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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 14, 1999
REGISTRATION NO. 333-64203
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEW PLAN EXCEL REALTY TRUST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MARYLAND 33-0160389
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
</TABLE>
1120 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 869-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEVEN F. SIEGEL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
NEW PLAN EXCEL REALTY TRUST, INC.
1120 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 869-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
WITH A COPY TO:
SCOTT N. WOLFE, ESQ.
LATHAM & WATKINS
701 B STREET, SUITE 2100
SAN DIEGO, CALIFORNIA 92101
(619) 236-1234
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
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 (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [X]
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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. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
- -------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE PRICE PER OFFERING REGISTRATION
REGISTERED UNIT PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 349,751 $25.04(3) $8,757,766.00(3) $2,584.00(4)
per share(1)
Common Stock, par value $0.01 69,945 $18.72(5) $1,309,371.00(5) $ 365.00
per share(1)
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</TABLE>
(1) Also includes preferred share purchase rights. Prior to the occurrence of
certain events, these rights will not be exercisable or represented
separately from the common stock.
(2) Including an indeterminate number of shares which may be issued with
respect to such shares of common stock by way of stock dividends, stock
splits, issuances of certain rights or otherwise, or in connection with a
stock combination, recapitalization, merger, consolidation or otherwise.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low prices
of the common stock as reported on the New York Stock Exchange on
September 18, 1998.
(4) Previously paid. This previous filing fee was based on the fee in effect on
September 24, 1998.
(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low prices
of the common stock as reported on the New York Stock Exchange on
September 10, 1999.
This registration statement relates to the possible issuance of shares of
common stock of New Plan Excel Realty Trust, Inc. upon the exchange of up to
323,304 units of limited partnership interest in Excel Realty Partners, L.P.
which were issued in a transaction on October 7, 1997, and the possible resale
of the shares of common stock by selling stockholders.
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT BECOME EFFECTIVE. WE MAY NOT
ISSUE THESE SECURITIES AND SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED SEPTEMBER 14, 1999
PROSPECTUS
NEW PLAN EXCEL REALTY TRUST, INC.
419,696 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
---------------
This prospectus relates to the possible issuance of up to 419,696 shares of
common stock of New Plan Excel Realty Trust, Inc., a Maryland corporation, to
certain holders of units of limited partnership interest in Excel Realty
Partners, L.P., a Delaware limited partnership, and the possible resale of
shares of common stock by these holders. The holders identified in this
prospectus may tender their units to Excel Realty Partners, L.P. for cash
redemption. New Plan DRP Trust, a Maryland real estate investment trust and our
wholly-owned subsidiary, the sole general partner of Excel Realty Partners,
L.P., may instead elect to exchange their units for shares of our common stock.
Neither we nor New Plan DRP Trust will receive any proceeds from the issuance of
the common stock to the holders or from the resale of such shares by the
holders.
We are a self-administered and self-managed real estate investment trust, or
"REIT," and one of the nation's largest community and neighborhood shopping
center companies. In addition to community and neighborhood shopping centers, we
own and manage other retail and commercial properties and apartment communities
in select markets throughout the United States. On October 7, 1997, Excel Realty
Partners, L.P. acquired a shopping mall in San Dimas, California from St.
Francis Associates, L.P. Pursuant to that transaction, Excel Realty Partners,
L.P. issued 323,304 units to St. Francis Associates, L.P., and in January 1998,
St. Francis distributed 78,677 of such units to Jonathan C. Whitman U/T/A
2/22/92. The units were initially exchangeable for shares of our common stock on
a one-for-one basis, but as a result of certain stock dividends and other
distributions with respect to the common stock, such units are currently
exchangeable for the number of shares of common stock offered hereby. The number
of shares of common stock is subject to further adjustment in the event of stock
splits, stock dividends and similar events in the future. We are registering the
offer and sale of shares of common stock pursuant to contractual obligations,
but this registration does not necessarily mean that we will in fact issue any
of the common stock to the above-described holders, or that if issued, such
holders will offer or resell any of their shares.
Our common stock is listed on the New York Stock Exchange under the symbol
NXL. On September 10, 1999, the last reported sales price of our common stock
was $18.75 per share. In order to maintain our qualification as a REIT for
federal income tax purposes, our charter limits the amount of capital stock that
may be owned by a single person or an affiliated group.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _____________, 1999
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WHERE TO FIND ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
materials we have filed with the Securities and Exchange Commission at its
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the operation of its public reference room. Our Securities and
Exchange Commission filings also are available to the public on the Securities
and Exchange Commission's Internet site at http://www.sec.gov. In addition, you
may obtain a copy of our Securities and Exchange Commission filings at no cost
by writing or telephoning our General Counsel at:
New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas
New York, New York 10036
(212) 869-3000
The Securities and Exchange Commission allows us to "incorporate by
reference" in this prospectus certain information we file with the Securities
and Exchange Commission, which means that we may disclose important information
in this prospectus by referring the reader to the document that contains the
information. The information incorporated by reference is considered to be a
part of this prospectus, and later information filed with the Securities and
Exchange Commission will update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
Securities and Exchange Commission under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, until the offering of
securities covered by this prospectus is completed:
o The Annual Report on Form 10-K/A of New Plan Excel Realty Trust,
Inc. for the fiscal year ended December 31, 1998;
o The Quarterly Report on Form 10-Q of New Plan Excel Realty
Trust, Inc. for the quarter ended March 31, 1999;
o The Quarterly Report on Form 10-Q of New Plan Excel Realty
Trust, Inc. for the quarter ended June 30, 1999; and
o The Current Reports on Form 8-K of New Plan Excel Realty Trust,
Inc. filed with the Securities and Exchange Commission on May 5,
April 22 and February 3, 1999.
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act of 1933, as amended, relating to
the securities that may be offered by this prospectus. This prospectus is a part
of that registration statement, but does not contain all of the information in
the registration statement. For more detail concerning New Plan Excel Realty
Trust, Inc. and any securities offered by this prospectus, you may examine the
registration statement and the exhibits filed with it at the locations listed in
the first paragraph under this heading.
You should rely on the information provided or incorporated by reference
in this prospectus. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front cover of
the document.
FORWARD-LOOKING STATEMENTS
This prospectus, together with other statements and information that we
publicly disseminate, contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934. Such statements are based on assumptions and
expectations which may not be realized and are inherently subject to risks,
uncertainties and other factors, many of which cannot be predicted with accuracy
and some of which might not even be anticipated. Future events and actual
results, performance or achievements, financial and otherwise, may differ
materially from the results, performance or achievements expressed or implied by
the forward-looking statements. Risks, uncertainties and other factors that
might cause such differences, some of which could be material, include, but are
not limited to: national and local economic, business and real estate and other
market conditions; financing risks, such as the inability to obtain debt or
equity financing on favorable terms;
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potential adverse effects of the recent merger transaction involving New Plan
Realty Trust and Excel Realty Trust; the level and volatility of interest rates;
financial stability of tenants; the rate of revenue increases versus expense
increases; governmental approvals, actions and initiatives; environmental/safety
requirements; risks of real estate acquisition and development (including the
failure of pending acquisitions to close and pending developments to be
completed on time and within budget); our ability and the ability of others with
which we do business or receive services (including utilities, financial
institutions, major tenants, suppliers, governmental agencies and
municipalities) to address the Year 2000 issue, and the costs of doing so; as
well as other risks listed from time to time in reports we file with the
Securities and Exchange Commission or we otherwise publicly disseminate.
All references in this prospectus to "we," "us," "our" or the "Company"
mean New Plan Excel Realty Trust, Inc. All references in this prospectus to
"common stock" refer to our common stock, par value $.01 per share. All
references to "units" refer to the units of limited partnership interest in
Excel Realty Partners, L.P.
THE COMPANY
We are a self-administered and self-managed equity REIT and one of the
nation's largest community shopping center companies. In addition to the
community and neighborhood shopping centers, we own and manage other retail and
commercial properties and apartment communities in select markets throughout the
United States.
As of June 30, 1999, we owned interests in a total of 304 retail
properties (including 11 commercial and miscellaneous properties) containing
over 37.8 million square feet of retail space in 31 states. We also owned, as of
that date, 55 multifamily residential communities in 14 states containing
approximately 13,000 units.
Our primary objective is to acquire, own and manage a portfolio of
commercial retail properties and apartment communities that will provide cash
for quarterly distributions to stockholders while protecting investor capital
and providing potential for capital appreciation. We seek to achieve this
objective by (i) aggressively managing and, where appropriate, redeveloping our
existing operating properties, (ii) continuing to acquire well-located
neighborhood and community shopping centers and other retail properties with
tenants that have a national or regional presence and an established credit
quality, and well-located income-producing apartment communities at a discount
to replacement cost, (iii) disposing of mature properties to continually update
our core property portfolio, and (iv) continuing to maintain a strong and
flexible financial position to facilitate growth.
As of June 30, 1999, we had approximately 780 employees and 25 offices
coast to coast. Our principal executive offices are located at 1120 Avenue of
the Americas, New York, New York 10036, and our telephone number is (212)
869-3000.
USE OF PROCEEDS
We are registering the shares of our common stock offered by this
prospectus pursuant to our contractual obligation to certain holders of units.
We will not receive any of the proceeds from the issuance of shares of common
stock to such holders or the resale of the shares by such holders.
DESCRIPTION OF CAPITAL STOCK
In the following summary we have summarized the material terms and
provisions of our capital stock. This summary does not purport to be complete
and for more detail you should refer to our charter and bylaws, each of which we
have previously filed with the Securities and Exchange Commission and which we
incorporate by reference as an exhibit to the registration statement of which
this prospectus is a part, and the Maryland General Corporation Law.
GENERAL
The Company has the authority to issue up to 250,000,000 shares of common
stock, par value $.01 per share, and 25,000,000 shares of preferred stock, par
value $.01 per share. On June 30, 1999, the Company had approximately 88,404,000
shares of common stock outstanding and approximately 2,287,000 shares of
preferred stock outstanding, consisting of approximately 1,507,000 shares of 8
1/2% Series A Cumulative Convertible Preferred Stock, 630,000 shares of 8 5/8%
Series B Cumulative Redeemable Preferred Stock
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and 150,000 shares of 7.8% Series D Cumulative Voting Step-Up Premium Rate
Preferred Stock. The latter two series of preferred stock are traded as
depositary shares, each depositary share representing one-tenth of a share of
preferred stock. As of the same date, 100,000 shares of Series C Junior
Participating Preferred Stock, or "Series C Preferred Stock," had been
classified and were reserved for issuance under the Company's stockholder rights
plan. See "Description of Capital Stock -- Stockholder Rights Plan."
COMMON STOCK
Subject to the preferential rights of any other shares of capital stock,
holders of the common stock are 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 outstanding shares 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 (such as the Company's 7.8% Series D Cumulative Voting Step-Up Premium
Rate Preferred Stock, the holders of which have the right to vote with the
holders of the common stock as though part of the same class), 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 a majority of all of the shares of or voting with the common
stock for the election of directors will be able to elect all of the directors
to be elected by such holders if they choose to do so and, accordingly, the
holders of the remaining common stock 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.
Subject to the provisions of the Company's charter regarding the restrictions on
transfer and limitations on ownership of common stock or preferred stock, shares
of common stock will have equal dividend, liquidation and other rights. Common
stock will, when issued, be fully paid and nonassessable.
STOCKHOLDER RIGHTS PLAN
The Company has a stockholder rights plan under which one preferred share
purchase right, or a "Right," is attached to each outstanding share of common
stock. When exercisable, each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of the Company's Series C
Preferred Stock for an exercise price of $45.00, subject to certain
anti-dilution adjustments. Because of the nature of the dividend, liquidation
and voting rights, the value of one one-thousandth of a share of Series C
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of common stock.
The Rights will become exercisable only if a person or group acquires,
obtains the right to acquire or announces a tender offer to acquire 15% or more
of the common stock. Shares of Series C Preferred Stock purchasable upon
exercise of the Rights will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 1,000 times the dividend, if any, declared per share
of common stock. In the event of liquidation, dissolution or winding up of the
Company, the holders of the Series C Preferred Stock will be entitled to a
minimum liquidation payment of $1,000 per share (plus any accrued but unpaid
dividends), preferential to common stock, but junior to the Company's other
currently authorized preferred stock and other preferred stock ranking on a
parity with such preferred stock as to distributions or rights upon liquidation,
dissolution or winding up of the affairs of the Company, but will be entitled to
an aggregate payment of 1,000 times the payment made per share of common stock
of the Company. Each share of Series C Preferred Stock will have 1,000 votes and
will vote together with shares of common stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of common stock are
exchanged, each share of Series C Preferred Stock will be entitled to receive
1,000 times the amount received per share of common stock. Shares of Series C
Preferred Stock are generally not redeemable. The Rights are protected by
customary anti-dilution provisions.
Until approximately 10 days after a person or group acquires, obtains the
right to acquire or announces a tender offer to acquire 15% or more of the
common stock, the Rights will be evidenced by the certificates representing
shares of common stock and will be transferred with and only with such
certificates. The surrender for transfer of any certificate for shares of common
stock will
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also constitute the transfer of the Rights associated with the shares
represented by such certificate. The Rights will expire on October 8, 2003,
subject to the Company's right to extend the date, unless earlier redeemed or
exchanged by the Company or terminated.
In the event that a person becomes an acquiring person or if the Company
were the surviving corporation in a merger with an acquiring person or any
affiliate or associate of an acquiring person and common stock was not changed
or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the acquiring person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of common stock having a market value of two times the
then current exercise price under the Right. In the event that, after a person
has become an acquiring person, the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price under the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the then current exercise price under the Right.
At any time after a person becomes an acquiring person and prior to the
earlier of one of the events described in the last sentence of the previous
paragraph or the acquisition by such acquiring person of 50% or more of the
outstanding shares of common stock, the board of directors may cause the Company
to exchange the Rights (other than Rights owned by an acquiring person which
will have become void), in whole or in part, for that number of shares of common
stock having an aggregate value equal to the spread (the excess of the value of
the adjustment shares issuable upon the exercise of a Right over the exercise
price) per Right (subject to adjustment).
The Rights may be redeemed in whole, but not in part, at a price of $.01
per Right by the board of directors at any time before the time that an
acquiring person has become such. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the board of
directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the redemption price.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that acquires more than 15% of the
outstanding shares of common stock of the Company on terms not approved by the
Company's board of directors. The Rights, however, should not interfere with any
merger or other business combination approved by the board of directors at any
time prior to a person or group becoming an acquiring person.
RESTRICTIONS ON OWNERSHIP OF CAPITAL STOCK
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, or the "Code," not more than 50% in value of the issued and outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities such as qualified pension
plans) during the last half of a taxable year. In addition, its shares of
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of twelve months (or during a proportionate part of a
shorter taxable year). See "Certain Federal Income Tax Considerations -- REIT
Qualification Requirements -- General."
The charter, subject to certain exceptions, contains certain restrictions
on the amount of shares of stock of the Company that a person may own. The
charter prohibits any person from acquiring or holding, directly or indirectly,
shares of the Company stock in excess of 9.8% (by value or by number of shares,
whichever is more restrictive, except only by value in the case of the 8 1/2%
Series A Cumulative Convertible Preferred Stock and the 8 5/8% Series B
Cumulative Redeemable Preferred Stock) of the outstanding shares of each class
or series of stock of the Company (except in the case of the 8 1/2% Series A
Cumulative Convertible Preferred Stock and the 7.8% Series D Cumulative Voting
Step-Up Premium Rate Preferred Stock, where the prohibition relates to the
stated percentage (by value or by number of shares, whichever is more
restrictive, except only by value in the case of the 8 1/2% Series A Cumulative
Convertible Preferred Stock) of all outstanding equity stock of the Company)
(the "Ownership Limit"). The number and value of shares of the outstanding
equity stock of the Company is required to be determined in good faith, which
determination shall be conclusive for all purposes hereof.
The board of directors of the Company, upon receipt of a ruling from the
IRS or an opinion of counsel or other evidence satisfactory to the board of
directors and upon at least 15 days' written notice from a transferee prior to
the proposed transfer that, if consummated, would result in the intended
transferee beneficially owning shares in excess of the Ownership Limit, and upon
such
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other conditions as the board of directors may direct, may exempt a person from
the Ownership Limit (an "Excepted Holder"). In order to be considered by the
board of directors of the Company as an Excepted Holder, a person also must not
own, directly or indirectly, an interest in a tenant of the Company (or a tenant
of any entity owned or controlled by the Company) that would cause the Company
to own, directly or indirectly, more than a 9.9% interest in such a tenant. The
person seeking an exemption must represent to the satisfaction of the Company's
board of directors that it will not violate the aforementioned restriction. The
person also must agree that any violation or attempted violation of the
foregoing restriction will result in the automatic transfer of the shares of
stock causing such violation to the Trust (as defined below).
The charter further prohibits (a) any person from beneficially or
constructively owning shares of stock of the Company that would result in the
Company being "closely held" under Section 856(h) of the Code or otherwise cause
the Company to fail to qualify as a REIT and (b) any person from transferring
shares of stock of the Company if such transfer would result in shares of stock
of the Company being owned by fewer than 100 persons. Any person who acquires or
attempts or intends to acquire beneficial or constructive ownership of shares of
stock of the Company that will or may violate any of the foregoing restrictions
on transferability and ownership, or any person who would have owned shares of
the stock of the Company that resulted in a transfer of shares to the Trust, is
required to give notice immediately to the Company and provide the Company with
such other information as the Company may request in order to determine the
effect of such transfer on the Company's status as a REIT. The foregoing
restrictions on transferability and ownership will not apply if the board of
directors of the Company 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.
If any transfer of shares of stock of the Company occurs which, if
effective, would result in any person beneficially or constructively owning
shares of stock of the Company in excess or in violation of the above transfer
or ownership limitations (a "Purported Transferee"), then that number of shares
of stock of the Company the beneficial or constructive ownership of which
otherwise would cause such person to violate such limitations (rounded to the
nearest whole share) shall be automatically transferred to a trust (the "Trust")
for the exclusive benefit of one or more charitable beneficiaries (the
"Charitable Beneficiary"), and the Purported Transferee shall not acquire any
rights in such shares. Such automatic transfer shall be deemed to be effective
as of the close of business on the Business Day (as defined in the charter)
prior to the date of such violative transfer. Shares of stock held in the Trust
shall be issued and outstanding shares of stock of the Company. The Purported
Transferee shall not benefit economically from ownership of any shares of stock
held in the Trust, shall have no rights to dividends and shall not possess any
rights to vote or other rights attributable to the shares of stock held in the
Trust. The trustee of the Trust (the "Trustee") shall have all voting rights and
rights to dividends or other distributions with respect to shares of stock held
in the Trust, which rights shall be exercised for the exclusive benefit of the
Charitable Beneficiary. Any dividend or other distribution prior to the
discovery by the Company that shares of stock have been transferred to the
Trustee shall be paid by the recipient of such dividend or distribution to the
Trustee upon demand, and any dividend or other distribution authorized but
unpaid shall be paid when due to the Trustee. Any dividend or distribution so
paid to the Trustee shall be held in trust for the Charitable Beneficiary. The
Purported Transferee shall have no voting rights with respect to shares of stock
held in the Trust and, subject to Maryland law, effective as of the date that
such shares of stock have been transferred to the Trust, the Trustee shall have
the authority (at the Trustee's sole discretion) (i) to rescind as void any vote
cast by a Purported Transferee prior to the discovery by the Company that such
shares have been transferred to the Trust and (ii) to recast such vote in
accordance with the desires of the Trustee acting for the benefit of the
Charitable Beneficiary. However, if the Company has already taken irreversible
corporate action, then the Trustee shall not have the authority to rescind and
recast such vote.
The Trustee may transfer the shares of stock held in the Trust to a
person, designated by the Trustee, whose ownership of the shares will not
violate the Ownership Limit or other limitations set forth in the charter. Upon
such sale, the interest of the Charitable Beneficiary in the shares sold shall
terminate and the Trustee shall distribute the net proceeds of the sale to the
Purported Transferee and to the Charitable Beneficiary as follows. The Purported
Transferee shall receive the lesser of (i) the price paid by the Purported
Transferee for the shares or, if the Purported Transferee did not give value for
the shares in connection with the event causing the shares to be held in the
Trust (e.g., a gift, devise or other such transaction), the Market Price (as
defined in the charter) of such shares on the day of the event causing the
shares to be held in the Trust and (ii) the price per share received by the
Trustee from the sale or other disposition of the shares held in the Trust. Any
net sale proceeds in excess of the amount payable to the Purported Transferee
shall be paid immediately to the Charitable Beneficiary. If, prior to the
discovery by the Company that shares of stock have been transferred to the
Trust, such shares are sold by a Purported Transferee, then (i) such shares
shall be deemed to have been sold on behalf of the Trust and (ii) to the extent
that the Purported Transferee received an amount for such shares that exceeds
the amount that such Purported Transferee was entitled to receive pursuant to
the aforementioned requirement, such excess shall be paid to the Trustee upon
demand.
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In addition, shares of stock held in the Trust shall be deemed to have
been offered for sale to the Company, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that resulted
in such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Company, or its designee, accepts such offer. The Company shall have the
right to accept such offer for a period of 90 days after the later of (i) the
date of the purported transfer resulting in a transfer to the Trust and (ii) the
date that the Company's board of directors determines in good faith that such
transfer occurred. Upon such a sale to the Company, the interest of the
Charitable Beneficiary in the shares sold shall terminate and the Trustee shall
distribute the net proceeds of the sale to the Purported Transferee.
All certificates representing shares of the common stock and the preferred
stock will bear a legend referring to the restrictions described above.
Every owner of more than 5% (or such lower percentage as required by the
Code or the regulations promulgated thereunder) of the number or value of
outstanding shares of common stock and preferred stock, shall, within 30 days
after December 31 of each year, give written notice to the Company stating the
name and address of such owner, the number of shares of each class and series of
stock of the Company which the owner constructively or beneficially owns and a
description of the manner in which such shares are held. Each such owner shall
provide to the Company such additional information as the Company may request in
order to determine the effect, if any, of such beneficial ownership on the
Company's status as a REIT and to ensure compliance with the Ownership Limit. In
addition, each stockholder shall upon demand be required to provide to the
Company such information as the Company may reasonably request in order to
determine the Company's status as a REIT and to comply with the requirements of
any taxing authority or governmental authority or to determine such compliance.
These ownership limits could delay, defer or prevent a transaction or a
change in control of the Company that might involve a premium price for the
common stock or the preferred stock or otherwise be in the best interest of the
stockholders.
TRANSFER AGENT
The transfer agent and registrar for the shares of common stock and
preferred stock is BankBoston, N.A.
DESCRIPTION OF UNITS AND PARTNERSHIP AGREEMENT
We have summarized material terms and provisions of the units, including a
summary of certain provisions of the Amended and Restated Agreement of Limited
Partnership of Excel Realty Partners, L.P. dated as of June 25, 1997, as amended
by the First Amendment to Amended and Restated Agreement of Limited Partnership
of Excel Realty Partners, L.P. dated as of August 20, 1999, which we refer to as
the "partnership agreement." The following Summary does not purport to be
complete and for more detail you should refer to applicable provisions of
Delaware law and the partnership agreement itself, which we have previously
filed with the Securities and Exchange Commission and which we incorporate by
reference as an exhibit to the registration statement of which this prospectus
is a part.
MANAGEMENT
Excel Realty Partners, L.P., or the "Partnership," is a Delaware limited
partnership. New Plan DRP Trust, a Maryland real estate investment trust and our
wholly-owned subsidiary, is the sole general partner of the Partnership, and as
such has full, exclusive and complete responsibility and discretion in the
management and control of the Partnership, subject to certain limited
exceptions. We sometimes refer to New Plan DRP Trust as the "general partner."
The limited partners of the Partnership, or the "limited partners," generally
have no authority to participate in or exercise control or management power over
the business and affairs of the Partnership. Pursuant to the partnership
agreement, we, in addition to the general partner, are obligated to satisfy all
of the general partner's obligations as general partner of the Partnership.
OPERATIONS
The partnership agreement requires that the Partnership be operated in a
manner that will enable us to satisfy the requirements for being classified as a
REIT. The partnership agreement provides that distributions of cash will be
distributed from time to time as determined by the general partner in accordance
with the partnership agreement. Subject to certain exceptions, the
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Partnership will also assume and pay when due, or reimburse the general partner
for payment of, all costs and expenses relating to the operation of the
Partnership.
TRANSFERABILITY OF INTERESTS
The partnership agreement provides that the general partner may not
voluntarily withdraw from the Partnership, or transfer or assign its interest in
the Partnership, without the consent of a majority in interest of the limited
partners, and only upon the admission of a successor general partner. Subject to
certain limitations and after certain specified dates, the limited partners may
transfer their interests in the Partnership to any Qualified Transferee (as
defined in the partnership agreement), subject to minimum transfer restrictions
and the general partner's right of first refusal. No transferee may become a
substituted limited partner without the general partner's consent.
CAPITAL CONTRIBUTIONS
If the general partner determines that the Partnership requires additional
funds at any time or from time to time in excess of funds available to the
Partnership from borrowings or capital contributions, and the general partner
borrows such funds from a financial institution or other lender, then the
general partner, to the extent permitted by law, will lend such funds to the
Partnership on comparable terms and conditions as are applicable to the general
partner's borrowing of such funds. Additionally, the general partner may
contribute, or accept contributions of, any required additional funds as
additional capital contributions to the Partnership.
EXCHANGE RIGHTS
Subject to certain limitations and after certain specified dates, the
holders of units have the right to require the Partnership to redeem part or all
of their units for cash or, at the general partner's election, the general
partner may acquire such units for shares of the Company's common stock (on a
one-for-one basis unless the general partner otherwise agrees), provided,
however, that a holder of units may not effect an exchange to the extent that it
would cause any person to violate any provision of our charter, including those
provisions relating to restrictions on ownership and transfer of our capital
stock. See "Description of Capital Stock -- Restrictions on Ownership of Capital
Stock." The number of shares of common stock for which the unit holders may
exchange their units is subject to adjustment in the event of stock splits,
stock dividends, issuance of certain rights, certain extraordinary distributions
and similar events.
TAX MATTERS
The general partner is the tax matters partner of the Partnership and, as
such, generally has authority to make tax elections under the Code on behalf of
the Partnership. The net income or net loss of the Partnership will generally be
allocated to the Company and the limited partners in accordance with their
priorities of distribution and as otherwise set forth in the partnership
agreement, subject to compliance with the provisions of Sections 704(b) and
704(c) of the Code and the regulations promulgated thereunder.
ABILITY TO ENGAGE IN OTHER BUSINESS
The general partner may conduct business of every nature and description,
including all activities pertaining to the acquisition and operation of shopping
center properties, independently of the Partnership.
TERM
The Partnership will continue in full force and effect until December 31,
2093, or until sooner dissolved upon the bankruptcy, dissolution, withdrawal or
termination of the general partner (unless the limited partners elect to
continue the Partnership), upon the election of the general partner and the
approval of the limited partners, upon an entry of decree of judicial
dissolution, or upon the sale or other disposition of all or substantially all
the assets of the Partnership.
INDEMNIFICATION
The partnership agreement provides for indemnification of the general
partner and the officers and directors of the general partner, and limits the
liability of the general partner to the Partnership and its partners for losses
sustained, liabilities incurred or
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benefits not derived as a result of errors in judgment or mistakes of fact or
law or any act or omission if the general partner acted in good faith.
EXCHANGE OF UNITS
TERMS OF THE EXCHANGE OF UNITS BY UNIT HOLDERS
Unit holders, subject to certain limitations and only after certain
specified dates, may exchange units for cash, or at the general partner's
election, for shares of the Company's common stock (on a one-for-one basis
unless the general partner otherwise agrees). The number of shares of common
stock for which the unit holders may exchange their units is subject to
adjustment in the event of stock splits, stock dividends, issuance of certain
rights, certain extraordinary distributions and similar events.
A unit holder effecting an exchange must deliver to the general partner a
notice of exchange. Such holder shall have the right to receive an amount of
cash from the Partnership equal to the Cash Amount (as defined in the
partnership agreement) on the Specified Redemption Date (as defined in the
partnership agreement). However, if the general partner elects to acquire such
tendered units in exchange for shares of the Company's common stock, the holder
shall have no right to cause the Partnership to redeem the units in exchange for
cash.
The shares of common stock shall be delivered as duly authorized, validly
issued, fully paid and nonassessable shares, free of any pledge, lien,
encumbrance or restriction, other than those provided in our charter and bylaws,
the Securities Act of 1933, as amended, relevant state securities or blue sky
laws and any applicable registration rights agreement with respect to such
shares of common stock. Notwithstanding any delay in such delivery, a holder
shall be deemed the owner of such shares of common stock and rights for all
purposes, including, without limitation, rights to vote or consent, receive
dividends, and exercise rights, as of the Specified Redemption Date.
Each holder tendering units shall continue to own all units subject to any
exchange, and be treated as a limited partner with respect to such units for all
purposes, until such units are transferred to the general partner and paid for
on the Specified Redemption Date. Until the Specified Redemption Date, such
holder shall have no rights as a stockholder of the Company.
CERTAIN CONDITIONS TO THE EXCHANGE
We will issue shares of common stock to a holder tendering units in
accordance with the partnership agreement subject to certain conditions,
including the following:
o In order to protect our status as a REIT, no such holder shall
be entitled to effect an exchange, if such exchange would cause
such holder or any other person to violate the provisions of our
charter.
o No such holder may effect an exchange more than once during any
twelve month period.
o No such holder may effect an exchange for less than 500 units,
or if such holder holds less than 500 units, all of the units
held by such holder.
o No such holder may effect an exchange during the period after
the record date established by the general partner for a
distribution from the Partnership to the partners in the
Partnership and prior to the record date established by us for a
distribution to our stockholders of some or all of such
distribution.
COMPARISON OF THE COMPANY AND THE PARTNERSHIP
The information below highlights a number of the significant differences between
the Partnership and the Company relating to, among other things, form of
organization, management control, voting rights, liquidity and federal income
tax considerations. These comparisons are intended to assist holders of units in
understanding how their investment will be changed if they exchange their units
for shares of common stock. THE FOLLOWING SUMMARY DOES NOT CONSTITUTE A COMPLETE
DISCUSSION OF THESE MATTERS, AND
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HOLDERS OF UNITS SHOULD CAREFULLY REVIEW THE BALANCE OF THIS PROSPECTUS AND THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART FOR ADDITIONAL
IMPORTANT INFORMATION ABOUT THE COMPANY.
FORM OF ORGANIZATION
The Partnership is organized as a Delaware limited partnership. The
Partnership's purpose is to conduct any business that may be lawfully conducted
by a limited partnership organized pursuant to the Delaware Revised Uniform
Limited Partnership Act, provided that such business is to be conducted in a
manner that permits us to be qualified as a REIT unless we cease to qualify as a
REIT.
We are a Maryland corporation. We have elected to be taxed as a REIT under the
Code and intend to maintain our qualification as a REIT. Under our charter, we
may engage in any lawful activity permitted by the Maryland General Corporation
Law.
ADDITIONAL EQUITY
The Partnership is authorized to issue units in exchange for additional capital
contributions as determined by the general partner. In exchange for such capital
contributions, the Partnership may issue partnership interests to the general
partner, may issue additional units to existing limited partners, and may admit
third parties as additional limited partners.
The board of directors may issue, in its discretion, common stock or shares of
preferred stock; provided that the total number of shares issued does not exceed
the authorized number of shares of stock set forth in our charter.
MANAGEMENT CONTROL
All management powers over the business and affairs of the Partnership are
vested in the general partner, and generally no limited partner of the
Partnership has any right to participate in or exercise control or management
power over the business and affairs of the Partnership, except as otherwise set
forth in the partnership agreement. The general partner may not be removed by
the holders of units with or without cause.
Our business and affairs are managed under the direction of our board of
directors subject to restrictions in our charter and bylaws. The board is
classified into three classes of directors. At each annual meeting of the
stockholders, the successors of the class of directors whose terms expire at
that meeting will be elected. The policies adopted by the board of directors may
be altered or eliminated without a vote of the stockholders. Accordingly, except
for their vote in the elections of directors, stockholders have no control over
the ordinary business policies of the Company.
DUTIES OF GENERAL PARTNERS AND DIRECTORS
Under Delaware law, the general partner of the Partnership is accountable to the
Partnership as a fiduciary and, consequently, is required to exercise good faith
and integrity in all of its dealings with respect to partnership affairs.
However, under the partnership agreement, the general partner is not liable for
monetary damages for losses sustained or liabilities incurred by partners as a
result of errors of judgment or of any act or omission, provided that the
general partner has acted in good faith.
Under the Maryland General Corporation Law, the directors must perform their
duties in good faith, in a manner that they reasonably believe to be in the best
interests of the Company and with the care of an ordinarily prudent person in a
like position. Directors of the Company who act in such a manner generally will
not be liable by reason of being a director of the Company.
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MANAGEMENT LIABILITY AND INDEMNIFICATION
As a matter of Delaware law, the general partner has liability for the payment
of the obligations and debts of the Partnership unless limitations upon such
liability are stated in the document or instrument evidencing the obligations.
Under the partnership agreement, the Partnership has agreed to indemnify the
general partner and any director or officer of the general partner from and
against all losses, claims, damages, liabilities, joint or several, expenses
(including legal fee and expenses), judgments, fines, settlements and other
amounts incurred in connection with any actions relating to the operations of
the Partnership in which the general partner or such director or officer is
involved, unless: (1) the act was in knowing violation of the law; (2) such
party received an improper personal benefit; or (3) the act involved fraud,
willful misconduct, recklessness or gross negligence. The reasonable expenses
incurred by an indemnitee may be reimbursed by the Partnership in advance of the
final disposition of the proceeding upon receipt by the Partnership of an
affirmation by such indemnitee of his, her or its good faith belief that the
standard of conduct necessary for indemnification has been met and an
undertaking by such indemnitee to repay the amount if it is determined that such
standard was not met.
Our charter contains a provision which eliminates the liability of our directors
and officers to the Company and its stockholders to the fullest extent permitted
by Maryland law.
ANTI-TAKEOVER PROVISIONS
Except in limited circumstances, the general partner of the Partnership has
exclusive management power over the business and affairs of the Partnership. The
general partner may not be removed by the limited partners with or without
cause. Subject to certain limitations and after certain specified dates, a
limited partner may generally transfer its limited partnership interest without
obtaining the approval of the general partner, provided that the general partner
has a right of first refusal for any proposed transfer and that the general
partner may, in its sole discretion, prevent the admission to the Partnership of
substituted limited partners.
In addition to our stockholder rights plan, our charter and bylaws contain a
number of provisions that may have the effect of delaying or discouraging an
unsolicited proposal for the acquisition of the Company or the removal of
incumbent management. These provisions include, among others: (1) a staggered
board of directors; (2) authorized stock that may be issued as preferred stock
in the discretion of the board of directors, with superior voting or other
rights to the common stock; and (3) provisions designed to avoid concentration
of share ownership in a manner that would jeopardize our status as a REIT under
the Code. The Maryland General Corporation Law also contains certain provisions
which could have the effect of delaying, deferring or preventing a change in
control of the Company or other transaction. See "Certain Provisions of Maryland
Law and the Company's Charter and Bylaws."
VOTING RIGHTS
Under the partnership agreement, the limited partners have voting rights in
limited circumstances, including as to the dissolution of the Partnership and
certain amendments to the partnership agreement, as described more fully below.
Otherwise, all decisions relating to the operation and management of the
Partnership are made by the general partner.
Our business and affairs are managed under the direction of our board of
directors, consisting of three classes having staggered terms of office. Each
class is to be elected by the stockholders at annual meetings. The Maryland
General Corporation Law requires that certain major corporate transactions,
including most amendments to our charter, may not be consummated without the
approval of stockholders as set forth below. All shares of common stock have one
vote per share, and our charter permits the board of directors to classify and
issue preferred stock in one or more series having voting power which may differ
from that of the common stock.
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The following is a comparison of the voting rights of the holders of units
and our stockholders as they relate to certain major transactions:
AMENDMENT OF THE PARTNERSHIP AGREEMENT OR OUR CHARTER
The partnership agreement may be amended through a proposal by the general
partner or a majority in interest of the limited partners. Such proposal, in
order to be effective, must be approved by the general partner and by the
written vote of a majority in interest of the limited partners. Certain
amendments that affect the fundamental rights of limited partners must be
approved by each affected limited partner. In addition, the general partner may,
without consent of the limited partners, amend the partnership agreement as to
certain ministerial matters.
Under the Maryland General Corporation Law and our charter, amendments to our
charter generally must be advised by the board of directors and approved by the
holders of at least a majority of the votes entitled to be cast on the matter.
VOTE REQUIRED TO DISSOLVE THE PARTNERSHIP OR THE COMPANY
The general partner may not elect to dissolve the Partnership without the prior
written consent of at least a majority in interest of the limited partners.
Under the Maryland General Corporation Law and our charter, dissolution of the
Company must be advised by the board of directors and approved by the holders of
at least a majority of the votes entitled to be cast on the matter.
COMPENSATION AND FEES
The general partner does not receive any compensation for its services as
general partner of the Partnership. The Partnership will reimburse the general
partner for all expenses incurred relating to the ongoing
operation of the Partnership.
Our officers and outside directors receive compensation for their services.
LIABILITY OF INVESTORS
Under the partnership agreement and applicable Delaware law, the liability of
the holders of units for the Partnership's debts and obligations is generally
limited to the amount of their investment in the Partnership.
Under Maryland law, stockholders generally are not personally liable for the
debts or obligations of the Company.
POTENTIAL DILUTION OF RIGHTS
The general partner of the Partnership is authorized, in its sole discretion and
without limited partner approval, to cause the Partnership to issue additional
limited partnership interests for any Partnership purpose at any time to the
limited partners or to other persons (including the general partner).
Our board of directors may issue, in its discretion, common stock or preferred
stock. The issuance of additional shares of either common stock or preferred
stock may result in the dilution of the interests of the stockholders.
LIQUIDITY
Subject to certain limitations and after certain specified dates, a limited
partner may generally transfer its limited partnership interest without
obtaining the approval of the general partner, provided that we have a right of
first refusal for any proposed transfer and that the general partner may, in its
sole discretion, prevent the admission to the Partnership of substituted limited
partners.
Generally, a stockholder is entitled to freely transfer the shares of common
stock received in exchange for units.
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TAXES
The Partnership itself is not subject to federal income taxes. Instead, each
holder of units includes its allocable share of the Partnership's taxable income
or loss in determining its individual federal income tax liability. Depending on
certain facts, a unitholder's allocable share of income and loss from the
Partnership may be subject to the "passive activity" limitations. Under the
"passive activity" rules, a unitholder's allocable share of income and loss from
the Partnership that is considered "passive income" generally can be offset only
against a holder's income and loss from other investments that constitute
"passive activities." Cash distributions from the Partnership are generally not
taxable to a holder of units except to the extent they exceed such holder's
basis in its interest in the Partnership (which will include such holder's
allocable share of the Partnership's nonrecourse debt). Holders of units are
required, in some cases, to file state income tax returns and/or pay state
income taxes in the states in which the Partnership owns property, even if they
are not residents of those states.
Dividends paid by the Company will be treated as "portfolio" income and
generally cannot be offset with losses from "passive activities." Distributions
made by the Company to its taxable domestic stockholders out of current or
accumulated earnings and profits (and not designated as capital gain dividends)
will be taken into account by them as ordinary income. Distributions that are
properly designated by the Company as capital gain dividends generally will be
taxed as capital gain at a rate of 20% to 25%. To the extent that the Company
makes distributions (not designated as capital gain dividends) in excess of its
current and accumulated earnings and profits, such distributions will first be
treated as a non-taxable return of capital to the extent of a stockholder's
adjusted basis in its stock, with the excess taxed as capital gain (if the stock
has been held as a capital asset). In the case of certain non-corporate taxable
domestic stockholders, including individuals, long-term capital gain with
respect to stock held more than twelve months is ordinarily taxed at a 20%
federal tax rate. Taxable domestic stockholders that are corporations may,
however, be required to treat up to 20% of certain capital gain dividends as
ordinary income. See "Certain Federal Income Tax Considerations -- Taxation of
Taxable U.S. Stockholders." The Company may be required to pay state income
taxes in certain states.
CERTAIN PROVISIONS OF MARYLAND LAW AND
THE COMPANY'S CHARTER AND BYLAWS
The following paragraphs summarize certain provisions of Maryland law and
our charter and bylaws. This summary does not purport to be complete and is
subject to and qualified in its entirety by reference to Maryland law and to our
charter and bylaws.
CLASSIFICATION OF THE BOARD OF DIRECTORS
Our bylaws provide that the number of directors of the Company may be
established by the board of directors but may not be fewer than the minimum
number required by the Maryland General Corporation Law (which under most
circumstances is three directors) nor more than fifteen. Any vacancy may be
filled by the stockholders or, at any regular meeting or at any special meeting
called for that purpose, by a majority of the remaining directors, except that
to fill a vacancy resulting from an increase in the number of directors requires
a majority vote of the entire board of directors. Pursuant to our charter, the
directors are divided into three classes. One class will hold office for a term
expiring at the annual meeting of stockholders to be held in 2000, another class
will hold office for a term expiring at the annual meeting of stockholders to be
held in 2001 and another class will hold office for a term expiring at the
annual meeting of stockholders held in 2002. As the term of each class expires,
directors in that class will be elected for a term of three years and until
their successors are duly elected and qualify. We believe that classification of
our board of directors will help to assure the continuity and stability of our
business strategies and policies as determined by our board of directors.
The classified director provision could have the effect of making the
replacement of incumbent directors more time consuming and difficult, which
could discourage a third party from making a tender offer or otherwise
attempting to obtain control of us, even though such an attempt might be
beneficial to us and our stockholders. At least two annual meetings of
stockholders, instead of one, will generally be required to effect a change in a
majority of our board of directors. Thus, the classified board provision could
increase the likelihood that incumbent directors will retain their positions.
Holders of common stock will have no right to cumulative voting for the election
of directors. Consequently, at each annual meeting of stockholders, the holders
of a majority of shares of common stock will be able to elect all of the
successors of the class of directors whose term expires at that meeting.
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REMOVAL OF DIRECTORS
Our charter provides that a director may be removed only for cause and by
the affirmative vote of a majority of the votes entitled to be cast generally in
the election of directors.
BUSINESS COMBINATIONS
Under the Maryland General Corporation Law, certain "business
combinations" between a Maryland corporation and any person who beneficially
owns ten percent or more of the voting power of the corporation's shares or an
affiliate of the corporation who, at any time within the two-year period prior
to the date in question, was an interested stockholder or an affiliate of such
an interested stockholder are prohibited for five years after the most recent
date on which the interested stockholder becomes an interested stockholder.
Thereafter, any such business combination must be recommended by the board of
directors of such corporation and approved by the affirmative vote of at least:
(a) 80% of the votes entitled to be cast by holders of outstanding shares of
voting stock of the corporation and (b) two-thirds of the votes entitled to be
cast by holders of voting stock of the corporation other than shares held by the
interested stockholder with whom (or with whose affiliate) the business
combination is to be effected, unless, among other conditions, the corporation's
common stockholders receive a minimum price (as defined in the Maryland General
Corporation Law) for their shares and the consideration is received in cash or
in the same form as previously paid by the interested stockholder for its
shares. These provisions of the Maryland General Corporation Law do not apply,
however, to business combinations that are approved or exempted by the board of
directors of the corporation prior to the time that the interested stockholder
becomes an interested stockholder.
Our board of directors has adopted a resolution providing that we, to the
extent permitted by applicable law, elect not to be governed by the provisions
of the Maryland General Corporation Law relative to "business combinations," but
no assurances can be given that such resolution will not be modified, amended or
revoked in the future or that the provisions of the Maryland General Corporation
Law relative to business combinations will not be reinstated or again become
applicable to us.
CONTROL SHARE ACQUISITIONS
The Maryland General Corporation Law provides that "control shares" of a
Maryland corporation acquired in a "control share acquisition" have no voting
rights except to the extent approved by a vote of two-thirds of the votes
entitled to be cast on the matter, excluding shares of stock owned by the
acquiror, by officers or by directors who are employees of the corporation.
"Control Shares" are voting shares of stock which, if aggregated with all other
such shares of stock previously acquired by such person, or in respect of which
such person is able to exercise or direct the exercise of voting power (except
solely by virtue of a revocable proxy), would entitle the acquiror to exercise
voting power in electing directors within one of the following ranges of voting
power: (i) one-fifth or more but less than one-third, (ii) one-third or more but
less than a majority, or (iii) a majority or more of all voting power. Control
shares do not include shares the acquiring person is then entitled to vote as a
result of having previously obtained stockholder approval. A "control share
acquisition" means the acquisition of control shares, subject to certain
exceptions.
A person who has made or proposes to make a control share acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel our board of directors to call a special meeting of
stockholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the corporation may itself
present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the control shares (except those for which voting
rights previously have been approved) for fair value determined, without regard
to the absence of voting rights for control shares, as of the date of the last
control share acquisition or of any meeting of stockholders at which the voting
rights of such shares are considered and not approved. If voting rights for
control shares are approved at a stockholders meeting and the acquiror becomes
entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights. The fair value of the shares as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid in the control share acquisition, and certain
limitations and restrictions otherwise applicable to the exercise of dissenters'
rights do not apply in the context of a control share acquisition.
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The control share acquisition statute does not apply (a) to shares
acquired in a merger, consolidation or share exchange if the corporation is a
party to the transaction or (b) to acquisitions approved or exempted by the
charter or bylaws of the corporation.
Our bylaws contain a provision exempting from the control share
acquisition statute any and all acquisitions by any holder of our stock. There
can be no assurance that such provision will not be amended or eliminated at any
time in the future.
The business combination statute and the control share acquisition statute
could have the effect of discouraging our acquisition by others and of
increasing the difficulty of consummating any such offer.
AMENDMENT TO THE CHARTER
Our charter, including its provisions on classification of our board of
directors, removal of directors, voting rights of common stock and voting
requirements for charter amendments, may be amended only by the affirmative vote
of the holders of at least a majority of all of the votes entitled to be cast on
the matter, after due authorization, approval and advice of our board of
directors.
DISSOLUTION OF THE COMPANY
The dissolution of the Company must be approved by the affirmative vote of
the holders of not less than a majority of all of the votes entitled to be cast
on the matter, after due authorization, approval and advice of our board of
directors.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
Our bylaws provide that: (a) with respect to an annual meeting of
stockholders, nominations of persons for election to our board of directors and
the proposal of business to be considered by stockholders may be made only: (i)
pursuant to the Company's notice of the meeting, (ii) by or at the direction of
our board of directors, or (iii) by a stockholder who is entitled to vote at the
meeting and has complied with the advance notice procedures set forth in our
bylaws, and (b) with respect to special meetings of stockholders, only the
business specified in the Company's notice of meeting may be brought before the
meeting of stockholders, and nominations of persons for election to our board of
directors may be made only (i) pursuant to the Company's notice of the meeting,
(ii) by or at the direction of our board of directors, or (iii) provided that
our board of directors has determined that directors shall be elected at such
meeting, by a stockholder who is entitled to vote at the meeting and has
complied with the advance notice provisions set forth in our bylaws.
The provisions in our charter on classification of our board of directors,
the business combination and the control share acquisition provisions of the
Maryland General Corporation Law, and the advance notice provisions of our
bylaws could have the effect of delaying, deferring or preventing a change in
control or other transaction in which holders of some, or a majority, of the
common stock might receive a premium for their common stock over the then
prevailing market price or which such holders might believe to be otherwise in
their best interests.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Maryland General Corporation Law permits a Maryland corporation to
include in its charter a provision eliminating 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. Our
charter contains such a provision which eliminates such liability to the maximum
extent permitted by the Maryland General Corporation Law. This provision does
not limit our ability or our stockholders' ability to obtain equitable relief,
such as an injunction or rescission.
Our charter and bylaws authorize us to the maximum extent permitted by
Maryland law to obligate the Company to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to any
present or former director or officer from and against any claim or liability to
which such person may become subject or which such person may incur by reason of
his status as a present or former director or officer of the Company. Our
charter and bylaws also permit us 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.
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The Maryland General Corporation Law requires a corporation (unless its
charter provides otherwise, which our 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 Maryland General Corporation Law 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, under the Maryland General Corporation Law, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, the Maryland General
Corporation Law permits a corporation to advance reasonable expenses to a
director or officer upon the corporation's receipt of (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 corporation and (b) a written
undertaking by or on his behalf to repay the amount paid or reimbursed by the
corporation if it shall ultimately be determined that the standard of conduct
was not met. The termination of any proceeding by conviction, or upon a plea of
nolo contendere or its equivalent, or an entry of any order of probation prior
to judgment, creates a rebuttable presumption that the director or officer did
not meet the requisite standard of conduct required for indemnification to be
permitted. It is the position of the Securities and Exchange Commission that
indemnification of directors and officers for liabilities arising under the
Securities Act of 1933, as amended, is against public policy and is
unenforceable.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of material U.S. federal income tax considerations
regarding the Company and the common stock offered hereby is based on current
law, is for general information only and is not tax advice. The information set
forth below, to the extent it constitutes matters of law, summaries of legal
matters or legal conclusions, is the opinion of Altheimer & Gray, our tax
counsel, as to the material federal income tax consequences relevant to
purchasers of our common stock. The tax treatment of a holder of any of the
common stock will vary depending on his or her particular situation, and this
discussion does not purport to deal with all aspects of U.S. federal income
taxation that may be relevant to particular stockholders in light of their
personal investment or tax circumstances, or to certain types of stockholders
(including, without limitation, insurance companies, financial institutions or
broker-dealers, tax-exempt organizations, stockholders holding securities as
part of a conversion transaction or a hedge or hedging transaction or as a
position in a straddle for tax purposes, foreign corporations and persons who
are not citizens or residents of the United States, except to the extent
discussed under the headings "Taxation of Tax-Exempt Stockholders" and "Taxation
of Non-U.S. Stockholders") subject to special treatment under the federal income
tax laws. In addition, the summary below does not consider the effect of any
foreign, state, local or other tax laws that may be applicable to holders of the
common stock offered hereby.
The information set forth below is based on the Code and the regulations
thereunder, and on the interpretations thereof by the courts and the Internal
Revenue Service, all as they exist on the date of this letter. These authorities
are subject to change, including changes with retroactive effect. No assurance
can be given as to whether, when, in what forms, or with what effective dates
the tax laws (or the interpretations thereof) may be changed.
You are urged to consult your tax advisor regarding the specific tax
consequences to you of (1) the disposition of units, (2) the acquisition,
ownership and sale or other disposition of our common stock, in each case
including the federal, state, local, foreign and other tax consequences, (3) our
election to be taxed as a REIT for federal income tax purposes, and (4)
potential changes in applicable tax laws.
The information in this section is based on the Code, current, temporary
and proposed Treasury Regulations promulgated under the Code, the legislative
history of the Code, current administrative interpretations and practices of the
IRS (including its practices and policies as expressed in certain private letter
rulings which are not binding on the IRS except with respect to the particular
taxpayers who requested and received such rulings), and court decisions, all as
of the date hereof. No assurance can be given that future legislation, Treasury
Regulations, administrative interpretations and practices and/or court decisions
will not adversely affect existing interpretations. Any such change could apply
retroactively to transactions preceding the date of the change. We have not
requested, and do not plan to request, any rulings from our IRS concerning our
tax treatment. Thus, no assurance can be
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provided that the statements set forth herein (which are, in any event, not
binding on the IRS or courts) will not be challenged by the IRS or will be
sustained by a court if so challenged.
This discussion is not intended as a substitute for careful tax planning.
Each prospective purchaser is advised to consult his or her own tax advisor
regarding the specific tax consequences to him or her of the purchase, ownership
and sale of the common stock offered hereby, including the federal, state,
local, foreign and other tax consequences of such purchase, ownership and sale
and of potential changes in applicable tax laws.
TAX CONSEQUENCES OF REDEMPTION OR EXCHANGE OF UNITS
The redemption or exchange of units for cash or common stock will be a
fully taxable transaction for federal income tax purposes. Depending upon a
holder's particular situation, it is possible that the amount of gain recognized
or even the tax liability resulting from such gain could exceed the amount of
cash and the value of common stock received upon such redemption or exchange.
Holders are advised to consult their own tax advisors regarding the specific tax
consequences of the redemption or exchange of units, including the federal,
state, local, foreign or other tax consequences of such transaction.
TAXATION OF THE COMPANY
General. Each of the Company's predecessor companies, New Plan Realty
Trust and Excel Realty Trust, Inc., elected to be taxed as a REIT under Sections
856 through 860 of the Code, commencing with the year ended July 31, 1972 for
New Plan and the year ended December 31, 1987 for Excel. The Company believes
that the predecessor companies were organized and that the predecessor companies
and the Company, since the combination of the predecessor companies, have been
operating in a manner so as to qualify for taxation as REITs under the Internal
Revenue Code. We intend to continue to operate in such a manner. Our
qualification and taxation as a REIT, however, depends upon our ability to meet
(through actual annual operating results, asset diversification, distribution
levels and diversity of stock ownership) the various qualification tests imposed
under the Code discussed below. Accordingly, no assurance can be given that we
have operated or will continue to operate in a manner so as to qualify or remain
qualified as a REIT. See "--Failure to Qualify." Further, the anticipated income
tax treatment described in this prospectus may be changed, perhaps
retroactively, by legislative, administrative or judicial action at any time.
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 U.S. 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).
If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income taxes on our net income that is currently distributed
to our stockholders. This treatment substantially eliminates the "double
taxation" that ordinarily results from investment in a corporation. Double
taxation refers to taxation that occurs once at the corporate level when income
is earned and once again at the stockholder level when such income is
distributed. We will be subject to federal income tax as follows:
o We will be taxed at regular corporate rates on any undistributed
REIT taxable income, including undistributed net capital gains.
o We may be subject to the "alternative minimum tax" on our items
of tax preference.
o If we have: (a) 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 (b) other
nonqualifying income from foreclosure property, we will be
subject to tax at the highest corporate rate on this income.
Foreclosure property is generally defined as property acquired
through foreclosure or after a default on a loan secured by the
property or a lease of the property.
o We will be subject to a 100% tax on any net income from
prohibited transactions. Prohibited transactions are, in
general, sales or other taxable dispositions of property held
primarily for sale to customers in the ordinary course of
business other than foreclosure property.
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o If we fail to satisfy the 75% or 95% gross income test, as
described below, but have otherwise maintained our qualification
as a REIT, we 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 we fail the 75% or 95% gross income test
multiplied by (b) a fraction intended to reflect our
profitability.
o We will be subject to a 4% excise tax on the excess of the
required distribution over the amounts actually distributed if
we fail to distribute during each calendar year at least the sum
of (i) 85% of our REIT ordinary income for the year, (ii) 95% of
our REIT capital gain net income for the year, and (iii) any
undistributed taxable income from prior periods.
o If we acquire any asset (a "Built-In Gain Asset") 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
our hands is determined by reference to the basis of the asset
in the hands of the C corporation, and we subsequently recognize
gain on the disposition of the asset during the ten-year period
(the "Recognition Period") beginning on the date on which we
acquired the asset, then under Treasury Regulations not yet
promulgated we will be subject to tax at the highest regular
corporate tax rate on this gain to the extent of the Built-In
Gain. For this purpose, the term "Built-In Gain" means the
excess of (a) the fair market value of the asset over (b) our
adjusted basis in the asset, in each case determined as of the
beginning of the Recognition Period. The results described in
this paragraph with respect to the recognition of Built-In Gain
assume that we will make an election pursuant to IRS Notice
88-19.
REIT QUALIFICATION REQUIREMENTS
General. The Code defines a REIT as a corporation, trust or association:
(1) that is managed by one or more trustees or directors;
(2) that issues transferable shares or transferable certificates to
evidence beneficial ownership;
(3) that would be taxable as a domestic corporation but for Sections 856
through 860 of the Code;
(4) that is not a financial institution or an insurance company within
the meaning of certain provisions of the Code;
(5) that is beneficially owned by 100 or more persons;
(6) 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) during the last
half of each taxable year; and
(7) that meets certain other tests, described below, regarding the
nature of its income and assets and the amount of its distributions.
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 twelve months, or during a proportionate
part of a taxable year of less than twelve months. Conditions (5) and (6) do not
apply until after the first taxable year for which an election is made to be
taxed as a REIT. For purposes of condition (6), pension funds and certain other
tax-exempt entities are treated as individuals, subject to a "look-through"
exception with respect to pension funds.
We believe that we have satisfied each of the above conditions. In
addition, our charter provides for restrictions regarding ownership and transfer
of shares. These restrictions are intended to assist us in continuing to satisfy
the share ownership requirements described in (5) and (6) above. These ownership
and transfer restrictions are described in the section entitled "Description of
Capital Stock--Restrictions on Ownership of Capital Stock." These restrictions,
however, may not ensure that we will, in all cases, be able to satisfy the share
ownership requirements described in (5) and (6) above. If we fail to satisfy
these share ownership requirements, except as provided in the next sentence, our
status as a REIT will terminate. However, if we comply with the rules contained
in applicable Treasury Regulations that require us to ascertain the actual
ownership of our shares and we do not know, or would not have
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known through the exercise of reasonable diligence, that we failed to meet the
requirement described in condition (6) above, we will be treated as having met
this requirement. See the section below entitled "--Failure to Qualify."
In addition, we may not maintain our status as a REIT unless our taxable
year is a calendar year. We have and will continue to have a calendar taxable
year.
Ownership of Subsidiaries. We own and operate a number of properties
through wholly-owned subsidiaries (the "QRSs"). We currently own 100% of the
stock of each of the QRSs. 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" (defined for taxable years
beginning on or before August 5, 1997, as any corporation if 100 percent of the
stock of such corporation is held by the REIT at all times during the period
such corporation was in existence and, for taxable years beginning after August
5, 1997, as any corporation 100 percent of the stock of which is owned by the
REIT (without regard to prior ownership)) 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 are treated
as our assets, liabilities and items. We have not, however, sought or received a
ruling from the IRS that the QRSs are "qualified REIT subsidiaries."
Ownership of a Partnership Interest. In the case of a REIT which 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. Also,
the REIT will be deemed to be entitled to its proportionate share of the income
of the partnership. The character of the assets and gross income of the
partnership retains 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, our proportionate share of the assets and items of income of
the partnerships in which we are a partner are treated as our assets and items
of income for purposes of applying the requirements described in this
prospectus, including the income and asset tests described below. We have direct
control of the partnerships in which we are a partner and intend to continue to
operate them in a manner consistent with the requirements for qualification as a
REIT.
Income Tests. We must satisfy two gross income requirements annually to
maintain our qualification as a REIT. First, in each taxable year we must derive
directly or indirectly at least 75% of our gross income (excluding gross income
from prohibited transactions) 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,
in each taxable year we must derive at least 95% of our gross income (excluding
gross income from prohibited transactions) from the real property investments
described above, or from dividends, interest and gain from the sale or
disposition of stock or securities (or from any combination of the foregoing).
For these purposes, the term "interest" generally does not include any amount
received or accrued, directly or indirectly, if the determination of the amount
depends in whole or in part on the income or profits of any person. An amount
received or accrued generally will not be excluded from the term "interest,"
however, solely by reason of being based on a fixed percentage or percentages of
receipts or sales.
Rents we receive will qualify as "rents from real property" in satisfying
the gross income requirements for a REIT described above only if the following
conditions are met:
o the amount of rent must not be based in whole or in part on the
income or profits of any person. An amount received or accrued
generally will not be excluded from the term "rents from real
property" solely because it is based on a fixed percentage or
percentages of receipts or sales;
o the Code provides that rents received from a tenant will not
qualify as "rents from real property" in satisfying the gross
income tests if the REIT, or an actual or constructive owner of
10% or more of the REIT, actually or constructively owns 10% or
more of the interests in such tenant (a "Related Party Tenant");
o 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 personal property will not qualify as "rents
from real property"; and
o 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 the property,
subject to a 1% de minimis exception, other
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than through an independent contractor from whom the REIT
derives no revenue. The REIT may, however, 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. Examples of such services include the provision of
light, heat, or other utilities, trash removal and general
maintenance of common areas.
Except as provided below, we do not and will not:
o charge rent for any property that is based in whole or in part
on the income or profits of any person (except by reason of
being based on a percentage of receipts or sales, as described
above);
o rent any property to a Related Party Tenant;
o 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
o perform services considered to be rendered to the occupant of
the property, other than through an independent contractor from
whom we derive no revenue.
Notwithstanding the foregoing, we may have taken and may continue to take
certain of the actions set forth above to the extent that we determine, based on
the advice of our tax counsel, that such actions will not jeopardize our status
as a REIT.
Income derived from the development, property management, administrative
and miscellaneous services described in the preceding paragraph qualifies under
neither the 95% nor 75% gross income tests. In addition, ERT Development
Corporation, a Delaware corporation ("EDV"), receives fees in exchange for the
performance of certain development activities. To the extent that our Board
believes that there would be adverse tax consequences through direct accrual of
such fees to us, such activities will be performed by EDV and such fees will not
accrue to us, but we will derive dividends from EDV, 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.
If we fail to satisfy one or both of the 75% or 95% gross income tests for
any taxable year, we may nevertheless qualify as a REIT for the year if we are
entitled to relief under certain provisions of the Code. Generally, we may avail
ourselves of the relief provisions if:
o our failure to meet these tests was due to reasonable cause and
not due to willful neglect;
o we attach a schedule of the sources of our income to our federal
income tax return; and
o 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 we
would be entitled to the benefit of these relief provisions. For example, if we
fail to satisfy the gross income tests because nonqualifying income that we
intentionally accrue or receive exceeds the limits on nonqualifying income, the
IRS could conclude that our failure to satisfy the tests was not due to
reasonable cause. If these relief provisions do not apply to a particular set of
circumstances, we will not qualify as a REIT. As discussed above, even if these
relief provisions apply, and we retain our status as a REIT, a tax would be
imposed with respect to our non-qualifying income. We may not always be able to
maintain compliance with the gross income tests for REIT qualification despite
our periodic monitoring of our income.
Sales or Dispositions of Assets. As a REIT, we are subject to a tax of
100% on our gain (i.e., the excess, if any, of the amount realized over our
adjusted basis in the property) from each sale of property (excluding certain
property obtained through foreclosure) in which we are a dealer. In calculating
our gain subject to the 100% tax, we are not allowed to offset gains on sales of
property with losses on other sales of property in which we are a dealer.
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Under the Code, we would be deemed to be a dealer in any property that we
hold primarily for sale to customers in the ordinary course of our business.
Such determination is a factual inquiry, and absolute certainty of our status
generally cannot be provided. However, we will not be treated as a dealer in
real property for the 100% tax if (i) we have 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) we either (a) have 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 of our assets 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 we derive no income. The sale of more than one
property to one buyer as part of one transaction constitutes one sale. However,
our failure to meet these "safe harbor" requirements does not necessarily mean
that we are a dealer in real property.
Based on these rules, if we sell a property that we have held for more
than four years and otherwise satisfy the "safe harbor" described in the
preceding paragraph, such sale will not result in the imposition of the 100% tax
on the gain. 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
frequent our sales of assets are, the more likely we 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 we qualify for the
safe harbor on any sales of property held for four years or more. Furthermore,
once we have 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.
Asset Tests. At the close of each quarter of our taxable year, we also
must satisfy three tests relating to the nature and diversification of our
assets.
o At least 75% of the value of our total assets must be
represented by real estate assets, cash, cash items and
government securities. For purposes of this test, real estate
assets include stock or debt instruments that are purchased with
the proceeds of a stock offering or a long-term (at least five
years) public debt offering, but only for the one-year period
beginning on the date we receive such proceeds.
o Not more than 25% of our total assets may be represented by
securities, other than those securities includable in the 75%
asset test.
o Of the investments included in the 25% asset class, the value of
any one issuer's securities may not exceed 5% of the value of
our total assets, and we may not own more than 10% of any one
issuer's outstanding voting securities (other than a QRS).
We currently hold 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, because the QRSs 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," our ownership of the
stock of the QRSs will not cause us to fail the asset tests.
We currently hold 100% of the nonvoting preferred stock of EDV, which
interest entitles us to a percentage of all dividends and liquidating
distributions of EDV. Such shares of nonvoting preferred stock will not
constitute voting securities for purposes of the asset tests. Furthermore, we
have not owned any of the voting securities of EDV and will not own more than
10% of the voting securities of such corporation. In addition, we believe that
the value of our securities of EDV have not exceeded 5% of the total value of
our assets, and will not exceed such amount in the future. No independent
appraisals have been obtained to support this conclusion. We cannot assure our
stockholders that the IRS will not contend that the value of the securities of
EDV held by us exceeds the 5% value limitation. The 5% value test must be
satisfied not only on the date that we acquired securities in EDV, but also each
time we increase our ownership in EDV securities or acquire other property.
Although we believe that we presently satisfy the 5% value test and plan to take
steps to ensure that we satisfy such test for any quarter with respect to which
retesting is to occur, we cannot assure our stockholders that such steps will
always be successful, or will not require a reduction in our interest in EDV.
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After initially meeting the asset tests at the close of any quarter, we
will not lose our 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 we fail
to satisfy the asset tests because we acquire securities or other property
during a quarter, we can cure this failure by disposing of sufficient
nonqualifying assets within 30 days after the close of that quarter. We believe
we have maintained and intend to continue to maintain adequate records of the
value of our assets to ensure compliance with the asset tests, and we intend to
take such other actions within the 30 days after the close of any quarter as may
be required to cure any noncompliance. If we fail to cure noncompliance with the
asset tests within this time period, we would cease to qualify as a REIT.
Annual Distribution Requirements. To maintain our qualification as a REIT,
we are required to distribute dividends, other than capital gain dividends, to
our stockholders in an amount at least equal to
o the sum of 95% of our "REIT taxable income," and 95% of our
after tax net income, if any, from foreclosure property, minus
o the excess of the sum of certain items of our noncash income
over 5% of "REIT taxable income" as described above.
Our "REIT taxable income" is computed without regard to the dividends paid
deduction and our net capital gain. In addition, for purposes of this test,
non-cash income means income attributable to leveled stepped rents, original
issue discount on purchase money debt, or a like-kind exchange that is later
determined to be taxable.
We must pay these distributions in the taxable year to which they relate,
or in the following taxable year if they are declared before we timely file our
tax return for such year and if paid on or before the first regular dividend
payment after such declaration. Except as provided below, these distributions
are taxable to our stockholders (other than tax-exempt entities, as discussed
below) in the year in which paid. This is so even though these distributions
relate to the prior year for purposes of our 95% distribution requirement. The
amount distributed must not be preferential. For example, every stockholder of
the class of stock to which a distribution is made must be treated the same as
every other stockholder of that class, and no class of stock may be treated
otherwise than in accordance with its dividend rights as a class. To the extent
that we do not distribute all of our net capital gain or distribute at least
95%, but less than 100%, of our "REIT taxable income," as adjusted, we will be
subject to tax thereon at regular ordinary and capital gain corporate tax rates.
We believe we have made and intend to continue to make timely distributions
sufficient to satisfy these annual distribution requirements.
We expect that our REIT taxable income will be less than our cash flow
because of depreciation and other non-cash charges included in our REIT taxable
income. Accordingly, we anticipate that we will generally have sufficient cash
or liquid assets to enable us to satisfy our distribution requirements. However,
from time to time, we may not have sufficient cash or other liquid assets to
meet these distribution requirements because of timing differences between the
actual receipt of income and actual payment of deductible expenses, and the
inclusion of income and deduction of expenses in determining our taxable income.
If these timing differences occur, we may need to arrange for short-term, or
possibly long-term, borrowings or need to pay dividends in the form of taxable
stock dividends in order to meet the distribution requirements.
Under certain circumstances, we may be able to rectify a failure to meet
our distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which we may include in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being taxed
on amounts distributed as deficiency dividends. However, we will be required to
pay interest based upon the amount of any deduction taken for deficiency
dividends.
In addition, we would be subject to a 4% excise tax on the excess of the
required distribution over the amounts actually distributed if we fail to
distribute during each calendar year, or in the case of distributions with
declaration and record dates falling in the last three months of the calendar
year, by the end of January immediately following such year, at least the sum of
85% of our REIT ordinary income for such year, 95% of our REIT capital gain
income for the year and any undistributed taxable income from prior periods. Any
REIT taxable income and net capital gain on which this excise tax is imposed for
any year is treated as an amount distributed during that year for purposes of
calculating the tax.
Under new federal legislation, a REIT may elect to retain (and not
distribute) and pay federal income tax on its net long-term capital gain and
possibly certain excise taxes on its undistributed income. If such election is
made, the REIT's stockholders must
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<PAGE> 25
include in income their proportionate share of the undistributed long-term
capital gain and are deemed to have paid their proportionate share of federal
income tax paid by the REIT.
FAILURE TO QUALIFY
If we fail to qualify for taxation as a REIT in any taxable year, and the
relief provisions of the Code applicable to REITs do not apply, we will be
subject to tax, including any applicable alternative minimum tax, on our taxable
income at regular corporate rates. Distributions to stockholders in any year in
which we fail to qualify as a REIT will not be deductible by us and we will not
be required to distribute any amounts to our stockholders. As a result, we
anticipate that our failure to qualify as a REIT would reduce the cash available
for distribution by us to our stockholders. In addition, if we fail to qualify
as a REIT, all distributions to stockholders will be taxable as ordinary income
to the extent of our current and accumulated earnings and profits. Subject to
certain limitations of the Code, corporate stockholders may be eligible for the
dividends-received deduction. Unless we are entitled to relief under specific
statutory provisions, we will also be disqualified from taxation as a REIT for
the four taxable years following the year during which we lose our
qualification. It is not possible to state whether in all circumstances we would
be entitled to this statutory relief.
OTHER TAX MATTERS
Our interests in partnerships involve special tax considerations,
including the possibility that the IRS might challenge the status of the
partnerships as partnerships (as opposed to associations taxable as
corporations) for federal income tax purposes. If any partnership in which we
own an interest were treated as an association, it would be taxable as a
corporation and therefore be subject to an entity-level tax on its income. In
such a situation, the character of our assets and items of gross income would
change and may prevent us from satisfying the REIT asset tests and possibly the
REIT income tests. This, in turn, would prevent us from qualifying as a REIT. In
addition, a change in a partnership's tax status might be treated as a taxable
event. If so, we might incur a tax liability without any related cash
distributions.
Treasury Regulations that apply for tax periods beginning on or after
January 1, 1997, provide that a domestic business entity not otherwise organized
as a corporation and which has at least two members (an "eligible entity") may
elect to be treated as a partnership for federal income tax purposes. Unless it
elects otherwise, an eligible entity in existence prior to January 1, 1997, will
have the same classification for federal income tax purposes that it claimed
under the entity classification Treasury Regulations in effect prior to this
date. In addition, an eligible entity which did not exist, or did not claim a
classification, prior to January 1, 1997, will be classified as a partnership
for federal income tax purposes unless it elects otherwise. The partnerships in
which we own an interest intend to claim classification as partnerships under
the final Treasury Regulations, and we believe these partnerships will be
classified as partnerships for federal income tax purposes.
A portion of the cash we will use to fund distributions to our
stockholders comes from EDV through dividends on our EDV nonvoting preferred
stock. EDV 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 EDV is required to pay reduces the cash available for
distribution by us to our stockholders.
As described above, the value of EDV's nonvoting preferred stock held by
us cannot exceed 5% of the value of our total assets at the end of any calendar
quarter in which we acquire such securities or increase our interest in such
securities. See "-- REIT Qualification Requirements -- Asset Tests." This
limitation may restrict the ability of EDV to increase the size of its business
unless the value of our assets is increasing at a commensurate rate.
STATE AND LOCAL TAXES
We may be subject to state or local taxation in various state or local
jurisdictions, including those in which we transact business. Our stockholders
may be subject to state or local taxation in various state or local
jurisdictions, including those in which they reside. Our state and local tax
treatment may not conform to the federal income tax consequences summarized
above. In addition, your state and local tax treatment may not conform to the
federal income tax consequences summarized above. Consequently, you should
consult your tax advisor regarding the effect of state and local tax laws on a
disposition of units or an investment in our common stock.
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<PAGE> 26
TAXATION OF TAXABLE U.S. STOCKHOLDERS
As used below, the term "U.S. stockholder" means a holder of shares of
common stock who is for United States federal income tax purposes:
o a citizen or resident of the United States;
o a corporation, partnership, or other entity created or organized
in or under the laws of the United States or of any state
thereof or in the District of Columbia, unless, in the case of a
partnership, Treasury Regulations provide otherwise;
o an estate the income of which is subject to United States
federal income taxation regardless of its source; or
o a trust whose administration is subject to the primary
supervision of a United States court and which has one or more
United States persons who have the authority to control all
substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
Regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to this date that elect to continue to be treated as
United States persons, shall also be considered U.S. stockholders.
Distributions Generally. Distributions out of our current or accumulated
earnings and profits, other than capital gain dividends discussed below, will
constitute dividends taxable to our taxable U.S. stockholders as ordinary
income. As long as we qualify as a REIT, these distributions will not be
eligible for the dividends-received deduction in the case of U.S. stockholders
that are corporations. For purposes of determining whether distributions to
holders of common stock are out of current or accumulated earnings and profits,
our earnings and profits will be allocated first to the outstanding preferred
stock, if any, and then to the common stock.
To the extent that we make distributions in excess of our current and
accumulated earnings and profits, these distributions will be treated first as a
tax-free return of capital to each U.S. stockholder. This treatment will reduce
the adjusted basis which each U.S. stockholder has in his or her shares of stock
for tax purposes by the amount of the distribution, but not below zero.
Distributions in excess of a U.S. stockholder's adjusted basis in his or her
shares will be taxable as capital gains, provided that the shares were held as a
capital asset, and will be taxable as long-term capital gain if the shares have
been held for more than one year. Dividends we declare in October, November, or
December of any year and payable to a stockholder of record on a specified date
in any of these months shall be treated as both paid by us and received by the
stockholder on December 31 of that year, provided we actually pay the dividend
on or before January 31 of the following calendar year. Stockholders may not
include in their own income tax returns any of our net operating losses or
capital losses.
Capital Gain Distributions. Distributions that we properly designate as
capital gain dividends will be taxable to taxable U.S. stockholders as gains
from the sale or disposition of a capital asset to the extent that they do not
exceed our actual net capital gain for the taxable year. Depending on the period
of time the tax characteristics of the assets which produced these gains, and on
certain designations, if any, which we may make, these gains may be taxable to
non-corporate U.S. stockholders at a 20% or 25% rate. U.S. stockholders that are
corporations may, however, be required to treat up to 20% of certain capital
gain dividends as ordinary income.
Passive Activity Losses and Investment Interest Limitations. Distributions
we make and gain arising from the sale or exchange by a U.S. stockholder of our
shares will not be treated as passive activity income. As a result, U.S.
stockholders will generally be unable to apply any "passive losses" against this
income or gain. Distributions we make, to the extent they do not constitute a
return of capital, generally will be treated as investment income for purposes
of computing the investment interest limitation. Gain arising from the sale or
other disposition of our shares, however, will not be treated as investment
income under certain circumstances.
Retention of Net Long-Term Capital Gains. We may elect to retain, rather
than distribute as a capital gain dividend, our net long-term capital gains. If
we make this election, we would pay tax on our retained net long-term capital
gains. In addition, to the extent we designate, a U.S. stockholder generally
would:
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<PAGE> 27
o include its proportionate share of our undistributed long-term
capital gains in computing its long-term capital gains in its
return for its taxable year in which the last day of our taxable
year falls;
o be deemed to have paid the capital gains tax imposed on us on
the designated amounts included in the U.S. stockholder's
long-term capital gains;
o receive a credit or refund for the amount of tax deemed paid by
it;
o increase the adjusted basis of its common stock by the
difference between the amount of includable gains and the tax
deemed to have been paid by it; and
o in the case of a U.S. stockholder that is a corporation,
appropriately adjust its earnings and profits for the retained
capital gains in accordance with Treasury Regulations to be
prescribed by the IRS.
Dispositions of Common Stock. If you are a U.S. stockholder and you sell
or dispose of your shares of common stock, you will recognize gain or loss for
federal income tax purposes in an amount equal to the difference between the
amount of cash and the fair market value of any property you receive on the sale
or other disposition and your adjusted basis in the shares for tax purposes.
This gain or loss will be capital if you have held the common stock as a capital
asset and will be long-term capital gain or loss if you have held the common
stock for more than one year. In general, if you are a U.S. stockholder and you
recognize loss upon the sale or other disposition of common stock that you have
held for six months or less (after applying certain holding period rules), the
loss you recognize will be treated as a long-term capital loss, to the extent
you received distributions from us which were required to be treated as
long-term capital gains.
TAXATION OF TAX-EXEMPT STOCKHOLDERS
The IRS has ruled that amounts distributed as dividends by a qualified
REIT do not constitute unrelated business taxable income (or "UBTI") when
received by a tax-exempt entity. Based on that ruling, provided that a
tax-exempt stockholder (except certain tax-exempt stockholders described below)
has not held its shares as "debt financed property" within the meaning of the
Code, and the shares are not otherwise used in a trade or business, dividend
income from us will not be UBTI to a tax-exempt stockholder. Similarly, income
from the sale of shares will not constitute UBTI unless a tax-exempt stockholder
has held its shares as "debt financed property" within the meaning of the Code
or has used the shares in its trade or business. Generally, debt financed
property is property, the acquisition or holding of which was financed through a
borrowing by the tax-exempt stockholder.
For stockholders which are social clubs, voluntary employee benefit
associations, supplemental unemployment benefit trusts, and qualified group
legal services plans exempt from federal income taxation under Sections
501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code, respectively, income from an
investment in our shares will constitute UBTI unless the organization is able to
properly claim a deduction for amounts set aside or placed in reserve for
certain purposes so as to offset the income generated by its investment in our
shares. These prospective investors should consult their tax advisors concerning
these "set aside" and reserve requirements.
Notwithstanding the above, however, a portion of the dividends paid by a
"pension-held REIT" shall be treated as UBTI as to any trust which:
o is described in Section 401(a) of the Code;
o is tax-exempt under Section 501(a) of the Code; and
o holds more than 10%, by value, of the interests in the REIT.
Tax-exempt pension funds that are described in Section 401(a) of the Code
are referred to below as "qualified trusts."
A REIT is a "pension held REIT" if:
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<PAGE> 28
o it would not have qualified as a REIT but for the fact that
Section 856(h)(3) of the Code provides that stock owned by
qualified trusts shall be treated, for purposes of the "not
closely held" requirement, as owned by the beneficiaries of the
trust, rather than by the trust itself; and
o either at least one such qualified trust holds more than 25%, by
value, of the interests in the REIT, or one or more such
qualified trusts, each of which owns more than 10%, by value, of
the interests in the REIT, holds in the aggregate more than 50%,
by value, of the interests in the REIT.
The percentage of any REIT dividend treated as UBTI is equal to the ratio
of:
o the UBTI earned by the REIT, treating the REIT as if it were a
qualified trust and therefore subject to tax on UBTI, to
o the total gross income of the REIT.
A de minimis exception applies where the percentage is less than 5% for
any year. The provisions requiring qualified trusts to treat a portion of REIT
distributions as UBTI will not apply if the REIT is able to satisfy the "not
closely held" requirement without relying upon the "look-through" exception with
respect to qualified trusts. As a result of the limitations on the transfer and
ownership of stock contained in the charter, we are not and do not expect to be
classified as a "pension-held REIT."
TAXATION OF NON-U.S. STOCKHOLDERS
The preceding discussion does not address the rules governing U.S. federal
income taxation of the ownership and disposition of common stock by persons who
are not U.S. stockholders ("non-U.S. stockholders"). In general, non-U.S.
stockholders may be subject to special tax withholding requirements on
distributions from us and with respect to their sale or other disposition of our
common stock, except to the extent reduced or eliminated by an income tax treaty
between the United States and the non-U.S. stockholder's country. A non-U.S.
stockholder who is a stockholder of record and is eligible for reduction or
elimination of withholding must file an appropriate form with us in order to
claim such treatment. Non-U.S. stockholders should consult their tax advisors
concerning the federal income tax consequences to them of an acquisition of
shares of common stock, including the federal income tax treatment of
dispositions of interests in, and the receipt of distributions from, us.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING.
We report to our stockholders and the IRS the amount of dividends paid
during each calendar year, and the amount of tax withheld, if any. Under the
backup withholding rules, a stockholder may be subject to backup withholding at
the rate of 31% with respect to dividends paid unless such stockholder (a) is a
corporation or comes within one of the exempt categories and, when required,
demonstrates this fact, or (b) provides a taxpayer identification number,
certifies as to no loss of exemption from backup withholding, and otherwise
complies with applicable requirements of the backup withholding rules. A
stockholder that does not provide us with its correct taxpayer identification
number may also be subject to penalties imposed by the IRS. Backup withholding
tax is not an additional tax. Any amount paid as backup withholding will be
creditable against the stockholder's income tax liability. In addition, we may
be required to withhold a portion of capital gain distributions to any
stockholders who fail to certify their non-foreign status to us. Backup
withholding tax and information reporting will generally not apply to
distributions paid to non-U.S. stockholders outside the United States or,
subject to certain exemptions, to a payment of the proceeds of a sale of Company
stock by or through a foreign office of a foreign broker. Payment to or through
a United States office of a broker of the proceeds of a sale is subject to both
backup withholding and information reporting unless the non-U.S. stockholder
certifies its foreign status. On October 6, 1997, the Treasury Department issued
new regulations (the "New Regulations") that make certain modifications to the
backup withholding rules applicable to non-U.S. stockholders. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1999, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
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EXPERTS
The financial statements incorporated in this prospectus by reference
from page F1 to page F51 from the Annual Report on Form 10-K/A of New Plan Excel
Realty Trust, Inc. for the year ended December 31, 1998, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Latham &
Watkins, San Diego, California. Latham & Watkins will rely as to certain matters
of Maryland law, including the legality of the shares offered under this
prospectus, on the opinion of Ballard Spahr Andrews & Ingersoll, LLP, Baltimore,
Maryland. In addition, the description of federal income tax consequences
contained in this prospectus is based upon the opinion of Altheimer & Gray,
Chicago, Illinois.
PLAN OF DISTRIBUTION
This prospectus relates to the possible issuance of up to 419,696 shares
of common stock upon the exchange of up to 323,304 units which were issued to
St. Francis Associates, L.P. on October 7, 1997 (in January 1998 St. Francis
Associates, L.P. distributed 78,677 of such units to Jonathan C. Whitman U/T/A
2/22/92) and the possible resale of the shares of common stock by such holders.
The units were initially exchangeable for shares of our common stock on a
one-for-one basis, but as a result of certain stock dividends and other
distributions with respect to the common stock, such units are currently
exchangeable for the number of shares of common stock offered hereby. The number
of shares of common stock is subject to further adjustment in the event of stock
splits, stock dividends and similar events in the future. We are registering the
offer and sale of shares of common stock pursuant to contractual obligations,
but the registration does not necessarily mean that we will in fact issue any of
the common stock, or that if issued, the holders will offer any of their shares.
Neither the Company nor the general partner will receive any cash proceeds
from the issuance of common stock upon receiving a notice of exchange of units.
Consequently, with each exchange, the interest of the general partner (which is
a wholly-owned subsidiary of the Company) in the Partnership may increase.
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================================================================================
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT IS
IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN
OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS
COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER THAT
DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where to Find Available Information.... 2
Forward-Looking Statements............. 2
The Company............................ 3
Use of Proceeds........................ 3
Description of Capital Stock........... 3
Description of Units and Partnership
Agreement.............................. 7
Exchange of Units...................... 9
Certain Provisions of Maryland Law and
the Company's Charter and Bylaws....... 13
Certain Federal Income Tax
Considerations......................... 16
Experts................................ 27
Legal Matters.......................... 27
Plan of Distribution................... 27
</TABLE>
================================================================================
================================================================================
419,696 SHARES
NEW PLAN EXCEL REALTY TRUST, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
-----------------
PROSPECTUS
----------------
__________, 1999
================================================================================
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the amount of fees and expenses to be
incurred in connection with this Registration Statement. All such expenses will
be paid by New Plan Excel Realty Trust, Inc.
<TABLE>
<S> <C>
SEC Registration Fee............ $ 2,949.00
Printing and Mailing Costs...... $ 5,000.00
Legal Fees and Expenses......... 30,000.00
Accounting Fees and Expenses.... 5,000.00
Miscellaneous................... 2,051.00
----------
Total................. $45,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our charter and bylaws require us to indemnify our directors, officers and
certain other persons to the fullest extent permitted from time to time by
Maryland law. The Maryland General Corporation Law permits a corporation to
indemnify its directors, officers and certain other persons 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 to or at the request of the corporation, unless it is established
that the act or omission of the indemnified party was material to the matter
giving rise to the proceedings and (i) was committed in bad faith or was the
result of active and deliberate dishonesty, (ii) the indemnified party actually
received an improper personal benefit, or (iii) in the case of any criminal
proceeding the indemnified party had reasonable cause to believe that the act or
omission was unlawful. Indemnification may be made against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by the director or
officer in connection with the proceeding; provided, however, that if the
proceeding is one by or in the right of the corporation, indemnification may not
be made with respect to any proceeding in which the director or officer has been
adjudged to be liable to the corporation. In addition, a director or officer may
not be indemnified with respect to any proceeding charging improper personal
benefit to the director or officer in which the director was adjudged to be
liable on the basis that personal benefit was improperly received. The
termination of any proceeding by conviction, or upon a plea of nolo contendere
or its equivalent, or an entry of any order of probation prior to judgment,
creates a rebuttal presumption that the director or officer did not meet the
requisite standard of conduct required for indemnification to be permitted.
ITEM 16. EXHIBITS
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Articles of Amendment and Restatement of the Charter of New Plan Excel
Realty Trust, Inc.(1)
3.2 Articles of Amendment of Amendment and Restatement of the Charter of New
Plan Excel Realty Trust, Inc.(2)
3.3 Amended and Restated Bylaws of New Plan Excel Realty Trust, Inc.(2)
3.4 Amendments to the Bylaws of New Plan Excel Realty Trust, Inc.(3)
3.5 Amendment to the Bylaws of New Plan Excel Realty Trust, Inc.(3)
4.1 Articles Supplementary (Series A Preferred Stock)(4)
4.2 Articles Supplementary (Series B Preferred Stock)(5)
4.3 Articles Supplementary (Series C Preferred Stock) (6)
4.4 Articles Supplementary (Series D Preferred Stock)(2)
</TABLE>
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<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.5 Rights Agreement dated as of May 15, 1998 between New Plan Excel Realty
Trust, Inc. and BankBoston, N.A., which includes the form of Rights
Certificate as Exhibit B and the Summary of Rights to Purchase Shares as
Exhibit C (7)
4.6 First Amendment to Rights Agreement dated as of February 8, 1999
between New Plan Excel Realty Trust, Inc. and BankBoston N.A. (8)
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP 8.1 Opinion of
Altheimer & Gray regarding tax matters
10.1 Amended and Restated Agreement of Limited Partnership of Excel Realty
Partners, L.P.(9)
10.2 First Amendment to Amended and Restated Agreement of Limited Partnership of
Excel Realty Partners, L.P.
23.1 Consent of Altheimer & Gray (included in Exhibit 8.1)
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in Exhibit 5.1)
23.3 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in Part II of the Registration Statement)
</TABLE>
- ----------
(1) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-3 filed with the Commission on May 25, 1995 (File No.
33-59195).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-3 filed with the Commission on October 1, 1998 (File No. 333-65211).
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999 filed with the Commission on August
11, 1999.
(4) Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on February 7, 1997 (File No. 1-12244).
(5) Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on January 14, 1998 (File No. 1-12244).
(6) Incorporated by reference to the Company's Annual Report on Form 10-K/A
for the year ended December 31, 1998 filed with the Commission on April 7,
1999.
(7) Incorporated by reference to the Company's Registration Statement on Form
8-A filed with the Commission on May 22, 1998 (File No. 1-12244).
(8) Incorporated by reference to the Company's Registration Statement on Form
8-A filed with the Commission on May 5, 1999 (File No. 1-12244).
(9) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997 filed with the Commission on March 25,
1998.
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, as amended;
(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
30
<PAGE> 33
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
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
than a 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 this
registration statement;
provided, however, that subparagraphs (i) and (ii) above 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 Securities and Exchange Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, 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, as
amended, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934, as amended, (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934, as amended) that is
incorporated by reference in this 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, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to existing 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 the
Securities Act of 1933, as amended, 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 the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
31
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of New York, State of New
York, on the 14th day of September, 1999.
NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ ARNOLD LAUBICH
----------------------------------------
Arnold Laubich
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
Each person whose signature appears below hereby constitutes and appoints
Arnold Laubich and Steven Siegel his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Amendment No. 1 to Registration Statement, or any
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with exhibits thereto and other documents in connection therewith or in
connection with the registration of the common stock offered hereby under the
Securities Exchange Act of 1934, with the Commission, granting unto such
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection with such matters and
hereby ratifying and confirming all that such attorneys-in-fact and agents or
their substitutes may do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ WILLIAM NEWMAN Chairman of the Board of September 14, 1999
- -------------------------------------
William Newman Directors
/s/ ARNOLD LAUBICH President, Chief Executive Officer, September 14, 1999
- -------------------------------------
Arnold Laubich Director
/s/ JAMES M. STEUTERMAN Executive Vice President, September 14, 1999
- ------------------------------------- Chief Operating Officer,
James M. Steuterman Director
/s/ MICHAEL I. BROWN Controller September 14, 1999
- -------------------------------------
Michael I. Brown
/s/ DEAN BERNSTEIN Senior Vice President, September 14, 1999
- ------------------------------------- Finance, Director, Principal
Dean Bernstein Financial Officer
/s/ RAYMOND H. BOTTORF Director September 14, 1999
- -------------------------------------
Raymond H. Bottorf
/s/ NORMAN GOLD Director September 14, 1999
- -------------------------------------
Norman Gold
</TABLE>
32
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ MELVIN NEWMAN Director September 14, 1999
- -------------------------------------
Melvin Newman
/s/ BRUCE A. STALLER Director September 14, 1999
- -------------------------------------
Bruce A. Staller
/s/ JOHN WETZLER Director September 14, 1999
- -------------------------------------
John Wetzler
/s/ GREGORY WHITE Director September 14, 1999
- -------------------------------------
Gregory White
</TABLE>
33
<PAGE> 36
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Articles of Amendment and Restatement of the Charter of New Plan Excel Realty
Trust, Inc.(1)
3.2 Articles of Amendment of Amendment and Restatement of the Charter of New Plan
Excel Realty Trust, Inc.(2)
3.3 Amended and Restated Bylaws of New Plan Excel Realty Trust, Inc.(2)
3.4 Amendments to the Bylaws of New Plan Excel Realty Trust, Inc.(3)
3.5 Amendment to the Bylaws of New Plan Excel Realty Trust, Inc.(3)
4.1 Articles Supplementary (Series A Preferred Stock)(4)
4.2 Articles Supplementary (Series B Preferred Stock)(5)
4.3 Articles Supplementary (Series C Preferred Stock) (6)
4.4 Articles Supplementary (Series D Preferred Stock)(2)
4.5 Rights Agreement dated as of May 15, 1998 between New Plan Excel Realty
Trust, Inc. and BankBoston, N.A., which includes the form of Rights
Certificate as Exhibit B and the Summary of Rights to Purchase Shares as
Exhibit C (7)
4.6 First Amendment to Rights Agreement dated as of February 8, 1999 between New
Plan Excel Realty Trust, Inc. and BankBoston N.A. (8)
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP 8.1 Opinion of Altheimer &
Gray regarding tax matters
10.1 Amended and Restated Agreement of Limited Partnership of Excel Realty
Partners, L.P.(9)
10.2 First Amendment to Amended and Restated Agreement of Limited Partnership of
Excel Realty Partners, L.P.
23.1 Consent of Altheimer & Gray (included in Exhibit 8.1)
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in Exhibit 5.1)
23.3 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in Part II of the Registration Statement)
</TABLE>
- ----------
(1) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-3 filed with the Commission on May 25, 1995 (File No.
33-59195).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-3 filed with the Commission on October 1, 1998 (File No. 333-65211).
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999 filed with the Commission on August
11, 1999.
(4) Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on February 7, 1997 (File No. 1-12244).
(5) Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on January 14, 1998 (File No. 1-12244).
(6) Incorporated by reference to the Company's Annual Report on Form 10-K/A
for the year ended December 31, 1998 filed with the Commission on April 7,
1999.
(7) Incorporated by reference to the Company's Registration Statement on Form
8-A filed with the Commission on May 22, 1998 (File No. 1-12244).
(8) Incorporated by reference to the Company's Registration Statement on Form
8-A filed with the Commission on May 5, 1999 (File No. 1-12244).
(9) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997 filed with the Commission on March 25,
1998.
34
<PAGE> 1
EXHIBIT 5.1
September 14, 1999
New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas
New York, New York 10036
Re: New Plan Excel Realty Trust, Inc. Registration Statement on Form
S-3 - 419,696 Shares of Common Stock, Par Value $0.01 Per Share
Ladies and Gentlemen:
In connection with the registration of 419,696 shares of Common Stock,
par value $0.01 per share (the "Stock"), under the Securities Act of 1933, as
amended, by New Plan Excel Realty Trust, Inc., a Maryland corporation (the
"Corporation"), on the Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on or about September 30, 1998, together with
Amendment No. 1 thereto filed or to be filed on or about September 14, 1999 (the
"Registration Statement"), you have requested our opinion with respect to the
matters set forth below.
We have acted as special Maryland corporate counsel for the Corporation
in connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Corporation, we have reviewed and are familiar
with the proceedings taken or proposed to be taken by the Corporation in
connection with the authorization, issuance and sale of the Stock and for
purposes of this Opinion, we have assumed that such proceedings have been or
will be timely completed in the manner proposed. We have examined the charter of
the Corporation as filed with the State Department of Assessments and Taxation
of Maryland (the "Charter"), the bylaws of the Corporation and certain actions
taken by the Corporation's Board of Directors and stockholders, including
relevant authorizations and approvals. In addition, we have examined a copy of
the Amended and Restated Agreement of Limited Partnership of Excel Realty
Partners, L.P., a Delaware limited partnership (the "Partnership"), dated as of
June 25, 1997, as further amended by the First Amendment to Amended and Restated
Agreement of Limited Partnership of Excel Realty Partners, L.P. (the "First
Amendment"), dated August 20, 1999, together with
<PAGE> 2
New Plan Excel Realty Trust, Inc.
September 14, 1999
Page 2
certain Partner Schedules thereto (the "Partnership Agreement"), by and among
the Corporation, and in the case of the First Amendment, the Corporation and New
Plan DRP Trust, a Maryland real estate investment trust, and in each case those
certain holders of units of limited partnership interest in the Partnership as
identified in the Registration Statement (the "Unit Holders"). We have also
examined such laws, records, documents, certificates, opinions and instruments,
including a certificate of an appropriate officer of the Corporation, as we have
deemed necessary to render this opinion.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity to the originals
of all documents submitted to us as certified, photostatic, facsimile or
conformed copies. In addition, we have assumed that each person executing any
instrument, document or certificate referred to herein on behalf of any party is
duly authorized to do so, and that all certificates submitted to us are true and
accurate, both when given and as of the date hereof. We have also assumed that
the units of limited partnership in the Partnership, in consideration for which
the Stock has been or will be issued, were duly and validly issued to, or issued
and subsequently transferred to, the Unit Holders in accordance with the
Partnership Agreement, and that such units were transferred and conveyed, or
will be transferred and conveyed, by the Unit Holders to the Corporation in
accordance with the terms of the Partnership Agreement, and that the Stock was
or will be thereupon issued in consideration therefor, in the manner and for the
number of shares provided for under the terms of the Partnership Agreement. In
addition, we have assumed that the Stock has not been nor will it be transferred
to a Unit Holder in violation of the restrictions on ownership and
transferability set forth in the Charter.
Based on the foregoing and subject to the assumption and qualifications
set forth herein, it is our opinion that, as of the date of this letter, the
issuance of the Stock (assuming that, upon issuance, the total number of shares
of Common Stock then issued and outstanding will not exceed the total number of
shares of Common Stock then authorized to be issued under the Charter) has been
duly authorized and the Stock has been or, when issued in the manner
contemplated by the Partnership Agreement in exchange for units in the
Partnership, will be validly issued and is or will be fully paid and
non-assessable.
We consent to your filing of this Opinion as an exhibit to the
Registration Statement and to the reference to the name of our firm under the
heading "Legal Matters".
We are qualified to practice law in the State of Maryland and do not
express any opinions herein concerning any law other than the law of the State
of Maryland. Furthermore, the
<PAGE> 3
New Plan Excel Realty Trust, Inc.
September 14, 1999
Page 3
opinions presented in this letter are limited to the matters specifically set
forth herein and no other opinion shall be inferred beyond the matters expressly
stated.
The opinions expressed in this letter are solely for your use and may
not be relied upon by any person without, in each instance, our prior written
consent.
Very truly yours,
/s/ BALLARD SPAHR ANDREWS
& INGERSOLL, LLP
<PAGE> 1
EXHIBIT 8.1
September 14, 1999
New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas
New York, NY 10036
Re: Registration Statement
Ladies and Gentlemen:
At your request, we have examined the registration statement of New Plan
Excel Realty Trust, Inc. (formerly known as Excel Realty Trust, Inc.), a
Maryland corporation ("New Plan Excel") dated September 14, 1999, to which
this opinion is an Exhibit (the "Registration Statement"), in connection with
the registration under the Securities Act of 1933, as amended, of shares of
Common Stock of New Plan Excel. Our opinion has been requested regarding certain
federal income tax language appearing in the Registration Statement. Capitalized
terms not otherwise defined herein shall have the meaning assigned to them in
the Registration Statement.
For purposes of this opinion:
1. We have examined the Articles of Incorporation of New Plan Excel
and such other documentation and information provided to us by New Plan Excel
and others as is relevant to the matter on which we are opining.
2. We have prepared and sent to New Plan Excel a memorandum setting
forth the various rules and definitions relating to the qualification of New
Plan Excel as a real estate investment trust ("REIT") within the meaning of the
Internal Revenue Code of 1986, as amended (the "Code").
3. We have relied, as to matters of fact necessary to this opinion,
on certificates and representations of New Plan Excel, David Lund, former chief
executive officer of New Plan Excel, and PricewaterhouseCoopers LLP, independent
public accountants of New Plan Excel. In addition, we have relied upon the
September 28, 1998, opinion of Latham & Watkins to New Plan Realty Trust
concerning the qualification of New Plan Excel as a REIT from January 1, 1993,
through September 28, 1998.
4. We have made no independent investigation of the facts
represented or set forth in any of the foregoing paragraphs of this letter and
are relying for purposes hereof on said Articles of Incorporation, certificate
and representations. Nothing has come to our attention, however, that would
<PAGE> 2
New Plan Excel Realty Trust, Inc.
September 14, 1999
Page 2
indicate in any material respect that such facts as so set forth are not
accurate or complete or do not include all material facts relevant to our
opinion.
5. We have reviewed the information in New Plan Excel's Prospectus
dated September 14, 1999, related to the above described offering
(collectively, the "Prospectus") under the caption "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS."
6. Our opinion is based on the Code and the regulations thereunder,
and on the interpretations thereof by the courts and the Internal Revenue
Service, all as they exist on the date of this letter. These authorities are
subject to change, including changes with retroactive effect. No assurance can
be given as to whether, when, in what forms, or with what effective dates the
tax laws (or the interpretations thereof) may be changed.
Based on the foregoing, it is our opinion that the information in the
Registration Statement under "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS," to the
extent such information constitutes matters of law or legal conclusions, is
correct.
Very truly yours,
/s/ ALTHEIMER & GRAY
<PAGE> 1
EXHIBIT 10.2
FIRST AMENDMENT TO
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL REALTY PARTNERS, L.P.
THIS FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF EXCEL REALTY PARTNERS, L.P., dated as of August 20, 1999
("AMENDMENT"), is entered into by and among New Plan DRP Trust, a Maryland real
estate investment trust, as the "GENERAL PARTNER", New Plan Excel Realty Trust,
Inc., a Maryland corporation ("NPXL") and the Persons whose names are set forth
on Exhibit A as attached hereto, as the Limited Partners, together with any
other Persons who become Partners in the Partnership as provided herein.
WHEREAS, Excel Realty Partners, L.P. (the "PARTNERSHIP") was formed
pursuant to that certain Agreement of Limited Partnership of Excel Realty
Partners, L.P., dated as of April 24, 1995, as amended by that certain First
Amendment to the Agreement of Limited Partnership of Excel Realty Partners,
L.P., dated as of December 31, 1995 and further amended in its entirety by that
certain Amended and Restated Agreement of Limited Partnership dated as of June
25, 1997 (the "PARTNERSHIP AGREEMENT"); and
WHEREAS, by an Assignment of General Partnership Interest of even date
herewith ("ASSIGNMENT"), NPXL, as successor by merger to Excel Realty Trust,
Inc., has assigned NPXL's entire general partnership interest in the Partnership
to General Partner, and by an Acceptance of even date herewith ("ACCEPTANCE"),
General Partner has agreed to become the successor general partner of the
Partnership; and
WHEREAS, the requisite number of Limited Partners have consented to the
Assignment, the Acceptance and the consequent substitution of General Partner in
the place of NPXL as the general partner of the Partnership, conditioned upon,
and in consideration of NPXL's and General Partner's execution and delivery of
this Amendment concurrently with the consummation of the Assignment transaction;
and
WHEREAS, the Partnership has obtained the required consent from all
other persons and/or entities (as applicable, pursuant to other contractual
obligations of the Partnership) to the Assignment, the Acceptance and the
consequent substitution of General Partner in the place of NPXL as the general
partner of the Partnership; and
WHEREAS, the parties now wish to amend the Partnership Agreement in
certain respects.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereby agree that the Partnership Agreement is amended as
follows:
<PAGE> 2
1. Capitalized terms used herein as defined terms and not otherwise
defined herein shall have the meanings ascribed to them in the Partnership
Agreement.
2. The definition of "ADJUSTMENT FACTOR" in the Partnership
Agreement is hereby amended by replacing the phrase "the General Partner" with
the word "NPXL" each time it appears in paragraphs (a), (b) and (c) of said
definition.
3. The definition of "GENERAL PARTNER" in the Partnership Agreement
is hereby amended to read as follows:
"'GENERAL PARTNER' means New Plan DRP Trust, a Maryland real
estate investment trust, and its successors and assigns, as the
general partner of the Partnership in their capacities as
general partner of the Partnership."
4. The definition of "REIT SHARE" in the Partnership Agreement is
hereby amended to read as follows:
"'REIT SHARE' means a share of the common stock, par value $.01
per share of New Plan Excel Realty Trust, Inc., a Maryland
corporation ("NPXL")."
5. The definition of "REIT SHARES AMOUNT" in the Partnership
Agreement is hereby amended by replacing the phrase "the General Partner" with
the word "NPXL" each time it appears in said definition.
6. The last sentence of Section 5.1 of the Partnership Agreement is
hereby amended to read as follows:
"The General Partner shall take such reasonable efforts, as
determined by it in its sole and absolute discretion and
consistent with NPXL's qualification as a REIT, to cause the
Partnership to distribute sufficient amounts to enable NPXL to
pay shareholder dividends that will (a) satisfy the requirements
for qualifying as a REIT under the Code and Regulations (the
"REIT REQUIREMENTS") and (b) avoid any federal income or excise
tax liability of the General Partner and NPXL."
7. Section 7.3C(5) of the Partnership Agreement is hereby amended
to read as follows:
"(5) to reflect such changes as are reasonably necessary for
NPXL to maintain its status as a REIT or to satisfy the REIT
Requirements; and"
8. For purposes of Article 11 of the Partnership Agreement, the
definition of "TRANSFER" in the Partnership Agreement is hereby amended to
include, without limiting the
2
<PAGE> 3
generality of the definition set forth in the Partnership Agreement, any sale,
assignment, bequest, conveyance, devise, gift (outright or in trust), Pledge,
encumbrance, hypothecation, mortgage, exchange, transfer or other disposition or
act of alienation, whether voluntary or involuntary or by operation of law of
any equity interests or securities in General Partner, of any nature or
character whatsoever (including, but not limited to, rights of any nature or
character, to purchase and/or convert into equity interests or securities of
General Partner).
9. Section 11.6D(c) is hereby amended to read as follows:
"(c) in the event that such Transfer would cause NPXL to cease
to comply with the REIT Requirements;"
10. Section 7.12 is hereby added to the Partnership Agreement to
read as follows:
"SECTION 7.12 CONTINUING OBLIGATIONS OF NPXL
A. Notwithstanding the Assignment or Section 11.2 of the
Partnership Agreement to the contrary, NPXL unconditionally and irrevocably
agrees to be jointly and severally obligated (along with General Partner) to
satisfy the "General Partner Obligations" as defined in Exhibit "B" attached
hereto and hereby incorporated herein (the "GENERAL PARTNER OBLIGATIONS"). The
obligations of NPXL hereunder are in addition to, and independent of, the
obligations of General Partner. A separate action or actions may be brought and
prosecuted against NPXL whether an action is brought against General Partner or
whether General Partner is joined in any such action or actions. NPXL further
agrees that it may be joined in any action against General Partner in connection
with the General Partner Obligations and recovery may be had against NPXL in any
such action. The Partners acknowledge that NPXL's obligations under this Section
7.12 are primary obligations and not that of a guarantor or surety.
B. NPXL hereby covenants that if any Qualifying Party
tenders Partnership Units for Redemption pursuant to the Partnership Agreement
and their respective Partner Schedules, and if the General Partner of the
Partnership, elects pursuant to Section 8.6B of the Partnership Agreement and
the provisions of the respective Partner Schedules, to acquire some or all of
the Tendered Units in exchange for REIT Shares, then (i) NPXL will cause such
REIT Shares to be issued as required to accomplish the Redemption, and (ii) to
the extent the Qualifying Party has been granted registration rights with
respect to any REIT Shares issued pursuant to Section 8.6B of the Partnership
Agreement, such registration rights shall continue to apply, without
modification."
IN WITNESS WHEREOF, the General Partner, NPXL and the Limited Partners
have adopted this Agreement as of the date first written above by the
affirmative vote of the General Partner and a Majority in Interest of the
Limited Partners, and the General Partner and NPXL
3
<PAGE> 4
have executed this Agreement as of the date first written above.
GENERAL PARTNER: NEW PLAN DRP TRUST
By: /s/ STEVEN SIEGEL
-------------------------------------
Its: SENIOR VICE PRESIDENT
------------------------------------
"NPXL" NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ STEVEN SIEGEL
-------------------------------------
Its: SENIOR VICE PRESIDENT
-------------------------------------
4
<PAGE> 5
EXHIBIT "A"
LIST OF LIMITED PARTNERS
[ATTACHED]
A-1
<PAGE> 6
EXHIBIT "A"
LIST OF LIMITED PARTNERS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C>
W.D.C. Real Estate Bright Meyers Development Corp.
P.O. Box 923389 c/o Fletcher Bright Co.
Norcross, GA 30010-3389 537 Market St., Ste. 400
Chattanooga, TN 37402
- -------------------------------------------------------------------------------------------
Harry B. Borders George Bright
2604 Summerfield Dr. 1511 Chickamauga Trail
Louisville, KY 40220 Lookout Mountain, GA 30750
- -------------------------------------------------------------------------------------------
James A. Brown Paula M. Brown
c/o Fletcher Bright Co. 504 Barrington Road
537 Market St., Suite 400 Signal Mountain, TN 37377
Chattanooga, TN 37402
- -------------------------------------------------------------------------------------------
W. Michael Caldwell Barry Alford
P.O. Box 923389 10719 Hobbs Road Station
Norcross, GA 30010-3389 Louisville, KY 40223
- -------------------------------------------------------------------------------------------
Charles Ambler Donald A. Barkley
c/o J. Lawrence, Patten & Patten 4279 Bakers Farm Place, NW
520 Lookout Street Atlanta , GA 30339
Chattanooga, TN 37403
- -------------------------------------------------------------------------------------------
Jane R. Benton Joan Blake Benton
409 Brady Point Road 6 South Wood Drive
Signal Mountain , TN 37377 Greenville , SC 29605
- -------------------------------------------------------------------------------------------
Oliver Benton, Jr. Barbara R. Blake
409 Brady Point Road 1516 Sunset Road
Signal Mountain , TN 37377 Chattanooga, TN 37405
- -------------------------------------------------------------------------------------------
E. Wells Blake, Jr. Edward W. & Barbara R. Blake
823 Cherokee Lane 1516 Sunset Road
Signal Mountain, TN 37377 Chattanooga , TN 37405
- -------------------------------------------------------------------------------------------
Fletcher Bright Edward E. Brown, Jr.
118 N. Hermitage Avenue Brown Associates
Lookout Mountain, TN 37350 P.O. Box 11507
Chattanooga, TN 37401-2507
- -------------------------------------------------------------------------------------------
</TABLE>
A-2
<PAGE> 7
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C>
Esther A. Brown Charles T. & Betty B. Cady,
P.O. Box 11507 Revocable Trust
Chattanooga, TN 37401-2507 Pioneer Bank
Attn: Debbie Frank
P.O. Box 1527
Chattanooga, TN 37401
- -------------------------------------------------------------------------------------------
Mary Frances Campbell Louise W. Conley
16 Bartram Road 303 East Brow Road
Lookout Mountain, TN 37350-1502 Lookout Mountain , TN 37350
- -------------------------------------------------------------------------------------------
George Dickinson Margaret T. Dillender
Fletcher Bright Company 120 Wilder Dr.
1837 Powers Ferry Rd., Bldg. 13 Signal Mountain, TN 37377
Atlanta, GA 30339
- -------------------------------------------------------------------------------------------
R. Park Ellis Edward W. Finlay
Fletcher Bright Company Attn: Dick Stewart, Sun Trust Bank, CUST
1837 Powers Ferry Rd., Building 13 PO Box 1638
Atlanta, GA 30339 Chattanooga, TN 37401
- -------------------------------------------------------------------------------------------
Christine R. Gilley Martha Glenn
721 East Brow Road 1416 Heritage Landing Dr.
Lookout Mountain , TN 37350 Chattanooga, TN 37405
- -------------------------------------------------------------------------------------------
Doris Jamesin U/A Nell Evans Johnson
Route 4, Box 107E First Tennessee Bank, CUST
Pikeville, TN 37367 701 Market Street
Chattanooga, TN 37402
- -------------------------------------------------------------------------------------------
Thomas Jones, DTD 7/23/83 Richard Lasky, M.D.
c/o Frances F. Jones 8320 E. Crestwood Circle
304 South Palisades Drive Tucson, AZ 85750
Signal Mountain, TN 37377
- -------------------------------------------------------------------------------------------
John M. Martin C. Scott Mayfield, Jr.
900 Cumberland Rd. P. O. Box 788
Chattanooga, TN 37409 Athens, TN 37371-0788
- -------------------------------------------------------------------------------------------
Fontaine P. Moore S.B. Rymer, III
Pioneer Bank, Mail Teller 45 Lakeshore Lane
P.O. Box 1527 Chattanooga, TN 37415
Chattanooga, TN 37401
- -------------------------------------------------------------------------------------------
</TABLE>
A-3
<PAGE> 8
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C>
Rachel B. Savage Victor P. Serodino
1610 Rockland Ct. P.O. Box 4539
Cleveland, TN 37311 Chattanooga, TN 37405-0539
- -------------------------------------------------------------------------------------------
Robert T. Spalding, M.D. Carolyn H. Stilwel
c/o Patten & Patten, Inc. 111 Constitution Dr.
520 Lookout Street Chattanooga, TN 37405
Chattanooga, TN 37402
- -------------------------------------------------------------------------------------------
Dr. Wayne E. Tipps Frank J. B. Varallo
902 West Brow 5790 Brainerd Road
Lookout Mountain, TN 37350 Chattanooga, TN 37411
- -------------------------------------------------------------------------------------------
Frank J. B. Varallo Irrevocable Trust Fletcher Bright Company
R. Federick DeCosimo, TTEE 537 Market Street, Ste. 400
1100 Tallan Bldg., Two Union Square Chattanooga, TN 37402
Chattanooga , TN 37402
- -------------------------------------------------------------------------------------------
Fletcher Bright Company Unity Investors, LLC
1300 First Tennessee Building c/o Peter Van Hauer
Chattanooga, TN 37402 632 Turnpike Road
Minneapolis, MN 55416
- -------------------------------------------------------------------------------------------
Stratford/Granite, L.L.C. Attn: Farah Davis Briggsmore Plaza
P.O. Box 1928 c/o Albert B. Glickman & Associates
Mt. Airy, NC 27030 9864 Wilshire Blvd.
Beverly Hills, CA 90210
- -------------------------------------------------------------------------------------------
G&H Associates Albert B. Glickman
c/o Albert B. Glickman & Associates 9864 Wilshire Blvd.
9864 Wilshire Blvd. Beverly Hills, CA 90210
Beverly Hills, CA 90210
- -------------------------------------------------------------------------------------------
Jerry G. Crumpler Montebello Plaza Co.
22601 Pacific Coast Hwy. #220 c/o Albert B. Glickman & Associates
Malibu, CA 90265 9864 Wilshire Blvd.
Beverly Hills, CA 90210
- -------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 9
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C>
Paradise Plaza Co. St. Francis Associates, L.P.
c/o Albert B. Glickman & Associates SFA Mgmt. Corp.
9864 Wilshire Blvd. 44 Montgomery St.
Beverly Hills, CA 90210 San Francisco, CA 94104
- -------------------------------------------------------------------------------------------
Jonathan C. Whitman, Trustee Lakeside Development Company
Jonathan C. Whitman UTA 2/22/92 c/o THF Realty Inc
1160 Bryant St. 955 Executive Parkway Sutie 210
San Francisco, CA 94103 St Louis, MO 63141
- -------------------------------------------------------------------------------------------
</TABLE>
A-5
<PAGE> 10
EXHIBIT "B"
GENERAL PARTNER OBLIGATIONS
For purposes of this Amendment, the "General Partner Obligations" shall
mean, without limitation unless expressly provided herein to the contrary, all
of General Partner's obligations as a general partner of the Partnership,
including but not limited to those obligations under the Partnership Agreement,
other legal and/or equitable obligations of general partners under applicable
law, contractual obligations of the Partnership, and other legal and equitable
obligations of the Partnership. The purpose of Section 7.12 of the Partnership
Agreement and the General Partner Obligations is to give the Limited Partners
exactly the same legal rights and remedies against NPXL after the Assignment
transaction as the Limited Partners had prior to the Assignment transaction.
Without limiting the foregoing standard and scope of the General Partner
Obligations, the following are examples of obligations that are included within
the definition of "General Partner Obligations":
(i) General Partner's obligations as a general partner of the
Partnership whether resulting from the Partnership Agreement, the related
Partner Schedules or other legal or equitable state or federal obligations of
general partners (e.g. fiduciary obligations);
(ii) General Partner's obligations as a general partner of the
Partnership relating to the Partnership's obligations under:
(1) applicable state or federal law (legal or equitable);
(2) the underlying retail leases and related agreements
(which have been assumed or executed by the Partnership) regarding the retail
projects owned, or ground leased, by the Partnership ("PROJECTS"), and, if
applicable, the related ground leases;
(3) the underlying debt of the Projects (which have been
assumed by the Partnership to the extent the same is recourse); and
(4) the various contracts and agreements relating to the
Projects (which have been assumed or executed by the Partnership).
B-1
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated March 2, 1999 relating to the financial statements
and financial statement schedules, which report is included in New Plan Excel
Realty Trust, Inc.'s Annual Report on Form 10-K/A for the year ended December
31, 1998. We also consent to the references to us under the heading "Experts" in
such Registration Statement.
PricewaterhouseCoopers LLP
New York, New York
September 8, 1999
/s/ PRICEWATERHOUSECOOPERS LLP
