feet, at an average cost of approximately $41.40 per
rentable square foot, against which the average debt was approximately $2.15
per rentable square foot at January 31, 1995. Average annual rental per square
foot was approximately $6.74 at July 31, 1994. The Trust owns 20 garden
apartment complexes consisting of 3,940 rental apartment units at an average
cost of approximately $23,278 per apartment unit against which the average debt
was approximately $698 per apartment unit at January 31, 1995. Average monthly
rental per apartment unit was approximately $441 at January 31, 1995. The
following schedule sets forth certain information concerning the Trust's
properties and mortgage receivables held.
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
SHOPPING AND FACTORY OUTLET CENTERS:
<S> <C> <C> <C> <C> <C> <C> <C>
Rockland Plaza 260,000 sq. ft. Shopping Fee 39 99 $17.39 None Marshall's
Nanuet, NY Center on 28 acres Barnes & Noble
Tower Records
Rock Bottom
Northland 123,000 sq. ft. Shopping Fee 11 91 4.99 None Ames
Shopping Plaza Center on 23 acres Kinney Drugs
Watertown, NY
Oswego Plaza 131,000 sq. ft. Shopping Fee 13 78 4.57 None J.C. Penney
Oswego, NY Center on 20 acres Radio Shack
University Mall 78,000 sq. ft. Shopping Fee 7 89 4.83 None Ames
Canton, NY Center on 25 acres
Montgomery Ward 84,000 sq. ft. Department Fee 1 100 1.99 None Montgomery
Rome, NY Store on 7 acres Ward
Mohawk Acres 107,000 sq. ft. Shopping Fee 20 71 9.32 None McCrory
Rome, NY Center on 13 acres Rite Aid
Dollar Depot
Westgate Plaza 72,000 sq. ft. Shopping Fee 4 100 5.24 None Ames
Oneonta, NY Center on 11 acres Grand Union
Rite Aid
Westgate Manor Plaza 66,000 sq. ft. Shopping Fee 11 84 6.14 None Victory
Rome, NY Center on 15 acres Markets
Rite Aid
D&F Plaza 192,000 sq. ft. Shopping Fee 19 56 4.80 None J.C. Penney
Dunkirk, NY Center on 30 acres Quality
Markets
South Plaza 144,000 sq. ft. Shopping Fee 12 92 4.84 None Ames
Norwich, NY Center on 36 acres Victory
Markets
Fay's Drug
River Road and 123,000 sq. ft. Shopping Fee 1 100 .66 None R. Alexander
Cavanaugh Road Center on 21 acres
Marcy, NY
Cortlandville 100,000 sq. ft. Shopping Fee 3 100 3.35 None Ames
Cortland, NY Center on 13 acres Victory
Markets
Kinney Drugs
Church Street 45,000 sq. ft. Shopping Fee 2 100 3.15 None Victory
Gloversville, NY Center on 4 acres Markets
Fay's Drug
</TABLE>
S-10
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
East Washington Ave. & 54,000 sq. ft. Shopping Fee 1 100 $ 2.20 None Tops Markets
Grand Central Ave. Center on 5 acres
Elmira, NY
Cayuga Mall 207,000 sq. ft. Shopping Fee 14 96 5.43 None TJX
Ithaca, NY Center on 22 acres P&C Market
Fay's Drug
McKinley Plaza 93,000 sq. ft. Shopping Fee 12 100 10.94 None T.J. Maxx
Hamburg, NY Center on 20 acres Kids-R-Us
Linens N
Things
JoAnn Fabrics
Kmart Plaza 116,000 sq. ft. Shopping Fee 4 100 6.25 None Kmart
Dewitt, NY Center on 11 acres Office Max
Pyramid Mall 233,000 sq. ft. Shopping Fee 7 82 8.37 None Kmart
Geneva, NY Center on 37 acres Tops
Shoppes at Seneca Mall 238,000 sq. ft. Shopping Fee 13 74 6.19 None Kmart
Liverpool, NY Center on 30 acres Price Chopper
Fay's Drug
JoAnn Fabrics
Transit Road Plaza 138,000 sq. ft. Shopping Fee 4 100 4.19 None Kmart
Lockport, NY Center on 15 acres Quality
Markets
Price Chopper Plaza 78,000 sq. ft. Shopping Fee 4 100 8.31 None Price Chopper
Rome, NY Center on 6 acres Fay's Drug
St. Augustine 335,000 sq. ft. Shopping Fee 98 99 15.29 $113,946 Reebok
Outlet Center Center on 32 acres WestPoint
St. Augustine, FL Pepperell
Levis
Ann Taylor
J. Crew
Columbus Center 270,000 sq. ft. Shopping Fee 20 87 3.19 None Hills
Columbus, IN Center on 24 acres Big Blue
Big Lots
Jasper Manor 194,000 sq. ft. Shopping Fee 10 95 5.54 None Kmart
Jasper, IN Center on 26 acres J.C. Penney
Goody's
Holiday Foods
Town Fair Shopping 114,000 sq. ft. Shopping Fee 5 98 5.36 None Kmart
Center Center on 16 acres Goody's
Princeton, IN
Wabash Crossing 167,000 sq. ft. Shopping Fee 10 100 6.11 None Kmart
Wabash, IN Center on 18 acres Clark's Food
Walgreen's
U.S. Route 13 and 110,000 sq. ft. Shopping Fee 1 1 1.21 None None
Clyde Avenue Center on 16 acres
Salisbury, MD
Maple Village 281,000 sq. ft. Shopping Fee 17 88 (1) None Kmart
Ann Arbor, MI Center on 32 acres Kroger
Montgomery
Ward
Frank's
Nursery
Washtenaw Fountain Plaza 136,000 sq. ft. Shopping Fee 8 92 9.73 None Builder's
Ypsilanti, MI Center on 12 acres Square
Dunham's
</TABLE>
S-11
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Osage Factory Outlet 399,000 sq. ft. Shopping Fee 111 98 $18.60 None Polo
Village Osage Beach, MO Center on 147 acres Guess?
Nike
Van Heusen
Branson Factory Outlet 316,000 sq. ft. Shopping Part Fee and 90 94 17.56 None Guess?
Banson, MO Center on 39 acres Part London Fog
Leasehold Lenox China
Eddie Bauer
Bennetts Mills Plaza 102,000 sq. ft. Shopping Fee 27 100 (1) None Food Town
Jackson, NJ Center on 13 acres Thrift Drug
Radio Shack
Middletown Plaza 123,000 sq. ft. Shopping Fee 18 76 9.94 None ShopRite
Middletown, NJ Center on 19 acres Thrift Drug
Laurel Square 243,000 sq. ft. Shopping Fee 24 98 8.57 None Kmart
Bricktown, NJ Center on 35 acres Pathmark
Fashion Bug
Hamilton Plaza 149,000 sq. ft. Shopping Fee 7 97 5.35 None Kmart
Hamilton, NJ Center on 18 acres Acme
Supermarket
Fayetteville Road 107,000 sq. ft. Shopping Fee 1 4 .37 None Kentucky Fried
Lumberton, NC Center on 17 acres Chicken
U.S. 301 South 105,000 sq. ft. Shopping Fee 1 76 .53 None Flea Market
Wilson, NC Center on 1 acre
Route 7 and 4,000 sq. ft. Shopping Fee 1 100 8.10 None Pizza Hut
Greenville Road Center on 1 acre
Greenville, NC
U.S. Route 70 80,000 sq. ft. Shopping Fee 1 100 1.21 None Goldsboro Flea
Goldsboro, NC Center on 10 acres Market
Neuse Boulevard 99,000 sq. ft. Shopping Fee 0 0 .48 None None
New Bern, NC Center on 19 acres
Silver Bridge Plaza 146,000 sq. ft. Shopping Fee 15 84 3.16 None Kroger
Gallipolis, OH Center on 20 acres Rite Aid
Quality Stores
Belpre Plaza 89,000 sq. ft. Shopping Leasehold 10 52 3.42 None Kroger
Belpre, OH Center on 8 acres Nelson's Drugs
Parkway Plaza 141,000 sq. ft. Shopping Fee 15 74 2.88 None The Pharm
Maumee, OH Center on 12 acres Value City
Southwood Plaza 83,000 sq. ft. Shopping Fee 11 85 3.85 None Big Lots
Bowling Green, OH Center on 44 acres Rite Aid
Fairfield Mall 74,000 sq. ft. Shopping Fee 6 90 6.15 None Kroger
Fairfield, OH Center on 9 acres Don-A-Lee
Central Avenue 157,000 sq. ft. Shopping Fee 5 100 3.22 None Woolworth
Market Place Center on 18 acres Kroger
Toledo, OH Jo-Ann Fabrics
Harbor Plaza 52,000 sq. ft. Shopping Fee 7 78 6.44 None Super Duper
Ashtabula, OH Center on 7 acres Rite Aid
Millersburg 17,000 sq. ft. Shopping Fee 3 85 7.70 None None
Millersburg, OH Center on 3 acres
Genoa 17,000 sq. ft. Shopping Fee 4 93 8.34 $600,375 Rite Aid
Genoa, OH Center on 2 acres
</TABLE>
S-12
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
The Marketplace 168,000 sq. ft. Shopping Fee 11 87 $ 4.55 None Quality Stores
Piqua, OH Center on 18 acres Pic n' Save
Revco Drugs
South Towne Center 309,000 sq. ft. Shopping Fee 28 88 6.89 None Kmart
Dayton, OH Center on 29 acres Burlington
Coat
Factory
New Boston SC 234,000 sq. ft. Shopping Fee 17 99 6.17 $9,309,000 Walmart
New Boston, OH Center on 22 acres Festival Food
Goody's
Brentwood Plaza 237,000 sq. ft. Shopping Fee 30 91 5.96 None T.J. Maxx
Cincinnati, OH Center on 20 acres IGA
Supermarkets
Hader Home
Improvement
Center
Western Village 139,000 sq. ft. Shopping Fee 15 99 7.32 None Big Lots
Cincinnati, OH Center on 13 acres Furrows
Heritage Square 232,000 sq. ft. Shopping Fee 19 91 5.25 None Bag 'N Save
Dover, OH Center on 29 acres Stambaugh
JoAnn Fabrics
Revco Drugs
Roosevelt Mall 250,000 sq. ft. Shopping Leasehold 61 87 22.70 None Hermans
Philadelphia, PA Center on 36 acres Rite Aid
Discovery Zone
Sam Goody
Joyce Leslie
John Wanamaker Dept. 313,000 sq. ft. Fee 1 100 .79 None John
Store Department Store Wanamaker's
Philadelphia, PA with parking on
Roosevelt Mall site
Roosevelt Mall Annex 36,000 sq. ft. Shopping Fee 9 80 27.23 None Hardee's
Philadelphia, PA Center on Roosevelt Restaurant
Mall site Fayva Shoes
Lenscrafters
Route 94 South and 87,000 sq. ft. Shopping Fee 3 21 2.27 None Hardee's
Clover Lane Center on 12 acres
Hanover, PA
Route 422 83,000 sq. ft. Shopping Fee 1 100 1.49 None Pharmhouse
Annville, PA Center on 15 acres
Cross Roads Plaza 105,000 sq. ft. Shopping Fee 14 97 3.26 None Quality Stores
Mt. Pleasant, PA Center on 14 acres Revco Drugs
Big Lots
Northland Center 94,000 sq. ft. Shopping Part Fee and 18 85 9.64 None Giant Food
State College, PA Center on 15 acres Part Fay's Drug
Leasehold
Stone Mill Plaza 95,000 sq. ft. Shopping Fee 21 97 10.81 None Giant Food
Lancaster, PA Center on 21 acres Rite Aid
St. Mary's Plaza 108,000 sq. ft. Shopping Fee 15 97 (1) None Penn Traffic
St. Mary's, PA Center on 11 acres J.C. Penney
Fashion Bug
Kings Giant Shopping 159,000 sq. ft. Shopping Leasehold 16 96 3.46 None Food Lion
Center Center on 18 acres Furniture City
Kingsport, TN
</TABLE>
S-13
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Georgetown Square 104,000 sq. ft. Shopping Fee 23 90 $8.19 None Kroger
Murfreesboro, TN Center on 11 acres Revco Drugs
Congress Crossing 172,000 sq. ft. Shopping Fee 18 96 6.28 None Kmart
Athens, TN Center on 39 acres Red Foods
Greeneville Commons 223,000 sq. ft. Shopping Fee 21 96 6.37 None Kmart
Greeneville, TN Center on 26 acres Belk's
Goody's
J.C. Penney
Main Street and 119,000 sq. ft. Shopping Fee 2 69 1.36 None Pharmhouse
Moseby Road Center on 10 acres Pizza Hut
Harrisonburg, VA
Jefferson Davis 87,000 sq. ft. Shopping Fee 1 100 2.05 None Pharmhouse
Boulevard Center on 8 acres
Spotslvania, VA
U.S. Routes 1 and 301 82,000 sq. ft. Shopping Fee 0 0 N/A None N/A
Colonial Heights, VA Center on 10 acres
Hanover Square 130,000 sq. ft. Shopping Fee 22 92 10.31 None UKrop's
Mechanicsville, VA Center on 14 acres Toy Works
Ridgeview Centre 177,000 sq. ft. Shopping Fee 16 97 6.47 None Kmart
Wise, VA Center on 30 acres Piggly Wiggly
Victorian Square 271,000 sq. ft. Shopping Fee 28 97 8.01 None Kmart
Midlothian, VA Center on 34 acres Lowes
Farm Fresh
Fort Chiswell Factory 176,000 sq. ft. Shopping Fee 30 61 5.31 None Polo
Outlet Center on 55 acres London Fog
Max Meadows, VA Bugle Boy
Van Heusen
Casual Corner
Grand Central Plaza 75,000 sq. ft. Shopping Leasehold 7 100 7.72 None Sun T.V.
Parkersburg, WV Center on 7 acres Watsons
Moundsville Plaza 170,000 sq. ft. Shopping Fee 15 70 4.17 None Kroger
Moundsville, WV Center on 29 acres Dollar Bargain
Revco Drugs
Kmart Plaza 102,000 sq. ft. Shopping Fee 11 99 4.24 None Kmart
Vienna, WV Center on 14 acres Taco Bell
New Louisa Plaza 111,000 sq. ft. Shopping Fee 12 91 3.77 None Wetterau
Louisa, KY Center on 20 acres Rite Aid
Family Dollar
Pamida
J* Town Center 187,000 sq. ft. Shopping Fee 24 99 5.34 None Target Stores
Jeffersontown, KY Center on 17 acres Wetterau
Revco Drugs
Jackson Village 145,000 sq. ft. Shopping Fee 8 62 3.44 None Wal-mart
Jackson, KY Center on 48 acres Winn-Dixie
Chinoe Village 106,000 sq. ft. Shopping Fee 16 54 4.60 None Winn-Dixie
Lexington, KY Center with office space
on 10 acres
Piccadilly Square 96,000 sq. ft. Shopping Fee 13 74 3.99 None Big Lots
Louisville, KY Center on 13 acres Taylor Drug
</TABLE>
S-14
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Eastgate Shopping Center 145,000 sq. ft. Shopping Fee 28 95 $9.50 None Kroger
Middletown, KY Center on 18 acres Rueff Lighting
Rodney Village 216,000 sq. ft. Shopping Fee 18 60 4.70 None Foodliner
Shopping Center Center on 15 acres Thrift Drug
Dover, DE McCrory
Doverama at Rodney 30,000 sq. ft. Shopping 75% 1 100 1.30 None Brunswick
Village Center on 1 acre Owned
Dover, DE
Southgate Plaza 60,000 sq. ft. Shopping Fee 7 89 3.27 None Eckerd Drugs
Albany, GA Center on 5 acres
Eastgate Plaza 44,000 sq. ft. Shopping Fee 7 100 4.20 None Winn-Dixie
Americus, GA Center on 4 acres Eckerd Drugs
Family Dollar
Perlis Plaza 166,000 sq. ft. Shopping Fee 25 88 4.74 None Belk's
Americus, GA Center on 20 acres Piggly Wiggly
Rite Aid
Rogers Plaza 50,000 sq. ft. Shopping Fee 5 66 2.51 None Piggly Wiggly
Ashburn, GA Center on 5 acres Rite Aid
Cordele Square 131,000 sq. ft. Shopping Fee 11 85 4.11 None Belk's
Cordele, GA Center on 11 acres Piggly Wiggly
Goody's
Mr. B's 14,000 sq. ft. Shopping Fee 7 80 3.48 None Southern
Cordele, GA Center on 1 acre Sunrise
Southgate Plaza 39,000 sq. ft. Shopping Fee 4 57 2.52 None B.C. Moore
Cordele, GA Center on 3 acres
Westgate 191,000 sq. ft. Shopping Fee 22 80 3.90 None Piggly Wiggly
Dublin, GA Center on 35 acres
Tift-Town 61,000 sq. ft. Shopping Fee 8 53 3.06 None Family Dollar
Tifton, GA Center on 4 acres Revco Drugs
Westgate 16,000 sq. ft. Shopping Fee 5 100 5.77 None Advance Auto
Tifton, GA Center on 2 acres Payless Shoe
Habersham Village 147,000 sq. ft. Shopping Fee 10 92 4.81 $4,576,634 Kmart
Cornelia, GA Center on 18 acres Winn-Dixie
Revco Drugs
Victory Square 165,000 sq. ft Shopping Fee 19 95 6.42 None Scotty's
Savannah, GA Center on 35 acres Food Lion
Albany Plaza 114,000 sq. ft. Shopping Fee 11 94 5.77 None Food Lion
Albany, GA Center on 7 acres Big Lot
Turners
Eckerds
Sweetwater Village 66,000 sq. ft. Shopping Fee 13 99 (1) 3,029,545 Winn-Dixie
Austell, GA Center on 7 acres Big B Drugs
Cedartown Shopping 107,000 sq. ft. Shopping Fee 10 96 (1) None Walmart
Center Center on 14 acres On Cue
Cedartown, GA Cato
Cedar Plaza Shopping 83,000 sq. ft. Shopping Fee 9 76 (1) None Kroger
Center Center on 9 acres
Cedartown, GA
Cloverdale Village 59,000 sq. ft. Shopping Fee 6 100 (1) 2,405,234 Winn-Dixie
Florence, AL Center on 6 acres Big B Drugs
</TABLE>
S-15
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Barstow Factory Outlet 333,000 sq. ft. Shopping Fee 89 98 $20.76 $10,568,682 Polo
Barstow, CA Center on 49 acres Nautica
Eddie Bauer
Timberland
Coach Leather
GARDEN APARTMENTS:
Devonshire Place 284 Unit Garden Fee 273 96 N/A None N/A
Birmingham, AL Apartments on 16 acres
Breckenridge 120 Unit Garden Fee 117 98 N/A None N/A
Birmingham, AL Apartments on 7 acres
Courts at Wildwood 220 Unit Garden Fee 212 96 N/A 2,750,000 N/A
Birmingham, AL Apartments on 22 acres
Rodney 207 Unit Garden Fee 188 91 N/A None N/A
Dover, DE Apartments on 11 acres
Mayfair 96 Unit Garden Fee 81 84 N/A None N/A
Dover, DE Apartments on 7 acres
Lake Park 227 Unit Garden Fee 223 98 N/A None N/A
Lake Park, FL Apartments on 10 acres
Jamestown 125 Unit Garden Fee 122 98 N/A None N/A
Lexington, KY Apartments on 8 acres
Poplar Level 88 Unit Garden Fee 88 100 N/A None N/A
Louisville, KY Apartments on 3 acres
LaFontenay 248 Unit Garden Fee 245 99 N/A None N/A
Louisville, KY Apartments on 17 acres
Charlestown at Douglas 244 Unit Garden Fee 230 94 N/A None N/A
Hill Apartments on 17 acres
Louisville, KY
Meadow East 100 Unit Garden Fee 96 96 N/A None N/A
Potsdam, NY Apartments on 15 acres
Mohawk Garden 209 Unit Garden Fee 180 86 N/A None N/A
Rome, NY Apartments on 12 acres
Arlington Village 164 Unit Garden Fee 161 98 N/A None N/A
Fairborn, OH Apartments on 10 acres
Chesterfield 104 Unit Garden Fee 104 100 N/A None N/A
Maumee, OH Apartments on 9 acres
Sedgefield 280 Unit Garden Fee 274 98 N/A None N/A
Florence, SC Apartments on 19 acres
Ashford Place 268 Unit Garden Fee 258 96 N/A None N/A
Clarksville, TN Apartments on 16 acres
Paddock Place 240 Unit Garden Fee 233 97 N/A None N/A
Clarskville, TN Apartments on 11 acres
The Pines 224 Unit Garden Fee 219 98 N/A None N/A
Clarksville, TN Apartments on 11 acres
Cedar Village 170 Unit Garden Fee 165 97 N/A None N/A
Clarksville, TN Apartments on 11 acres
Hickory Lake Apartments 322 Unit Garden Fee 315 98 N/A None N/A
Nashville, TN Apartments on 26 acres
</TABLE>
S-16
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 3/15/95 3/15/95 7/31/94 1/31/95 3/15/95
-------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
DEVELOPMENT:
Six Flags Factory 55 acres of Land Fee N/A N/A N/A None N/A
Outlets
Jackson Township, NJ
MISCELLANEOUS:
Institute for Defense 51,000 sq. ft. Leasehold 1 100 $ 4.49 None Institute for
Analyses Building Office Building and Subject to Defense
Princeton, NJ Computer Complex Operating Analyses
on 8 acres Sublease
MORTGAGE RECEIVABLES:
1 North Central Avenue 15,000 sq. ft. $500,000
Hartsdale, NY Shopping Center Second
on 1 acre Mortgage
Newdon Plaza 105,000 sq. ft. $10,350,000
New City, NY Shopping Center First
on 10 acres Mortgage
Whitestown Plaza 83,000 sq. ft. $4,610,000
Whitesboro, NY Shopping Center First
on 11 acres Mortgage
Laurel Mall 333,000 sq. ft. $6,200,000
Connellsville, PA Shopping Center Second
on 57 acres Mortgage
</TABLE>
--------
(1)Property purchased after July 31, 1994.
S-17
<PAGE>
MANAGEMENT
THE TRUST
The Trustees and executive officers of the Trust and their principal
occupations are as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME AGE AND AFFILIATIONS
---- --- ---------------------
<S> <C> <C>
William Newman.......... 68 Chairman of the Board and Chief Executive Officer
Chairman of the Board of the Trust since its organization in 1972;
of Trustees and Chief President of the Trust from 1972 to 1988 and
Executive Officer President of the Trust's corporate predecessor
from 1962 to 1972; formerly Chairman of National
Association of Real Estate Investment Trusts; ac-
tive in real estate for more than 40 years.
Arnold Laubich.......... 65 President and Chief Operating Officer and Trustee
President, Chief of the Trust since August 1, 1988; President of
Operating Officer and Dover Management Corp. (which managed the Trust's
Trustee properties) from 1972 to 1988; Senior Vice Presi-
dent of the Trust's predecessor from 1962 to
1972.
Norman Gold............. 64 Partner in the law firm of Altheimer & Gray; ac-
Trustee tive in the practice of law for 39 years; Trustee
of the Trust since its organization in 1972;
Trustee of Banyan Short Term Income Trust, Banyan
Hotel Investment Fund and Banyan Strategic Land
Trust.
Melvin Newman........... 53 Private Investor; Vice President and General Coun-
Trustee sel of the Trust from 1972 to 1982; Trustee of
the Trust since 1983.
Raymond H. Bottorf...... 52 President of U.S. Alpha, Inc., a wholly-owned sub-
Trustee sidiary of Algemeen Burgerlijk Pensionefonds;
Trustee of the Trust since 1991.
James M. Steuterman..... 38 Executive Vice President since 1994; Trustee since
Executive Vice 1990; Senior Vice President--Acquisitions from
President and Trustee 1990 to 1994; Vice President from 1988 to 1990;
Property acquisition officer for the Trust since
1984.
Dean Bernstein.......... 37 Vice President and Trustee since 1992; Assistant
Vice President-- Vice President from 1991 to 1992; previously a
Administration and Vice President in the Real Estate Group at Chemi-
Finance and Trustee cal Bank.
Gregory White........... 39 Trustee since 1994; Founding partner and managing
Trustee director of Schroder Mortgage Associates since
1992; previously a managing director of Salomon
Brothers Inc. from 1988 to 1992.
John Wetzler............ 49 Trustee since 1994; President of Nautica Retail
Trustee U.S.A., Inc., a division of Nautica Enterprises,
Inc., an international men's apparel company,
since 1994 and Executive Vice President from 1988
to 1994.
William Kirshenbaum..... 59 Vice President of the Trust since 1981; Treasurer
Vice President, since 1983.
Treasurer
</TABLE>
S-18
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME AGE AND AFFILIATIONS
---- --- ---------------------
<S> <C> <C>
Leonard N. Cancell...... 62 Senior Vice President of the Trust since August 1,
Senior Vice President-- 1988; Senior Vice President of Dover Management
Operations from 1972 to 1988; employee of the Trust's prede-
cessor from 1964 to 1972.
Irwin E. Kwartler....... 68 Vice President of the Trust since 1982; previous-
Vice President ly, National Sales Manager, Kimball Division of
Litton Industries.
Michael I. Brown........ 52 Chief Financial Officer since 1991; Controller of
Chief Financial Officer the Trust since 1987.
and Controller
Steven F. Siegel........ 34 General Counsel and Secretary of the Trust since
General Counsel and October 1991; formerly an associate in the law
Secretary firm of Miro, Miro & Weiner for six years.
Joseph Bosco............ 45 Vice President of the Trust since 1993; employee
Vice President-- of the Trust since 1983.
Apartment Operations
</TABLE>
S-19
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in the
Prospectus, to which description reference is hereby made. The following
statements relating to the Notes and the Senior Securities Indenture between
the Trust and The First National Bank of Boston (the "Trustee"), dated as of
March , 1995 (the "Senior Indenture"), are summaries of provisions contained
therein and do not purport to be complete. Such statements are qualified by
reference to the provisions of the Senior Indenture, including the definitions
therein of certain terms. (Capitalized terms not otherwise defined herein shall
have the meanings given to them in the Prospectus.)
GENERAL
The % Senior Notes due April , 200_ (the "Notes") will be limited to
$100,000,000 aggregate principal amount and will mature on April , 200_. The
Notes will be direct senior obligations of the Trust and will rank equally with
other unsecured and unsubordinated indebtedness of the Trust.
The Notes will only be issued in fully registered book-entry form without
coupons in denominations of $1,000 and integral multiples thereof, except under
the limited circumstances described below under "Book-Entry System."
The Notes are not subject to any redemption or sinking fund provisions.
Reference is made to the section entitled "Description of Debt Securities--
Certain Covenants" in the accompanying Prospectus for a description of the
covenants applicable to the Notes. Compliance with such covenants generally may
not be waived by the Trustee unless the Holders of at least a majority in
principal amount of all outstanding Notes consent to such waiver; provided,
however, that the defeasance and covenant defeasance provisions in the Senior
Indenture described under "Description of Debt Securities --Discharge,
Defeasance and Covenant Defeasance" in the accompanying Prospectus will apply
to the Notes.
Except as described under "Description of Debt Securities--Certain
Covenants--Limitations on Incurrence of Debt" and under "Description of Debt
Securities--Merger, Consolidation or Sale" in the accompanying Prospectus, the
Senior Indenture does not contain any other provisions that would limit the
ability of the Trust to incur indebtedness or that would afford Holders of the
Notes protection in the event of (i) a highly leveraged or similar transaction
involving the Trust or (ii) a reorganization, restructuring, merger or similar
transaction involving the Trust that may adversely affect the Holders of the
Notes. In addition, subject to the limitations set forth under "Description of
Debt Securities--Merger, Consolidation or Sale" in the accompanying Prospectus,
the Trust may, in the future, enter into certain transactions such as the sale
of all or substantially all of its assets or the merger or consolidation of the
Trust with another entity that would increase the amount of the Trust's
indebtedness or substantially reduce or eliminate the Trust's assets, which may
have an adverse effect on the Trust's ability to service its indebtedness,
including the Notes.
The Trust has no present intention of engaging in a highly leveraged or
similar transaction involving the Trust.
INTEREST
The Notes will bear interest at the rate set forth on the cover page of this
Prospectus Supplement from , 1995, or the most recent Interest Payment Date
(as defined below) to which interest has been paid or provided for, payable
semi-annually on and of each year, beginning , 1995 (each, an
"Interest Payment Date") to the person in whose name a Note (or any predecessor
Note) is registered at the close of business on or , as the case may
be, next preceding such Interest Payment Date.
S-20
<PAGE>
BOOK-ENTRY SYSTEM
The Notes will be represented by a single global security (the "Global
Security") and registered in the name of DTC or its nominee. Upon the issuance
of the Global Security, DTC or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Notes
represented by the Global Security to the accounts designated by the
Underwriters. Ownership of beneficial interests in the Global Security will be
limited to institutions that have accounts with DTC or its nominee
("Participants") and to persons that may hold interests through Participants.
Ownership of beneficial interests in the Global Security will be shown only on,
and the transfer of those ownership interests will be effected only through,
records maintained by such Participants. The laws of some jurisdictions may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and laws may impair the ability to
transfer beneficial interests in the Global Security.
Notwithstanding any provision of the Senior Indenture or the Notes, the
Global Security may not be exchanged in whole or in part for Notes registered,
and no transfer of the Global Security in whole or in part may be registered,
in the name of any Person other than DTC or any nominee of DTC unless (i) DTC
has notified the Trust that it is unwilling or unable to continue as depositary
for the Global Security or has ceased to be qualified to act as such as
required by the Senior Indenture or (ii) there shall have occurred and be
continuing an Event of Default with respect to the Notes. All Notes issued in
exchange for the Global Security or any portion thereof will be registered in
such names as DTC may direct.
As long as DTC or its nominee is the registered holder and owner of the
Global Security, DTC or such nominee, as the case may be, will be considered
the sole owner and holder of the Notes for all purposes of such Notes and for
all purposes under the Senior Indenture. Except in the limited circumstances
referred to above, owners of beneficial interests in the Global Security will
not be entitled to have the Notes registered in their names, will not receive
or be entitled to receive physical delivery of certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
the Senior Indenture or the Notes. Payment of principal of, and interest and
premium, if any, on the Notes will be made to DTC or its nominee, as the case
may be, as the registered owner or holder of the Global Security.
Payments, transfers, exchanges and other matters relating to beneficial
interests in the Global Security may be subject to various policies and
procedures adopted by DTC from time to time. Neither the Trust nor the Trustee
will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
the Global Security for any Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests or for any other
aspect of the relationship between DTC and its Participants or the relationship
between such Participants and the owners of beneficial interests in the Global
Security owning through such Participants.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds
securities that its Participants deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations ("Direct Participants").
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers and banks and trust companies
that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly. The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
S-21
<PAGE>
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Trust in immediately available funds, so long as DTC continues to make its
Same-Day Funds Settlement System available to the Trust.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Notes
will trade in DTC's Same-Day Funds Settlement System, and secondary market
trading activity in the Notes will therefore be required by DTC to settle in
immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Notes.
UNDERWRITING
Subject to the terms and conditions contained in the terms agreement and
related underwriting agreement (collectively, the "Underwriting Agreement"),
the Trust has agreed to sell to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated (the
"Underwriters"), and the Underwriters have severally agreed to purchase from
the Trust, the principal amount of the Notes set forth opposite their names
below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF THE NOTES
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................
Lehman Brothers Inc......................................
Morgan Stanley & Co. Incorporated........................
------------
Total............................................... $100,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent, and that the Underwriters will be
obligated to purchase all of the Notes if any are purchased.
The Underwriters have advised the Trust that the Underwriters propose
initially to offer the Notes to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers
at such price less a concession not in excess of % of principal amount
thereof. The Underwriters may allow, and such dealers may reallow, a discount
not in excess of % of principal amount thereof on sales to certain other
dealers. After the initial public offering, the public offering price,
concession and discounts may be changed.
The Trust has agreed to indemnify the Underwriters against certain civil
liabilities, including certain liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.
S-22
<PAGE>
PROSPECTUS
NEW PLAN REALTY TRUST
$181,750,000
DEBT SECURITIES, PREFERRED SHARES,
DEPOSITARY SHARES, COMMON SHARES AND WARRANTS
New Plan Realty Trust ("New Plan" or the "Trust") may from time to time offer
in one or more series its (i) unsecured debt securities, which may be either
senior debt securities ("Senior Securities") or subordinated debt securities
("Subordinated Securities," and together with Senior Securities, the "Debt
Securities"), (ii) preferred shares of beneficial interest, par value $1.00 per
share ("Preferred Shares"), (iii) Preferred Shares represented by depositary
shares ("Depositary Shares"), (iv) common shares of beneficial interest without
par value ("Common Shares"), or (v) warrants to purchase Debt Securities,
Preferred Shares or Common Shares (collectively, "Warrants"), with an aggregate
initial public offering price of up to $181,750,000 on terms to be determined
at the time of offering. Debt Securities, Preferred Shares, Depositary Shares,
Common Shares and Warrants (collectively, the "Offered Securities") may be
offered, separately or together, in separate series in amounts, at prices and
on terms to be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, ranking, currency,
form (which may be registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, terms for redemption at the option of the Trust or
repayment at the option of the Holder, terms for sinking fund payments, terms
for conversion into Preferred Shares or Common Shares, and any initial public
offering price; (ii) in the case of Preferred Shares, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other terms and conditions, and any initial public offering price; (iii) in the
case of Depositary Shares, the fractional share of a Preferred Share
represented by each such Depositary Share; (iv) in the case of Common Shares,
any initial public offering price; and (v) in the case of Warrants, the number
and terms thereof, the designation and the number of securities issuable upon
their exercise, the exercise price, the terms of the offering and sale thereof
and, where applicable, the duration and detachability thereof. In addition,
such specific terms may include limitations on direct or beneficial ownership
and restrictions on transfer of certain types of Offered Securities, in each
case as may be appropriate to preserve the status of the Trust as a real estate
investment trust ("REIT") for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered
Securities covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through agents designated
from time to time by the Trust, or to or through underwriters or dealers. If
any agents or underwriters are involved in the sale of any of the Offered
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Offered Securities may be sold
without delivery of the applicable Prospectus Supplement describing the method
and terms of the offering of such series of Offered Securities.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
----------------
The date of this Prospectus is March 23, 1995.
<PAGE>
AVAILABLE INFORMATION
The Trust is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Trust with the Commission in
accordance with the Exchange Act can be inspected and copied at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, the Common Shares are
listed on the New York Stock Exchange and similar information concerning the
Trust can be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Trust has filed with the Commission a registration statement (the
"Registration Statement") (of which this Prospectus is a part) under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Offered Securities. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain portions of which have been
omitted as permitted by the rules and regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto. For further information
regarding the Trust and the Offered Securities, reference is hereby made to the
Registration Statement and such exhibits and schedules which may be obtained
from the Commission at its principal office in Washington, D.C. upon payment of
the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Trust under the Exchange
Act with the Commission and are incorporated herein by reference:
1. The Trust's Annual Report on Form 10-K for the year ended July 31,
1994, filed October 14, 1994 pursuant to the Exchange Act, Form 10-K/A,
Amendment No. 1 thereto filed December 12, 1994, and Form 10-K/A, Amendment
No. 2 thereto filed February 14, 1995.
2. The Trust's Quarterly Reports on Form 10-Q for the three-month periods
ended October 31, 1994 and January 31, 1995, filed on December 9, 1994 and
March 13, 1995, respectively, pursuant to the Exchange Act.
3. The Trust's Report on Form 8-K dated August 8, 1994, filed August 8,
1994 pursuant to the Exchange Act.
4. The Trust's Reports on Form 8-K/A dated September 1, 1994, filed
September 1, 1994 pursuant to the Exchange Act, and on Form 8-K/A Amendment
No. 2 relating thereto dated March 23, 1994, filed March 23, 1994 pursuant
to the Exchange Act.
5. The Trust's Reports on Form 8-K/A dated October 6, 1994, filed October
6, 1994 pursuant to the Exchange Act, and on Form 8-K/A Amendment No. 2
relating thereto dated March 23, 1994, filed March 23, 1994 pursuant to the
Exchange Act.
6. Item 1 of the Trust's registration statement on Form 8-A, as amended,
filed May 19, 1986 pursuant to Section 12 of the Exchange Act.
All documents filed by the Trust pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Offered Securities shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing such documents.
2
<PAGE>
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request. Requests should be
directed to New Plan Realty Trust, Attention: Ronald Frankel, 1120 Avenue of
the Americas, New York, New York 10036; (212) 869-3000.
THE TRUST
New Plan, one of the largest publicly traded real estate investment trust in
the United States based on the aggregate market value of its outstanding Common
Shares, is a self-administered and self-managed equity real estate investment
trust which primarily owns shopping centers. The Trust's present equity
investments consist principally of 99 shopping centers, with approximately
12,652,000 gross rentable square feet, five factory outlet centers with
approximately 1,559,000 gross rentable square feet and 20 garden apartment
complexes containing 3,940 apartment units. These properties are located in 19
states. Since the organization of the corporate predecessor of the Trust in
1962, the Trust and its predecessor have been directed by members of the Newman
family. The Newman family has been active in real estate ownership and
management since 1926.
The Trust has paid regular and uninterrupted cash distributions on its Common
Shares since it commenced operations as a real estate investment trust in 1972.
These distributions, which are paid quarterly, have increased from $0.19 per
Common Share in fiscal 1973 to $1.315 per Common Share in fiscal 1994. Since
inception, each distribution has either been equal to or greater than the
distribution preceding it, and the distributions have been increased in each of
the last 62 consecutive quarters. The Trust intends to continue to declare
quarterly distributions on its Common Shares.
The Trust invests its assets in income-producing real estate, with a primary
emphasis on shopping centers, including factory outlet centers, and garden
apartments. The Trust's primary investment strategy is to identify and purchase
well-located shopping centers, including factory outlet centers, and garden
apartments usually at a significant discount to replacement cost. The Trust
seeks to achieve income growth through a program of expansion, renovation,
leasing, re-leasing and improving the tenant mix of its shopping centers and
factory outlets. The Trust minimizes development risks by generally purchasing
existing income-producing properties.
The Trust, a Massachusetts business trust, maintains its executive offices at
1120 Avenue of the Americas, New York, New York 10036, and its telephone number
is (212) 869-3000.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Trust for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-------------------------------------------------------------
SIX
MONTHS
ENDED
JANUARY
31,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
16.3 19.0 28.5 23.6 17.0 11.7
</TABLE>
To date, the Trust has not issued any preferred shares; therefore, the ratios
of earnings to combined fixed charges and preferred share dividends are
unchanged from the ratios presented in this section. For purposes of computing
these ratios, earnings have been calculated by adding fixed charges (excluding
capitalized interest) to income (loss) before income taxes and extraordinary
items. Fixed charges consist of interest costs, whether expensed or
capitalized, the interest component of rental expense, if any, and amortization
of debt discounts and issue costs, whether expensed or capitalized.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the Trust
intends to use the net proceeds from the sale of the Offered Securities for
working capital and general trust purposes, which may include the acquisition
of shopping centers, factory outlet centers and garden apartments as suitable
opportunities arise, the expansion and improvement of certain properties owned
or to be owned by the Trust, and the repayment of certain indebtedness
outstanding at such time.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities being offered and the extent to which
such general provisions may apply will be described in a Prospectus Supplement
relating to such Debt Securities.
The Senior Securities are to be issued under an Indenture, as amended or
supplemented from time to time (the "Senior Securities Indenture"), between the
Trust and a trustee to be selected by the Trust (the "Senior Securities
Trustee") and the Subordinated Securities are to be issued under an Indenture,
as amended or supplemented from time to time (the "Subordinated Securities
Indenture"), between the Trust and a trustee to be selected by the Trust (the
"Subordinated Securities Trustee"). The Senior Securities Indenture and the
Subordinated Securities Indenture are referred to herein individually as the
"Indenture" and collectively as the "Indentures," and the Senior Securities
Trustee and the Subordinated Securities Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees." A form of the
Senior Securities Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part and will be available for
inspection at the corporate trust office of the Senior Securities Trustee or as
described above under "Available Information." A form of the Subordinated
Securities Indenture will be filed as an exhibit to an amendment to the
Registration Statement of which this Prospectus is a part and will be available
for inspection at the corporate trust office of the Subordinated Securities
Trustee or as described above under "Available Information." The Indentures
will be subject to, and governed by, the Trust Indenture Act of 1939, as
amended (the "TIA"). The descriptions of the Indentures set forth below assume
that the Trust has entered into the Indentures. The Trust will execute the
applicable Indenture when and if the Trust issues Debt Securities. The
statements made hereunder relating to the Indentures and the Debt Securities to
be issued thereunder are summaries of certain provisions thereof and do not
purport to be complete and are
4
<PAGE>
subject to, and are qualified in their entirety by reference to, all provisions
of the Indentures and such Debt Securities. Unless otherwise specified, all
section references appearing herein are to sections of the Indentures, and
capitalized terms used but not defined herein shall have the meanings set forth
in the Indentures.
Provisions Applicable to Both Senior Securities and Subordinated Securities
GENERAL
The Debt Securities will be direct, unsecured obligations of the Trust.
Senior Securities will rank pari passu with certain other senior debt of the
Company that may be outstanding from time to time and will rank senior to all
Subordinated Securities that may be outstanding from time to time. Each
Indenture provides that the Debt Securities may be issued without limit as to
aggregate principal amount, in one or more series, in each case as established
from time to time in or pursuant to authority granted by a resolution of the
Board of Trustees of the Trust or as established in one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series (Section
301).
Each Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
either Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect
to such series (Section 608). In the event that two or more persons are acting
as Trustee with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Trustee (Section 609)
thereunder, and, except as otherwise indicated herein, any action described
herein to be taken by the Trustee may be taken by each such Trustee with
respect to, and only with respect to, the one or more series of Debt Securities
for which it is Trustee under the applicable Indenture.
Reference is made to the Prospectus Supplement relating to the series of Debt
Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the classification of such Debt Securities as Senior Securities or
Subordinated Securities;
(3) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(4) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities which is convertible into Common Shares or
Preferred Shares, or the method by which any such portion shall be
determined;
(5) if convertible, in connection with the preservation of the Trust's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Shares or Preferred Shares into which such
Debt Securities are convertible;
(6) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(7) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(8) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Dates for such
Interest Payment Dates, or the method by which such dates shall be
determined,
5
<PAGE>
the Person to whom such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
(9) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and notices or demands to or upon the Trust in respect of such
Debt Securities and the applicable Indenture may be served;
(10) the period or periods within which, the price or prices at which and
the terms and conditions upon which such Debt Securities may be redeemed,
in whole or in part, at the option of the Trust, if the Trust is to have
such an option;
(11) the obligation, if any, of the Trust to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which,
the price or prices at which and the terms and conditions upon which such
Debt Securities will be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(12) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(13) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
other method may, but need not be, based on a currency, currencies,
currency unit or units or composite currency or currencies) and the manner
in which such amounts shall be determined;
(14) whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be
issuable in a temporary global form or permanent global form;
(15) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or covenants set
forth in the applicable Indenture;
(16) whether such Debt Securities will be issued in certificated or book-
entry form;
(17) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and the terms and conditions relating thereto;
(18) the applicability, if any, of the defeasance and covenant defeasance
provisions of Article XIV of the applicable Indenture;
(19) if such Debt Securities are to be issued upon the exercise of
Warrants, the time, manner and place for such Debt Securities to be
authenticated and delivered;
(20) the terms, if any, upon which such Debt Securities may be
convertible into Common Shares or Preferred Shares of the Trust and the
terms and conditions upon which such conversion will be effected,
including, without limitation, the initial conversion price or rate and the
conversion period;
(21) whether and under what circumstances the Trust will pay Additional
Amounts as contemplated in the applicable Indenture on such Debt Securities
in respect of any tax, assessment or governmental charge and, if so,
whether the Trust will have the option to redeem such Debt Securities in
lieu of making such payment;
(22) the name of the applicable Trustee and the address of its corporate
trust office; and
(23) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
6
<PAGE>
Except as set forth below under "Certain Covenants--Limitations on Incurrence
of Debt," neither Indenture contains any other provisions that would limit the
ability of the Trust to incur indebtedness or that would afford Holders of Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Trust or in the event of a change of control. However,
restrictions on ownership and transfers of the Trust's Common Shares and
Preferred Shares are designed to preserve its status as a REIT and, therefore,
may act to prevent or hinder a change of control. See "Description of Preferred
Shares" and "Description of Common Shares." Reference is made to the applicable
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the Events of Default or covenants of the
Trust that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the applicable
Trustee, provided that, at the option of the Trust, payment of interest may be
made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register or by wire transfer of funds to such Person at
an account maintained within the United States (Sections 301, 305, 306, 307 and
1002).
Any interest not punctually paid or duly provided for on any Interest Payment
Date with respect to a Debt Security ("Defaulted Interest") will forthwith
cease to be payable to the Holder on the applicable Regular Record Date and may
either be paid to the person in whose name such Debt Security is registered at
the close of business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the applicable Trustee,
notice whereof shall be given to the Holder of such Debt Security not less than
10 days prior to such Special Record Date, or may be paid at any time in any
other lawful manner, all as more completely described in the applicable
Indenture (Section 307).
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the applicable Trustee. Every Debt Security surrendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Trust may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith (Section 305). If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the Trustee)
initially designated by the Trust with respect to any series of Debt
Securities, the Trust may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that the Trust will be required to maintain a
transfer agent in each Place of Payment for such series. The Trust may at any
time designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).
Neither the Trust nor any Trustee shall be required to (i) issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed
in part; or (iii) issue, register the transfer of or exchange any Debt Security
which has been surrendered for repayment at the option of the Holder, except
the portion, if any, of such Debt Security not to be so repaid (Section 305).
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MERGER, CONSOLIDATION OR SALE
The Trust may merge with or into, consolidate with, or sell, lease or convey
all or substantially all of its assets to, any other trust or corporation,
provided that (a) either the Trust shall be the continuing trust or
corporation, or the successor trust or corporation (if other than the Trust)
formed by or resulting from any such merger or consolidation or which shall
have received the transfer of such assets shall expressly assume payment of the
principal of (and premium, if any) and interest on all of the Debt Securities
and the due and punctual performance and observance of all of the covenants and
conditions contained in the Indentures; (b) immediately after giving effect to
such transaction and treating any indebtedness which becomes an obligation of
the Trust or any Subsidiary as a result thereof as having been incurred by the
Trust or such Subsidiary at the time of such transaction, no Event of Default
under the Indentures, and no event which, after notice or the lapse of time, or
both, would become such an Event of Default, shall have occurred and be
continuing; and (c) an officer's certificate and legal opinion covering such
conditions shall be delivered to the Trustees (Sections 801 and 803).
CERTAIN COVENANTS
Limitations on Incurrence of Debt. The Trust will not, and will not permit
any Subsidiary to, incur any Debt (as defined below) if, immediately after
giving effect to the incurrence of such additional Debt and the application of
the proceeds thereof, the aggregate principal amount of all outstanding Debt of
the Trust and its Subsidiaries on a consolidated basis determined in accordance
with generally accepted accounting principles is greater than 65% of the sum of
(i) the Trust's Total Assets (as defined below) as of the end of the calendar
quarter covered in the Trust's Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most recently filed with the Commission (or,
if such filing is not permitted under the Exchange Act, with the Trustee) prior
to the incurrence of such additional Debt, (ii) the purchase price of any real
estate assets or mortgages receivable acquired by the Trust or any Subsidiary
since the end of such calendar quarter, including those obtained in connection
with the incurrence of such additional Debt, and (iii) the amount of any
securities offering proceeds received by the Trust or any Subsidiary since the
end of such calendar quarter (to the extent that such proceeds were not used to
acquire such real estate assets or mortgages receivable or used to reduce Debt)
(Section 1004).
In addition to the foregoing limitation on the incurrence of Debt, the Trust
will not, and will not permit any Subsidiary to, incur any Debt secured by any
mortgage, lien, charge, pledge, encumbrance or security interest of any kind
upon any of the property of the Trust or any Subsidiary if, immediately after
giving effect to the incurrence of such additional Debt and the application of
the proceeds thereof, the aggregate principal amount of all outstanding Debt of
the Trust and its Subsidiaries on a consolidated basis which is secured by any
mortgage, lien, charge, pledge, encumbrance or security interest on property of
the Trust or any Subsidiary is greater than 40% of the sum of (i) the Trust's
Total Assets as of the end of the calendar quarter covered in the Trust's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may
be, most recently filed with the Commission (or, if such filing is not
permitted under the Exchange Act, with the Trustee) prior to the incurrence of
such additional Debt, (ii) the purchase price of any real estate assets or
mortgages receivable acquired by the Trust or any Subsidiary since the end of
such calendar quarter, including those obtained in connection with the
incurrence of such additional Debt and (iii) the amount of any securities
offering proceeds received by the Trust or any Subsidiary since the end of such
calendar quarter (to the extent that such proceeds were not used to acquire
such real estate assets or mortgages receivable or used to reduce Debt)
(Section 1004).
In addition to the foregoing limitations on the incurrence of Debt, the Trust
will not, and will not permit any Subsidiary to, incur any Debt if Consolidated
Income Available for Debt Service (as defined below) for any 12 consecutive
calendar months within the 15 calendar months immediately preceding the date on
which such additional Debt is to be incurred shall have been less than 1.5
times the Maximum Annual Service Charge (as defined below) on the Debt of the
Trust and all Subsidiaries to be outstanding immediately after the incurring of
such additional Debt (Section 1004).
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The Trust will at all times maintain an Unencumbered Total Asset Value in an
amount not less than 100% of the aggregate principal amount of all outstanding
Debt of the Trust and its Subsidiaries that is unsecured.
Existence. Except as permitted under "Merger, Consolidation or Sale," the
Trust will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Trust shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the Holders of the Debt
Securities (Section 1005).
Maintenance of Properties. The Trust will cause all of its properties used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Trust may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that the Trust and its Subsidiaries shall not be prevented
from selling or otherwise disposing for value its properties in the ordinary
course of business (Section 1006).
Insurance. The Trust will, and will cause each of its Subsidiaries to, keep
all of its insurable properties adequately insured against loss or damage with
insurers of recognized responsibility and having an A.M. Best policy holder's
rating of not less than A-:V (Section 1007).
Payment of Taxes and Other Claims. The Trust will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
future taxes, assessments and governmental charges levied or imposed upon it or
any Subsidiary or upon the income, profits or property of the Trust or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Trust or any
Subsidiary, unless such lien would not have a material adverse effect upon such
property; provided, however, that the Trust shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim (i) whose amount, applicability or validity is being contested in good
faith by appropriate proceedings or (ii) for which the Trust has set apart and
maintains an adequate reserve (Section 1008).
Provision of Financial Information. Whether or not the Trust is subject to
Section 13 or 15(d) of the Exchange Act, the Trust will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which the Trust would have been required
to file with the Commission pursuant to such Section 13 or 15(d) if the Trust
were so subject, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Trust would
have been required so to file such documents if the Trust were so subject. The
Trust will also in any event (x) within 15 days of each Required Filing Date
(i) transmit by mail to all Holders of Debt Securities, as their names and
addresses appear in the Security Register, without cost to such Holders, copies
of the annual reports and quarterly reports which the Trust would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Trust were subject to such Sections and (ii) file with the
Trustees copies of the annual reports, quarterly reports and other documents
which the Trust would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Trust were subject to such
Sections and (y) if filing such documents by the Trust with the Commission is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder (Section 1009).
As used herein,
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Trust and its Subsidiaries
plus amounts which have been deducted for (a) interest on
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Debt of the Trust and its Subsidiaries, (b) provision for taxes of the Trust
and its Subsidiaries based on income, (c) amortization of debt discount, (d)
property depreciation and amortization and (e) the effect of any noncash charge
resulting from a change in accounting principles in determining Consolidated
Net Income for such period.
"Consolidated Net Income" for any period means the amount of consolidated net
income (or loss) of the Trust and its Subsidiaries for such period determined
on a consolidated basis in accordance with generally accepted accounting
principles.
"Debt" of the Trust or any Subsidiary means any indebtedness of the Trust or
any Subsidiary, whether or not contingent, in respect of (i) borrowed money or
evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any security
interest existing on property owned by the Trust or any Subsidiary, (iii)
letters of credit or amounts representing the balance deferred and unpaid of
the purchase price of any property except any such balance that constitutes an
accrued expense or trade payable or (iv) any lease of property by the Trust or
any Subsidiary as lessee which is reflected on the Trust's Consolidated Balance
Sheet as a capitalized lease in accordance with generally accepted accounting
principles, in the case of items of indebtedness under (i) through (iii) above
to the extent that any such items (other than letters of credit) would appear
as a liability on the Trust's Consolidated Balance Sheet in accordance with
generally accepted accounting principles, and also includes, to the extent not
otherwise included, any obligation by the Trust or any Subsidiary to be liable
for, or to pay, as obligor, guarantor or otherwise (other than for purposes of
collection in the ordinary course of business), indebtedness of another person
(other than the Trust or any Subsidiary) (it being understood that Debt shall
be deemed to be incurred by the Trust or any Subsidiary whenever the Trust or
such Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof).
"Maximum Annual Service Charge" as of any date means the maximum amount which
may become payable in any period of 12 consecutive calendar months from such
date for interest on, and required amortization of, Debt. The amount payable
for amortization shall include the amount of any sinking fund or other
analogous fund for the retirement of Debt and the amount payable on account of
principal on any such Debt which matures serially other than at the final
maturity date of such Debt.
"Total Assets" as of any date means the sum of (i) Undepreciated Real Estate
Assets and (ii) all other assets of the Trust and its Subsidiaries determined
in accordance with generally accepted accounting principles (but excluding
accounts receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the amount of real
estate assets of the Trust and its Subsidiaries on such date, before
depreciation and amortization determined on a consolidated basis in accordance
with generally accepted accounting principles.
"Unencumbered Total Asset Value" as of any date means the sum of the Trust's
Total Assets which are unencumbered by any mortgage, lien, charge, pledge or
security interest.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder (a) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (b) default in the payment of the principal of (or premium, if
any, on) any Debt Security of such series at its Maturity; (c) default in
making any sinking fund payment as required for any Debt Security of such
series; (d) default in the performance of any other covenant of the Trust
contained in the applicable Indenture (other than a covenant added to such
Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in such Indenture; (e) an event of default under any evidence of
indebtedness of the Trust or any mortgage, indenture or other instrument under
which such indebtedness is issued or by which such
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indebtedness is secured or evidenced, such default having resulted in the
acceleration of the maturity of an aggregate principal amount exceeding
$10,000,000 of such indebtedness, but only if such indebtedness is not
discharged or such acceleration is not rescinded or annulled within a specified
period of time; (f) certain events of bankruptcy, insolvency or reorganization,
or court appointment of a receiver, liquidator or trustee of the Trust, any
Significant Subsidiary or the property of the Trust or any Significant
Subsidiary; and (g) any other Event of Default provided with respect to a
particular series of Debt Securities (Section 501). The term "Significant
Subsidiary" means each significant subsidiary (as defined in Regulation S-X
promulgated under the Securities Act) of the Trust.
If an Event of Default under the Indenture with respect to Debt Securities of
any series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities or Indexed Securities, such portion of the principal amount as may
be specified in the terms thereof) of all of the Debt Securities of that series
to be due and payable immediately by written notice thereof to the Trust (and
to the applicable Trustee if given by the Holders). However, at any time after
such a declaration of acceleration with respect to Debt Securities of such
series (or of all Debt Securities then Outstanding under the applicable
Indenture, as the case may be) has been made, but before a judgment or decree
for payment of the money due has been obtained by the applicable Trustee, the
Holders of not less than a majority in principal amount of Outstanding Debt
Securities of such series (or of all Debt Securities then Outstanding under the
applicable Indenture, as the case may be) may rescind and annul such
declaration and its consequences if (a) the Trust shall have deposited with the
applicable Trustee all required payments of the principal of (and premium, if
any) and interest on the Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may
be), plus certain fees, expenses, disbursements and advances of the Trustee and
(b) all Events of Default, other than the non-payment of accelerated principal
(or specified portion thereof), with respect to Debt Securities of such series
(or of all Debt Securities then Outstanding under the applicable Indenture, as
the case may be) have been cured or waived as provided in the applicable
Indenture (Section 502). Each Indenture also provides that the Holders of not
less than a majority in principal amount of the Outstanding Debt Securities of
any series (or of all Debt Securities then Outstanding under the applicable
Indenture, as the case may be) may waive any past default with respect to such
series and its consequences, except a default (x) in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or (y) in respect of a covenant or provision contained in the applicable
Indenture that cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security affected thereby (Section 513).
Each Trustee is required to give notice to the Holder of Debt Securities
within 90 days of a default under the applicable Indenture; provided, however,
that the Trustee may withhold notice to the Holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if the Responsible Officers of the
Trustee consider such withholding to be in the interest of such Holders
(Section 601).
Each Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the
applicable Indenture or for any remedy thereunder, except in the case of
failure of the Trustee thereunder for 60 days, to act after it has received a
written request to institute proceedings in respect of an Event of Default from
the Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it (Section 507). This provision will not prevent, however, any
Holder of Debt Securities from instituting suit for the enforcement of payment
of the principal of (and premium, if any) and interest on such Debt Securities
at the respective due dates thereof (Section 508).
Subject to provisions in each Indenture relating to its duties in case of
default, each Trustee is under no obligation to exercise any of its rights or
powers under the applicable Indenture at the request or direction of
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any Holders of any series of Debt Securities then Outstanding under such
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity (Section 602). The Holders of not less than a majority in
principal amount of the applicable Outstanding Debt Securities of any series
(or of all Debt Securities then Outstanding under the applicable Indenture, as
the case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or of
exercising any trust or power conferred upon the Trustee. However, the Trustee
may refuse to follow any direction which is in conflict with any law or the
applicable Indenture, which may involve the Trustee in personal liability or
which may be unduly prejudicial to the Holders of Debt Securities of such
series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Trust must deliver
to each Trustee a certificate, signed by one of several specified officers,
stating whether or not such officer has knowledge of any default under the
applicable Indenture and, if so, specifying each such default and the nature
and status thereof (Section 1010).
MODIFICATION OF THE INDENTURES
Modifications and amendments of each Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under such Indenture which are affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each such Debt Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (b)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the
Holder of any such Debt Security; (c) change the Place of Payment, or the coin
or currency, for payment of principal of, premium, if any, or interest on any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the applicable Indenture, to waive compliance with certain
provisions thereof or certain defaults and consequences thereunder or to reduce
the quorum or voting requirements set forth in such Indenture; (f) if
Subordinated Securities, modify any of the provisions of the Subordinated
Securities Indenture relating to the subordination of such Subordinated
Securities in a manner adverse to the Holders thereof; or (g) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities have the right to waive compliance by the Trust with certain
covenants in the applicable Indenture (Section 1012).
Modifications and amendments of each Indenture may be made by the Trust and
the applicable Trustee without the consent of any Holder of Debt Securities
issued thereunder for any of the following purposes: (i) to evidence the
succession of another Person to the Trust as obligor under the applicable
Indenture; (ii) to add to the covenants of the Trust for the benefit of the
Holders of all or any series of Debt Securities or to surrender any right or
power conferred upon the Trust in the applicable Indenture; (iii) to add Events
of Default for the benefit of the Holders of all or any series of Debt
Securities; (iv) to add or change any provisions of the applicable Indenture to
facilitate the issuance of, or to liberalize certain terms of, Debt Securities
in bearer form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of the applicable Indenture,
provided that any such change or elimination shall become effective only when
there are no Debt Securities
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Outstanding of any series created prior thereto which are entitled to the
benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Preferred Shares or Common Shares of the Trust; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the applicable Indenture by more than
one Trustee; (ix) to cure any ambiguity, defect or inconsistency in the
applicable Indenture, provided that such action shall not adversely affect the
interests of Holders of Debt Securities of any series in any material respect;
or (x) to supplement any of the provisions of the applicable Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Debt Securities, provided that such action shall not adversely affect
the interests of the Holders of the Debt Securities of any series in any
material respect (Section 901).
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of a Debt Security denominated in a Foreign Currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to
Section 301 of the Indenture, and (iv) Debt Securities owned by the Trust or
any other obligor upon the Debt Securities or any Affiliate of the Trust or of
such other obligor shall be disregarded (Section 101).
Each Indenture contains provisions of convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting may be called at any time
by the applicable Trustee, and also, upon request, by the Trust or the Holders
of at least 10% in principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given as provided in the applicable
Indenture (Section 1502). Except for any consent that must be given by the
Holder of each Debt Security affected by certain modifications and amendments
of the applicable Indenture, any resolution presented at a meeting or adjourned
meeting duly reconvened at which a quorum is present may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series; provided, however, that, except as
referred to above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
that series. Any resolution passed or decision taken at any meeting of Holders
of Debt Securities of any series duly held in accordance with the applicable
Indenture will be binding on all Holders of Debt Securities of that series. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be Persons holding or representing a majority in principal amount
of the Outstanding Debt Securities of a series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver which
may be given by the Holders of not less than a specified percentage in
principal amount of the Outstanding Debt Securities of a series, the Persons
holding or representing such specified percentage in principal amount of the
Outstanding Debt Securities of such series will constitute a quorum (Section
1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the applicable Indenture expressly provides may be made, given or
taken by the Holders of a specified percentage in principal amount of all
Outstanding Debt Securities affected thereby, or of the
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Holders of such series and one or more additional series: (i) there shall be no
minimum quorum requirement for such meeting and (ii) the principal amount of
the Outstanding Debt Securities of such series that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under the applicable Indenture (Section 1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Trust may discharge certain obligations to Holders of any series of Debt
Securities that have not already been delivered to the Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are payable in an amount sufficient to pay the entire
indebtedness on such Debt Securities in respect of principal (and premium, if
any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be (Section 401).
Each Indenture provides that, if the provisions of Article XIV are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of such Indenture, the Trust may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities and to hold moneys for payment in
trust) ("defeasance") (Section 1402) or (b) to be released from its obligations
with respect to such Debt Securities under Sections 1004 to 1009, inclusive, of
the applicable Indenture (being the restrictions described under "Certain
Covenants") or, if provided pursuant to Section 301 of such Indenture, its
obligations with respect to any other covenant, and any omission to comply with
such obligations shall not constitute a default or an Event of Default with
respect to such Debt Securities ("covenant defeasance") (Section 1403), in
either case upon the irrevocable deposit by the Trust with the applicable
Trustee, in trust, of an amount, in such currency or currencies, currency unit
or units or composite currency or currencies in which such Debt Securities are
payable at Stated Maturity, or Government Obligations (as defined below), or
both, applicable to such Debt Securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Trust has
delivered to the applicable Trustee an Opinion of Counsel (as specified in the
applicable Indenture) to the effect that the Holders of such Debt Securities
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance had
not occurred (Section 1404).
"Government Obligations" means securities which are (i) direct obligations of
the United States of America or the government which issued the Foreign
Currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the Foreign Currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian
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with respect to any such Government Obligation or a specific payment of
interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Trust has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to Section 301 of the applicable Indenture or the terms of
such Debt Security to receive payment in a currency, currency unit or composite
currency other than that in which such deposit has been made in respect of such
Debt Security, or (b) a Conversion Event (as defined below) occurs in respect
of the currency, currency unit or composite currency in which such deposit has
been made, the indebtedness represented by such Debt Security shall be deemed
to have been, and will be, fully discharged and satisfied through the payment
of the principal of (and premium, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by covering the amount so deposited
in respect of such Debt Security into the currency, currency unit or composite
currency in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate (Section 1405). "Conversion Event" means the cessation of use of (i) a
Foreign Currency, both by the government of the country which issued such
currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established (Section 101). Unless otherwise provided
in the applicable Prospectus Supplement, all payments of principal of (and
premium, if any) and interest on any Debt Security that is payable in a Foreign
Currency that ceases to be used by its government of issuance shall be made in
U.S. dollars.
In the event the Trust effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than the Event of Default described in
clause (d) under "Events of Default, Notice and Waiver" with respect to Section
1004 to 1009, inclusive, of the applicable Indenture (which Sections would no
longer be applicable to such Debt Securities) or described in clause (g) under
"Events of Default, Notice and Waiver" with respect to any other covenant as to
which there has been covenant defeasance, the amount in such currency, currency
unit or composite currency in which such Debt Securities are payable, and
Government Obligations on deposit with the applicable Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of
Default. However, the Trust would remain liable to make payment of such amounts
due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Preferred Shares or Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Preferred Shares or Common
Shares, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the
Holders or the Trust, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of
such Debt Securities.
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GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary (the "Depository") identified in
the applicable Prospectus Supplement relating to such series. Global Securities
are expected to be deposited with The Depository Trust Company, as Depository.
Global Securities may be issued in either registered or bearer form and in
either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable
Prospectus Supplement, the Trust anticipates that the following provisions will
apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Trust if such Debt Securities are offered and sold
directly by the Trust. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depository or its nominee (with respect to
beneficial interests of Participants) and records of Participants (with respect
to beneficial interests of persons who hold through Participants). The laws of
some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and laws may impair
the ability to own, pledge or transfer beneficial interest in a Global
Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below or in the applicable Prospectus
Supplement, owners of beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of any such Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture.
Payments of principal of, any premium and any interest on, or any Additional
Amounts payable with respect to, individual Debt Securities represented by a
Global Security registered in the name of a Depository or its nominee will be
made to the Depository or its nominee, as the case may be, as the registered
owner of the Global Security representing such Debt Securities. None of the
Trust, the Trustees, any Paying Agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Trust expects that the Depository for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to
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their respective beneficial interests in the principal amount of such Global
Security for such Debt Securities as shown on the records of such Depository or
its nominee. The Trust also expects that payments by Participants to owners of
beneficial interests in such Global Security held through such Participants
will be governed by standing instructions and customary practices, as is the
case with securities held for the account of customers in bearer form or
registered in "street name." Such payments will be the responsibility of such
Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is
not appointed by the Trust within 90 days, the Trust will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Trust may, at any time and in its
sole discretion, subject to any limitations described in the applicable
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of such series represented by one or more Global Securities
and, in such event, will issue individual Debt Securities of such series in
exchange for the Global Security or Securities representing such series of Debt
Securities. Individual Debt Securities of such series so issued will be issued
in denominations, unless otherwise specified by the Trust, of $1,000 and
integral multiples thereof.
Provisions Applicable Solely to Subordinated Securities
GENERAL
Subordinated Securities will be issued under the Subordinated Indenture and
will rank pari passu with certain other subordinated debt of the Company that
may be outstanding from time to time and will rank junior to all Senior
Indebtedness (as defined below) of the Company (including any Senior
Securities) that may be outstanding from time to time. All section references
appearing below are to sections of the Subordinated Indenture.
The term "Senior Indebtedness" is defined in the Subordinated Indenture as
indebtedness incurred by the Trust for money borrowed whether outstanding on
the date hereof or incurred in the future, all deferrals, renewals or
extensions of any such indebtedness and all evidences of indebtedness issued in
exchange for any such indebtedness and guarantees by the Trust of the foregoing
items of indebtedness for money borrowed by persons other than the Trust,
unless, in any such case, such indebtedness or guarantee provides by its terms
that it shall not constitute Senior Indebtedness.
If Subordinated Securities are issued under the Subordinated Indenture, the
aggregate principal amount of Senior Indebtedness outstanding as of a recent
date will be set forth in the Prospectus Supplement. The Subordinated Indenture
does not restrict the amount of Senior Indebtedness that the Trust may incur.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest on the
Subordinated Securities is expressly subordinated, to the extent and in the
manner set forth in the Subordinated Indenture, in right of payment to the
prior payment in full of all Senior Indebtedness of the Trust.
(a) Upon (i) any acceleration of the principal amount due on the Subordinated
Securities or (ii) any payment or distribution of assets of the Trust of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding up or total or partial liquidation or reorganization
of the Trust, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal and premium, if any, and
interest due upon all Senior Indebtedness shall first be paid in full, or
payment thereof provided for in money or money's worth in accordance with its
terms, before any payment is made on account of the principal of, premium, if
any, or interest on the indebtedness evidenced by the Subordinated Securities,
and upon any such acceleration, dissolution or winding up or liquidation or
reorganization, any payment or distribution of assets of the Trust of any kind
or character, whether in cash,
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property or securities, to which the holders of the Subordinated Securities
would be entitled, except for the provisions of the Subordinated Indenture,
shall (subject to the power of a court of competent jurisdiction to make other
equitable provision reflecting the rights conferred by the provisions of the
Subordinated Securities upon the Senior Indebtedness and the holders thereof
with respect to the Subordinated Securities and the holders thereof by a lawful
plan of reorganization under applicable bankruptcy law), be paid by the Trust
or any receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, or by the holders of the
Subordinated Securities if received by them, directly to the holders of Senior
Indebtedness (pro rata to each such holder on the basis of the respective
amounts of Senior Indebtedness held by such holder) or their representatives,
to the extent necessary to pay all Senior Indebtedness (including interest
thereon) in full, in money or money's worth, after giving effect to any
concurrent payments or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
indebtedness evidenced by the Subordinated Securities. The consolidation of the
Trust with or the merger of the Trust into another Person or the liquidation or
dissolution of the Trust following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another Person upon the
terms and conditions provided in the Subordinated Indenture shall not be deemed
a dissolution, winding-up, liquidation or reorganization for these purposes.
(b) In the event that any payment or distribution of assets of the Trust of
any kind or character not permitted by the foregoing provisions, whether in
cash, property or securities, shall be received by the holders of Subordinated
Securities before all Senior Indebtedness is paid in full, or provision made
for such payment, in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all such Senior Indebtedness in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
(c) No payment on account of principal of, premium, if any, sinking funds or
interest on the Subordinated Securities shall be made unless full payment of
amounts then due for principal, premium, if any, sinking funds and interest on
any Senior Indebtedness has been made or duly provided for in money or money's
worth in accordance with the terms of such Senior Indebtedness. No payment on
account of principal, premium, if any, sinking funds or interest on the
Subordinated Securities shall be made if, at the time of such payment or
immediately after giving effect thereto, (i) there shall exist a default in the
payment of principal, premium, if any, sinking fund or interest with respect to
any Senior Indebtedness, or (ii) there shall have occurred an event of default
(other than a default in the payment of principal, premium, if any, sinking
funds or interest) with respect to any Senior Indebtedness, as defined therein
or in the instrument under which the same is outstanding, permitting the
holders thereof to accelerate the maturity thereof, and such event of default
shall not have been cured or waived or shall not have ceased to exist.
SUBROGATION
From and after the payment in full of all Senior Indebtedness, the holders of
the Subordinated Securities (together with the holders of any other
indebtedness of the Trust which is subordinate in right of payment to the
payment in full of all Senior Indebtedness, which is not subordinate in right
of payment to the Subordinated Securities and which by its terms grants such
right of subrogation to the holder thereof) shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets or securities of the Trust applicable to the Senior Indebtedness until
the Subordinated Securities shall be paid in full, and, for the purposes of
such subrogation, no such payments or distributions to the holders of Senior
Indebtedness of assets or securities, which otherwise would have been payable
or distributable to holders of the Subordinated Securities, shall, as between
the Trust, its creditors other than the holders of Senior Indebtedness, and the
holders of the Subordinated Securities, be deemed to be a payment by the Trust
to or
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on account of the Senior Indebtedness, it being understood that these
provisions of the Subordinated Indenture are and are intended solely for the
purpose of defining the relative rights of the holders of the Subordinated
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand, and nothing contained in the Subordinated Indenture is intended to
or shall impair as between the Trust, its creditors other than the holders of
Senior Indebtedness, and the holders of the Subordinated Securities, the
obligation of the Trust, which is unconditional and absolute, to pay to the
holders of the Subordinated Securities the principal of, premium, if any, and
interest on the Subordinated Securities as and when the same shall become due
and payable in accordance with their terms, or to affect the relative rights of
the holders of the Subordinated Securities and creditors of the Trust other
than the holders of the Senior Indebtedness, nor shall anything therein prevent
the Holder of any Subordinated Security from exercising all remedies otherwise
permitted by applicable law upon default under such Security subject to the
rights of the holders of Senior Indebtedness to receive cash, property or
securities of the Trust otherwise payable or deliverable to the holders of the
Subordinated Securities or to a representative of such holders, on their
behalf.
DESCRIPTION OF PREFERRED SHARES
The Trust is authorized to issue 1,000,000 preferred shares of beneficial
interest, par value $1.00 per share, and no Preferred Shares were outstanding
as of the date of this Prospectus.
The following description of the Preferred Shares sets forth certain general
terms and provisions of the Preferred Shares to which any Prospectus Supplement
may relate. The particular terms of the Preferred Shares being offered and the
extent to which such general provisions may or may not apply will be described
in a Prospectus Supplement relating to such Preferred Shares. The statements
below describing the Preferred Shares are in all respects subject to and
qualified in their entirety by reference to the applicable provisions of the
Trust's Declaration of Trust, as amended.
GENERAL
Subject to limitations prescribed by Massachusetts law and the Declaration of
Trust, as amended, the Board of Trustees is authorized to fix the number of
shares constituting each series of Preferred Shares and the designations and
powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, including such
provisions as may be desired concerning voting, redemption, dividends,
dissolution or the distribution of assets, conversion or exchange, and such
other subjects or matters as may be fixed by resolution of the Board of
Trustees or a duly authorized committee thereof. The Preferred Shares will,
when issued, be fully paid and nonassessable and will have no preemptive
rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of shares of such Preferred Shares being offered, the
liquidation preference per share and the offering price of such
Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provisions for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
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(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares of the Trust,
including the conversion price (or manner of calculation thereof);
(10) Whether interests in such Preferred Shares will be represented by
Depositary Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of the Trust;
(13) Any limitations on issuance of any series of preferred shares
ranking senior to or on a parity with such series of Preferred
Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Trust;
(14) Any limitations on direct or beneficial ownership and restrictions
on transfer of such Preferred Shares, in each case as may be
appropriate to preserve the status of the Trust as a REIT; and
(15) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares.
RANK
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and/or rights upon
liquidation, dissolution or winding up of the Trust, rank (i) senior to all
classes or series of Common Shares of the Trust, and to all equity securities
ranking junior to such Preferred Shares with respect to dividend rights and/or
rights upon liquidation, dissolution or winding up of the Trust, as the case
may be; (ii) on a parity with all equity securities issued by the Trust the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Shares with respect to dividend rights and/or rights
upon liquidation, dissolution or winding up of the Trust, as the case may be;
and (iii) junior to all equity securities issued by the Trust the terms of
which specifically provide that such equity securities rank senior to the
Preferred Shares with respect to dividend rights and/or rights upon
liquidation, dissolution or winding up of the Trust, as the case may be. As
used in the Declaration of Trust, as amended, for these purposes, the term
"equity securities" does not include convertible debt securities.
DIVIDENDS
Holders of Preferred Shares shall be entitled to receive, when, as and if
declared by the Board of Trustees of the Trust, out of assets of the Trust
legally available for payment, cash dividends at such rates (or method of
calculation thereof) and on such dates as will be set forth in the applicable
Prospectus Supplement. Each such dividend shall be payable to holders of record
as they appear on the stock transfer books of the Trust on such record dates as
shall be fixed by the Board of Trustees of the Trust.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees of the Trust fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Shares for which dividends are noncumulative, then the holders of
such series of the Preferred Shares will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Trust will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If any Preferred Shares of any series are outstanding, no full dividends
shall be declared or paid or set apart for payment on the preferred shares of
the Trust of any other series ranking, as to dividends, on a parity with or
junior to the Preferred Shares of such series for any period unless (i) if such
series of Preferred Shares has a cumulative dividend, full cumulative dividends
have been or contemporaneously are declared
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and paid or declared and a sum sufficient for the payment thereof set apart for
such payment on the Preferred Shares of such series for all past dividend
periods and the then current dividend period or (ii) if such series of
Preferred Shares does not have a cumulative dividend, full dividends for the
then current dividend period have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
such payment on the Preferred Shares of such series. When dividends are not
paid in full (or a sum sufficient for such full payment is not so set apart)
upon the Preferred Shares of any series and the shares of any other series of
preferred shares ranking on a parity as to dividends with the Preferred Shares
of such series, all dividends declared upon the Preferred Shares of such series
and any other series of preferred shares ranking on a parity as to dividends
with such Preferred Shares shall be declared pro rata so that the amount of
dividends declared per share on the Preferred Shares of such series and such
other series of preferred shares shall in all cases bear to each other the same
ratio that accrued dividends per share on the Preferred Shares of such series
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Shares do not have a cumulative
dividend) and such other series of preferred shares bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Preferred Shares of such series which may
be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if such
series of Preferred Shares has a cumulative dividend, full cumulative dividends
on the Preferred Shares of such series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
no dividends (other than in common shares or other capital stock ranking junior
to the Preferred Shares of such series as to dividends and upon liquidation)
shall be declared or paid or set aside for payment or other distribution upon
the Common Shares or any other capital stock of the Trust ranking junior to or
on a parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares or any other capital stock of the
Trust ranking junior to or on a parity with the Preferred Shares of such series
as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such stock) by the Trust
(except by conversion into or exchange for other capital stock of the Trust
ranking junior to the Preferred Shares of such series as to dividends and upon
liquidation).
Any dividend payment made on a series of Preferred Shares shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred Shares
of any series will be subject to mandatory redemption or redemption at the
option of the Trust, as a whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by the Trust in each year commencing after a date
to be specified, at a redemption price per share to be specified, together with
an amount equal to all accrued and unpaid dividends thereon (which shall not,
if such Preferred Shares do not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the
net proceeds of the issuance of capital stock of the Trust, the terms of such
Preferred Shares may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred
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Shares shall automatically and mandatorily be converted into shares of the
applicable capital stock of the Trust pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period and (ii) if such series
of Preferred Shares does not have a cumulative dividend, full dividends on all
shares of such series have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
the then current dividend period, no shares of such series of Preferred Shares
shall be redeemed unless all outstanding Preferred Shares of such series are
simultaneously redeemed; provided, however, that the foregoing shall not
prevent the purchase or acquisition of Preferred Shares of such series pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding Preferred Shares of such series, and, unless (i) if such series of
Preferred Shares has a cumulative dividend, full cumulative dividends on all
outstanding shares of such series have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period and
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends on all shares of such series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for the then current dividend period, the Trust shall not
purchase or otherwise acquire directly or indirectly any Preferred Shares of
such series (except by conversion into or exchange for capital stock of the
Trust ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation).
If fewer than all of the outstanding Preferred Shares of any series are to be
redeemed, the number of shares to be redeemed will be determined by the Trust
and such shares may be redeemed pro rata from the holders of record of such
shares in proportion to the number of such shares held by such holders (with
adjustments to avoid redemption of fractional shares) or any other equitable
method determined by the Trust.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares of
any series to be redeemed at the address shown on the stock transfer books of
the Trust. Each notice shall state: (i) the redemption date; (ii) the number of
shares and series of the Preferred Shares to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Shares
are to be surrendered for payment of the redemption price; (v) that dividends
on the shares to be redeemed will cease to accrue on such redemption date; and
(vi) the date upon which the holder's conversion rights, if any, as to such
shares shall terminate. If fewer than all the Preferred Shares of any series
are to be redeemed, the notice mailed to each such holder thereof shall also
specify the number of Preferred Shares to be redeemed from each such holder. If
notice of redemption of any Preferred Shares has been properly given and if the
funds necessary for such redemption have been irrevocably set aside by the
Trust in trust for the benefit of the holders of any Preferred Shares so called
for redemption, then from and after the redemption date dividends will cease to
accrue on such Preferred Shares, such Preferred Shares shall no longer be
deemed outstanding and all rights of the holders of such shares will terminate,
except the right to receive the redemption price. Any moneys so deposited which
remain unclaimed by the holders of such Preferred Shares at the end of two
years after the redemption date will be returned by the applicable bank or
trust company to the Trust.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Trust, then, before any distribution or payment shall be
made to the holders of any Common Shares or any other class or series of
capital stock of the Trust ranking junior to any series of Preferred Shares in
the distribution of assets upon any liquidation, dissolution or winding up of
the Trust, the holders of such series of Preferred Shares shall be entitled to
receive, after payment or provision for payment of the Trust's debts and other
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liabilities, out of assets of the Trust legally available for distribution to
shareholders, liquidating distributions in the amount of the liquidation
preference per share (set forth in the applicable Prospectus Supplement), plus
an amount equal to all dividends accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Shares do not have a cumulative dividend). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of such series of Preferred Shares will have no right or
claim to any of the remaining assets of the Trust. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
legally available assets of the Trust are insufficient to pay the amount of the
liquidating distributions on all such outstanding Preferred Shares and the
corresponding amounts payable on all shares of other classes or series of
capital stock of the Trust ranking on a parity with such series of Preferred
Shares in the distribution of assets upon liquidation, dissolution or winding
up, then the holders of such series of Preferred Shares and all other such
classes or series of capital stock shall share ratably in any such distribution
of assets in proportion to the full liquidating distributions to which they
would otherwise be respectively entitled.
If the liquidating distributions shall have been made in full to all holders
of a series of Preferred Shares, the remaining assets of the Trust shall be
distributed among the holders of any other classes or series of capital stock
ranking junior to such series of Preferred Shares upon liquidation, dissolution
or winding up, according to their respective rights and preferences and in each
case according to their respective number of shares. For purposes of this
section, a distribution of assets in any dissolution, winding up or liquidation
will not include (i) any consolidation or merger of the Trust with or into any
other corporation, (ii) any dissolution, liquidation, winding up, or
reorganization of the Trust immediately followed by incorporation of another
corporation to which such assets are distributed or (iii) a sale or other
disposition of all or substantially all of the Trust's assets to another
corporation; provided that, in each case, effective provision is made in the
charter of the resulting and surviving corporation or otherwise for the
recognition, preservation and protection of the rights of the holders of
Preferred Shares.
VOTING RIGHTS
Holders of any series of Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement. If the Trust elects to
issue a series of Preferred Shares, it may also amend the Declaration of Trust,
as amended, to provide for certain additional voting rights to holders of
Preferred Shares.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, the Trust shall not, without the
affirmative vote or consent of the holders of a majority of the shares of each
series of Preferred Shares outstanding at the time, given in person or by
proxy, either in writing or at a meeting (such series voting separately as a
class), (i) authorize or create, or increase the authorized or issued amount
of, any class or series of capital stock ranking prior to such series of
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, or reclassify any
authorized capital stock of the Trust into any such shares, or create,
authorize or issue any obligation or security convertible into or evidencing
the right to purchase any such shares; or (ii) amend, alter or repeal the
provisions of the Trust's Declaration of Trust, as amended, whether by merger,
consolidation or otherwise, so as to materially and adversely affect any right,
preference, privilege or voting power of such series of Preferred Shares or the
holders thereof; provided, however, that any increase in the amount of the
authorized preferred shares or the creation or issuance of any other series of
preferred shares, or any increase in the amount of authorized shares of such
series or any other series of Preferred Shares, in each case ranking on a
parity with or junior to the Preferred Shares of such series with respect to
payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be affected, all outstanding shares of such series of
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Preferred Shares shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been irrevocably deposited in trust to
effect such redemption.
Under Massachusetts law, notwithstanding anything to the contrary set forth
above, holders of each series of Preferred Shares will be entitled to vote as a
class upon a proposed amendment to the Declaration of Trust, as amended,
whether or not entitled to vote thereon by the Declaration of Trust, as
amended, if the amendment would increase the aggregate number of authorized
shares of such series, increase or decrease the par value of the shares of such
series, or alter or change the powers, preferences or special rights of the
shares of such series so as to affect them adversely.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred Shares
are convertible into Common Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Common Shares into which the Preferred Shares are convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of the Preferred
Shares or the Trust, the events requiring an adjustment of the conversion price
and provisions affecting conversion in the event of the redemption of such
Preferred Shares.
RESTRICTIONS ON OWNERSHIP
For the Trust to qualify as a REIT under the Code, not more than 50% in value
of its outstanding capital stock may be owned, directly or constructively, by
five or fewer individuals (as defined in the Code) during the last half of a
taxable year, and the capital stock must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year of 12 months (or during a
proportionate part of a shorter taxable year). Therefore, the Declaration of
Trust, as amended, imposes certain restrictions on the ownership and
transferability of Preferred Shares. For a general description of such
restrictions, see "Description of Common Shares--Restrictions on Ownership."
All certificates representing Preferred Shares will bear a legend referring to
these restrictions.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Trust may issue receipts ("Depositary Receipts") for Depositary Shares,
each of which will represent a fractional interest of a share of a particular
series of Preferred Shares, as specified in the applicable Prospectus
Supplement. Preferred Shares of each series represented by Depositary Shares
will be deposited under a separate Deposit Agreement (each, a "Deposit
Agreement") among the Trust, the depositary named therein (the "Preferred
Shares Depositary") and the holders from time to time of the Depositary
Receipts. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Receipt will be entitled, in proportion to the fractional interest
of a share of a particular series of Preferred Shares represented by the
Depositary Shares evidenced by such Depositary Receipt, to all rights and
preferences of the Preferred Shares represented by such Depositary Shares
(including dividend, voting, conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the
issuance and delivery of the Preferred Shares by the Trust to the Preferred
Shares Depositary, the Trust will cause the Preferred Shares Depositary to
issue, on behalf of the Trust, the Depositary Receipts. Copies of the
applicable form of Deposit Agreement and Depositary Receipt may be obtained
from the Trust upon request, and the following summary of the form thereof
filed as an exhibit to the Registration Statement of which this Prospectus is a
part is qualified in its entirety by reference thereto.
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DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Shares Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Shares to the record
holders of Depositary Receipts evidencing the related Depositary Shares in
proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and
other information and to pay certain charges and expenses to the Preferred
Shares Depositary.
In the event of a distribution other than in cash, the Preferred Shares
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Shares Depositary, unless the Preferred Shares
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Shares Depositary may, with the approval of the Trust,
sell such property and distribute the net proceeds from such sale to such
holders.
WITHDRAWAL OF SHARES
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Shares Depositary (unless the related Depositary Shares have
previously been called for redemption), the holders thereof will be entitled to
delivery at such office, to or upon such holder's order, of the number of whole
or fractional Preferred Shares and any money or other property represented by
the Depositary Shares evidenced by such Depositary Receipts. Holders of
Depositary Receipts will be entitled to receive whole or fractional shares of
the related Preferred Shares on the basis of the proportion of Preferred Shares
represented by each Depositary Share as specified in the applicable Prospectus
Supplement, but holders of such Preferred Shares will not thereafter be
entitled to receive Depositary Shares therefor. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of shares of Preferred
Shares to be withdrawn, the Preferred Shares Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares. The Trust does not expect that there will be any public
market for Preferred Shares that are withdrawn as described in this paragraph.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Trust redeems Preferred Shares held by the Preferred Shares
Depositary, the Preferred Shares Depositary will redeem as of the same
redemption date the number of Depositary Shares representing the Preferred
Shares so redeemed, provided the Trust shall have paid in full to the Preferred
Shares Depositary the redemption price of the Preferred Shares to be redeemed
plus an amount equal to any accrued and unpaid dividends thereon to the date
fixed for redemption. The redemption price per Depositary Share will be equal
to the redemption price and any other amounts per share payable with respect to
the Preferred Shares. If fewer than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected pro rata (as
nearly as may be practicable without creating fractional Depositary Shares) or
by any other equitable method determined by the Trust.
From and after the date fixed for redemption, all dividends in respect of the
Preferred Shares so called for redemption will cease to accrue, the Depositary
Shares so called for redemption will no longer be deemed to be outstanding and
all rights of the holders of the Depositary Receipts evidencing the Depositary
Shares so called for redemption will cease, except the right to receive any
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Receipts were entitled upon such redemption upon
surrender thereof to the Preferred Shares Depositary.
VOTING OF THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the Preferred
Shares are entitled to vote, the Preferred Shares Depositary will mail the
information contained in such notice of meeting to the record
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holders of the Depositary Receipts evidencing the Depositary Shares which
represent such Preferred Shares. Each record holder of Depositary Receipts
evidencing Depositary Shares on the record date (which will be the same date as
the record date for the Preferred Shares) will be entitled to instruct the
Preferred Shares Depositary as to the exercise of the voting rights pertaining
to the amount of Preferred Shares represented by such holder's Depositary
Shares. The Preferred Shares Depositary will vote the amount of Preferred
Shares represented by such Depositary Shares in accordance with such
instructions, and the Trust will agree to take all reasonable action which may
be deemed necessary by the Preferred Shares Depositary in order to enable the
Preferred Shares Depositary to do so. The Preferred Shares Depositary will
abstain from voting the amount of Preferred Shares represented by such
Depositary Shares to the extent it does not receive specific instructions from
the holders of Depositary Receipts evidencing such Depositary Shares. The
Preferred Shares Depositary shall not be responsible for any failure to carry
out any instruction to vote, or for the manner or effect of any such vote made,
as long as any such action or non-action is in good faith and does not result
from negligence or willful misconduct of the Preferred Shares Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Trust,
whether voluntary or involuntary, the holders of each Depositary Receipt will
be entitled to the fraction of the liquidation preference accorded each
Preferred Share represented by the Depositary Share evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED SHARES
The Depositary Shares, as such, are not convertible into Common Shares or any
other securities or property of the Trust. Nevertheless, if so specified in the
applicable Prospectus Supplement relating to an offering of the Depositary
Shares, the Depositary Receipts may be surrendered by holders thereof to the
Preferred Shares Depositary with written instructions to the Preferred Shares
Depositary to instruct the Trust to cause conversion of the Preferred Shares
represented by the Depositary Shares evidenced by such Depositary Receipts into
whole shares of Common Shares, other shares of Preferred Shares of the Trust or
other shares of capital stock, and the Trust has agreed that upon receipt of
such instructions and any amounts payable in respect thereof, it will cause the
conversion thereof utilizing the same procedures as those provided for delivery
of Preferred Shares to effect such conversion. If the Depositary Shares
evidenced by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt will be issued for any Depositary Shares not to be
converted. No fractional shares of Common Shares will be issued upon
conversion, and if such conversion will result in a fractional share being
issued, an amount will be paid in cash by the Trust equal to the value of the
fractional interest based upon the closing price of the Common Shares on the
last business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Shares and any provision of the Deposit Agreement may
at any time be amended by agreement between the Trust and the Preferred Shares
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
Preferred Shares will not be effective unless such amendment has been approved
by the existing holders of at least a majority of the Depositary Shares
evidenced by the Depositary Receipts then outstanding. No amendment shall
impair the right, subject to certain exceptions in the Deposit Agreement, of
any holder of Depositary Receipts to surrender any Depositary Receipt with
instructions to deliver to the holder the related Preferred Shares and all
money and other property, if any, represented thereby, except in order to
comply with law. Every holder of an outstanding Depositary Receipt at the time
any such amendment becomes effective shall be deemed, by continuing to hold
such Depositary Receipt, to consent and agree to such amendment and to be bound
by the Deposit Agreement as amended thereby.
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The Deposit Agreement may be terminated by the Trust upon not less than 30
days' prior written notice to the Preferred Shares Depositary if (i) such
termination is necessary to preserve the Trust's status as a REIT or (ii) at
least two-thirds of each series of Preferred Shares affected by such
termination consents to such termination, whereupon the Preferred Shares
Depositary shall deliver or make available to each holder of Depositary
Receipts, upon surrender of the Depositary Receipts held by such holder, such
number of whole or fractional shares of Preferred Shares as are represented by
the Depositary Shares evidenced by such Depositary Receipts together with any
other property held by the Preferred Shares Depositary with respect to such
Depositary Receipt. The Trust has agreed that if the Deposit Agreement is
terminated to preserve the Trust's status as a REIT, then the Trust will use
its best efforts to list the Preferred Shares issued upon surrender of the
related Depositary Shares on a national securities exchange. In addition, the
Deposit Agreement will automatically terminate if (i) all outstanding
Depositary Shares shall have been redeemed or converted, or (ii) there shall
have been a final distribution in respect of the related Preferred Shares in
connection with any liquidation, dissolution or winding up of the Trust and
such distribution shall have been distributed to the holders of Depositary
Receipts evidencing the Depositary Shares representing such Preferred Shares.
CHARGES OF PREFERRED SHARES DEPOSITARY
The Trust will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Trust will pay the fees and expenses of the Preferred Shares Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay certain other transfer and
other taxes and governmental charges as well as the fees and expenses of the
Preferred Shares Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Shares Depositary may resign at any time by delivering to the
Trust notice of its election to do so, and the Trust may at any time remove the
Preferred Shares Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Shares Depositary. A successor
Preferred Shares Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Shares Depositary will forward to holders of Depositary
Receipts any reports and communications from the Trust which are received by
the Preferred Shares Depositary with respect to the related Preferred Shares.
Neither the Preferred Shares Depositary nor the Trust will be liable if it is
prevented from or delayed in, by law or any circumstances beyond its control,
performing its obligations under the Deposit Agreement. The obligations of the
Trust and the Preferred Shares Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence or willful misconduct, and the Trust and the Preferred Shares
Depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Receipts, Depositary Shares or Preferred Shares
represented thereby unless satisfactory indemnity is furnished. The Trust and
the Preferred Shares Depositary may rely on written advice of counsel or
accountants, or information provided by persons presenting Preferred Shares
represented thereby for deposit, holders of Depositary Receipts or other
persons believed in good faith to be competent to give such information, and on
documents believed in good faith to be genuine and signed by a proper party.
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In the event the Preferred Shares Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on
the one hand, and the Trust, on the other hand, the Preferred Shares Depositary
shall be entitled to act on such claims, requests or instructions received from
the Trust.
DESCRIPTION OF COMMON SHARES
The Trust has the authority to issue an unlimited number of common shares of
beneficial interest without par value. At January 31, 1995, the Trust had
outstanding 52,944,762 common shares of beneficial interest without par value.
The following description of the Common Shares sets forth certain general
terms and provisions of the Common Shares to which any Prospectus Supplement
may relate, including a Prospectus Supplement providing that Common Shares will
be issuable upon conversion of Debt Securities or Preferred Shares or upon the
exercise of Warrants. The statements below describing the Common Shares are in
all respects subject to and qualified in their entirety by reference to the
applicable provisions of the Trust's Declaration of Trust, as amended.
Holders of the Trust's Common Shares will be entitled to receive dividends
when, as and if declared by the Board of Trustees of the Trust, out of funds
legally available therefor. Payment and declaration of dividends on the Common
Shares and purchases of Common Shares by the Trust will be subject to certain
restrictions if the Trust fails to pay dividends on the Preferred Shares. See
"Description of Preferred Shares". Upon any liquidation, dissolution or winding
up of the Trust, holders of Common Shares will be entitled to share equally and
ratably in any assets available for distribution to them, after payment or
provision for payment of the debts and other liabilities of the Trust and the
preferential amounts owing with respect to any outstanding Preferred Shares.
The Common Shares will possess ordinary voting rights for the election of
trustees and in respect of other corporate matters, each share entitling the
holder thereof to one vote. Holders of Common Shares will not have cumulative
voting rights in the election of directors, which means that holders of more
than 50% of all of the Trust's Common Shares voting for the election of
trustees can elect all of the trustees if they choose to do so and the holders
of the remaining shares cannot elect any trustees. Approval of the following
matters requires the affirmative vote of the holders of at least 66 2/3% of all
outstanding Common Shares: amendments to the Trust's Declaration of Trust, as
amended, termination of the Trust, certain mergers, reorganizations or
consolidations of the Trust or the sale, conveyance, exchange or other
disposition of more than 50% of the Trust's property. Holders of Common Shares
will not have preemptive rights, which means they have no right to acquire any
additional Common Shares that may be issued by the Trust at a subsequent date.
The Common Shares will, when issued, be fully paid and nonassessable.
RESTRICTIONS ON OWNERSHIP
For the Trust to qualify as a REIT under the Code, not more than 50% in value
of its outstanding capital stock may be owned, directly or indirectly, by five
or fewer individuals (as defined in the Code) during the last half of a taxable
year, and its capital stock must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of 12 months (or during a
proportionate part of a shorter taxable year). The Declaration of Trust, as
amended, imposes certain restrictions on the ownership and transferability of
Common Shares and Preferred Shares (collectively, "Shares"). If two-thirds (
2/3) of the Trustees determine that ownership of Shares has become, or that
there is a substantial possibility it may become, concentrated to an extent
which would prevent the Trust from continuing to be qualified as a REIT, then
the Trustees may redeem (by lot or other manner deemed equitable by the
Trustees) a sufficient number of Shares to bring the ownership of the Shares
into conformity with the requirements of the Code, or prohibit the transfer of
Shares to prevent the ownership of Shares from being concentrated to an extent
which may not allow the Trust to qualify as a REIT under the Code. The
redemption price to be paid will be (i) the last reported sale price of the
applicable Shares on the last business day prior to the redemption date on the
principal national securities
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exchange on which such Shares are listed, or (ii) if the applicable Shares are
not so listed, the average of the highest bid and lowest asked prices on such
last business day as reported by the National Quotation Bureau Incorporated or
a similar organization selected from time to time by the Trustees for the
purpose, or (iii) if not determinable as aforesaid, as determined in good faith
by the Trustees. From and after the date fixed for redemption by the Trustees,
the holder of any Shares so called for redemption shall cease to be entitled to
any distributions, voting rights and other benefits with respect to the Shares
called for redemption, except the right to payment of the applicable redemption
price. Under certain circumstances the proceeds of redemption might be taxed as
a dividend to the recipient.
In order to insure that the Trust remains qualified as a REIT for federal
income tax purposes, the Declaration of Trust, as amended, also provides that
any transfer of Shares that would prevent the Trust from continuing to be so
qualified shall be void ab initio, and the intended transferee of such Shares
shall be deemed never to have had an interest therein. If the foregoing
provision is determined to be void or invalid by virtue of any legal decision,
statute, rule or regulation, then the transferee of such Shares shall be deemed
to have acted as agent on behalf of the Trustees in acquiring such Shares, and
to hold such Shares on behalf of the Trustees.
All certificates representing Common Shares will bear a legend referring to
these restrictions.
If a shareholder has knowledge that he owns, directly or indirectly, together
with certain related persons, 5,000 or more Shares (including Shares into which
convertible securities, options and warrants may be converted or purchased
pursuant thereto), within 10 days of becoming aware of such ownership, whether
or not connected with any acquisition of Shares, he must notify the Trust in
writing of such fact and must similarly notify the Trust of any subsequent
acquisition of Shares (or convertible securities, options or warrants) by
himself or related persons of which he has knowledge within 10 days of becoming
aware of such acquisition. In addition, each shareholder shall upon demand be
required to disclose to the Trust in writing such information with respect to
the direct, indirect and constructive ownership of Shares as the Board of
Trustees deems necessary to comply with the provisions of the Code applicable
to a REIT or to comply with the requirements of any taxing authority or
governmental agency.
The Registrar and Transfer Agent for the Trust's Common Shares is The First
National Bank of Boston.
DESCRIPTION OF WARRANTS
The Trust may issue Warrants for the purchase of Debt Securities, Preferred
Shares, Depositary Shares or Common Shares. Warrants may be issued
independently or together with any Offered Securities and may be attached to or
separate from such securities. Each series of Warrants will be issued under a
separate warrant agreement (each, a "Warrant Agreement") to be entered into
between the Trust and a warrant agent ("Warrant Agent"). The Warrant Agent will
act solely as an agent of the Trust in connection with the Warrants of such
series and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following sets
forth certain general terms and provisions of the Warrants offered hereby.
Further terms of the Warrants and the applicable Warrant Agreement will be set
forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms, where
applicable, of the Warrants in respect of which this Prospectus is being
delivered: (1) the title of such Warrants; (2) the aggregate number of such
Warrants; (3) the price or prices at which such Warrants will be issued; (4)
the currencies in which the price of such Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the securities purchasable
upon exercise of such Warrants; (6) the designation and terms of the Offered
Securities with which such Warrants are issued and the number of such Warrants
issued with each such security; (7) the currency or currencies, including
composite currencies, in which the principal of or any premium or interest on
the securities purchasable upon exercise of such Warrants will be payable;
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(8) if applicable, the date on and after which such Warrants and the related
securities will be separately transferable; (9) the price at which and currency
or currencies, including composite currencies, in which the securities
purchasable upon exercise of such Warrants may be purchased; (10) the date on
which the right to exercise such Warrants shall commence and the date on which
such right shall expire; (11) the minimum or maximum amount of such Warrants
which may be exercised at any one time; (12) information with respect to book-
entry procedures, if any; (13) a discussion of certain Federal income tax
considerations; and (14) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
TO THE TRUST OF ITS REIT ELECTION
The following summary of certain federal income tax considerations to the
Trust is based on current law, is for general information only, and is not tax
advice. The tax treatment of a holder of any of the Offered Securities will
vary depending upon the terms of the specific securities acquired by such
holder, as well as his particular situation, and this discussion does not
attempt to address any aspects of federal income taxation relating to holders
of Offered Securities. Certain federal income tax considerations relevant to
holders of the Offered Securities will be provided in the applicable Prospectus
Supplement relating thereto.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT, AS
WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF THE TRUST AS A REIT
General. The Trust has elected to be taxed as a real estate investment trust
under Sections 856 through 860 of the Code, commencing with its taxable year
ended July 31, 1972. The Trust believes that, commencing with its taxable year
ended July 31, 1972, it was organized and has been operating in such a manner
as to qualify for taxation as a REIT under the Code and the Trust intends to
continue to operate in such a manner, but no assurance can be given that it
will operate in a manner so as to qualify or remain qualified.
These sections of the Code are highly technical and complex. The following
sets forth the material aspects of the sections that govern the federal income
tax treatment of a REIT. This summary is qualified in its entirety by the
applicable Code provisions, rules and regulations promulgated thereunder, and
administrative and judicial interpretations thereof.
In the opinion of Altheimer & Gray, commencing with the Trust's taxable year
which ended July 31, 1972, the Trust has been organized in conformity with the
requirements for qualification as a REIT, and its method of operation enabled
it to meet the requirements for qualification and taxation as a REIT under the
Code. It must be emphasized that this opinion is based on various assumptions
and is conditioned upon certain representations made by the Trust as to factual
matters. In addition, this opinion is based upon the factual representations of
the Trust concerning its business and properties as set forth in this
Prospectus. Moreover, such qualification and taxation as a REIT depends upon
the Trust's ability to meet, through actual annual operating results,
distribution levels, diversity of stock ownership, and the various
qualification tests imposed under the Code discussed below, the results of
which have not been and will not be reviewed by Altheimer & Gray. Accordingly,
no assurance can be given that the actual results of the Trust's operation in
any particular taxable year will satisfy such requirements. See "--Failure to
Qualify."
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<PAGE>
If the Trust qualifies for taxation as a REIT, it generally will not be
subject to federal corporate income taxes on its net income that is currently
distributed to shareholders. This treatment substantially eliminates the
"double taxation" (at both the corporate and shareholder levels) that generally
results from investment in a regular corporation. However, the Trust will be
subject to federal income tax as follows: First, the Trust will be taxed at
regular corporate rates on any undistributed real estate investment trust
taxable income, including undistributed net capital gains. Second, under
certain circumstances, the Trust may be subject to the "alternative minimum
tax" on its items of tax preference. Third, if the Trust has (i) net income
from the sale or other disposition of "foreclosure property" which is held
primarily for sale to customers in the ordinary course of business or (ii)
other non-qualifying income from foreclosure property, it will be subject to
tax at the highest corporate rate on such income. Fourth, if the Trust has net
income from prohibited transactions (which are, in general, certain sales or
other dispositions of property held primarily for sale to customers in the
ordinary course of business other than foreclosure property), such income will
be subject to a 100% tax. Fifth, if the Trust should fail to satisfy the 75%
gross income test or the 95% gross income test (as discussed below), but has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on an amount equal
to (a) the gross income attributable to the greater of the amount by which the
Trust fails the 75% or 95% test, multiplied by (b) a fraction intended to
reflect the Trust's profitability. Sixth, if the Trust should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net income for
such year, and (iii) any undistributed taxable income from prior periods, the
Trust would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if the Trust
acquires any asset from a C Corporation (i.e., generally a corporation subject
to full corporate-level tax) in certain transactions in which the basis of the
asset in the hands of the Trust is determined by reference to the basis of the
asset (or any other property) in the hands of the C corporation, and the Trust
recognizes gain on the disposition of such asset during the 10-year period (the
"Recognition Period") beginning on the date on which such asset was acquired by
the Trust, then, to the extent of the excess, if any, of the fair market value
over the adjusted basis of any such asset as of the beginning of the
Recognition Period (the "Built-in Gain"), such gain will be subject to tax at
the highest regular corporate rate pursuant to Internal Revenue Service ("IRS")
regulations that have not yet been promulgated.
Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) which is managed by one or more trustees or directors,
(2) the beneficial ownership of which is evidenced by transferable shares, or
by transferable certificates of beneficial interest, (3) which would be taxable
as a domestic corporation, but for Section 856 through 859 of the Code, (4)
which is neither a financial institution nor an insurance company subject to
certain provisions of the Code, (5) the beneficial ownership of which is held
by 100 or more persons, (6) during the last half of each taxable year, not more
than 50% in value of the outstanding stock of which is owned, directly or
constructively, by five or fewer individuals (as defined in the Code) and (7)
which meets certain other tests, described below, regarding the nature of its
income and assets. The Code provides that conditions (1) to (4) must be met
during the entire taxable year and that condition (5) must be met during at
least 335 days of a taxable year of 12 months, or during a proportionate part
of a taxable year of less than 12 months. Conditions (5) and (6) will not apply
until after the first taxable year for which an election is made to be taxed as
a REIT.
The Trust has satisfied condition (5) and believes that it has issued
sufficient shares to allow it to satisfy condition (6). In addition, the
Trust's Declaration of Trust, as amended, provides for restrictions regarding
ownership and transfer of the Trust's capital stock, which restrictions are
intended to assist the Trust in continuing to satisfy the share ownership
requirements described in (5) and (6) above. The ownership and transfer
restrictions pertaining to a particular series of Preferred Shares are
described in "Description of Preferred Shares--Restrictions on Ownership."
The Trust owns and operates a number of properties through subsidiaries. Code
Section 856(i) provides that a corporation which is a "qualified REIT
subsidiary" shall not be treated as a separate corporation, and all assets,
liabilities, and items of income, deduction, and credit of a "qualified REIT
subsidiary" shall be
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<PAGE>
treated as assets, liabilities and such items (as the case may be) of the REIT.
Thus, in applying the requirements described herein, the Trust's "qualified
REIT subsidiaries" will be ignored, and all assets, liabilities and items of
income, deduction, and credit of such subsidiaries will be treated as assets,
liabilities and items of the Trust.
Income Tests. In order to maintain qualification as a REIT, the Trust
annually must satisfy three gross income requirements. First, at least 75% of
the Trust's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types
of temporary investments. Second, at least 95% of the Trust's gross income
(excluding gross income from prohibited transactions) for each taxable year
must be derived from such real property investments, dividends, interest and
gain from the sale or disposition of stock or securities (or from any
combination of the foregoing). Third, short-term gain from the sale or other
disposition of stock or securities, gain from prohibited transactions and gain
on the sale or other disposition of real property held for less than four years
(apart from involuntary conversions and sales of foreclosure property) must
represent less than 30% of the Trust's gross income (including gross income
from prohibited transactions) for each taxable year.
Rents received by the Trust will qualify as "rents from real property" in
satisfying the gross income requirements for a REIT described above only if
several conditions are met. First, the amount of rent must not be based in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "rents from
real property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Second, the Code provides that rents received
from a tenant will not qualify as "rents from real property" in satisfying the
gross income tests if the real estate investment trust, or an owner of 10% or
more of the REIT, directly or constructively owns 10% or more of such tenant (a
"Related Party Tenant"). Third, if rent attributable to personal property
leased in connection with a lease of real property is greater than 15% of the
total rent received under the lease, then the portion of rent attributable to
such personal property will not qualify as "rents from real property." Finally,
for rents received to qualify as "rents from real property," the REIT generally
must not operate or manage the property or furnish or render services to the
tenants of such property, other than through an independent contractor from
whom the REIT derives no revenue; provided, however, the Trust may directly
perform certain services that are "usually or customarily rendered" in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant" of the property. The Trust does not and
will not charge rent for any property that is based in whole or in part on the
income or profits of any person (except by reason of being based on a
percentage of receipts of sales, as described above), the Trust does not and
will not rent any property to a Related Party Tenant, and the Trust does not
and will not derive rental income attributable to personal property (other than
personal property leased in connection with the lease of real property, the
amount of which is less than 15% of the total rent received under the lease).
The Trust directly performs services under certain of its leases.
The term "interest" generally does not include any amount received or accrued
(directly or indirectly) if the determination of such amount depends in whole
or in part on the income or profits of any person. However, an amount received
or accrued generally will not be excluded from the term "interest" solely by
reason of being based on a fixed percentage or percentages of receipts or
sales.
If the Trust fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such year
if it is entitled to relief under certain provisions of the Code. These relief
provisions will generally be available if the Trust's failure to meet such
tests was due to reasonable cause and not due to willful neglect, the Trust
attaches a schedule of the sources of its income to its federal income tax
return, and any incorrect information on the schedule was not due to fraud with
intent to evade tax. It is not possible, however, to state whether in all
circumstances the Trust would be entitled to the benefit of these relief
provisions. As discussed above under "--General," even if these relief
provisions apply, a tax would be imposed with respect to the excess net income.
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<PAGE>
Asset Tests. The Trust, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of the Trust's total assets must be represented by real
estate assets (including (i) assets held by the Trust's qualified REIT
subsidiaries and the Trust's allocable share of real estate assets held by
partnerships in which the Trust owns an interest and (ii) stock or debt
instruments held for not more than one year purchased with the proceeds of a
stock offering or long-term (at least five years) debt offering of the Trust),
cash, cash items and government securities. Second, not more than 25% of the
Trust's total assets may be represented by securities other than those in the
75% asset class. Third, of the investments included in the 25% asset class, the
value of any one issuer's securities owned by the Trust may not exceed 5% of
the value of the Trust's total assets and the Trust may not own more than 10%
of any one issuer's outstanding voting securities.
The Trust currently has numerous wholly-owned subsidiaries. As set forth
above, the ownership of more than 10% of the voting securities of any one
issuer by a REIT is prohibited by the asset tests. However, if the Trust's
subsidiaries are "qualified REIT subsidiaries" as defined in the Code, such
subsidiaries will not be treated as separate corporations for federal income
tax purposes. Thus, the Trust's ownership of stock of a "qualified REIT
subsidiary" will not cause the Trust to fail the asset tests.
Annual Distribution Requirements. The Trust, in order to qualify as a REIT,
is required to distribute dividends (other than capital gain dividends) to its
shareholders in an amount at least equal to (A) the sum of (i) 95% of the
Trust's "REIT taxable income" (computed without regard to the dividends paid
deduction and the Trust's net capital gain) and (ii) 95% of the net income
(after tax), if any, from foreclosure property, minus (B) the sum of certain
items of non-cash income. In addition, if the Trust disposes of any asset
during a Recognition Period, the Trust will be required, pursuant to IRS
regulations which have not yet been promulgated, to distribute at least 95% of
the Built-in Gain (after tax), if any, recognized on the disposition of such
asset. Such distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before the Trust timely
files its tax return for such year and if paid on or before the first regular
dividend payment after such declaration. To the extent that the Trust does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "real estate investment trust taxable income," as adjusted,
it will be subject to tax thereon at regular ordinary and capital gain
corporate tax rates. Furthermore, if the Trust should fail to distribute during
each calendar year at least the sum of (i) 85% of its REIT ordinary income for
such year, (ii) 95% of its REIT capital gain income for such year, and (iii)
any undistributed taxable income from prior periods, the Trust would be subject
to a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. The Trust intends to make timely distributions sufficient
to satisfy this annual distribution requirement.
It is possible that the Trust, from time to time, may not have sufficient
cash or other liquid assets to meet the above distribution requirements due to
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at taxable income of the Trust. In the event that
such timing differences occur, in order to meet the 95% distribution
requirement, the Trust may find it necessary to arrange for short-term, or
possibly long-term borrowings or to pay dividends in the form of taxable stock
dividends.
Under certain circumstances, the Trust may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends"
to stockholders in a later year, which may be included in the Trust's deduction
for dividends paid for the earlier year. Thus, the Trust may be able to avoid
being taxed on amounts distributed as deficiency dividends; however, the Trust
will be required to pay interest based upon the amount of any deduction taken
for deficiency dividends.
FAILURE TO QUALIFY
If the Trust fails to qualify for taxation as a REIT in any taxable year, and
the relief provisions do not apply, the Trust will be subject to tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. Distributions to shareholders in any year in which the Trust
fails to qualify
33
<PAGE>
will not be deductible by the Trust nor will they be required to be made. In
such event, to the extent of current and accumulated earnings and profits, all
distributions to shareholders will be taxable as ordinary income and, subject
to certain limitations of the Code, corporate distributees may be eligible for
the dividends received deduction. Unless entitled to relief under specific
statutory provisions, the Trust will also be disqualified from taxation as a
REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether in all circumstances the Trust
would be entitled to such statutory relief.
PLAN OF DISTRIBUTION
The Trust may sell the Offered Securities to one or more underwriters for
public offering and sale by them or may sell the Offered Securities to
investors directly or through agents. Any such underwriter
or agent involved in the offer and sale of the Offered Securities will be named
in the applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Trust also may offer and sell
the Offered Securities in exchange for one or more of its then outstanding
issues of debt or convertible debt securities. The Trust also may, from time to
time, authorize underwriters acting as the Trust's agents to offer and sell the
Offered Securities upon the terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from the
Trust in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of Offered Securities for whom they may act as
agent. Underwriters may sell Offered Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by the Trust to underwriters or agents in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Trust, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act.
If so indicated in a Prospectus Supplement, the Trust will authorize agents,
underwriters or dealers to solicit offers by certain institutional investors to
purchase Offered Securities of the series to which such Prospectus Supplement
relates providing for payment and delivery on a future date specified in such
Prospectus Supplement. There may be limitations on the minimum amount which may
be purchased by any such institutional investor or on the portion of the
aggregate principal amount of the particular Offered Securities which may be
sold pursuant to such arrangements. Institutional investors to which such
offers may be made, when authorized, include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and such other institutions as may be approved by the
Trust. The obligations of any such purchasers pursuant to such delayed delivery
and payment arrangements will not be subject to any conditions except that (i)
the purchase by an institution of the particular Offered Securities shall not
at the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject, and (ii) if the particular
Offered Securities are being sold to underwriters, the Trust shall have sold to
such underwriters the total principal amount of such Offered Securities or
number of Warrants less the principal amount or number thereof, as the case may
be, covered
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<PAGE>
by such arrangements. Underwriters will not have any responsibility in respect
of the validity of such arrangements or the performance of the Trust or such
institutional investors thereunder.
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for the Trust and its subsidiaries in
the ordinary course of business.
ERISA MATTERS
The Trust may be considered a "party in interest" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and a
"disqualified person" under corresponding provisions of the Code with respect
to certain employee benefit plans. Certain transactions between an employee
benefit plan and a party in interest or disqualified person may result in
"prohibited transactions" within the meaning of ERISA and the Code, unless such
transactions are effected pursuant to an applicable exemption. Any employee
benefit plan or other entity subject to such provisions of ERISA or the Code
proposing to invest in the Offered Securities should consult with its legal
counsel.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Trust by
Robinson Silverman Pearce Aronsohn & Berman, New York, New York. Robinson
Silverman Pearce Aronsohn & Berman will rely on Goodwin, Procter & Hoar,
Boston, Massachusetts, as to matters of Massachusetts law, including the legal
authorization and issuance of the Offered Securities. Certain legal matters in
connection with the Offered Securities will be passed upon for any
underwriters, dealers or agents by Brown & Wood, New York, New York. Altheimer
& Gray, Chicago, Illinois, has acted as counsel to the Trust on tax and certain
other matters. Norman Gold, a member of Altheimer & Gray, is a Trustee. Mr.
Gold beneficially owns 10,899 Common Shares.
EXPERTS
The consolidated balance sheets as of July 31, 1994 and 1993 and the
consolidated statements of income, changes in shareholders' equity, and cash
flows and the consolidated financial statement schedules of the Trust for each
of the three years in the period ended July 31, 1994, which appear in the
Annual Report on the Form 10-K incorporated by reference in this Prospectus,
have been incorporated herein in reliance on the report of Coopers & Lybrand,
independent accountants, given on the authority of that firm as experts in
accounting and auditing. The historical summary of revenues and certain
operating expenses of certain properties acquired by the Trust for the year
ended October 31, 1993 appearing in the Trust's Report on Form 8-K/A dated
September 1, 1994 and the historical summary of revenues and certain operating
expenses of certain properties acquired by the Trust for the year ended
December 31, 1993 appearing in the Trust's Report on Form 8-K/A dated October
6, 1994, have been audited by Eichler Bergsman & Co., LLP, independent
accountants, as set forth in their reports thereon, included therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such reports given the authority of such
firm as experts in accounting and auditing.
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NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNEC-
TION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR IN THE
PROSPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF. THIS PROSPEC-
TUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Trust................................................................. S-3
Recent Developments....................................................... S-3
Ratios of Earnings to Fixed Charges....................................... S-4
Use of Proceeds........................................................... S-5
Capitalization............................................................ S-5
Selected Financial Data................................................... S-6
Business.................................................................. S-7
Management................................................................ S-18
Description of the Notes.................................................. S-20
Underwriting.............................................................. S-22
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Trust................................................................. 3
Ratios of Earnings to Fixed Charges....................................... 4
Use of Proceeds........................................................... 4
Description of Debt Securities............................................ 4
Description of Preferred Shares........................................... 19
Description of Depositary Shares.......................................... 24
Description of Common Shares.............................................. 28
Description of Warrants................................................... 29
Certain Federal Income Tax Considerations to the Trust of its REIT
Election................................................................. 30
Plan of Distribution...................................................... 34
ERISA Matters............................................................. 35
Legal Opinions............................................................ 35
Experts................................................................... 35
</TABLE>
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$100,000,000
NEW PLAN
REALTY TRUST
% SENIOR NOTES DUE APRIL , 200_
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
MARCH , 1995
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