<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EXCEL REALTY TRUST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
MARYLAND 16955 VIA DEL CAMPO, SUITE 100 33-0160389
STATE OR OTHER JURISDICTION OF SAN DIEGO, CALIFORNIA 92127 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) (619) 485-9400 IDENTIFICATION NO.)
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RICHARD B. MUIR
EXECUTIVE VICE PRESIDENT AND SECRETARY
16955 VIA DEL CAMPO, SUITE 100
SAN DIEGO, CALIFORNIA 92127
(619) 485-9400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
SCOTT N. WOLFE, ESQ. THOMAS R. SMITH, JR., ESQ.
LATHAM & WATKINS BROWN & WOOD
701 B STREET, SUITE 2100 ONE WORLD TRADE CENTER, 56TH FLOOR
SAN DIEGO, CALIFORNIA 92101 NEW YORK, NEW YORK 10048
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend of interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
==========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT AGGREGATE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(2) UNIT(3) PRICE(2)(3) FEE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4)................................
Preferred Stock, par value $0.01 per share(5).....
Depositary Shares representing Preferred
Stock(6)........................................ $500,000,000 (8) $500,000,000 $151,516(9)
Common Stock, par value $.01 per share(7).........
Common Stock Warrants.............................
Preferred Stock Warrants..........................
Depositary Share Warrants.........................
Debt Warrants.....................................
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</TABLE>
(Footnotes on next page)
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<PAGE> 2
(1) Offered Securities registered hereunder may be sold separately, together or
as units with other Offered Securities registered hereunder.
(2) In U.S. dollars or the equivalent thereof at the time of sale for any Debt
Security denominated in one or more foreign currencies or units of two or
more foreign currencies or composite currencies (such as European Currency
Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for shares of Common Stock or
Preferred Stock that are issued upon conversion of Debt Securities,
Preferred Stock or Depositary Shares registered hereunder. The aggregate
maximum public offering price of all Offered Securities issued pursuant to
this Registration Statement will not exceed $500,000,000. Debt Securities
may be issued with original issue discount such that the aggregate initial
public offering price will not exceed $500,000,000.
(4) Including Debt Securities issuable upon exercise of Warrants to purchase
Debt Securities registered hereunder.
(5) Including such indeterminate number of shares of Preferred Stock as may from
time to time be issued at indeterminate prices or issuable upon conversion
of Debt Securities or upon exercise of Warrants to purchase Preferred Stock
issued hereunder.
(6) To be represented by Depositary Receipts representing an interest in all or
a specified portion of a share of Preferred Stock. Includes such
indeterminate number of Depositary Shares as may be issued upon exercise of
Warrants to purchase Depositary Shares.
(7) Including such indeterminate number of shares of Common Stock as may from
time to time be issued at indeterminate prices or issuable upon conversion
of Debt Securities, Preferred Stock or Depositary Shares registered
hereunder or upon exercise of the Warrants to purchase Common Stock
registered hereunder, as the case may be.
(8) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(9) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 4, 1997
PROSPECTUS
EXCEL REALTY TRUST, INC.
$500,000,000
DEBT SECURITIES, PREFERRED STOCK,
DEPOSITARY SHARES, COMMON STOCK AND WARRANTS
Excel Realty Trust, Inc. ("Excel" or the "Company") may from time to time
offer in one or more series (i) its unsecured senior debt securities (the "Debt
Securities"), (ii) shares or fractional shares of its preferred stock, par value
$.01 per share (the "Preferred Stock"), (iii) shares of its Preferred Stock
represented by depositary shares (the "Depositary Shares"), (iv) shares of its
common stock, par value $.01 per share (the "Common Stock"), or (v) warrants to
purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities
(the "Warrants"), with an aggregate initial public offering price of up to
$500,000,000 on terms to be determined at the time of offering. The Debt
Securities, Preferred Stock, Depositary Shares, Common Stock 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, currency of
denomination and payment, 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 Company or repayment at the option of the Holder, terms for
sinking fund payments, terms for conversion into Preferred Stock or Common
Stock, and any initial public offering price; (ii) in the case of Preferred
Stock, the specific title and stated value, any dividend, liquidation,
redemption, conversion, voting and other rights, and any initial public offering
price; (iii) in the case of Depositary Shares, the fractional share of Preferred
Stock represented by each such Depositary Share; (iv) in the case of Common
Stock, any initial public offering price; and (v) in the case of Warrants, the
securities as to which such Warrants may be exercised, the duration, offering
price, exercise price and detachability. In addition, such specific terms may
include limitations on actual and constructive ownership and restrictions on
transfer of the Offered Securities, in each case as may be appropriate to
preserve the status of the Company 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 Company, 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.
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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.
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The date of this Prospectus is , 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company 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 Company's Exchange
Act file number is 1-12244. The Registration Statement, the exhibits and
schedules forming a part thereof and the reports, proxy statements and other
information filed by the Company 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. Electronic reports, proxy statements and other information filed through
the Commission's Electronic Data Gathering, Analysis and Retrieval system are
publicly available through the Commission's Web site (http://www.sec.gov). In
addition, the Company's Common Stock and Series A Preferred Stock (as defined
below) are listed on the New York Stock Exchange and similar information
concerning the Company can be inspected and copied at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company 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 Company 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 Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. Annual Report on Form 10-K for the fiscal year ended December 31,
1996, filed with the Commission on March 10, 1997;
b. Current Report on Form 8-K, filed with the Commission on January
17, 1997;
c. Current Report on Form 8-K/A, filed with the Commission on January
22, 1997;
d. Current Report on Form 8-K, filed with the Commission on February
7, 1997;
e. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the Company's fiscal year ended December 31,
1996;
f. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed with the Commission on
July 30, 1993; and
g. The description of the Company's Series A Preferred Stock contained
in the Company's Registration Statement on Form 8-A, filed with the
Commission on January 30, 1997.
All documents filed by the Company 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 part hereof
from the date of filing such documents.
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
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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 of the Offered
Securities, to whom this Prospectus is delivered, upon written or oral request.
Requests should be directed to the Secretary of the Company, 16955 Via Del
Campo, Suite 100, San Diego, California 92127 (telephone number: (619)
485-9400).
THE COMPANY
The Company is a self-administered, self-managed REIT which acquires, owns
and manages neighborhood and community shopping centers and other retail and
commercial properties which are primarily leased on a long-term basis to major
retail companies throughout the United States. As of December 31, 1996, the
Company owned or managed 42 shopping centers (the "Shopping Centers"), 67 single
tenant properties (the "Single Tenant Properties"), three commercial properties
and office buildings (the "Commercial Properties") and one additional property
which is held for disposition. The Shopping Centers consist of neighborhood and
community shopping centers which typically range from 100,000 to 200,000 square
feet in size. The Single Tenant Properties typically are either anchor stores
within shopping centers not owned by the Company or free standing properties
located in commercial areas, with triple net leases which require the lessee to
be responsible for substantially all of the costs and expenses associated with
the ongoing maintenance of the property, including but not limited to property
taxes, insurance and common area maintenance. The Commercial Properties consist
of office buildings and commercial properties which the Company typically
purchases at an attractive price to take advantage of a distressed situation or
underutilized space. The Shopping Centers, Single Tenant Properties and
Commercial Properties accounted for approximately 67%, 32% and 1%, respectively,
of the annualized base rental income ("ABR") of the Company at December 31,
1996. As of December 31, 1996, the Company's 112 operating properties were
located in 27 states, contained approximately 8.2 million square feet of gross
leasable area ("GLA"), had an average age of seven years and were 96.6% leased.
The Company emphasizes investments in retail properties where a substantial
portion of such properties' GLA is subject to long-term net leases to national
or regional retail tenants. The Company seeks to lease to national or regional
retail tenants that market basic goods and services to consumers and enjoy a
leading position in their respective industries.
The Company's primary objective is to acquire, own and manage a portfolio
of commercial retail properties that will provide cash for quarterly
distributions to stockholders while protecting investor capital and providing
potential for capital appreciation. The Company seeks to achieve this objective
by (i) aggressively managing its existing properties, (ii) continuing to acquire
well-located neighborhood and community shopping centers with tenants that have
a national or regional presence and an established credit quality, (iii)
disposing of mature properties to continually update its core property
portfolio, and (iv) continuing to maintain a strong and flexible financial
position to facilitate growth.
The Company has elected to be taxed as a REIT for federal income tax
purposes commencing with its taxable year ended December 31, 1987, and believes
that, commencing with such taxable year, it has been organized and has operated
in conformity with the requirements for qualification as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"). Although the Company
believes that it will continue to operate in such a manner, no assurance can be
given that the Company will continue to qualify as a REIT. Qualification as a
REIT involves the application of highly technical and complex Code provisions
for which there are only limited judicial or administrative interpretations. If
in any taxable year the Company were to fail to qualify as a REIT, the Company
would not be allowed a deduction for distributions to stockholders in computing
taxable income and would be subject to federal taxation at regular corporate
rates. As a result, such a failure would adversely affect the Company's ability
to make distributions to its stockholders and could have an adverse affect on
the market value and marketability of the Offered Securities.
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To ensure that the Company qualifies as a REIT, transfer of the shares of
Common Stock and Preferred Stock is subject to certain restrictions, and actual
or constructive ownership of Common Stock or Preferred Stock by any single
person is limited to 9.8% by value of such Common Stock or Preferred Stock,
subject to certain exceptions. The Company's Charter provides that any purported
transfer in violation of the above-described ownership limitations shall be void
ab initio.
The Company was incorporated under the laws of California in 1985 and
reincorporated as a Maryland corporation in July 1993. The Company's executive
offices are located at 16955 Via Del Campo, Suite 100, San Diego, California
92127, and the Company's telephone number is (619) 485-9400.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the years ended
December 31, 1996, 1995, 1994, 1993 and 1992 was 2.31, 1.65, 1.98, 1.30 and
1.20, respectively. Prior to December 31, 1996, the Company had not issued any
Preferred Stock. Therefore, the ratio of earnings to combined fixed charges and
dividend requirements are unchanged from the foregoing ratios.
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income (loss) before
real estate sales, income taxes and extraordinary items. Fixed charges consist
of interest costs, whether expensed or capitalized, the interest component of
rental expense, and amortization and write-off of debt discounts and issue
costs, whether expensed or capitalized.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Offered Securities
for general corporate purposes, which may include the acquisition of
multi-tenant retail properties, single tenant properties or commercial
properties as suitable opportunities arise, the expansion and improvement of
certain properties in the Company's portfolio, and the repayment of certain
outstanding indebtedness at such time.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of May 8,
1995, as amended by the First Supplemental Indenture dated as of April 4, 1997,
and as further amended, supplemented or modified from time to time (the
"Indenture"), between the Company and State Street Bank and Trust Company of
California, N.A. (as successor to The First National Bank of Boston), as trustee
(the "Trustee"). The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part and is available for inspection at
the corporate trust office of the Trustee at 725 South Figueroa Street, Suite
3100, Los Angeles, California 90017 or as described above under "Available
Information." The Indenture is subject to, and governed by, the Trust Indenture
Act of 1939, as amended (the "TIA"). The statements made hereunder relating to
the Indenture and the Debt Securities to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indenture and such Debt Securities. All section references appearing herein are
to sections of the Indenture, and capitalized terms used but not defined herein
shall have the respective meanings set forth in the Indenture.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company. The 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 Directors of the Company 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,
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without the consent of the Holders of the Debt Securities of such series, for
issuances of additional Debt Securities of such series (Section 301).
The 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
the 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 Indenture separate and apart from the
trust administered by any other Trustee (Section 609), 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 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 aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) 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 Stock or Preferred
Stock, or the method by which any such portion shall be determined;
(4) if convertible, in connection with the preservation of the
Company's status as a REIT, any applicable limitations on the ownership or
transferability of the Common Stock or Preferred Stock into which such Debt
Securities are convertible;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(6) 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;
(7) 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, 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;
(8) 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 Company in respect of such
Debt Securities and the Indenture may be served;
(9) the date or dates on which, or period or periods within which, the
price or prices at which and the terms and conditions upon which such Debt
Securities may be redeemed, as a whole or in part, at the option of the
Company, if the Company is to have such an option;
(10) the obligation, if any, of the Company 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 date or dates on
which, or 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, as a whole or in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be units of two
or more foreign currencies or a composite currency or currencies, and the
terms and conditions relating thereto;
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(12) 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
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;
(13) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default and notice and
waiver thereof or covenants set forth in the Indenture;
(14) whether such Debt Securities will be issued in certificated or
book-entry form;
(15) 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 terms and conditions relating thereto;
(16) the applicability, if any, of the defeasance and covenant
defeasance provisions of Article XIV of the Indenture;
(17) if such Debt Securities are to be issued upon the exercise of
debt warrants, the time, manner and place for such Debt Securities to be
authenticated and delivered;
(18) the terms and conditions, if any, upon which such Debt Securities
may be convertible into Common Stock or Preferred Stock of the Company 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;
(19) whether and under what circumstances the Company will pay
Additional Amounts as contemplated in the Indenture on such Debt Securities
in respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt Securities in
lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the 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.
Except as set forth below under "Certain Covenants -- Limitations on
Incurrence of Debt" and "Merger, Consolidation or Sale of Assets," the Indenture
does not contain any provisions that would limit the ability of the Company to
incur indebtedness or to substantially reduce or eliminate the Company's assets,
which may have an adverse affect on the Company's ability to service its
indebtedness (including the Debt Securities) or that would afford Holders of
Debt Securities protection in the event of a highly leveraged or similar
transaction involving the Company or in the event of a change of control.
However, restrictions on ownership and transfers of the Company's Common Stock
and Preferred Stock designed to preserve its status as a REIT may act to prevent
or hinder a change of control. See "Description of Common Stock" and
"Description of Preferred Stock." 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 Company that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
A significant number of the Company's properties are owned through its
subsidiaries. Therefore, the rights of the Company and its creditors, including
holders of Debt Securities, to participate in the assets of such subsidiaries
upon the liquidation or recapitalization of such subsidiaries or otherwise will
be subject to the prior claims of such subsidiaries' respective creditors
(except to the extent that claims of the Company itself as a creditor may be
recognized).
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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 Trustee, initially located
at 725 South Figueroa Street, Suite 3100, Los Angeles, California 90017,
provided that, at the option of the Company, 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
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 Indenture.
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 Trustee referred to above.
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 or exchange thereof at the corporate
trust office of the Trustee referred to above. 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
Company 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 Company with respect to any series of
Debt Securities, the Company 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 Company will be required to maintain a
transfer agent in each Place of Payment for such series. The Company may at any
time designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).
Neither the Company nor the 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).
MERGER, CONSOLIDATION OR SALE OF ASSETS
For so long as the Debt Securities are outstanding, the Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other corporation, only to the extent that
(a) either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall be a corporation duly organized and validly existing under the laws of the
United States or any state thereof or the District of Columbia, and 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 Indenture;
(b) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any
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Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default under the
Indenture, 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 Trustee (Sections 801 and 803).
CERTAIN COVENANTS
The Indenture provides that the Company will comply with the covenants set
forth below so long as the Debt Securities are outstanding.
Limitations on Incurrence of Debt. The Company 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, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis determined in accordance with generally accepted accounting
principles is greater than 60% of the sum of (i) Undepreciated Real Estate
Assets (as defined below) as of the end of the calendar quarter covered in the
Company'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 and (ii) the purchase price of any real estate assets
acquired by the Company or any Subsidiary since the end of such calendar
quarter, including those obtained in connection with the incurrence of such
additional Debt (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
Company 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 Company or any Subsidiary if, immediately
after giving effect to the incurrence of such additional Debt, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis which is secured by any mortgage, lien, charge, pledge,
encumbrance or security interest on property of the Company or any Subsidiary is
greater than 40% of the sum of (i) Undepreciated Real Estate Assets as of the
end of the calendar quarter covered in the Company'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 and (ii) the
purchase price of any real estate assets acquired by the Company or any
Subsidiary since the end of such calendar quarter, including those obtained in
connection with the incurrence of such additional Debt (Section 1004).
In addition to the foregoing limitations on the incurrence of Debt, the
Company 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 Company and all Subsidiaries to be outstanding immediately after the
incurring of such additional Debt (Section 1004).
Maintenance of Unencumbered Total Asset Value. The Company will at all
times maintain an Unencumbered Total Asset Value (as defined below) in an amount
not less than 150% of the aggregate principal amount of all outstanding Debt of
the Company and its Subsidiaries that is unsecured (Section 1014).
Existence. Except as permitted under "Merger, Consolidation or Sale of
Assets," the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and that of
each of its Subsidiaries and their respective rights (charter and statutory) and
franchises; provided, however, that the foregoing shall not obligate the Company
or any Subsidiary to preserve any right or franchise (or, in the case of any
Subsidiary, its existence) if the Company or such Subsidiary 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 1006).
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Maintenance of Properties. The Company 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 Company 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 Company and its Subsidiaries shall not be prevented
from selling or otherwise disposing for value its properties in the ordinary
course of business (Section 1007).
Insurance. The Company will, and will cause each of its Subsidiaries to,
keep all of its insurable properties insured against loss or damage at least
equal to their then full insurable value with insurers of recognized
responsibility and having a rating of at least A:VIII in Best's Key Rating Guide
(Section 1008).
Payment of Taxes and Other Claims. The Company will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company 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 Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings (Section 1009).
Provision of Financial Information. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Company will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which the Company would have been required
to file with the Commission pursuant to such Section 13 or 15(d) (the "Financial
Statements") if the Company 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 Company would have been required so to file such documents if the
Company were so subject. The Company 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 Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by the
Company 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
1010).
Additional Covenants. Any additional covenants of the Company with respect
to a series of the Debt Securities will be set forth in the Prospectus
Supplement relating thereto.
As used herein,
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted for (a) interest on Debt of the Company
and its Subsidiaries, (b) provision for taxes of the Company 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 Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company 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 Company or any Subsidiary,
(iii) letters of credit or
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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 Company or any Subsidiary as
lessee which is reflected on the Company'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 Company's Consolidated Balance Sheet in accordance with generally
accepted accounting principles, and also includes, to the extent not otherwise
included, any obligation by the Company 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 Company or any Subsidiary) (it being understood that Debt shall
be deemed to be incurred by the Company or any Subsidiary whenever the Company
or such Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof).
"Funds from Operations" for any period means the Consolidated Net Income of
the Company and its Subsidiaries for such period computed in accordance with
generally accepted accounting principles, excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
"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.
"Net Operating Income" means, with respect to any property, the gross
revenues derived from such property less direct property operating expenses (but
excluding depreciation, debt service, general and administrative expenses, and
any other such items of a non-recurring nature).
"Total Assets" as of any date means the greater of (a) the sum of (i)
property Net Operating Income divided by 0.0975 and (ii) all other assets of the
Company and its Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles (but excluding intangibles), or
(b) the sum of (i) Undepreciated Real Estate Assets (as defined below) and (ii)
all other assets of the Company and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
(but excluding intangibles).
"Undepreciated Real Estate Assets" as of any date means the amount of real
estate assets of the Company 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 Total
Assets which are unencumbered by any mortgage, lien, charge, pledge or security
interest that secures the payment of any obligations under any Debt.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The 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 Company contained in the
Indenture (other than a covenant added to the 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 the Indenture; (e)
default under any evidence of indebtedness of the Company or any mortgage,
indenture or other instrument under which such indebtedness is issued or by
which such indebtedness is secured, which results in the acceleration of such
indebtedness prior to its maturity, if such indebtedness so accelerated exceeds
$10,000,000 in aggregate principal amount, but only if such indebtedness is not
discharged or such
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acceleration is not rescinded or annulled in accordance with the Indenture; (f)
certain events of bankruptcy, insolvency or reorganization, or court appointment
of a receiver, liquidator or trustee of the Company or any Significant
Subsidiary or either of its property; 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 Company.
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 Company (and to
the 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 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 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 Indenture, as the case may be) may rescind
and annul such declaration and its consequences if (a) the Company shall have
deposited with the 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 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 hereof), with respect to Debt Securities of such series (or of
all Debt Securities then Outstanding under the Indenture, as the case may be)
have been cured or waived as provided in the Indenture (Section 502). The
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 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 Indenture that cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security affected thereby
(Section 513).
The Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the 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 best interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the case of failure of the Trustee, 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 or to convert any of the Debt Securities in accordance with its
terms (if applicable) (Section 508).
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the 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 Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the 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
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conferred upon the Trustee. However, the Trustee may refuse to follow any
direction which is in conflict with any law or the 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 Company must
deliver to the Trustee a certificate, signed by one of several specified
officers, stating whether or not such officer has knowledge of any default under
the Indenture and, if so, specifying each such default and the nature and status
thereof (Section 1011).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the 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 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 change the manner of calculating the rate)
or amount of interest on, or any premium payable on redemption or repayment of,
any such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security or Indexed 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, or 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 or to convert any such Debt
Security in accordance with its terms (if applicable); (e) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the 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 the Indenture; (f) 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; or
(g) modify any of the conversion provisions applicable to any Debt Security in a
manner adverse to the Holder thereof (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 Company of certain
covenants in the Indenture (Section 1013).
Modifications and amendments of the Indenture may be made by the Company
and the Trustee without the consent of any Holder of Debt Securities for any of
the following purposes: (i) to evidence the succession of another Person to the
Company as obligor under the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of all or any series of Debt Securities
or to surrender any right or power conferred upon the Company in the Indenture;
(iii) to add Events of Default for the benefit of the Holders of all or any
series of Securities; (iv) to add or change any provisions of the 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 Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities 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 Common Stock or Preferred Stock of the Company; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture by more than one Trustee;
(ix) to cure any ambiguity, defect or inconsistency in the 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 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).
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The 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 amount of such Indexed Security on the issue date, unless
otherwise provided with respect to such Indexed Security pursuant to Section 301
of the Indenture, and (iv) Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any Affiliate of the Company or of such
other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of not
less than 10% in principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given as provided in the 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 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 not
less than 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 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 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 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 Indenture (Section
1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company 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 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
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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 date of redemption or
repayment, as the case may be (Section 401).
The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligation (i) 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, (ii) to convert the Debt Securities
in accordance with their terms (if applicable), (iii) to register the transfer
or exchange of such Debt Securities, (iv) to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, (v) to maintain an office or agency
in respect of such Debt Securities and (vi) 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 1010, inclusive, and
Section 1014 of the Indenture (being the restrictions described under "Certain
Covenants") or, if provided pursuant to Section 301 of the 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 Company with the 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 Company
has delivered to the Trustee an Opinion of Counsel (as specified in the
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 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 any such Government Obligation or the specific payment
of interest on or principal of any such Government Obligation evidenced by such
depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company 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 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
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of (and premium, if any) and interest on such Debt Security as they become due
out of the proceeds yielded by converting 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 currency, currency unit
or composite 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. 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 (Section 101).
In the event the Company 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
Sections 1004 to 1010, inclusive, and Section 1014 of the 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 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 Company 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 Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, 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 Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
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 "Depositary") identified in
the applicable Prospectus Supplement relating to such series. Global Securities
may be issued in either registered or bearer form and in either temporary or
permanent form. The specific terms of the depositary arrangement with respect to
a series of Debt Securities will be described in the applicable Prospectus
Supplement relating to such series.
DESCRIPTION OF COMMON STOCK
The Company has the authority to issue up to 100,000,000 shares of common
stock, par value $.01 per share (the "Common Stock"). At April 3, 1997, the
Company had outstanding 18,329,407 shares of Common Stock.
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement may
relate, including a Prospectus Supplement
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providing that Common Stock will be issuable upon conversion of Debt Securities
or Preferred Stock of the Company or upon the exercise of the Warrants to
purchase Common Stock issued by the Company. The statements below describing the
Common Stock are in all respects subject to and qualified in their entirety by
reference to the applicable provisions of the Company's Charter and Bylaws and
the Maryland General Corporation Law ("MGCL").
Subject to the preferential rights of any other shares or series of capital
stock, holders of the Company's Common Stock will be entitled to receive
dividends when, as and if authorized and declared by the Board of Directors of
the Company, out of funds legally available therefor. Payment and declaration of
dividends on the Common Stock and purchases of shares thereof by the Company may
be subject to certain restrictions if the Company fails to pay dividends on the
Preferred Stock. See "Description of Preferred Stock." Upon the distribution of
assets upon any liquidation, dissolution or winding up of the Company, holders
of Common Stock will be entitled to share equally and ratably in any assets
available for distribution to them, after payment or provision for payment of
all known debts and liabilities of the Company and any preferential amounts
owing with respect to any outstanding Preferred Stock. Subject to certain
provisions of Maryland law and the Company's Charter and Bylaws, each
outstanding share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of stockholders, including the election of directors, and,
except as otherwise required by law or except as provided with respect to any
other class or series of stock, the holders of such shares will possess the
exclusive voting power. Holders of Common Stock will not have cumulative voting
rights in the election of directors, which means that holders of more than 50%
of all of the shares of the Company's Common Stock voting for the election of
directors will be able to elect all of the directors if they choose to do so
and, accordingly, the holders of the remaining shares will be unable to elect
any directors. Holders of shares of Common Stock will not have preemptive
rights, which means they have no right to acquire any additional shares of
Common Stock that may be issued by the Company at a subsequent date. Holders of
Common Stock also will have no conversion, sinking fund, redemption, preference
or exchange rights. The Common Stock will, when issued, be fully paid and
nonassessable and will not be subject to preemptive or other similar rights.
RESTRICTIONS ON OWNERSHIP
With certain exceptions, the Company's Charter provides that no person may
own, actually or constructively, more than 9.8% by value of the Company's Common
Stock or Preferred Stock. See "Restrictions on Ownership of Capital Stock."
TRANSFER AGENT
The Registrar and Transfer Agent for the Company's Common Stock is The
First National Bank of Boston.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of Preferred Stock,
par value $.01 per share (the "Preferred Stock"), 4,600,000 shares of which have
been classified as 8 1/2% Series A Cumulative Convertible Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"). At April 3, 1997, the
Company had outstanding 4,600,000 shares of Series A Preferred Stock.
Under the Company's Charter, shares of Preferred Stock may be issued from
time to time, in one or more series, as authorized by the Board of Directors,
generally without the approval of the stockholders. Prior to issuance of shares
of each series, the Board of Directors is required by the MGCL and the Company's
Charter to adopt resolutions and file Articles Supplementary (the "Articles
Supplementary") with the State Department of Assessments and Taxation of
Maryland, fixing for each such series the designations, powers, preferences and
rights of the shares of such series and the qualifications, limitations or
restrictions thereon, including, but not limited to, dividend rights, dividend
rate or rates, conversion rights, voting rights, rights and terms of redemption
(including sinking fund provisions), the redemption price or prices, and the
liquidation preferences as are permitted by Maryland law. The Board of Directors
could authorize the issuance of shares
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of Preferred Stock with terms and conditions which could have the effect of
discouraging a takeover or other transaction which holders of some, or a
majority, of such shares might believe to be in their best interests or in which
holders of some, or a majority, of such shares might receive a premium for their
shares over the then market price of such shares.
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Charter (including the applicable
Articles Supplementary) and Bylaws and the MGCL.
GENERAL
Subject to limitations prescribed by Maryland law and the Company's Charter
and Bylaws, the Board of Directors is authorized to fix the number of shares
constituting each series of Preferred Stock 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 Directors or duly
authorized committee thereof. The Preferred Stock will, when issued, be fully
paid and nonassessable and will not have, or be subject to, any preemptive or
similar rights.
Reference is made to the Prospectus Supplement relating to the series of
Preferred Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of such Preferred
Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred Stock;
(4) Whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on such Preferred Stock shall
accumulate;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provisions for a sinking fund, if any, for such Preferred
Stock;
(7) The provisions for redemption, if applicable, of such Preferred
Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into Common Stock of the Company, including the
conversion price (or manner of calculation thereof) and conversion period;
(10) Whether interests in such Preferred Stock will be represented by
Depositary Shares;
(11) A discussion of federal income tax considerations applicable to
such Preferred Stock;
(12) In addition to those limitations described below, any other
limitations on actual and constructive ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of the
Company as a REIT; and
(13) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
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RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Stock of the Company, and to all equity securities ranking
junior to such Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; (ii) on a parity with all
equity securities issued by the Company the terms of which specifically provide
that such equity securities rank on a parity with the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company; and (iii) junior to all equity securities issued by the Company
the terms of which specifically provide that such equity securities rank senior
to the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company. As used in the Company's
Charter for these purposes, the term "equity securities" does not include
convertible debt securities.
DIVIDENDS
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will have the rights with respect to payment of dividends set forth below.
Holders of shares of the Preferred Stock of each series shall be entitled
to receive, when, as and if declared and authorized by the Board of Directors of
the Company, out of assets of the Company legally available for payment, cash
dividends at such rates 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 Company on such record dates
as shall be fixed by the Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will accumulate from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are non-cumulative, then the holders of such
series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company 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 shares of the Preferred Stock of any series are outstanding, no full
dividends shall be declared or paid or set apart for payment on the Preferred
Stock of the Company of any other series ranking, as to dividends, on a parity
with or junior to the Preferred Stock of such series for any period unless (i)
if such series of Preferred Stock has a cumulative dividend, full cumulative
dividends have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof irrevocably set apart for such payment on
the Preferred Stock of such series for all past dividend periods and the then
current dividend period or (ii) if such series of Preferred Stock 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 irrevocably set apart for such payment on the Preferred
Stock of such series. When dividends are not paid in full (or a sum sufficient
for such full payment is not so irrevocably set apart) upon the shares of
Preferred Stock of any series and the shares of any other series of preferred
stock ranking on a parity as to dividends with the Preferred Stock of such
series, all dividends declared upon shares of Preferred Stock of such series and
any other series of preferred stock ranking on a parity as to dividends with
such Preferred Stock shall be declared pro rata so that the amount of dividends
declared per share on the Preferred Stock of such series and such other series
of preferred stock shall in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of Preferred Stock of such
series (which shall not include any accumulation in respect of unpaid dividends
for prior dividend periods if such Preferred Stock does not have a cumulative
dividend) and such other series of preferred stock 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 Stock of such series which may be
in arrears.
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Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
irrevocably set apart for payment for all past dividend periods and the then
current dividend period and (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof irrevocably set apart for payment for the then current
dividend period, no dividends (other than in Common Stock or other capital stock
ranking junior to the Preferred Stock of such series as to dividends and upon
liquidation, dissolution or winding up of the Company) shall be declared or paid
or set aside for payment or other distribution shall be declared or made upon
the Common Stock or any other capital stock of the Company ranking junior to or
on a parity with the Preferred Stock of such series as to dividends or upon
liquidation, dissolution or winding up of the Company, nor shall any Common
Stock or any other capital stock of the Company ranking junior to or on a parity
with the Preferred Stock of such series as to dividends or upon liquidation,
dissolution or winding up of the Company 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 Company
(except by conversion into or exchange for other capital stock of the Company
ranking junior to the Preferred Stock of such series as to dividends and upon
liquidation, dissolution or winding up of the Company, and except for a
redemption or purchase or other acquisition of shares of Common Stock made for
purposes of an employee benefit plan of the Company or any subsidiary or as
provided for under the Company's Charter to protect the Company's status as a
REIT).
Any dividend payment made on shares of a series of Preferred Stock 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 shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
option of the Company, 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 Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company 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 Stock does 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 Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock 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 Stock shall
automatically and mandatorily be converted into shares of the applicable capital
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Stock
has a cumulative dividend, full cumulative dividends on all shares of any series
of Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof irrevocably set apart for
payment for all past dividend periods and the then current dividend period and
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends on the Preferred Stock of any series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
irrevocably set apart for payment for the then current dividend period, no
shares of any series of Preferred Stock shall be redeemed unless all outstanding
shares of Preferred Stock of such series are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase or acquisition of
shares of Preferred Stock of such series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Preferred
Stock of such series, and, unless (i) if such series of Preferred Stock has a
cumulative dividend, full cumulative dividends on all outstanding shares of any
series of Preferred Stock have been or
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contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof irrevocably set apart for payment for all past dividend periods
and the then current dividend period and (ii) if such series of Preferred Stock
does not have a cumulative dividend, full dividends on the Preferred Stock of
any series have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof irrevocably set apart for payment for
the then current dividend period, the Company shall not purchase or otherwise
acquire directly or indirectly any shares of Preferred Stock of such series
(except by conversion into or exchange for capital stock of the Company ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation, dissolution or winding up of the Company).
If fewer than all of the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company 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 Company that will not result in
violation of the ownership limitations set forth in the Charter.
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 a share of Preferred
Stock of any series to be redeemed at the address shown on the stock transfer
books of the Company. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Stock to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such Preferred
Stock 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 shares of Preferred Stock of
any series are to be redeemed, the notice mailed to each such holder thereof
shall also specify the number of shares of Preferred Stock to be redeemed from
each such holder. If notice of redemption of any shares of Preferred Stock has
been given and if the funds necessary for such redemption have been irrevocably
set apart by the Company in trust for the benefit of the holders of any shares
of Preferred Stock so called for redemption, then from and after the redemption
date dividends will cease to accrue on such shares of Preferred Stock, such
shares of Preferred Stock 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.
In addition, and the foregoing to the contrary notwithstanding, the shares
of Preferred Stock will be issued subject to the terms and provisions of the
Charter providing for a purchase option in favor of the Company in respect of
those shares, to protect the Company's status as a REIT.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the Company, the
holders of each series of Preferred Stock shall be entitled to receive out of
assets of the Company legally available for distribution to stockholders
liquidating distributions in the amount of the liquidation preference per share
(set forth in the applicable Prospectus Supplement and Articles Supplementary),
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 Stock does not have a cumulative dividend). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of Preferred Stock will have no right or claim to any of
the remaining assets of the Company. In the event that, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the legally available
assets of the Company are insufficient to pay the amount of the liquidating
distributions on all outstanding shares of Preferred Stock and the corresponding
amounts payable on all shares of other classes or series of capital stock of the
Company ranking on a parity with the Preferred Stock in the distribution of
assets upon liquidation, dissolution or winding up of the Company, then the
holders of the Preferred Stock 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.
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If liquidating distributions shall have been made in full to all holders of
shares of Preferred Stock, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital stock
ranking junior to the Preferred Stock upon liquidation, dissolution or winding
up of the Company, according to their respective rights and preferences and in
each case according to their respective number of shares. For such purposes, the
consolidation or merger of the Company with or into any other corporation, or
the sale, lease, transfer or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as indicated in the applicable Prospectus Supplement and
Articles Supplementary.
Whenever dividends on any shares of Preferred Stock shall be in arrears for
six or more consecutive quarterly periods, the number of directors then
constituting the Board of Directors of the Company, if not then previously
increased by reason of a similar arrearage with respect to any series of
Preferred Stock with like rights, will automatically be increased by two (2) and
the holders of each series of Preferred Stock (voting separately as a class with
all other series of Preferred Stock upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the election of two
additional directors of the Company at a special meeting of the shares of
Preferred Stock of any series so in arrears or at the next annual meeting of
stockholders, and at each subsequent annual meeting at which their successors
are to be elected, until (i) if such series of Preferred Stock has a cumulative
dividend, all dividends accumulated on such shares of Preferred Stock for the
past dividend periods and the then current dividend period shall have been fully
paid or declared and a sum sufficient for the payment thereof irrevocably set
apart for payment or (ii) if such series of Preferred Stock does not have a
cumulative dividend, four consecutive quarterly dividends shall have been fully
paid or declared and a sum sufficient for the payment thereof irrevocably set
apart for payment; whereupon, in either such case, either such directors shall
resign or their term of office shall expire, and the number of directors
constituting the Board of Directors shall be decreased accordingly.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock remain outstanding, the Company shall not, without the
affirmative vote or consent of the holders of at least 66 2/3% of the shares of
each series of Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting (such series voting separately as a
class), (i) authorize or create, or increase the authorized or issued amount of,
any class or series of capital stock ranking senior to such series of Preferred
Stock with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the Company or reclassify any
authorized capital stock of the Company 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 Company's Charter (including the Articles Supplementary for such series
of Preferred Stock), 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 Stock or the holders thereof; provided, however,
that any increase in the amount of the authorized Preferred Stock or the
creation or issuance of any other series of Preferred Stock, or any increase in
the amount of authorized shares of such series or any other series of Preferred
Stock, in each case ranking on a parity with or junior to the Preferred Stock of
such series with respect to payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up of the Company, 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 effected, all outstanding shares of such series of Preferred Stock 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.
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CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Common Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of shares of Common Stock into which the Preferred Stock is 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 Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Preferred Stock.
RESTRICTIONS ON OWNERSHIP
With certain exceptions, the Company's Charter provides that no person may
own, actually or constructively, more than 9.8% by value of the Company's Common
Stock or Preferred Stock. See "Restrictions on Ownership of Capital Stock."
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company 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 Stock, as specified in the applicable Prospectus
Supplement. Shares of Preferred Stock of each series represented by Depositary
Shares will be deposited under a separate Deposit Agreement (each, a "Deposit
Agreement") among the Company, the depositary named therein (the "Preferred
Stock 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 Stock represented by the Depositary Shares
evidenced by such Depositary Receipt, to all the rights and preferences of the
Preferred Stock 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 Stock by the Company to the Preferred Stock
Depositary, the Company will cause the Preferred Stock Depositary to issue, on
behalf of the Company, the Depositary Receipts. Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from the Company upon
request, and the statements made hereunder relating to the Deposit Agreement and
the Depositary Receipts to be issued thereunder are summaries of certain
provisions thereof and do not purport to be complete and are subject to, and
qualified in their entirety by reference to, all of the provisions of the
applicable Deposit Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock 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 Stock
Depositary.
In the event of a distribution other than in cash, the Preferred Stock
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 Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Stock converted into other securities.
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WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into other securities), 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 shares of the Preferred
Stock 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 Stock on
the basis of the proportion of Preferred Stock represented by each Depositary
Share as specified in the applicable Prospectus Supplement, but holders of such
shares of Preferred Stock 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 Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date the number of Depositary Shares representing shares of the
Preferred Stock so redeemed, provided the Company shall have paid in full to the
Preferred Stock Depositary the redemption price of the Preferred Stock 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 corresponding proportion of the redemption price and any other
amounts per share payable with respect to the Preferred Stock. 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
Company that will not result in a violation of the Ownership Limit (as defined
below).
From and after the date fixed for redemption, all dividends in respect of
the shares of Preferred Stock 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 and surrender thereof to the Preferred Stock Depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Receipts evidencing the Depositary Shares which represent such
Preferred Stock. 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 Stock) will be entitled to instruct the Preferred Stock Depositary
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by such holder's Depositary Shares. The Preferred Stock
Depositary will vote the amount of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all reasonable action which may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting the amount of
Preferred Stock 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 Stock 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 wilful misconduct of the
Preferred Stock Depositary.
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LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of each Depositary Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible into Common Stock or
any other securities or property of the Company. Nevertheless, if so specified
in the applicable Prospectus Supplement relating to an offering of Depositary
Shares, the Depositary Receipts may be surrendered by holders thereof to the
Preferred Stock Depositary with written instructions to the Preferred Stock
Depositary to instruct the Company to cause conversion of the Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipts into
whole shares of Common Stock, other shares of Preferred Stock of the Company or
other shares of stock, and the Company 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 Stock to effect such conversion. If the Depositary Shares evidenced
by a Depositary Receipt are to be converted in part only, a new Depositary
Receipt or Receipts will be issued for any Depositary Shares not to be
converted. No fractional shares of Common Stock will be issued upon conversion,
and if such conversion would result in a fractional share being issued, an
amount will be paid in cash by the Company equal to the value of the fractional
interest based upon the closing price of the Common Stock 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 Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
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 Stock will not be effective unless such amendment has been approved by
the existing holders of at least 66 2/3% of the Depositary Shares evidenced by
the Depositary Receipts then outstanding. No amendment shall impair the right,
subject to certain exceptions in the Depositary Agreement, of any holder of
Depositary Receipts to surrender any Depositary Receipt with instructions to
deliver to the holder the related Preferred Stock 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 Receipt, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby.
The Deposit Agreement may be terminated by the Company upon not less than
30 days' prior written notice to the Preferred Stock Depositary if (i) such
termination is necessary to preserve the Company's status as a REIT or (ii) a
majority of each series of Preferred Stock affected by such termination consents
to such termination, whereupon the Preferred Stock 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 Stock as are represented by the Depositary Shares evidenced
by such Depositary Receipts together with any other property held by the
Preferred Stock Depositary with respect to such Depositary Receipts. The Company
has agreed that if the Deposit Agreement is terminated to preserve the Company's
status as a REIT, then the Company will use its best efforts to list the
Preferred Stock 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, (ii) there shall have been a final distribution in respect of the
related Preferred Stock in connection with any liquidation, dissolution or
winding up of the Company and such distribution shall have been distributed to
the holders of Depositary Receipts evidencing the Depositary Shares representing
such Preferred Stock or (iii) each share of the related Preferred Stock shall
have been converted into securities of the Company not so represented by
Depositary Shares.
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CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock 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 DEPOSITORY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary. A successor
Preferred Stock 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 Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company 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
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of Preferred
Stock represented by the Depositary Shares), gross negligence or willful
misconduct, and the Company and the Preferred Stock Depositary will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of Preferred Stock represented
thereby unless satisfactory indemnity is furnished. The Company and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information provided by persons presenting shares of Preferred Stock
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.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
RESTRICTIONS ON OWNERSHIP
Holders of Depositary Receipts will be subject to the ownership
restrictions of the Company's Charter which provides, with certain exceptions,
that no person may own, actually or constructively, more than 9.8% by value of
the Company's Common Stock or Preferred Stock. See "Restrictions on Ownership of
Capital Stock."
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock, Depositary Shares or Common Stock. 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 Company and a warrant agent specified therein ("Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in
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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 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 or prices of such Warrants may be payable; (5) the
designation, amount and terms of the Offered Securities purchasable upon
exercise of such Warrants; (6) the designation and terms of the other Offered
Securities with which such Warrants are issued and the number of such Warrants
issued with each such security; (7) if applicable, the date on and after which
such Warrants and the Offered Securities purchasable upon exercise of such
Warrants will be separately transferable; (8) the price or prices at which and
currency or currencies in which the Offered Securities purchasable upon exercise
of such Warrants may be purchased; (9) the date on which the right to exercise
such Warrants shall commence and the date on which such right shall expire; (10)
the minimum or maximum amount of such Warrants which may be exercised at any one
time; (11) information with respect to book-entry procedures, if any; (12) a
discussion of certain Federal income tax considerations; and (13) any other
material terms of such Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Warrants.
RESTRICTIONS ON OWNERSHIP OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, not more than 50% in
value of its outstanding stock may be owned, actually or constructively, by five
or fewer individuals (as defined in the Code to include certain entities) during
the last half of a taxable year, and its 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 Company's Charter provides, subject to certain exceptions specified
therein, that no holder may own, or be deemed to own by virtue of the
constructive ownership provisions of the Code, more than 9.8% by value (the
"Ownership Limit") of the outstanding Common Stock or Preferred Stock of the
Company. The Charter further provides that any purported issuance or transfer of
Common Stock or Preferred Stock in violation of the Ownership Limit shall be
void ab initio. If shares of Common Stock or Preferred Stock in excess of the
Ownership Limit, or shares of Common Stock or Preferred Stock that would cause
the Company to be beneficially owned by less than 100 persons, are issued or
transferred to any person, the Charter provides that, subject to certain
exceptions, the intended transferee will acquire no rights in the stock. Shares
of Common Stock or Preferred Stock transferred in excess of the Ownership Limit,
or shares of Common Stock or Preferred Stock otherwise resulting in beneficial
ownership of the Company being vested in fewer than 100 persons or loss of the
Company's REIT status (collectively, an "Excess Transfer"), will automatically
be transferred to an independent trustee for the benefit of one or more
charitable organizations to be selected by the Company. While held by such
trustee, the Charter provides that such shares will continue to have voting and
dividend rights and will remain outstanding. The trustee may transfer such
shares to any person whose ownership will not violate the Ownership Limit or the
other limitations applicable to the intended transferee. If such a transfer is
made by the trustee, the sale proceeds shall be paid to the intended transferee
to the extent of the lesser of (a) the price paid by the intended transferee for
the shares in the Excess Transfer (or, if the Excess Transfer was a gift or
similar transaction, the market value of such shares at the time of the Excess
Transfer) and (b) the price realized by the trustee on the sale or other
disposition of such shares; any remaining proceeds, together with any dividends
received by the trustee, will be paid to the charitable beneficiaries. The
Charter also provides that shares of Common Stock or Preferred Stock held by the
trustee will be subject to a purchase option in favor of the Company for a
90-day period following the Excess Transfer.
The constructive ownership rules are complex and may cause Common Stock or
Preferred Stock owned actually or constructively by a group of related
individuals and/or entities to be deemed constructively owned by one individual
or entity. As a result, the acquisition of less than 9.8% by value of the Common
Stock or Preferred Stock of the Company (or the acquisition of an interest in an
entity which owns such Common Stock or Preferred Stock) by an individual or
entity could cause that individual or entity (or another
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individual or entity) to own constructively in excess of 9.8% by value of the
Common Stock or Preferred Stock, and thus subject such Common Stock or Preferred
Stock to the Ownership Limit.
The Board of Directors may waive the Ownership Limit with respect to a
particular stockholder if evidence satisfactory to the Board of Directors is
presented that such ownership will not then or in the future jeopardize the
Company's status as a REIT. As a condition of such waiver, the Board of
Directors will require a ruling from the Internal Revenue Service (the "IRS"),
opinions of counsel or other evidence satisfactory to the Board of Directors
with respect to preserving the REIT status of the Company. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors determines that it is no longer in the best interests of the Company
to attempt to qualify, or to continue to qualify, as a REIT.
The Ownership Limit will not be automatically removed even if the REIT
provisions of the Code are changed so as to no longer contain any ownership
concentration limitation or if the Board of Directors and the stockholders of
the Company determine that it is no longer in the best interest of the Company
to attempt to qualify, or to continue to qualify, as REIT. Except as otherwise
described above, any change of the Ownership Limit would require an amendment to
the Charter of the Company. Such amendments require the affirmative vote of
holders owning a majority of the outstanding shares of Common Stock. In addition
to preserving the Company's status as a REIT, the Ownership Limit may have the
effect of precluding an acquisition of control of the REIT without the approval
of the Board of Directors.
All certificates representing shares of Common Stock and Preferred Stock
will bear a legend referring to the restrictions described above.
All persons who own, actually or constructively, more than a specified
percentage of the outstanding shares of Common Stock or Preferred Stock must
file an affidavit with the Company containing the information specified in the
Charter within 30 days after January 1 of each year. In addition, each such
stockholder shall upon demand be required to disclose to the Company in writing
such information with respect to the actual and constructive ownership of shares
as the Board of Directors deems necessary to comply with the provisions of the
Code applicable to a REIT or to comply with the requirements of any taxing
authority or governmental agency.
These ownership limitations could have the effect of discouraging a
takeover or other transaction in which holders of some, or a majority, of shares
of stock of the Company might receive a premium for their shares over the then
prevailing market price or which such holders might believe to be otherwise in
their best interest.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
TO THE COMPANY OF ITS REIT ELECTION
The following summary of certain federal income tax considerations to the
Company 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 PROSPECTIVE INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS
SUPPLEMENT, AS WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES 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 COMPANY AS A REIT
General. The Company has elected to be taxed as a REIT under Sections 856
through 860 of the Code, commencing with its taxable year ended December 31,
1987. The Company believes that, commencing with
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such taxable year, it has been organized and has operated in such a manner as to
qualify for taxation as a REIT under the Code, and the Company intends to
continue to operate in such a manner, but no assurance can be given that it has
operated or will continue to operate in a manner so as to qualify or remain
qualified.
The REIT provisions of the Code and the corresponding Treasury Regulations
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, all of which are subject to change (which change may
apply retroactively).
Latham & Watkins has rendered an opinion to the Company as of April 4, 1997
to the effect that the Company is organized in conformity with the requirements
for qualification as a REIT, and that the Company's proposed method of operation
will enable it to continue 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 such assumptions and
certain representations made by the Company as to factual matters. Moreover,
such qualification and taxation as a REIT depends upon the Company's ability to
meet, through actual annual operating results, distribution levels and diversity
of stock ownership, the various qualification tests imposed under the Code
discussed below, the results of which have not been and will not be reviewed by
Latham & Watkins. Accordingly, no assurance can be given that the actual results
of the Company's operation for any particular taxable year have satisfied or
will satisfy such requirements. Further, the anticipated income tax treatment
described in this Prospectus may be changed, perhaps retroactively, by
legislative, administrative or judicial action at any time. See "-- Failure to
Qualify."
If the Company 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 stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a regular corporation. However, the Company will be subject to
federal income tax as follows: First, the Company will be taxed at regular
corporate rates on any undistributed "REIT taxable income," including
undistributed net capital gains. Second, under certain circumstances, the
Company may be subject to the "alternative minimum tax" on its items of tax
preference. Third, if the Company 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 Company 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 Company 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 Company fails the 75% or
95% test, multiplied by (b) a fraction intended to reflect the Company's
profitability. Sixth, if the Company 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 Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. Seventh, with respect to an asset (a "Built-In Gain
Asset") acquired by the Company from a corporation which is or has been a C
corporation (i.e., generally, a corporation subject to full corporate-level tax)
in a transaction in which the basis of the Built-In Gain Asset in the hands of
the Company is determined by reference to the basis of the asset in the hands of
the C corporation, if the Company recognizes gain on the disposition of such
asset during the ten-year period (the "Recognition Period") beginning on the
date on which such asset was acquired by the Company, then, to the extent of the
Built-In Gain (i.e., the excess of (a) the fair market value of such asset over
(b) the Company's adjusted basis in such asset, determined as of the beginning
of the Recognition Period), such gain will be subject to tax at the highest
corporate rate pursuant to Treasury Regulations that have not yet been
promulgated. The results described above with respect to the recognition of
Built-In Gain assume that the Company will make an election pursuant to IRS
Notice 88-19.
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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 Sections 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, actually or constructively,
by five or fewer individuals (as defined in the Code to include certain
entities) 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), inclusive, 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. For
purposes of conditions (5) and (6), pension funds and certain other tax-exempt
entities are treated as individuals, subject to a "look-through" exception in
the case of condition (6).
The Company believes that it has previously issued sufficient shares to
allow it to satisfy conditions (5) and (6). In addition, the Company's Charter
and Articles Supplementary provide for restrictions regarding ownership and
transfer of the Company's Common Stock and Preferred Stock, which restrictions
are intended to assist the Company in continuing to satisfy the share ownership
requirements described in (5) and (6) above. Such ownership and transfer
restrictions are described in "Restrictions on Ownership of Capital Stock."
In addition, a corporation may not elect to be taxed as a REIT unless its
taxable year is the calendar year. The Company has a calendar taxable year.
The Company owns and operates a number of properties through wholly-owned
subsidiaries (the "QRSs"). The Company has owned 100% of the stock of each of
the QRSs at all times that each of the QRSs has been in existence. As a result,
the QRSs will be treated as "qualified REIT subsidiaries" under the Code. 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
treated as assets, liabilities and such items (as the case may be) of the REIT.
Thus, in applying the requirements described herein, the QRSs will be ignored,
and all assets, liabilities and items of income, deduction, and credit of such
QRSs will be treated as assets, liabilities and items of the Company. The
Company has not, however, sought or received a ruling from the IRS that the QRSs
are qualified REIT subsidiaries.
The Company also owns and operates a number of properties through
partnerships. In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in the
hands of the REIT for purposes of Section 856 of the Code, including satisfying
the gross income tests and the asset tests. Thus, the Company's proportionate
share of the assets, liabilities and items of income of the partnerships in
which the Company is a partner will be treated as assets, liabilities and items
of income of the Company for purposes of applying the requirements described
herein. Certain special tax risks which may arise as a result of the Company
investing in certain properties through partnerships are described below under
the heading "-- Other Tax Matters." The Company has direct control of the
partnerships in which it is a partner and believes that it has operated and
intends to continue to operate such partnerships consistent with the
requirements for qualification as a REIT.
Income Tests. In order to maintain qualification as a REIT, the Company
annually must satisfy three gross income requirements. First, at least 75% of
the Company'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 Company'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
29
<PAGE> 32
or securities (or from any combination of the foregoing). Third, subject to
certain exceptions in the year in which the Company is liquidated, 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 Company's
gross income (including gross income from prohibited transactions) for each
taxable year. See "-- Sales or Dispositions of Assets."
Rents received by the Company 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 if the REIT, or an actual
or constructive owner of 10% or more of the REIT, actually or constructively
owns 10% or more of a tenant of the REIT (or a tenant of any partnership in
which the REIT is a partner) (a "Related Party Tenant"), the rent received by
the REIT (either directly or through any such partnership) from such tenant will
not qualify as "rents from real property" in satisfying the gross income tests
of the Code. 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. However, the REIT 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 Company does not and will not (i) 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 fixed percentage of receipts or sales, as
described above), (ii) rent any property to a Related Party Tenant (unless the
Board of Directors of the Company determines in its discretion that the rent
received from such Related Party Tenant is not material and will not jeopardize
the Company's status as a REIT), (iii) 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), or (iv) except for certain development, property
management, administrative and miscellaneous services, perform services which
are not usually or customarily rendered in connection with the rental of space
for occupancy only or which are considered to be rendered to the occupant of the
property, other than through an independent contractor from whom the Company
derives no revenue.
ERT Development Corporation ("ERT") receives fees in exchange for the
performance of certain development activities. Such fees will not accrue to the
Company, but the Company will derive dividends from ERT, which qualify under the
95% gross income test, but not the 75% gross income test. The Company believes
that the aggregate amount of any nonqualifying income in any taxable year has
not exceeded and will not exceed the limit on nonqualifying income under the
gross income tests.
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 gross
receipts or sales.
If the Company 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 Company's failure to meet such
tests was due to reasonable cause and not due to willful neglect, the Company
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 Company would be entitled to the benefit of these relief
provisions. If these relief provisions are inapplicable to a particular set of
circumstances involving the Company, the Company would not qualify as a REIT. As
discussed above under "-- General," even if these relief provisions apply, a tax
would be imposed with respect to the excess net
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<PAGE> 33
income. No similar mitigation provision provides relief if the Company fails the
30% gross income test. In such case, the Company would cease to qualify as a
REIT.
Sales or Dispositions of Assets. The Company, as a REIT, is generally
subject to two restrictions that limit its ability to sell real property. First,
as previously discussed, to qualify as a REIT, the Company must satisfy a 30%
gross income limitation. Under this limitation, less than 30% of its gross
income may be derived from the sale or disposition of (i) stock or securities
held for less than one year, (ii) property (excluding certain property obtained
through foreclosure) in which the Company is a "dealer," and (iii) real property
held for less than four years. Gain from the sale or disposition of certain real
property received in foreclosure or from involuntary conversion (e.g., eminent
domain or accidental destruction) of any real property is not included for
purposes of the 30% income limitation calculation. Second, the Company is
subject to a tax of 100% on its gain (i.e., the excess, if any, of the amount
realized over the Company's adjusted basis in the property) from each sale of
property (excluding certain property obtained through foreclosure) in which it
is a dealer. In calculating its gains subject to the 100% tax, the Company is
not allowed to offset gains on sales of property with losses on other sales of
property in which it is a dealer.
Under the Code, the Company would be deemed to be a dealer in any property
that the Company holds primarily for sale to customers in the ordinary course of
its business. Such determination is a factual inquiry, and absolute legal
certainty of the Company's status generally cannot be provided. However, the
Company will not be treated as a dealer in real property for either the 30%
gross income limitation or the 100% tax if (i) it has held the property for at
least four years for the production of rental income, (ii) capitalized
expenditures on the property in the four years preceding sale are less than 30%
of the net selling price of the property, and (iii) the Company either (a) has
seven or fewer sales of property (excluding certain property obtained through
foreclosure) for the year of sale or(b) the aggregate tax basis of property sold
during the year of sale is 10% or less of the aggregate tax basis of all assets
of the Company as of the beginning of the taxable year and substantially all of
the marketing and development expenditures with respect to the property sold are
made through an independent contractor from whom the Company derives no income.
The sale of more than one property to one buyer as part of one transaction
constitutes one sale. However, the failure of the Company to meet these "safe
harbor" requirements does not necessarily mean that it is a dealer in real
property.
Based on these rules, if the Company sells a property that it has held more
than four years and otherwise satisfies the "safe harbor" described in the
preceding paragraph, such sale will not cause the Company to violate the 30%
gross income limitation and thereby lose its REIT status, or result in the
imposition of the 100% tax on the gain. Even if the Company's disposition of
property does not qualify for the safe harbor, the Company can maintain its REIT
status by limiting sales so that the potential gain would not exceed the 30%
gross income limitation. However, because any dealer gain that is not covered by
the safe harbor is subject to the 100% tax, any sale not covered by the safe
harbor creates a risk that the REIT will be considered to be a dealer in real
property. Although any risk from a single isolated sale may be small, the more
regular, continuous, and ongoing the Company's sales of assets are, the more
likely the Company will be treated as a dealer with respect to sales or
dispositions of real property. Moreover, except for certain sales of property
obtained through foreclosure, all sales, including sales of property held less
than four years, count toward the seven sales/10% tax basis safe harbor for
purposes of determining whether the Company qualifies for the safe harbor on any
sales of property held for four years or more. Furthermore, once the Company has
exceeded the seven sales/10% tax basis safe harbor, gain from all sales and not
just the gain from sales in excess of such safe harbor are potentially subject
to the 100% tax.
The Company may be able to avoid triggering gain for purposes of the 30%
gross income limitation on real property it has held less than four years if it
exchanges such property for other property in a transaction that qualifies as a
like-kind exchange under the Code, because the like-kind exchange provisions
result in the deferral of gain. The like-kind exchange provisions of the Code,
however, are not available to the Company on any property that it holds
primarily for sale rather than investment or the production of income. An
exchange of property for tax purposes that does not qualify for like-kind
exchange treatment or some other nonrecognition provision is treated the same as
a sale for cash. The Company may dispose of certain properties that it has held
less than four years in transactions intended to qualify as like-kind exchanges.
The Company
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intends to limit the gain realized from such transactions such that if it were
to be required to immediately recognize all such gain it would nevertheless
continue to satisfy the 30% income limitation. However, the failure of the
transaction to qualify as a like-kind exchange could subject the Company to the
100% tax on its gains as described above even though the 30% income limitation
was satisfied.
Asset Tests. The Company, 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 Company's total assets (including assets held by
the Company's qualified REIT subsidiaries and the Company's allocable share of
the assets held by partnerships in which the Company owns an interest) must be
represented by real estate assets (including 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) public debt offering of the Company), cash, cash
items and government securities. Second, not more than 25% of the Company's
total assets (including assets held by the Company's qualified REIT subsidiaries
and the Company's allocable share of assets held by partnerships in which the
Company owns an interest) 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 Company may not exceed 5%
of the value of the Company's total assets (including assets held by the
Company's qualified REIT subsidiaries and the Company's allocable share of the
assets held by partnerships in which the Company owns an interest) and the
Company may not own more than 10% of any one issuer's outstanding voting
securities.
The Company currently holds 100% of the stock of each of the QRSs. As set
forth above, the asset tests provide that a REIT may not own securities of any
one issuer which constitute more than 10% of such issuer's voting securities or
more than 5% of the value of the REIT's total assets. However, if the Company'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. Because the QRSs will be treated as "qualified REIT subsidiaries," the
Company's ownership of the stock of the QRSs will not cause the Company to fail
the asset tests.
The Company owns 100% of the nonvoting preferred stock of ERT. Such shares
of nonvoting preferred stock will not constitute voting securities for purposes
of the asset tests. Furthermore, the Company has not owned and will not own any
of the voting securities of ERT. Therefore, the Company will not be considered
to own more than 10% of the voting securities of such corporation. In addition,
the Company believes (and has represented to tax counsel to the Company for
purposes of its opinion, as described above) that the value of its securities of
ERT have not exceeded 5% of the total value of the Company's assets, and will
not exceed such amount in the future. Latham & Watkins, in rendering its opinion
as to the qualification of the Company as a REIT, is relying on the
representation of the Company to such effect. No independent appraisals have
been obtained to support this conclusion.
After meeting the asset tests at the close of any quarter, the Company will
not lose its status as a REIT for failure to satisfy the asset tests at the end
of a later quarter solely by reason of changes in asset values. If the failure
to satisfy the asset tests results from an acquisition of securities or other
property during a quarter, the failure can be cured by disposition of sufficient
nonqualifying assets within 30 days after the close of that quarter. The Company
intends to maintain adequate records of the value of its assets to ensure
compliance with the asset tests and to take such other actions within 30 days
after the close of any quarter as may be required to cure any noncompliance. If
the Company fails to cure noncompliance with the asset tests within such time
period, the Company would cease to qualify as a REIT.
Annual Distribution Requirements. The Company, in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends) to
its stockholders in an amount at least equal to (A) the sum of (i) 95% of the
Company's "REIT taxable income" (computed without regard to the dividends paid
deduction and by excluding the Company's net capital gain) and (ii) 95% of the
net income (after tax), if any, from foreclosure property, minus (B) the excess
of the sum of certain items of non-cash income over 5% of "REIT taxable income"
as described in clause (A)(i) above. In addition, if the Company disposes of any
Built-In Gain Asset during its Recognition Period, the Company will be required,
pursuant to Treasury 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
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year to which they relate, or in the following taxable year if declared before
the Company 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 Company does not distribute all of its net capital gain or distributes at
least 95%, but less than 100%, of its "REIT taxable income," as adjusted, it
will be subject to tax thereon at regular ordinary and capital gain corporate
tax rates. Furthermore, if the Company 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 Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. The Company has made and intends to make timely
distributions sufficient to satisfy these annual distribution requirements.
It is possible that the Company, from time to time, may not have sufficient
cash or other liquid assets to meet these 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 Company. In the event that
such timing differences occur, in order to meet these distribution requirements,
the Company 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 Company 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 Company's
deduction for dividends paid for the earlier year. Thus, the Company may be able
to avoid being taxed on amounts distributed as deficiency dividends; however,
the Company will be required to pay interest based upon the amount of any
deduction taken for deficiency dividends.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Such a failure could have an adverse effect on the
market value and marketability of the Offered Securities. Distributions to
stockholders in any year in which the Company fails to qualify will not be
deductible by the Company nor will they be required to be made. In such event,
to the extent of current and accumulated earnings and profits, all distributions
to stockholders 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 Company 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 Company would be
entitled to such statutory relief.
OTHER TAX MATTERS
Certain of the Company's investments are through partnerships which may
involve special tax risks. Such risks include possible challenge by the IRS of
(a) allocations of income and expense items, which could affect the computation
of income of the Company and (b) the status of the partnerships as partnerships
(as opposed to associations or publicly traded partnerships taxable as
corporations) for income tax purposes. If any of the partnerships is treated as
an association or a publicly traded partnership, it would be taxable as a
corporation. In such a situation, if the Company's ownership in any of the
partnerships exceeded 10% of the partnership's voting interests or the value of
such interest exceeded 5% of the value of the Company's total assets, the
Company would cease to qualify as a REIT. Furthermore, in such a situation,
distributions from any of the partnerships to the Company would be treated as
dividends, which are not taken into account in satisfying the 75% gross income
test described above and which could therefore make it more difficult for the
Company to qualify as a REIT for the taxable year in which such distribution was
received. In addition, in such a situation, the interest in any of the
partnerships held by the Company would not qualify as a "real estate asset,"
which could make it more difficult for the Company to meet the 75% asset test
described above. Finally, in such a situation, the Company would not be able to
deduct its share of losses generated by the partnerships in computing its
taxable income. See "Failure to Qualify" above for a discussion of the effect of
the Company's
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failure to meet such tests for a taxable year. The Company believes that each of
the partnerships will be treated for tax purposes as a partnership (and not as
an association or a publicly traded partnership taxable as a corporation).
However, no assurance can be given that the IRS may not successfully challenge
the tax status of any of the partnerships.
A portion of the cash to be used by the Company to fund distributions to
its stockholders comes from ERT through dividends on nonvoting preferred stock
held by the Company. ERT does not qualify as a REIT and pays federal, state and
local income taxes on its taxable income at normal corporate rates. The federal,
state and local income taxes that ERT is required to pay reduces the cash
available for distribution by the Company to its stockholders.
As described above, the value of ERT's nonvoting preferred stock held by
the Company cannot exceed 5% of the value of the Company's total assets at the
end of any calendar quarter in which the Company acquires such securities or
increases its interest in such securities. See "-- Taxation of the Company as a
REIT -- Asset Tests." This limitation may restrict the ability of ERT to
increase the size of its business unless the value of the assets of the Company
is increasing at a commensurate rate.
PLAN OF DISTRIBUTION
The Company 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 Company 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 Company also may, from time
to time, authorize underwriters acting as the Company'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
Company in the form of underwriting discounts or commissions and may also
receive commissions from any entity 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 Company 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, concessions 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 Company, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Offered Securities
sold pursuant to Contracts shall be not less nor more than, the respective
amounts stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered Securities covered
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by its Contracts 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 Offered Securities are being sold to underwriters, the Company
shall have sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company and its
subsidiaries in the ordinary course of business.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995, and the
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996
incorporated by reference herein have been incorporated herein in reliance on
the report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Latham & Watkins, San Diego, California and for any underwriters, dealers or
agents by Brown & Wood LLP, New York, New York. Latham & Watkins and Brown &
Wood LLP will rely as to certain matters of Maryland law, including the legality
of certain of the securities registered hereby, on the opinion of Ballard Spahr
Andrews & Ingersoll, Baltimore, Maryland. In addition, the description of
federal income tax consequences contained in this Prospectus is based upon the
opinion of Latham & Watkins.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the Offered Securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee................................... $151,516
"Blue Sky" Fees and Expenses (including counsel fees)............. 15,000
Printing and Engraving Expenses................................... 75,000
Legal Fees and Expenses (other than Blue Sky fees)................ 100,000
Accounting Fees and Expenses...................................... 50,000
Miscellaneous..................................................... 8,484
--------
$400,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Maryland General Corporation Law (the "MGCL") permits a Maryland
corporation to include in its charter a provision limiting the liability of its
directors and officers to the corporation and its stockholders for money damages
except for liability resulting from (a) actual receipt of an improper benefit or
profit in money, property or services or (b) active and deliberate dishonesty
established by a final judgment as being material to the cause of action. The
Charter of the Company contains such a provision which eliminates such liability
to the maximum extent permitted by Maryland law.
The Charter of the Company authorizes it, to the maximum extent permitted
by Maryland law, to obligate itself to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former director or officer or (b) any individual who, while a
director of the Company and at the request of the Company, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan or
any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise. The Bylaws of the Company obligate it, to the maximum extent
permitted by Maryland law, to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer who is made a party to the proceeding or (b) any
individual who, while a director of the Company and at the request of the
Company, serves or has served another corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a director, officer,
partner or trustee of such corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. The Charter and Bylaws also permit
the Company to indemnify and advance expenses to any person who served a
predecessor of the Company in any of the capacities described above and to any
employee or agent of the Company or a predecessor of the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or omission of the director
or officer was material to the matter giving rise to the proceeding and (i) was
committed in bad faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received an improper personal
benefit in money, property or services or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. However, a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation. In
addition, the MGCL requires the Company, as a condition to
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advancing expenses, to obtain (a) a written affirmation by the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company as authorized by the Bylaws and (b)
a written statement by or on his behalf to repay the amount paid or reimbursed
by the Company if it shall ultimately be determined that the standard of conduct
was not met.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.01 Form of Underwriting Agreement for Debt Securities.(1)
1.02 Form of Underwriting Agreement for Equity Securities.(1)
3.01 Amended and Restated Articles of Incorporation of the Company.(1)
3.02 Amended and Restated Bylaws of the Company.(1)
4.01 Form of Indenture, dated as of May 8, 1995.(1)
4.02 First Supplemental Indenture, dated as of April 4, 1997.
4.03 Form of Debt Security.*
4.04 Form of Common Stock Certificate, incorporated by reference to Exhibit 5.01
to the Company's Registration Statement on Form 8-A, filed with the
Commission on July 30, 1993.
4.05 Form of Common Stock Warrant Agreement.*
4.06 Form of Articles Supplementary for the Preferred Stock.*
4.07 Form of Preferred Stock Certificate.*
4.08 Form of Preferred Stock Warrant Agreement.*
4.09 Form of Deposit Agreement, including form of Depositary Share.*
4.10 Form of Depositary Share Warrant Agreement.*
4.11 Form of Debt Warrant Agreement.*
5.01 Opinion of Latham & Watkins.
5.02 Opinion of Ballard Spahr Andrews & Ingersoll.
8.01 Opinion of Latham & Watkins re: tax matters.
12.01 Calculation of Ratios of Earnings to Fixed Charges.
23.01 Consent of Coopers & Lybrand L.L.P.
23.02 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5).
23.03 Consents of Latham & Watkins (included in Exhibits 5 and 8).
25.01 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ---------------
* To be filed by amendment or incorporated by reference in connection with the
offering of Offered Securities.
(1) Filed as an exhibit to the Company's Registration Statement on Form S-3
dated May 9, 1995 (File No. 33-59195), as amended by Amendment No. 1 thereto
dated May 25, 1995, Amendment No. 2 thereto dated June 1, 1995 and Amendment
No. 3 thereto dated June 12, 1995.
II-2
<PAGE> 40
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on April 4, 1997.
EXCEL REALTY TRUST, INC.
By /s/ GARY B. SABIN
------------------------------------
Gary B. Sabin
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary B. Sabin and Richard B. Muir and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ------------------
<S> <C> <C>
/s/ GARY B. SABIN Chairman of the Board, Chief April 4, 1997
- --------------------------------------------- Executive Officer and
Gary B. Sabin Director
/s/ RICHARD B. MUIR Executive Vice President, April 4, 1997
- --------------------------------------------- Secretary and Director
Richard B. Muir
/s/ DAVID A. LUND Chief Financial Officer April 4, 1997
- --------------------------------------------- (Principal Accounting
David A. Lund Officer)
/s/ BOYD A. LINDQUIST Director April 4, 1997
- ---------------------------------------------
Boyd A. Lindquist
/s/ D. CHARLES MARSTON Director April 4, 1997
- ---------------------------------------------
D. Charles Marston
Director
- ---------------------------------------------
Robert E. Parsons, Jr.
/s/ BRUCE A. STALLER Director April 3, 1997
- ---------------------------------------------
Bruce A. Staller
/s/ JOHN H. WILMOT Director April 3, 1997
- ---------------------------------------------
John H. Wilmot
</TABLE>
II-4
<PAGE> 42
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ -------------------------------------------------------------------- ------------
<C> <S> <C>
1.01 Form of Underwriting Agreement for Debt Securities(1)...............
1.02 Form of Underwriting Agreement for Equity Securities(1).............
3.01 Amended and Restated Articles of Incorporation of the Company(1)....
3.02 Amended and Restated Bylaws of the Company(1).......................
4.01 Form of Indenture, dated as of May 8, 1995(1).......................
4.02 First Supplemental Indenture, dated as of April 4, 1997.............
4.03 Form of Debt Security*..............................................
4.04 Form of Common Stock Certificate, incorporated by reference to
Exhibit 5.01 to the Company's Registration Statement on Form 8-A,
filed with the Commission on July 30, 1993..........................
4.05 Form of Common Stock Warrant Agreement*.............................
4.06 Form of Articles Supplementary for the Preferred Stock*.............
4.07 Form of Preferred Stock Certificate*................................
4.08 Form of Preferred Stock Warrant Agreement*..........................
4.09 Form of Deposit Agreement, including form of Depositary Share*......
4.10 Form of Depositary Share Warrant Agreement*.........................
4.11 Form of Debt Warrant Agreement*.....................................
5.01 Opinion of Latham & Watkins.........................................
5.02 Opinion of Ballard Spahr Andrews & Ingersoll........................
8.01 Opinion of Latham & Watkins re: tax matters.........................
12.01 Calculation of Ratios of Earnings to Fixed Charges..................
23.01 Consent of Coopers & Lybrand L.L.P. ................................
23.02 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit
5)..................................................................
23.03 Consents of Latham & Watkins (included in Exhibits 5 and 8).........
25.01 Statement of Eligibility of Trustee on Form T-1.....................
</TABLE>
- ---------------
* To be filed by amendment or incorporated by reference in connection with the
offering of Offered Securities.
(1) Filed as an exhibit to the Company's Registration Statement on Form S-3
dated May 9, 1995 (File No. 33-59195), as amended by Amendment No. 1 thereto
dated May 25, 1995, Amendment No. 2 thereto dated June 1, 1995 and Amendment
No. 3 thereto dated June 12, 1995.
<PAGE> 1
================================================================================
EXHIBIT 4.02
FIRST SUPPLEMENTAL INDENTURE
dated as of April 4, 1997
between
EXCEL REALTY TRUST, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee
--------------------------------------
SENIOR DEBT SECURITIES
of
EXCEL REALTY TRUST, INC.
--------------------------------------
================================================================================
<PAGE> 2
THIS FIRST SUPPLEMENTAL INDENTURE is entered into as of April 4, 1997
by and between Excel Realty Trust, Inc., a Maryland corporation (the "Company"),
and State Street Bank and Trust Company of California, N.A., a national banking
association organized under the laws of the United States, as trustee (the
"Trustee").
WHEREAS, the Company and The First National Bank of Boston ("FNBB")
entered into that certain Indenture dated as of May 8, 1995 (the "Indenture"),
relating to the Company's senior debt securities;
WHEREAS, the Trustee succeeded to all or substantially all of the
corporate trust business of FNBB and thereby became the successor of FNBB under
the Indenture;
WHEREAS, the Company has made a request to the Trustee that the Trustee
join with it, in accordance with Section 901 of the Indenture, in the execution
of this First Supplemental Indenture to amend certain existing provisions or add
certain additional provisions to the Indenture for the benefit of Holders of all
series of Securities created on or after the date of this First Supplemental
Indenture; and
WHEREAS, the Company and the Trustee are authorized to enter into this
First Supplemental Indenture;
NOW, THEREFORE, the Company and the Trustee agree as follows:
Section 1. Relation to Indenture. This First Supplemental Indenture
supplements the Indenture and shall be a part and subject to all the terms
thereof. Except as supplemented hereby, the Indenture and the Securities issued
thereunder shall continue in full force and effect.
Section 2. Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein are used as defined in the Indenture.
Section 3. Certain Definitions. Section 101 of the Indenture is amended
so that the following definitions are amended and restated, or added, as
applicable, in alphabetical order:
"Net Operating Income" means, with respect to any property,
the gross revenues derived from such property less direct property
operating expenses (but excluding depreciation, debt service, general
and administrative expenses, and any other such items of a
non-recurring nature).
"Total Assets" as of any date means the greater of (a) the sum
of (i) property Net Operating Income divided by 0.0975 and (ii) all
other assets of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP (but excluding intangibles),
or (b) the sum of (i) Undepreciated Real Estate Assets and (ii) all
other assets of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP (but excluding intangibles).
Section 4. Restrictions on Dividends and Other Distributions. Section
1005 of the Indenture is deleted in its entirety.
1
<PAGE> 3
Section 5. Counterparts. This First Supplemental Indenture may be
executed in counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same instrument.
Section 6. Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 7. Concerning the Trustee. The Trustee shall not be responsible
for any recital herein (other than the second and fourth recitals as they appear
as they apply to the Trustee) as such recitals shall be taken as statements of
the Company, or the validity of the execution by the Company of this First
Supplemental Indenture. The Trustee makes no representations as to the validity
or sufficiency of this First Supplemental Indenture.
2
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
EXCEL REALTY TRUST, INC.
By:/s/ RICHARD B. MUIR
-------------------------
Name: Richard B. Muir
Title: Executive Vice President
[SEAL]
Attest:
/s/ GRAHAM R. BULLICK
- ------------------------
Name: Graham R. Bullick
Title: Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as Trustee
By:/s/ SCOTT EMMONS
----------------------
Name: Scott Emmons
Title: Assistant Vice President
[SEAL]
Attest:
/s/ JEANIE MAR
- ---------------------
Name: Jeanie Mar
Title: Assistant Vice President
3
<PAGE> 1
[LETTERHEAD OF LATHAM & WATKINS]
EXHIBIT 5.01
April 4, 1997
Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 100
San Diego, California 92127
Re: $500,000,000 Aggregate Offering Price of Securities of Excel
Realty Trust, Inc.
Ladies and Gentlemen:
We are acting as counsel for Excel Realty Trust, Inc. (the "Company")
in connection with the registration statement on Form S-3 (the "Registration
Statement") being filed by you with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, relating to the
offering from time to time, as set forth in the prospectus contained in the
Registration Statement (the "Prospectus") and as to be set forth in one or more
supplements to the Prospectus (each a "Prospectus Supplement"), by the Company
of up to $500,000,000 aggregate offering price of (i) one or more series of debt
securities (the "Debt Securities"), (ii) one or more series of shares of
preferred stock, par value $.01 per share (the "Preferred Stock"), (iii) shares
of Preferred Stock represented by Depository Shares (the "Depository Shares"),
(iv) shares of common stock, par value $.01 per share (the "Common Stock"), (v)
warrants to purchase Common Stock (the "Common Stock Warrants"), (vi) warrants
to purchase Preferred Stock (the "Preferred Stock Warrants"), (vii) warrants to
purchase Depositary Shares (the "Depositary Share Warrants") or (viii) warrants
to purchase Debt Securities (the "Debt Warrants"). The Debt Securities,
Preferred Stock, Depository Shares, Common Stock, Common Stock Warrants,
Preferred Stock Warrants, Depositary Share Warrants and Debt Warrants are
collectively referred to herein as the "Securities." Any Debt Securities,
Preferred Stock and Depositary Shares may be convertible into shares of Common
Stock.
The Debt Securities will be issued pursuant to the Indenture dated as
of May 8, 1995, as amended by the First Supplemental Indenture dated as of April
4, 1997 (the "Indenture"), between the Company and State Street Bank and Trust
Company of California, N.A. (as successor to The First National Bank of Boston),
as trustee (the "Trustee"). The Depositary Shares will be issued under one or
more deposit agreements (each, a "Deposit Agreement"), each to be between the
Company and a financial institution identified therein as the depositary (each,
a "Depositary"). The Common Stock Warrants, Preferred Stock Warrants, Depositary
Share Warrants and Debt Warrants (collectively, the "Warrants") will be issued
under one or more warrant agreements (each, a "Warrant Agreement"), each to be
between the Company and a financial institution identified therein as warrant
agent (each, a "Warrant Agent").
<PAGE> 2
Excel Realty Trust, Inc.
April 4, 1997
Page 2
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization and issuance of the Securities and
for the purposes of this opinion, have assumed such proceedings will be timely
completed in the manner presently proposed. In addition, we have made such legal
and factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to our satisfaction of such documents,
corporate records and instruments, as we have deemed necessary or appropriate
for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain factual matters.
In addition, we have obtained and relied upon such certificates and assurances
from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the State of
New York, and we express no opinion with respect to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction or as to any
matters of municipal law or the laws of any local agencies within any state.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. The Indenture has been duly executed and delivered by the
Company and (assuming due authorization by the Company and due
authorization, execution and delivery by the Trustee) constitutes the
legally valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
2. When the Debt Securities have been duly established by the
Indenture (including, without limitation, the adoption by the Board of
Directors of the Company of a resolution duly authorizing the issuance
and delivery of the Debt Securities), duly authenticated by the Trustee
and duly executed and delivered on behalf of the Company against
payment therefor in accordance with the terms and provisions of the
Indenture and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the Debt Securities will constitute
legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
The opinions set forth above are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought; (iii) the
unenforceability under certain circumstances under law or court
<PAGE> 3
Excel Realty Trust, Inc.
April 4, 1997
Page 3
decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution
is contrary to public policy; (iv) we express no opinion concerning the
enforceability of the waiver of rights or defenses contained in Section 514 of
the Indenture; and (v) we express no opinion with respect to whether
acceleration of Debt Securities may affect the collectibility of any portion of
the stated principal amount thereof which might be determined to constitute
unearned interest thereon.
To the extent that the obligations of the Company under the Indenture
may be dependent upon such matters, we assume for purposes of this opinion that:
(i) the Indenture has been duly and validly authorized by all necessary
corporate action required of the Company under the laws of its jurisdiction of
organization and the person(s) who have executed and delivered the Indenture on
behalf of the Company have been duly and validly authorized to do so by all
necessary corporate action required of the Company under the laws of its
jurisdiction of organization; (ii) the Trustee is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (iii) the Trustee is duly qualified to engage in the activities
contemplated by the Indenture; (iv) the Indenture has been duly authorized,
executed and delivered by the Trustee and constitutes the legal, valid and
binding obligation of the Trustee, enforceable against the Trustee in accordance
with its terms; (v) the Trustee is in compliance, generally and with respect to
acting as a trustee under the Indenture, with all applicable laws and
regulations; and (vi) the Trustee has the requisite organizational and legal
power and authority to perform its obligations under the Indenture.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE> 1
EXHIBIT 5.02
[BALLARD SPAHR ANDREWS & INGERSOLL LETTERHEAD]
April 3, 1997
Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 100
San Diego, California 92127
Re: Excel Realty Trust, Inc.
Ladies and Gentlemen:
We have served as Maryland counsel to Excel Realty Trust, Inc., a
Maryland corporation (the "Company") in connection with certain matters of
Maryland law arising out of the Registration Statement on Form S-3 filed by the
Company on or about April 4, 1997, with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended to date
(the "Registration Statement"), relating to the offering by the Company from
time to time of (i) one or more series of Debt Securities (the "Debt
Securities"), (ii) one or more series of shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock"), (iii) shares of Preferred Stock
represented by Depositary Shares (the "Depositary Shares"), (iv) shares of
Common Stock, par value $.01 per share (the "Common Stock"), and (v) Warrants to
purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities
(the "Warrants"), with an aggregate initial public offering price of up to
$500,000,000. The Debt Securities, Preferred Stock, Depositary Shares, Common
Stock and Warrants are collectively referred to herein as the "Securities."
In our capacity as Maryland counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization and issuance of the
Securities, and for purposes of this opinion have assumed that such proceedings
will be timely completed in the manner presently proposed. In addition, we
have made such legal and factual examinations and inquiries, including an
examination of originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and instruments as we have
deemed necessary or appropriate for purposes of this opinion. Among such
documents are the Registration Statement, the Charter of the Company certified
as of a recent date by the State Department of Assessments and Taxation of
Maryland (the
<PAGE> 2
Excel Realty Trust, Inc.
April 3, 1997
Page 2
"Charter"), the Amended and Restated By-Laws of the Company, Resolutions of the
Board of Directors of the Company in connection with the matters contemplated by
the Registration Statement, and an Indenture dated May 8, 1995, by and between
the Company and State Street Bank and Trust Company of California, N.A. (as
successor to The First National Bank of Boston), as Trustee, together with a
First Supplemental Indenture dated as of April 4, 1997 (as so amended, the
"Indenture").
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies or facsimiles.
We have been furnished with, and have relied upon, Certificates of
Officers of the Company with respect to certain factual matters. In addition,
we have obtained and relied upon such certificates and assurances from public
officials as we have deemed necessary; and we have assumed that each
certificate submitted to us is true and correct, both when given and as of the
date hereof.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. The Indenture has been duly and validly authorized by all
necessary corporate action required of the Company under the Maryland General
Corporation Law ("MGCL") and the person(s) who have executed and delivered the
Indenture on behalf of the Company have been duly and validly authorized to do
so by all necessary corporate action required of the Company under the MGCL.
2. The Company has the authority, pursuant to its Charter, to
issue up to 10,000,000 shares of Preferred Stock. When a series of Preferred
Stock has been duly established in accordance with the terms of the Company's
Charter and applicable law, and upon adoption by the Board of Directors of the
Company of a resolution in form and content as required by applicable law, and
assuming that such shares then remain available for issue under the Charter,
upon issuance and delivery of and payment for such shares in the manner
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement (as defined in the Registration Statement) and by such resolution,
such shares of such series of Preferred Stock will be validly issued, fully
paid and nonassessable.
3. The Company has the authority, pursuant to its Charter, to
issue up to 100,000,000 shares of Common Stock. Upon adoption by the Board of
Directors of the Company of a resolution in form and content as required by
applicable law, and assuming that such shares then remain available for issue
under the Charter, upon issuance and delivery of and payment for such shares in
the manner contemplated by the Registration Statement and/or the applicable
Prospectus Supplement and by such resolution, such shares of Common Stock will
be validly issued, fully paid and nonassessable.
<PAGE> 3
Excel Realty Trust, Inc.
April 3, 1997
Page 3
We consent to your filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the prospectus included therein.
The foregoing opinions are limited to the laws of the State of Maryland
and we do not express any opinion herein concerning any other law.
We assume no obligation to supplement this opinion any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinions expressed herein after the date hereof.
This opinion is being furnished to you solely for your benefit.
Accordingly it may not be relied upon, quoted in any manner to, or delivered to
any other person or entity without, in each instance, our prior written
consent.
Very truly yours,
/s/ BALLARD SPAHR ANDREWS & INGERSOLL
<PAGE> 1
[LATHAM & WATKINS LETTERHEAD]
EXHIBIT 8.01
April 4, 1997
Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 100
San Diego, California 92127
Re: $500,000,000 Aggregate Offering Price of Securities of Excel
Realty Trust, Inc. (the "Company")
Ladies and Gentlemen:
In connection with the registration statement of Form S-3 (the
"Registration Statement") filed by you with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the sale by
the Company of up to $500,000,000 aggregate offering price of (i) one or more
series of debt securities, (ii) one or more series of preferred stock, par value
$.01 per share, (iii) depositary shares representing preferred stock, (iv)
shares of common stock, par value $.01 per share, or (v) warrants to purchase
common stock, preferred stock, depositary shares or debt securities, you have
requested our opinion concerning certain of the federal income tax consequences
to the Company of its election to be taxed as a real estate investment trust.
This opinion is based on various statements of fact and assumptions,
including the statements of fact set forth in the Registration Statement. We
have also been furnished with, and with your consent have relied upon, certain
representations made by the Company with respect to certain factual matters
through a certificate of an officer of the Company (the "Officer's
Certificate").
As special tax counsel, we have made such legal and factual
examinations and inquiries, including an examination of originals or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments, as we have deemed necessary or
appropriate for purposes of this opinion. In our examination, we have assumed
the
<PAGE> 2
LATHAM & WATKINS
Excel Realty Trust, Inc.
April 4, 1997
Page 2
genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity to authentic original documents of all
documents submitted to us as copies.
We are opining herein as to the effect on the subject transaction only
of the federal income tax laws of the United States, and we express no opinion
with respect to the applicability thereto, or the effect thereon, of other
federal laws, the laws of any other jurisdiction or as to any matters of
municipal law or the laws of any other local agencies within any state.
Based on such statements of fact, assumptions and representations, it
is our opinion that:
1. The Company is organized in conformity with the requirements for
qualification as a "real estate investment trust," and its proposed method of
operation, as described in the statements of fact and representations of the
Company referred to above, will enable it to continue to meet the requirements
for qualification and taxation as a "real estate investment trust" under the
Internal Revenue Code of 1986, as amended (the "Code").
2. The statements in the Prospectus set forth under the caption
"Certain Federal Income Tax Considerations to the Company of its REIT Election,"
to the extent such statements constitute matters of law, summaries of legal
matters, or legal conclusions, have been reviewed by us and are accurate in all
material respects.
No opinion is expressed as to any matter not discussed herein.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Any such change may
affect the conclusions stated herein. Also, any variation or difference in the
facts from those set forth in the statements of fact in the Registration
Statement and the representations made by the Company through the Officer's
Certificate may affect the conclusions stated herein. Moreover, the Company's
qualification and taxation as a real estate investment trust depends upon the
Company's ability to meet, through actual annual operating results, distribution
levels and diversity of stock ownership, the various qualification tests imposed
under the Code, the results of which have not been and will not be reviewed by
Latham & Watkins. Accordingly, no assurance can be given that the actual results
of the Company's operation for any particular taxable year have satisfied or
will satisfy such requirements.
<PAGE> 3
LATHAM & WATKINS
Excel Realty Trust, Inc.
April 4, 1997
Page 3
This opinion is furnished only to you, and is solely for your use in
connection with the Registration Statement. We hereby consent to the filing of
this opinion as an exhibit to the Registration Statement and to the use of our
name under the capital "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE> 1
EXHIBIT 12.01
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------------------
1996 1995 1994 1993 1992
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings:
Net Income $23,796,000 $18,192,000 $13,796,000 $ 3,232,000 $ 454,000
Less:
(Gain) Loss or Impairment on Real Estate Sales 1,777,000 (3,683,000) 108,000 (399,000) 0
Add:
Interest on Indebtedness 18,823,000 16,765,000 13,277,000 9,085,000 2,175,000
Amortization of Loan Costs 1,041,000 1,240,000 824,000 118,000 43,000
Write-off of Loan Costs (415,000) 4,453,000 89,000 157,000 0
----------- ----------- ----------- ----------- -----------
EARNINGS $45,022,000 $36,967,000 $28,094,000 $12,193,000 $ 2,672,000
=========== =========== =========== =========== ===========
Fixed Charges:
Interest on Indebtedness $18,823,000 $16,765,000 $13,277,000 $ 9,085,000 $ 2,175,000
Amortization of Loan Costs 1,041,000 1,240,000 824,000 118,000 43,000
Write-off of Loan Costs (415,000) 4,453,000 89,000 157,000 0
----------- ----------- ----------- ----------- -----------
FIXED CHARGES $19,449,000 $22,458,000 $14,190,000 $ 9,360,000 $ 2,218,000
=========== =========== =========== =========== ===========
Ratio of Earnings to Fixed Charges 2.31 1.65 1.98 1.30 1.20
=========== =========== =========== =========== ===========
</TABLE>
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Excel Realty Trust, Inc. and subsidiaries on Form S-3 of our report dated
January 31, 1997 on our audits of the consolidated financial statements and
financial statement schedules of Excel Realty Trust, Inc. and subsidiaries as
of December 31, 1996 and 1995, and for the years ended December 31, 1996, 1995,
and 1994. We also consent to the reference to our Firm under the caption
"Experts."
/s/ Coopers & Lybrand L.L.P.
San Diego, California
April 3, 1997
<PAGE> 1
EXHIBIT 25.01
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |X|
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
NATIONAL ASSOCIATION
- --------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
UNITED STATES
- --------------------------------------------------------------------------------
(Jurisdiction of incorporation or organization if not a U.S. national bank)
06-1143380
- --------------------------------------------------------------------------------
(IRS Employer Identification No.)
725 SOUTH FIGUEROA STREET, SUITE 3100, LOS ANGELES, CALIFORNIA 90017
- --------------------------------------------------------------------------------
(Address of principal executive offices)
90017
- --------------------------------------------------------------------------------
(Zip code)
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
725 SOUTH FIGUEROA STREET, SUITE 3100, LOS ANGELES, CALIFORNIA, 90017
213-362-7338
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
(Exact Name of Obligor as specified in its charter)
MARYLAND
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
33-0160389
- --------------------------------------------------------------------------------
(IRS Employer Identification No.)
16955 VIA DEL CAMPO, STE. 100, SAN DIEGO, CALIFORNIA
- --------------------------------------------------------------------------------
(Address of principal executive offices)
92127
- --------------------------------------------------------------------------------
(Zip code)
DEBT SECURITIES
- --------------------------------------------------------------------------------
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
(a) The trustee is subject to the supervision of the Comptroller of the
Currency, Western District Office, 50 Fremont Street, Suite 3900, San
Francisco, CA 94105-2292.
(b) The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with the obligor.
The trustee is not affiliated with the obligor.
No responses are included for Items 3-15 of this form T-1 because the obligor is
not in default on securities issued under indentures under which State Street
Bank and Trust Company of California, N.A. is trustee.
Item 16. List of Exhibits
1. Articles of Association of State Street Bank and Trust Company of
California, National Association.*
2. Certificate of Corporate Existence (with fiduciary powers) from the
Comptroller of the Currency, Administrator of National Banks.*
3. Authorization of the Trustee to exercise fiduciary powers (included in
Exhibits 1 and 2; no separate instrument).
4. By-laws of State Street Bank and Trust Company of California, National
Association.*
5. Consent of State Street Bank and Trust Company of California, National
Association required by Section 321(b) of the Act.*
6. Consolidated Report of Income at the close of business December 31,
1996, Federal Financial Institutions Examination Council, Consolidated
Reports of Condition and Income for A Bank With Domestic Offices Only
and Total Assets of Less Than $100 Million - FFIEC 034.**
* The indicated documents have been filed as exhibits with corresponding
exhibit numbers to the Form T-1 of Oasis Residential, Inc., filed
pursuant to Section 305(b)(2) of the Act, filed with the Securities and
Exchange Commission on November 18, 1996 (Registration No. 033-90488),
and are incorporated herein by reference.
** The indicated document was filed as an exhibit with a corresponding
exhibit number to the Form T-1 filed as Exhibit 25 to a Registration
Statement on Form S-3 of Intevac, Inc., filed with the Securities and
Exchange Commission on April 3, 1997 (Registration No. 333-24275), and
is incorporated herein by reference.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, State Street Bank and Trust Company of California, National Association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Los Angeles, and
State of California, on the 4th day of April, 1997.
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, NATIONAL ASSOCIATION
By: /s/ Scott C. Emmons
-----------------------------------
Scott C. Emmons
Assistant Vice President
