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As filed with the Securities and Exchange Commission on October 17, 1996
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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GABLES RESIDENTIAL TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 58-2077868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 PACES FERRY ROAD
OVERLOOK III, SUITE 1450
ATLANTA, GEORGIA 30339
(770) 436-4600
(Address and Telephone Number of Principal Executive Offices)
MARCUS E. BROMLEY
CHIEF EXECUTIVE OFFICER
GABLES RESIDENTIAL TRUST
2859 PACES FERRY ROAD
OVERLOOK III, SUITE 1450
ATLANTA, GEORGIA 30339
(770) 436-4600
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
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copy to:
GILBERT G. MENNA, P.C.
ETTORE A. SANTUCCI, P.C.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109
(617) 570-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
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If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. X
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If this form is used 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.
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If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
Being Registered(1) Registered(2) Offering Price Per Unit(3) Aggregate Offering Price(4) Registration Fee(5)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities
Preferred Shares(6) $300,000,000 N.A. $300,000,000 $90,125
Common Shares(7)
Warrants(8)
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</TABLE>
(1) This registration statement also covers contracts which may be issued
by the Registrant under which the counter party may be required to
purchase Debt Securities, Preferred Shares or Common Shares, which
contracts would be issued with the Debt Securities, Preferred Shares,
Common Shares and/or Warrants registered hereby, as the case may be.
In addition, the Securities registered hereunder may be sold
separately, together or as units with other Securities registered
hereunder.
(2) The amount to be registered consists of up to $300,000,000 of an
indeterminate amount of Debt Securities, Preferred Shares, Common
Shares and/or Warrants. There is also being registered hereunder
such currently indeterminate number of Preferred Shares or Common
Shares as may be issued upon conversion of the Debt Securities or
Preferred Shares or upon exercise of the Warrants registered hereby,
as the case may be.
(3) The proposed maximum offering price per unit has been omitted pursuant
to Securities Act Release No. 6964. The registration fee has been
calculated in accordance with rule 457(o) under the Securities Act of
1933, as amended, and reflects the offering price rather than the
principal amount of any Debt Securities issued at a discount.
(4) Estimated solely for purposes of computing the registration fee. No
separate consideration will be received for Preferred Shares or Common
Shares issued upon conversion of Debt Securities or Preferred Shares
or upon exercise of the Warrants.
(5) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
amount of $2,590,071 of securities covered by the earlier Registration
Statement on Form S-3 (No. 33-93672) is being carried forward and the
corresponding registration fee of $784 was previously paid at the time
of filing.
(6) Including such indeterminate number of Preferred Shares as may issued
from time to time at indeterminate prices or upon conversion of Debt
Securities registered hereby or upon exercise of Warrants registered
hereby, as the case may be.
(7) Including such indeterminate number of Common Shares as may be issued
from time to time at indeterminate prices or upon conversion of Debt
Securities or Preferred Shares registered hereby or upon exercise of
Warrants registered hereby, as the case may be.
(8) Including such indeterminate number of Warrants or other rights,
including without limitation share purchase or subscription rights, as
may be issued from time to time at indeterminate prices.
The Prospectus contained in this Registration Statement relates to and
constitutes a Post-Effective Amendment to the Registration Statement on Form
S-3 (No. 33-93672) of the Registrant, and it is intended to be the combined
prospectus referred to in Rule 429 under the Securities Act of 1933, as
amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL NOR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 17, 1996
PROSPECTUS
$300,000,000
GABLES RESIDENTIAL TRUST
DEBT SECURITIES
PREFERRED SHARES
COMMON SHARES
WARRANTS
Gables Residential Trust ("Gables" or the "Company") may offer from
time to time in one or more series (i) its unsecured debt securities ("Debt
Securities"), (ii) preferred shares of beneficial interest, $.01 par value per
share ("Preferred Shares"), (iii) common shares of beneficial interest, $.01
par value per share ("Common Shares"), and (iv) warrants or other rights to
purchase Preferred Shares or Common Shares ("Warrants"), with an aggregate
public offering price of up to $300,000,000 (or its equivalent based on the
exchange rate at the time of sale) in amounts, at prices and on terms to be
determined at the time of offering. The Debt Securities, Preferred Shares,
Common Shares and Warrants (collectively, the "Securities") may be offered
separately or together, in separate series, in amounts, at prices and on terms
to be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the
specific title, aggregate principal amount, ranking, currency, form (which may
be registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion
into Common Shares or Preferred Shares, covenants and any initial public
offering price; (ii) in the case of Preferred Shares, the specific designation
and stated value per share, any dividend, liquidation, redemption, conversion,
voting and other rights, and any initial public offering price; (iii) in the
case of Common Shares, any initial public offering price; and (iv) in the case
of Warrants, the duration, offering price, exercise price and detachability.
In addition, such specific terms may include limitations on direct or
beneficial ownership and restrictions on transfer of the Securities, in each
case as may be consistent with the Company's Amended and Restated Declaration
of Trust as then in effect, or otherwise appropriate to preserve the status of
the Company as a real estate investment trust ("REIT") for federal income tax
purposes. See "Restrictions on Transfers of Shares of Beneficial Interest."
The applicable Prospectus Supplement will also contain information,
where appropriate, about certain United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Securities covered by such Prospectus Supplement.
The Securities may be offered by the Company directly to one or more
purchasers, through agents designated from time to time by the Company or to or
through underwriters or dealers. If any agents or underwriters are involved in
the sale of any of the Securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them, will be
set forth, or will be calculable from the information set forth, in an
accompanying Prospectus Supplement. See "Plan of Distribution." No Securities
may be sold without delivery of a Prospectus Supplement describing the method
and terms of the offering of such Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is October __, 1996.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or "Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities. This Prospectus, which constitutes part
of the Registration Statement, omits certain of the information contained in
the Registration Statement and the exhibits thereto on file with the Commission
pursuant to the Securities Act and the rules and regulations of the Commission
thereunder. The Registration Statement, including exhibits thereto, may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New
York, New York 10048, and Northwestern Atrium Center, 500 W. Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and copies may be obtained at the
prescribed rates from the Public Reference Section of the Commission at its
principal office in Washington, D.C. Statements contained in this Prospectus
as to the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
The Company files information electronically with the Commission, and
the Commission maintains a Web Site that contains reports, proxy and
information statements and other information regarding registrants (including
the Company) that file electronically with the Commission. The address of the
Commission's Web Site is (http://www.sec.gov.).
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and proxy statements and other information
with the Commission. Such reports, proxy statements and other information can
be inspected and copied at the locations described above. Copies of such
materials can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. In addition, the Common Shares are listed on the New York
Stock Exchange (the "NYSE"), and such materials can be inspected and copied at
the NYSE, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference: (i) the
Company's Annual Report on Form 10-K for the year ended December 31,1995, as
amended by Form 10-K/A filed with the Commission on April 26, 1996, and the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996
and June 30, 1996, filed with the Commission pursuant to the Exchange Act; (ii)
the description of the Company's Common Shares contained in its Registration
Statement on Form 8-A filed with the Commission pursuant to the Exchange Act,
including all amendments and reports updating such description; (iii) the Proxy
Statement prepared by the Company in connection with its 1996 Annual Meeting of
Shareholders; and (iv) the Company's Current Report on Form 8-K dated March 25,
1996, filed with the Commission on April 1, 1996; the Company's Current Report
on Form 8-K dated April 23, 1996, as amended by Form 8-K/A filed with the
Commission on July 2, 1996; the Company's Current Report on Form 8-K dated July
26, 1996, filed with the Commission on August 16, 1996; and the Company's
Current Report on Form 8-K dated September 11, 1996, filed with the Commission
on September 26, 1996.
All other documents filed with the Commission by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the
Securities are to be incorporated herein by reference and such documents shall
be deemed to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS.
WRITTEN REQUESTS SHOULD BE MAILED TO GABLES RESIDENTIAL TRUST, 2859 PACES FERRY
ROAD, OVERLOOK III, SUITE 1450, ATLANTA, GEORGIA, ATTENTION: DIRECTOR OF
INVESTOR RELATIONS. TELEPHONE REQUESTS MAY BE DIRECTED TO (770) 436-4600.
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THE COMPANY
GENERAL
Gables is one of the largest managers, developers and owners of
multifamily apartment communities in the Southeastern and Southwestern United
States. The Company is a self-administered and self-managed real estate
investment trust (a "REIT") and has elected to be treated as a REIT under the
Internal Revenue Code of 1986, as amended, beginning with its taxable year
ending December 31, 1994. The Company's Common Shares are listed on the New
York Stock Exchange under the symbol "GBP".
The Company currently engages in the multifamily apartment community
management, development, construction and acquisition businesses, including the
provision of related brokerage and corporate rental housing services.
Substantially all of the Company's business is conducted through, and all of
the Company's interests in its properties are held by or through, Gables Realty
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"). Through its ownership of Gables GP, Inc. ("GGPI"), a Texas
corporation and wholly-owned subsidiary of the Company that is the sole general
partner of the Operating Partnership, and its ownership of a direct limited
partnership interest in the Operating Partnership, the Company is currently an
84.5% economic owner of the Operating Partnership (this structure is commonly
referred to as an umbrella partnership REIT or "UPREIT").
As of September 30, 1996, the Company owned 46 stabilized multifamily
communities comprising 14,681 apartment homes, of which 30 were developed and
16 were acquired by the Company, including an indirect 25.0% general partner
interest in two multifamily communities. Additionally, as of such date, the
Company owned seven multifamily communities under development or in the
lease-up phase expected to comprise 1,925 apartment homes. The Company also
owned as of such date parcels of land for the future development of four
multifamily communities expected to comprise 978 apartment homes.
The Company was organized as a real estate investment trust under the
laws of the State of Maryland in 1993 to continue and expand the operations of
its privately owned predecessor organization. The Company's Common Shares have
been traded on the New York Stock Exchange since the completion of the
Company's initial public offering on January 26, 1994 (the "Initial Offering").
The Company's executive offices are located at 2859 Paces Ferry Road, Atlanta,
Georgia 30339 and its telephone number is (770) 436-4600.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement,
the Company intends to use the net proceeds from the sale of Securities for
general corporate purposes, including repayment of indebtedness, acquisition of
or investment in new properties and developments and maintenance of currently
owned properties.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct unsecured obligations of the
Company and may be either senior Debt Securities ("Senior Securities") or
subordinated Debt Securities ("Subordinated Securities"). The Debt Securities
will be issued under one or more indentures, each dated as of a date prior to
the issuance of the Debt Securities to which it relates. Senior Securities and
Subordinated Securities may be issued pursuant to separate indentures
(respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each
case between the Company and a trustee (a "Trustee"), which may be the same
Trustee, and in the form that has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, subject to such amendments or
supplements as may be adopted from time to time. The Senior Indenture and the
Subordinated Indenture, as amended or supplemented from time to time, are
sometimes hereinafter referred to collectively as the "Indentures." The
Indentures will be subject to and governed by the Trust Indenture Act of 1939,
as amended (the "TIA"). The statements made under this heading relating to the
Debt Securities and the Indentures are summaries of the anticipated provisions
thereof, do not purport to be complete and are qualified in their entirety by
reference to the Indentures and such Debt Securities.
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Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
TERMS
The indebtedness represented by the Senior Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the
Company. The indebtedness represented by Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Debt of the Company as described under "--Subordination." The particular terms
of the Debt Securities offered by a Prospectus Supplement will be described in
the applicable Prospectus Supplement, along with any applicable modifications
of or additions to the general terms of the Debt Securities as described herein
and in the applicable Indenture and any applicable federal income tax
considerations. Accordingly, for a description of the terms of any series of
Debt Securities, reference must be made to both the Prospectus Supplement
relating thereto and the description of the Debt Securities set forth in this
Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Company or as set
forth in the applicable Indenture or in one or more indentures supplemental to
such Indenture. All Debt Securities of one series need not be issued at the
same time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the Debt Securities of such series, for issuance of
additional Debt Securities of such series.
Each Indenture will provide that the Company may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and, except as otherwise indicated herein, any action described
herein to be taken by each Trustee may be taken by each such Trustee with
respect to, and only with respect to, the one or more series of Debt Securities
for which it is Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indentures and the Debt Securities. The Prospectus Supplement relating
to the series of Debt Securities being offered will contain further terms
of such Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such
Debt Securities are Senior Securities or Subordinated
Securities;
(2) The aggregate principal amount of such Debt
Securities and any limit on such aggregate principal
amount;
(3) The price (expressed as a percentage of the principal
amount thereof) at which such Debt Securities will be
issued and, if other than the principal amount
thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the
maturity thereof, or (if applicable) the portion of
the principal amount of such Debt Securities that is
convertible into Common Shares or Preferred Shares,
or the method by which any such portion shall be
determined;
(4) If convertible, the terms on which such Debt
Securities are convertible, including the initial
conversion price or rate and the conversion period
and any applicable limitations on the ownership or
transferability of the Common Shares or Preferred
Shares receivable on conversion;
(5) The date or dates, or the method for determining such
date or dates, on which the principal of such Debt
Securities will be payable;
(6) The rate or rates (which may be fixed or variable),
or the method by which such rate or rates shall be
determined, at which such Debt Securities will bear
interest, if any;
(7) The date or dates, or the method for determining such
date or dates, from which any such interest will
accrue, the dates on which any such interest will be
payable, the record dates for such interest
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payment dates, or the method by which such dates
shall be determined, the persons to whom such
interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(8) The place or places where the principal of (and
premium, if any) and interest, if any, on such Debt
Securities will be payable, where such Debt
Securities may be surrendered for conversion or
registration of transfer or exchange and where
notices or demands to or upon the Company in respect
of such Debt Securities and the applicable Indenture
may be served;
(9) The period or periods, if any, within which, the
price or prices at which and the other terms and
conditions upon which such Debt Securities may,
pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at
the option of the Company;
(10) The obligation, if any, of the Company to redeem,
repay or purchase such Debt Securities pursuant to
any sinking fund or analogous provision or at the
option of a holder thereof, and the period or periods
within which, the price or prices at which and the
other terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as
a whole or in part, pursuant to such obligation;
(11) If other than U.S. dollars, the currency or
currencies in which such Debt Securities are
denominated and payable, which may be a foreign
currency or units of two or more foreign currencies
or a composite currency or currencies, and the terms
and conditions relating thereto;
(12) Whether the amount of payments of principal of (and
premium, if any) or interest, if any, on such Debt
Securities may be determined with reference to an
index, formula or other method (which index, formula
or method may, but need not be, based on a currency,
currencies, currency unit or units, or composite
currency or currencies) and the manner in which such
amounts shall be determined;
(13) Whether such Debt Securities will be issued in
certificated or book-entry form and, if in book entry
form, the identity of the depository for such Debt
Securities;
(14) Whether such Debt Securities will be in registered or
bearer form and, if in registered form, the
denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the
denominations thereof and terms and conditions
relating thereto;
(15) The applicability, if any, of the defeasance and
covenant defeasance provisions described herein or
set forth in the applicable Indenture, or any
modification thereof;
(16) Whether and under what circumstances the Company will
pay any additional amounts on such Debt Securities in
respect of any tax, assessment or governmental charge
and, if so, whether the Company will have the option
to redeem such Debt Securities in lieu of making such
payment;
(17) Any deletions from, modifications of or additions to
the events of default or covenants of the Company, to
the extent different from those described herein or
set forth in the applicable Indenture with respect to
such Debt Securities, and any change in the right of
any Trustee or any of the holders to declare the
principal amount of any of such Debt Securities due
and payable; and
(18) Any other terms of such Debt Securities not
inconsistent with the provisions of the applicable
Indenture.
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon
declaration of acceleration of the maturity thereof ("Original Issue Discount
Securities"). In such cases, all material U.S. federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
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Except as may be set forth in any Prospectus Supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. Restrictions on ownership
and transfers of the Common Shares and Preferred Shares are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Restrictions on Transfers of Shares of Beneficial
Interest." Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of, or additions
to, the events of default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series will be issuable in denominations of $1,000
and integral multiples thereof.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee or at the
office of any transfer agent designated by the Company for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the applicable Trustee or at the office of any transfer agent
designated by the Company for such purpose. Every Debt Security surrendered
for conversion, registration of transfer or exchange must be duly endorsed or
accompanied by a written instrument of transfer, and the person requesting such
action must provide evidence of title and identity satisfactory to the
applicable Trustee or transfer agent. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus
Supplement refers to any transfer agent (in addition to the applicable Trustee)
initially designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that the Company will be required to maintain a
transfer agent in each place of payment for such series. The Company may at
any time designate additional transfer agents with respect to any series of
Debt Securities.
Neither the Company nor any Trustee shall be required (i) to issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before the day of mailing
of a notice of redemption of any Debt Securities that may be selected for
redemption and ending at the close of business on the day of such mailing; (ii)
to register the transfer of or exchange any Debt Security, or portion thereof,
so selected for redemption, in whole or in part, except the unredeemed portion
of any Debt Security being redeemed in part; or (iii) to issue, register the
transfer of or exchange any Debt Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such Debt
Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indentures will provide that the Company may, without the consent
of the holders of any outstanding Debt Securities, consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other entity provided that (i) either the Company shall be the
continuing entity, or the successor entity (if other than the Company) formed
by or resulting from any such consolidation or merger or which shall have
received the transfer of such assets, and which is organized under the laws of
any domestic jurisdiction and assumes (A) the Company's obligations to pay
principal of (and premium, if any) and interest on all of the Debt Securities
and (B) the due and punctual performance and observance of all of the covenants
and conditions contained in each Indenture; (ii) immediately after giving
effect to such transaction and treating any indebtedness that becomes an
obligation of the Company or any subsidiary as a result thereof as having been
incurred by the Company or such subsidiary at the time of such transaction, no
event of default under the Indentures, and no event which, after notice or the
lapse of time, or both, would become such an event of default, shall have
occurred and be continuing; and (iii) an officers' certificate and legal
opinion covering such conditions shall be delivered to each Trustee.
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CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or
Sale of Assets," the Indentures will require the Company to do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, rights (by declaration of trust, bylaws and statute) and
franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if its Board of Trustees determines that the
preservation thereof is no longer desirable in the conduct of its business.
Maintenance of Properties. The Indentures will require the Company to
cause all of its material properties used or useful in the conduct of its
business or the business of any subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that the
Company and its subsidiaries shall not be prevented from selling or otherwise
disposing of their properties for value in the ordinary course of business.
Insurance. The Indentures will require the Company to cause each of
its and its subsidiaries' insurable properties to be insured against loss or
damage at least equal to their then full insurable value with insurers of
recognized responsibility and, if described in the applicable Prospectus
Supplement, having a specified rating from a recognized insurance rating
service.
Payment of Taxes and Other Claims. The Indentures will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges
levied or imposed upon it or any subsidiary or upon the income, profits or
property of the Company or any subsidiary and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Company or any subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith.
Additional Covenants. Any additional covenants of the Company with
respect to any series of Debt Securities will be set forth in the Prospectus
Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Prospectus Supplement,
each Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (i) default
for 30 days in the payment of any installment of interest on any Debt Security
of such series; (ii) default in the payment of principal of (or premium, if
any, on) any Debt Security of such series at its maturity; (iii) default in
making any sinking fund payment as required for any Debt Security of such
series; (iv) default in the performance or breach of any other covenant or
warranty of the Company contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the applicable Indenture; (v) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the
Company or any of its subsidiaries (including obligations under leases required
to be capitalized on the balance sheet of the lessee under generally accepted
accounting principles but not including any indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company or any of its subsidiaries
(including such leases, but not including such indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000, whether such indebtedness exists on the date
of such Indenture or shall thereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable or such
obligations being accelerated, without such acceleration having been rescinded
or annulled; (vi) certain events of bankruptcy, insolvency or reorganization,
or court appointment of a receiver, liquidator or trustee of the Company or any
Significant Subsidiary of the Company; and (vii) any other event of default
provided with respect to a particular series of Debt Securities. The term
"Significant Subsidiary" has the meaning ascribed to such term in Regulation
S-X promulgated under the Securities Act.
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If an event of default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25%
in principal amount of the Debt Securities of that series will have the right
to declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Trustee if given by the holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then outstanding
under any Indenture, as the case may be) has been made, but before a judgment
or decree for payment of the money due has been obtained by the applicable
Trustee, the holders of not less than a majority in principal amount of
outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may rescind and
annul such declaration and its consequences if (i) the Company shall have
deposited with the applicable Trustee all required payments of the principal of
(and premium, if any) and interest on the Debt Securities of such series (or of
all Debt Securities then outstanding under the applicable Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
applicable Trustee; and (ii) all events of default, other than the non-payment
of accelerated principal (or specified portion thereof), with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) have been cured or waived as provided
in such Indenture. The Indentures will also provide that the holders of not
less than a majority in principal amount of the outstanding Debt Securities of
any series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be) may waive any past default with respect to such
series and its consequences, except a default (i) in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series; or (ii) in respect of a covenant or provision contained in the
applicable Indenture that cannot be modified or amended without the consent of
the holder of each outstanding Debt Security affected thereby.
The Indentures will require each Trustee to give notice to the holders
of Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; provided, however, that
such Trustee may withhold notice to the holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if specified responsible officers
of such Trustee consider such withholding to be in the interest of such holders.
The Indentures will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an event of default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of
Debt Securities from instituting suit for the enforcement of payment of the
principal of (and premium, if any) and interest on such Debt Securities at the
respective due dates thereof.
The Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, a Trustee will be under no
obligation to exercise any of its rights or powers under an Indenture at the
request or direction of any holders of any series of Debt Securities then
outstanding under such Indenture, unless such holders shall have offered to the
Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee,
or of exercising any trust or power conferred upon such Trustee. However, a
Trustee may refuse to follow any direction which is in conflict with any law or
the applicable Indenture, which may involve such Trustee in personal liability
or which may be unduly prejudicial to the holders of Debt Securities of such
series not joining therein.
Within 120 days after the close of each fiscal year, the Company will
be required to deliver to each Trustee a certificate, signed by one of several
specified officers of the Company, stating whether or not such officer has
knowledge of any default under the applicable Indenture and, if so, specifying
each such default and the nature and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under such Indenture
affected
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by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the holder of each such Debt Security
affected thereby, (i) change the stated maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (ii)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the
holder of any such Debt Security; (iii) change the place of payment, or the
coin or currency, for payment of principal of, premium, if any, or interest on
any such Debt Security; (iv) impair the right to institute suit for the
enforcement of any payment on or with respect to any such Debt Security; (v)
reduce the above-stated percentage of any outstanding Debt Securities necessary
to modify or amend the applicable Indenture with respect to such Debt
Securities, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the applicable Indenture; or (vi) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of
Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive covenants of the applicable
Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Company and the respective Trustee thereunder without the consent
of any holder of Debt Securities for any of the following purposes: (i) to
evidence the succession of another person to the Company as obligor under such
Indenture; (ii) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities or to surrender any right or
power conferred upon the Company in such Indenture; (iii) to add events of
default for the benefit of the holders of all or any series of Debt Securities;
(iv) to add or change any provisions of an Indenture to facilitate the issuance
of, or to liberalize certain terms of, Debt Securities in bearer form, or to
permit or facilitate the issuance of Debt Securities in uncertificated form,
provided that such action shall not adversely affect the interests of the
holders of the Debt Securities of any series in any material respect; (v) to
change or eliminate any provisions of an Indenture, provided that any such
change or elimination shall become effective only when there are no Debt
Securities outstanding of any series created prior thereto which are entitled
to the benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Shares or Preferred Shares; (viii) to provide for the
acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under an Indenture by more than one Trustee; (ix)
to cure any ambiguity, defect or inconsistency in an Indenture, provided that
such action shall not adversely affect the interests of holders of Debt
Securities of any series issued under such Indenture; or (x) to supplement any
of the provisions of an Indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such Debt Securities,
provided that such action shall not adversely affect the interests of the
holders of the outstanding Debt Securities of any series.
The Indentures will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof; (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to
such Indenture; and (iv) Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or of such
other obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be
called at any time by the applicable Trustee, and also, upon request, by the
Company or the holders of at least 10% in principal amount of the outstanding
Debt Securities of such series, in any such case
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upon notice given as provided in such Indenture. Except for any consent that
must be given by the holder of each Debt Security affected by certain
modifications and amendments of an Indenture, any resolution presented at a
meeting or adjourned meeting duly reconvened at which a quorum is present may
be adopted by the affirmative vote of the holders of a majority in principal
amount of the outstanding Debt Securities of that series; provided, however,
that, except as referred to above, any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
may be made, given or taken by the holders of a specified percentage, which is
less than a majority, in principal amount of the outstanding Debt Securities of
a series may be adopted at a meeting or adjourned meeting or adjourned meeting
duly reconvened at which a quorum is present by the affirmative vote of the
holders of such specified percentage in principal amount of the outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance
with an Indenture will be binding on all holders of Debt Securities of that
series. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series; provided,
however, that if any action is to be taken at such meeting with respect to a
consent or waiver which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Debt Securities of
a series, the persons holding or representing such specified percentage in
principal amount of the outstanding Debt Securities of such series will
constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver and other action that such Indenture expressly provides
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding Debt Securities affected thereby, or of the
holders of such series and one or more additional series: (i) there shall be
no minimum quorum requirement for such meeting; and (ii) the principal amount
of the outstanding Debt Securities of such series that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under such Indenture.
SUBORDINATION
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Debt (as defined below), but the obligation of the Company to make
payments of the principal of and interest on such Subordinated Securities will
not otherwise be affected. No payment of principal or interest will be
permitted to be made on Subordinated Securities at any time if a default on
Senior Debt exists that permits the holders of such Senior Debt to accelerate
its maturity and the default is the subject of judicial proceedings or the
Company receives notice of the default. After all Senior Debt is paid in full
and until the Subordinated Securities are paid in full, holders will be
subrogated to the rights of holders of Senior Debt to the extent that
distributions otherwise payable to holders have been applied to the payment of
Senior Debt. The Subordinated Indenture will not restrict the amount of Senior
Debt or other indebtedness of the Company and its subsidiaries. As a result of
these subordination provisions, in the event of a distribution of assets upon
insolvency, holders of Subordinated Securities may recover less, ratably, than
general creditors of the Company.
Senior Debt will be defined in the applicable Indenture as the
principal of and interest on, or substantially similar payments to be made by
the Company in respect of, the following, whether outstanding at the date of
execution of the applicable Indenture or thereafter incurred, created or
assumed: (i) indebtedness of the Company for money borrowed or represented by
purchase-money obligations; (ii) indebtedness of the Company evidenced by
notes, debentures, bonds, or other securities issued under the provisions of an
indenture, fiscal agency agreement or other agreement; (iii) obligations of the
Company as lessee under leases of property either made as part of any sale and
leaseback transaction to which the Company is a party or otherwise; (iv)
indebtedness, obligations and liabilities of others in respect of which the
Company is liable contingently or otherwise to pay or advance money or property
or as guarantor, endorser or otherwise or which the Company has agreed to
purchase or otherwise acquire; and (v) any binding commitment of the Company to
fund any real estate investment or to fund any investment in any entity making
such real estate investment, in each case other than (A) any such indebtedness,
obligation or liability referred to in clauses (i) through (iv) above as to
which, in the instrument creating or evidencing the same pursuant to which the
same is outstanding, it is provided
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that such indebtedness, obligation or liability is not superior in right of
payment to the Subordinated Securities or ranks pari passu with the
Subordinated Securities; (B) any such indebtedness, obligation or liability
which is subordinated to indebtedness of the Company to substantially the same
extent as or to a greater extent than the Subordinated Securities are
subordinated; and (C) the Subordinated Securities. There will not be any
restrictions in any Indenture relating to Subordinated Securities upon the
creation of additional Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Company's most recent
fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement,
the Company will be permitted, at its option, to discharge certain obligations
to holders of any series of Debt Securities issued under any Indenture that
have not already been delivered to the applicable Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are payable in an amount sufficient to pay the entire
indebtedness on such Debt Securities in respect of principal (and premium, if
any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the stated maturity or redemption date, as the
case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (i) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities, to hold moneys for payment in trust
and, with respect to Debt Securities which are convertible or exchangeable, the
right to convert or exchange) ("defeasance"); or (ii) to be released from its
obligations with respect to such Debt Securities under the applicable Indenture
(being the restrictions described under "--Certain Covenants") or, if provided
in the applicable Prospectus Supplement, its obligations with respect to any
other covenant, and any omission to comply with such obligations shall not
constitute an event of default with respect to such Debt Securities ("covenant
defeasance"), in either case upon the irrevocable deposit by the Company with
the applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as
defined below), or both, applicable to such Debt Securities, which through the
scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any) and interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Company has delivered to the applicable Trustee an opinion of
counsel (as specified in the applicable Indenture) to the effect that the
holders of such Debt Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of
counsel, in the case of defeasance, will be required to refer to and be based
upon a ruling received from or published by the Internal Revenue Service (the
"IRS") or a change in applicable United States federal income tax law occurring
after the date of the Indenture. In the event of such defeasance, the holders
of such Debt Securities would thereafter be able to look only to such trust
fund for payment of principal (and premium, if any) and interest.
"Government Obligations" means securities that are (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged; or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal
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of any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest on
or principal of the Government Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (i) the holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the applicable Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such Debt
Security; or (ii) a Conversion Event (as defined below) occurs in respect of
the currency, currency unit or composite currency in which such deposit has
been made, the indebtedness represented by such Debt Security will be deemed to
have been, and will be, fully discharged and satisfied through the payment of
the principal of (and premium, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit or
composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market
exchange rate. "Conversion Event" means the cessation of use of (i) a
currency, currency unit or composite currency both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community; (ii) the ECU both within the European Monetary System and
for the settlement of transactions by public institutions of or within the
European Communities; or (iii) any currency unit or composite currency other
than the ECU for the purposes for which it was established. Unless otherwise
provided in the applicable Prospectus Supplement, all payments of principal of
(and premium, if any) and interest on any Debt Security that is payable in a
foreign currency that ceases to be used by its government of issuance shall be
made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to
any Debt Securities and such Debt Securities are declared due and payable
because of the occurrence of any event of default other than the event of
default described in clause (iv) under "--Events of Default, Notice and Waiver"
with respect to specified sections of an Indenture (which sections would no
longer be applicable to such Debt Securities) or described in clause (vii)
under "--Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities are
payable, and Government Obligations on deposit with the applicable Trustee,
will be sufficient to pay amounts due on such Debt Securities at the time of
their stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such event of
default. However, the Company would remain liable to make payment of such
amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect to
the Debt Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or Preferred
Shares, the conversion price or rate (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Debt Securities and any restrictions on conversion,
including restrictions directed at maintaining the Company's REIT status.
PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee,
the address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
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applicable register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or any premium or interest on any Debt Security
which remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Company, and the
holder of such Debt Security thereafter may look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") that will
be deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF PREFERRED SHARES
The description of the Company's Preferred Shares set forth below does
not purport to be complete and is qualified in its entirety by reference to the
Company's Amended and Restated Declaration of Trust (the "Declaration of
Trust") and Amended and Restated Bylaws (the "Bylaws"), as in effect.
GENERAL
Under the Declaration of Trust, the Company has authority to issue up
to 161,000,000 shares of beneficial interest, consisting of 100,000,000 Common
Shares, par value $.01 per share, 51,000,000 excess shares of beneficial
interest, par value $.01 per share ("Excess Shares"), and 10,000,000 Preferred
Shares, par value $.01 per share. No Preferred Shares were outstanding as of
the date of this Prospectus. Preferred Shares may be issued from time to time,
in one or more series, as authorized by the Board of Trustees of the Company.
Prior to issuance of shares of each series, the Board of Trustees is required
by the Maryland General Corporation Law ("MGCL") and the Company's Declaration
of Trust to fix for each series, subject to the provisions of the Company's
Declaration of Trust regarding Excess Shares, the terms, preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms or conditions of
redemption, as are permitted by Maryland law. The Preferred Shares will, when
issued, be fully paid and nonassessable and will have no preemptive rights.
The Board of Trustees could authorize the issuance of Preferred Shares with
terms and conditions that could have the effect of discouraging a takeover or
other transaction that holders of Common Shares might believe to be in their
best interests or in which holders of some, or a majority, of the Common Shares
might receive a premium for their shares over the then market price of such
Common Shares.
TERMS
The following description of the Preferred Shares sets forth certain
general terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares
are in all respects subject to and qualified in their entirety by reference to
the applicable provisions of the Company's Declaration of Trust and Bylaws and
any applicable amendment to the Declaration of Trust designating terms of a
series of Preferred Shares (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the
Preferred Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred
Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Shares;
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(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for
such Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred
Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities
exchange;
(9) The terms and conditions, if applicable, upon which such
Preferred Shares will be convertible into Common Shares,
including the conversion price or rate (or manner of
calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable
to such Preferred Shares;
(12) The relative ranking and preference of such Preferred Shares
as to dividend rights and rights upon liquidation, dissolution
or winding up of the affairs of the Company;
(13) Any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred
Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(14) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate
to preserve the status of the Company as a REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Shares of the Company, and to all equity securities ranking
junior to such Preferred Shares with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; (ii) on a parity with
all equity securities issued by the Company, the terms of which specifically
provide that such equity securities rank on a parity with the Preferred Shares
with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the Company; and (iii) junior to all equity securities issued by
the Company, the terms of which specifically provide that such equity
securities rank senior to the Preferred Shares with respect to dividend rights
or rights upon liquidation, dissolution or winding up of the Company. The term
"equity securities" does not include convertible debt securities.
DIVIDENDS
Holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Trustees of the Company, out
of assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of the Company on such record dates as shall
be fixed by the Board of Trustees of the Company.
Dividends on any series of the Preferred Shares may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement.
Dividends, if cumulative, will be cumulative from and after the date set forth
in the applicable Prospectus Supplement. If the Board of Trustees of the
Company fails to declare a dividend payable on a dividend payment date on any
series of the Preferred Shares for which dividends are non-cumulative, then the
holders of such series of the Preferred Shares will have no right to receive a
dividend in respect of the dividend period ending on such dividend payment
date, and the Company will have no obligation to pay the dividend accrued for
such period, whether or not dividends on such series are declared payable on
any future dividend payment date.
If Preferred Shares of any series are outstanding, no dividends will
be declared or paid or set apart for payment on any shares of beneficial
interest of the Company of any other series ranking, as to dividends, on a
parity with or
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junior to the Preferred Shares of such series for any period unless (i) if such
series of Preferred Shares has a cumulative dividend, full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on the
Preferred Shares of such series for all past dividend periods and the then
current dividend period; or (ii) if such series of Preferred Shares does not
have a cumulative dividend, full dividends for the then current dividend period
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on the
Preferred Shares of such series. When dividends are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon Preferred Shares of
any series and the shares of any other series of Preferred Shares ranking on a
parity as to dividends with the Preferred Shares of such series, all dividends
declared upon Preferred Shares of such series and any other series of Preferred
Shares ranking on a parity as to dividends with such Preferred Shares shall be
declared pro rata so that the amount of dividends declared per share of
Preferred Shares of such series and such other series of Preferred Shares shall
in all cases bear to each other the same ratio that accrued dividends per share
on the Preferred Shares of such series (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods if such
Preferred Shares does not have a cumulative dividend) and such other series of
Preferred Shares bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
Preferred Shares of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i)
if such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period; and (ii) if such series of Preferred Shares does not have a
cumulative dividend, full dividends on the Preferred Shares of such series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for payment for the then
current dividend period, no dividends (other than in Common Shares or other
shares of beneficial interest ranking junior to the Preferred Shares of such
series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made upon the
Common Shares, or any other shares of beneficial interest of the Company
ranking junior to or on a parity with the Preferred Shares of such series as to
dividends or upon liquidation, nor shall any Common Shares, or any other shares
of beneficial interest of the Company ranking junior to or on a parity with the
Preferred Shares of such series as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any such
shares) by the Company (except by conversion into or exchange for other shares
of beneficial interest of the Company ranking junior to the Preferred Shares of
such series as to dividends and upon liquidation).
Any dividend payment made on a series of Preferred Shares shall first
be credited against the earliest accrued but unpaid dividend due with respect
to shares of such series which remain payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
the Company, as a whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares
that is subject to mandatory redemption will specify the number of such
Preferred Shares that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Shares do not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is payable only from
the net proceeds of the issuance of shares of beneficial interest of the
Company, the terms of such Preferred Shares may provide that, if no such shares
of beneficial interest shall have been issued or to the extent the net proceeds
from any issuance are insufficient to pay in full the aggregate redemption
price then due, such Preferred Shares shall automatically and mandatorily be
converted into the applicable shares of beneficial interest of the Company
pursuant to conversion provisions specified in the applicable Prospectus
Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all Preferred
Shares of such series shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current
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dividend period; and (ii) if a series of Preferred Shares does not have a
cumulative dividend, full dividends on all of the Preferred Shares of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for the then
current dividend period, no Preferred Shares of such series shall be redeemed
unless all outstanding Preferred Shares of such series are simultaneously
redeemed; provided, however, that the foregoing shall not prevent the purchase
or acquisition of Preferred Shares of such series to preserve the REIT status
of the Company or pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding Preferred Shares of such series. In
addition, unless (i) if such series of Preferred Shares has a cumulative
dividend, full cumulative dividends on all outstanding shares of such series of
Preferred Shares have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period; and (ii) if
such series of Preferred Shares does not have a cumulative dividend, full
dividends on the Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, the Company shall
not purchase or otherwise acquire directly or indirectly any Preferred Shares
of such series (except by conversion into or exchange for shares of beneficial
interest of the Company ranking junior to the Preferred Shares of such series
as to dividends and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Preferred Shares of such
series to preserve the REIT status of the Company or pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by any other equitable manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the stock transfer books
of the Company. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price; (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by the
Company in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, and all rights of the holders of such
shares will terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company, then, before any distribution or payment
shall be made to the holders of any Common Shares or any other class or series
of shares of beneficial interest of the Company ranking junior to the Preferred
Shares in the distribution of assets upon any liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Shares shall
be entitled to receive out of assets of the Company legally available for
distribution to shareholders liquidating distributions in the amount of the
liquidation preference per share, if any, set forth in the applicable
Prospectus Supplement, plus an amount equal to all dividends accrued and unpaid
thereon (which shall not include any accumulation in respect of unpaid
noncumulative dividends for prior dividend periods). After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of Preferred Shares will have no right or claim to any of the remaining assets
of the Company. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Company are
insufficient to pay the amount of the liquidating distributions on all
outstanding Preferred Shares and the corresponding amounts payable on all other
classes or series of shares of beneficial interest of the Company ranking on a
parity with the Preferred Shares in the distribution of assets, then the
holders of the Preferred Shares and all other such classes or series of shares
of beneficial interest shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
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If liquidating distributions shall have been made in full to all
holders of Preferred Shares, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of shares of
beneficial interest ranking junior to the Preferred Shares upon liquidation,
dissolution or winding up, according to their respective rights and preferences
and in each case according to their respective number of shares. For such
purposes, the consolidation or merger of the Company with or into any other
corporation, trust or entity, or the sale, lease or conveyance of all or
substantially all of the property or business of the Company, shall not be
deemed to constitute a liquidation, dissolution or winding up of the Company.
VOTING RIGHTS
Holders of the Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so long
as any Preferred Shares of a series remain outstanding, the Company will not,
without the affirmative vote or consent of the holders of at least two-thirds
of the Preferred Shares of such series outstanding at the time, given in person
or by proxy, either in writing or at a meeting (such series voting separately
as a class), (i) authorize or create, or increase the authorized or issued
amount of, any class or series of shares of beneficial interest ranking prior
to such series of Preferred Shares with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized shares of beneficial interest of the Company into
such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares; or (ii)
amend, alter or repeal the provisions of the Company's Declaration of Trust or
the Designating Amendment for such series of Preferred Shares, whether by
merger, consolidation or otherwise (an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such
series of Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so long
as the Preferred Shares remain outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event the Company
may not be the surviving entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting power of holders of Preferred Shares, and provided further that (A)
any increase in the amount of the authorized Preferred Shares or the creation
or issuance of any other series of Preferred Shares, or (B) any increase in the
amount of authorized shares of such series or any other series of Preferred
Shares, in each case ranking on a parity with or junior to the Preferred Shares
of such series with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Shares
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred
Shares is convertible into Common Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Common Shares into which the Preferred Shares are convertible, the conversion
price or rate (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Shares or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Shares.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code
of 1986, as amended (the "Code"), not more than 50% in value of its outstanding
shares of beneficial interest may be owned, directly or indirectly, by five or
fewer individuals (as defined in the Code to include certain entities) during
the last half of a taxable year. To assist the Company in meeting this
requirement, the Company may take certain actions to limit the beneficial
ownership, directly or indirectly, by a single person of the Company's
outstanding equity securities, including any Preferred Shares of the Company.
Therefore, the Designating Amendment for each series of Preferred Shares may
contain provisions restricting the ownership and transfer of the Preferred
Shares. The applicable Prospectus Supplement will specify any additional
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ownership limitation relating to a series of Preferred Shares. See
"Restrictions on Transfers of Shares of Beneficial Interest."
TRANSFER AGENT
The transfer agent and registrar for the Preferred Shares will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF COMMON SHARES
The description of the Company's Common Shares set forth below does
not purport to be complete and is qualified in its entirety by reference to the
Company's Declaration of Trust and Bylaws, as in effect.
GENERAL
Under the Declaration of Trust, the Company has authority to issue
100,000,000 Common Shares, par value $.01 per share. At September 30, 1996,
the Company had outstanding 19,286,429 Common Shares. In addition, on such
date 3,528,232 Units of Limited Partnership of the Operating Partnership (the
"Units") were outstanding (other than those held directly or indirectly by the
Company) and may be exchanged for Common Shares on a one-for-one basis. All
Common Shares offered hereby will, when issued, be duly authorized, fully paid
and nonassessable.
TERMS
Subject to the preferential rights of any other shares or series of
shares of beneficial interest and to the provisions of the Company's
Declaration of Trust regarding Excess Shares, holders of Common Shares will be
entitled to receive distributions on Common Shares if, as and when authorized
and declared by the Board of Trustees of the Company out of assets legally
available therefor and to share ratably in the assets of the Company legally
available for distribution to its shareholders in the event of its liquidation,
dissolution or winding-up after payment of, or adequate provision for, all
known debts and liabilities of the Company.
Subject to the provisions of the Company's Declaration of Trust
regarding Excess Shares, each outstanding Common Share entitles the holder to
one vote on all matters submitted to a vote of shareholders, including the
election of trustees, and, except as otherwise required by law or except as
provided with respect to any other class or series of shares of beneficial
interest, the holders of Common Shares will possess exclusive voting power.
There is no cumulative voting in the election of trustees, which means that the
holders of a majority of the outstanding Common Shares can elect all of the
trustees then standing for election, and the holders of the remaining Common
Shares will not be able to elect any trustee.
Holders of Common Shares have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any securities of the
Company.
Subject to the provisions of the Company's Declaration of Trust
regarding Excess Shares, all Common Shares will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.
The Company's Declaration of Trust provides that the Company cannot
merge with or sell all or substantially all of the assets of the Company,
except pursuant to a resolution approved by shareholders holding a majority of
the shares entitled to vote on the resolution. In addition, the partnership
agreement of the Operating Partnership requires that any merger or sale of all
or substantially all of the assets of the Operating Partnership be approved by
partners holding 75% of the Units.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, not more than 50%
in value of its outstanding shares of beneficial interest may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year. To assist
the Company in meeting this requirement, the Company
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may take certain actions to limit the beneficial ownership, directly or
indirectly, by a single person of the Company's outstanding equity securities.
See "Restrictions on Transfers of Shares of Beneficial Interest."
TRANSFER AGENT
The transfer agent and registrar for the Common Shares is The First
National Bank of Boston, Boston, Massachusetts.
DESCRIPTION OF WARRANTS
The Company has no Warrants or other share purchase rights outstanding
(other than options issued under the Company's Second Amended and Restated 1994
Share Option and Incentive Plan). The Company may issue Warrants for the
purchase of Preferred Shares or Common Shares. Warrants may be issued
independently, together with any other Securities offered by any Prospectus
Supplement or through a dividend or other distribution to the Company's
shareholders and may be attached to or separate from such Securities. Warrants
may be issued under a warrant agreement (each, a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Warrants of a
particular series and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of Warrants. The
following sets forth certain general terms and provisions of the Warrants
offered hereby. Further terms of the Warrants and the applicable Warrant
Agreement will be set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (1) the title of such Warrants; (2) the
aggregate number of such Warrants; (3) the price or prices at which such
Warrants will be issued; (4) the designation, number and terms of the Preferred
Shares or Common Shares purchasable upon exercise of such Warrants; (5) the
designation and terms of the other Securities, if any, with which such Warrants
are issued and the number of such Warrants issued with each such Security: (6)
the date, if any, on and after which such Warrants and the related Preferred
Shares or Common Shares, if any, will be separately transferable; (7) the price
at which each Preferred Share or Common Share purchasable upon exercise of such
Warrants may be purchased; (8) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (9) the
minimum or maximum amount of such Warrants which may be exercised at any one
time; (10) information with respect to book-entry procedures, if any; (11) a
discussion of certain federal income tax considerations; and (12) any other
terms of such Warrants, including terms, procedures and limitations relating to
the transferability, exchange and exercise of such Warrants.
RESTRICTIONS ON TRANSFERS OF SHARES OF BENEFICIAL INTEREST
For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding shares of beneficial
interest may be owned, directly or indirectly, by five or fewer individuals
(defined in the Code to include certain entities) during the last half of a
taxable year (other than the first year), and such shares of beneficial
interest must be beneficially owned by 100 or more persons during at least 335
days of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. In order to protect the Company
against the risk of losing its status as a REIT due to a concentration of
ownership among its shareholders, the Declaration of Trust provides that no
holder (other than persons approved by the trustees at their option and in
their discretion) may own, or be deemed to own by virtue of the attribution
provisions of the Code, more than 9.8% (the "Ownership Limit") of the Company's
shares of beneficial interest. The Board of Trustees does not expect that it
would waive the Ownership Limit in the absence of the ruling from the IRS or an
opinion of counsel satisfactory to it that the changes in ownership will not
then or in the future jeopardize the Company's status as a REIT. Any transfer
of shares of beneficial interest (including warrants) or any security
convertible into shares of beneficial interest that would create a direct or
indirect ownership of shares of beneficial interest in excess of the Ownership
Limit or that would result in the disqualification of the Company as a REIT,
including any transfer that results in the shares of beneficial interest being
owned by fewer than 100 persons or that results in the Company being "closely
held" within the meaning of Section 856(h) of the Code, shall be null and void,
and the intended transferee will acquire no rights to the shares of beneficial
interest. The foregoing restrictions on transferability and ownership will not
apply if the Board of Trustees determines that it is no longer in the best
interests of the Company to attempt to qualify, or to continue to qualify, as
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a REIT. In addition, the foregoing restrictions do not apply with respect to
an offeror in the event of an all cash tender offer by it which has been
accepted by at least two-thirds of the Company's outstanding shares.
Shares of beneficial interest owned, or deemed to be owned, or
transferred to a shareholder in excess of the Ownership Limit will
automatically be exchanged for Excess Shares that will be transferred, by
operation of law, to the Company as trustee of a trust for the exclusive
benefit of the transferees to whom such shares of beneficial interest may be
ultimately transferred without violating the Ownership Limit. While the Excess
Shares are held in trust, they will not be entitled to vote, they will not be
considered for purposes of any shareholder vote or the determination of a
quorum for such vote, and, except upon liquidation, they will not be entitled
to participate in dividends or other distributions. Any dividend or
distribution paid to a proposed transferee of Excess Shares prior to the
discovery by the Company that shares of beneficial interest have been
transferred in violation of the provisions of the Company's Declaration of
Trust shall be repaid to the Company upon demand. The Excess Shares are not
treasury shares, but rather constitute a separate class of issued and
outstanding shares of beneficial interest of the Company. The original
transferee-shareholder may, at any time the Excess Shares are held by the
Company in trust, transfer the interest in the trust representing the Excess
Shares to any individual whose ownership of the shares of beneficial interest
exchanged into such Excess Shares would be permitted under the Ownership Limit,
at a price not in excess of the price paid by the original
transferee-shareholder for the shares of beneficial interest that were
exchanged for Excess Shares. Immediately upon the transfer to the permitted
transferee, the Excess Shares will automatically be exchanged for shares of
beneficial interest of the class from which they were converted. If the
foregoing transfer restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the intended
transferee of any Excess Shares may be deemed, at the option of the Company, to
have acted as an agent on behalf of the Company in acquiring the Excess Shares
and to hold the Excess Shares on behalf of the Company.
In addition to the foregoing transfer restrictions, the Company will
have the right, for a period of 90 days during the time any Excess Shares are
held by the Company in trust, to purchase all or any portion of the Excess
Shares from the original transferee-shareholder for the lesser of the price
paid for the shares of beneficial interest by the original
transferee-shareholder or the market price (as determined in the manner set
forth in the Declaration of Trust) of the shares of beneficial interest on the
date the Company exercises its option to purchase. The 90-day period begins on
the date of the violative transfer if the original transferee-shareholder gives
notice to the Company of the transfer or, if no such notice is given, the date
the Board of Trustees determines that a violative transfer has been made.
Every owner of more than 5% (or such lower percentage as required by
the Code or regulations thereunder) of the issued and outstanding Common Shares
must file a written notice with the Company containing the information
specified in the Declaration of Trust no later than January 30 of each year.
Each shareholder shall upon demand be required to disclose to the Company in
writing any information with respect to the direct, indirect and constructive
ownership of beneficial interests as the Board of Trustees deems necessary to
comply with the provisions of the Code applicable to REITs, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.
This ownership limitation may have the effect of precluding
acquisition of control of the Company unless the Board of Trustees determines
that maintenance of REIT status is no longer in the best interests of the
Company.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF
THE COMPANY'S DECLARATION OF TRUST AND BYLAWS
The following summary of certain provisions of Maryland law and the
Company's Declaration of Trust and Bylaws does not purport to be complete and
is qualified by reference to Maryland law and the Company's Declaration of
Trust and Bylaws.
MARYLAND BUSINESS COMBINATION STATUTE
The MGCL establishes special requirements with respect to "business
combinations" between Maryland corporations and "interested shareholders"
unless exemptions are applicable. Among other things, the law prohibits for a
period of five years a merger and other specified or similar transactions
between a company and an interested shareholder and requires a supermajority
vote for such transactions after the end of the five-year period.
20
<PAGE> 22
"Interested shareholders" are all persons owning beneficially,
directly or indirectly, more than 10% of the outstanding voting stock of the
Maryland corporation. "Business combinations" include any merger or similar
transaction subject to a statutory vote and additional transactions involving
transfers of assets or securities in specified amounts to interested
shareholders or their affiliates. Unless an exemption is available,
transactions of these types may not be consummated between a Maryland
corporation and an interested shareholder or its affiliates for a period of
five years after the date on which the shareholder first became an interested
shareholder. Thereafter, the transaction may not be consummated unless
recommended by the Board of Trustees and approved by the affirmative vote of at
least 80% of the votes entitled to be cast by all holders of outstanding voting
shares and 66 2/3% of the votes entitled to be cast by all holders of
outstanding voting shares other than the interested shareholder. A business
combination with an interested shareholder that is approved by the Board of
Trustees of a Maryland corporation at any time before an interested shareholder
first becomes an interested shareholder is not subject to the special voting
requirements. An amendment to a Maryland corporation's charter electing not to
be subject to the foregoing requirements must be approved by the affirmative
vote of at least 80% of the votes entitled to be cast by all holders of
outstanding voting shares and 66 2/3% of the votes entitled to be cast by
holders of outstanding voting shares who are not interested shareholders. Any
such amendment is not effective until 18 months after the vote of shareholders
and does not apply to any business combination of a corporation with a
shareholder who was an interested shareholder on the date of the shareholder
vote.
MARYLAND CONTROL SHARE ACQUISITION STATUTE
The MGCL provides that "control shares" of a Maryland real estate
investment trust 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 beneficial interest
owned by the acquiror or by officers of trustees who are employees of the
trust. "Control shares" are voting shares of beneficial interest which, if
aggregated with all other such shares of beneficial interest previously
acquired by the acquiror or in respect of which the acquiror is able to
exercise or direct the exercise of voting power (except solely by revocable
proxy), would entitle the acquiror to exercise voting power in electing
trustees 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 of all voting power. Control shares do not include shares
of beneficial interest the acquiring person is then entitled to vote as a
result of having previously obtained shareholder 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 the board of trustees to call a special meeting of
shareholders to be held within 50 days of demand to consider voting rights for
the shares. If no request for a meeting is made, the trust may itself present
the question at any shareholders 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 trust may
redeem any or all of the control shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to the
absence of voting rights for the control shares, as of the date of the last
control share acquisition by the acquiror or of any meeting of shareholders at
which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a shareholders meeting and the
acquiror becomes entitled to vote a majority of the shares of beneficial
interest entitled to vote, all other shareholders may exercise appraisal
rights. The fair value of the shares of beneficial interest as determined for
purposes of such appraisal rights may not be less than the highest price per
share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply to shares
acquired in a merger, consolidation or share exchange if the trust is a party
to the transaction, or to acquisitions approved or exempted by the declaration
of trust or bylaws of the trust.
The business combination statute and the control share acquisition
statute could have the effect of discouraging offers to acquire the Company and
of increasing the difficulty of consummating any such offer.
LIMITATION OF SHAREHOLDER'S LIABILITY
Under Maryland law, shareholders generally are not responsible for the
corporation's debts or obligations, and the Company's Declaration of Trust
specifically provides that no shareholder of the Company will be personally
liable
21
<PAGE> 23
for any obligations of the Company. The Company's Bylaws further provide that
the Company shall indemnify each shareholder against any claim or liability to
which the shareholder may become subject by reason of his or her being or
having been a shareholder, and that the Company shall reimburse each
shareholder for all legal and other expenses reasonably incurred by him or her
in connection with any such claim or liability. However, with respect to tort
claims, contractual claims where shareholder liability is not so negated,
claims for taxes and certain statutory liability, the shareholder may, in some
jurisdictions, including Texas, be personally liable to the extent that such
claims are not satisfied by the Company. Inasmuch as the Company will carry
public liability insurance which it considers adequate, any risk of personal
liability to shareholders is limited to situations in which the Company's
assets plus its insurance coverage would be insufficient to satisfy the claims
against the Company and its shareholders.
LIMITATION OF TRUSTEES' AND OFFICERS' LIABILITY
Under Maryland law a real estate investment trust formed in Maryland
is permitted to limit, by provision in its declaration of trust, the liability
of trustees and officers so that no trustee or officer of the Company shall be
liable to the Company or to any shareholder for money damages except to the
extent that (i) the trustee or officer actually received an improper benefit in
money, property, or services, for the amount of the benefit or profit in money,
property, or services actually received, or (ii) a judgment or other final
adjudication adverse to the trustee or officer is entered in a proceeding based
on a finding in a proceeding that the trustee's or officer's action was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. The Company's Declaration of Trust has
incorporated the provisions of such law limiting the liability of trustees and
officers.
The Company's Bylaws require it to indemnify, to the full extent of
Maryland law, any present or former trustee or officer (and such person's
spouse and children) (an "Indemnitee") who is or was a party or threatened to
be made a party to any proceeding by reason of his or her service in that
capacity, against all expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the
proceeding, provided that the Company shall have received a written affirmation
by the Indemnitee that he or she has met the standard of conduct necessary for
indemnification by the Company as authorized by the Bylaws. The Company shall
not be required to indemnify an Indemnitee if (a) it is established that (i)
the Indemnitee's act or omission was committed in bad faith or was the result
of active or deliberate dishonesty, (ii) the Indemnitee actually received an
improper personal benefit in money, property or services or (iii) in the case
of a criminal proceeding, the Indemnitee had reasonable cause to believe that
the Indemnitee's act or omission was unlawful, (b) the proceeding was initiated
by the Indemnitee, (c) the Indemnitee received payment for such expenses
pursuant to insurance or otherwise or (d) the proceeding arises under Section
16 of the Securities Exchange Act of 1934, as amended. Pursuant to the Bylaws,
the Indemnitee is required to repay the amount paid or reimbursed by the
Company if it shall ultimately be determined that the standard of conduct was
not met. The Company's Bylaws also permit the Company to provide such other
and further indemnification or payment or reimbursement of expenses as may be
permitted by the MGCL or to which the Indemnitee may be entitled. GGPI's
bylaws contain similar provisions that are consistent with Texas law.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of
the Company's officers and trustees. The indemnification agreements require,
among other things, that the Company indemnify its officers and trustees to the
fullest extent permitted by law and advance to the officers and trustees all
related expenses, subject to reimbursement if it is subsequently determined
that indemnification is not permitted. Under these agreements, the Company
also must indemnify and advance all expenses incurred by officers and trustees
seeking to enforce their rights under the indemnification agreements, and cover
officers and trustees under the Company's trustees' and officers' liability
insurance. Although the form of indemnification agreement offers substantially
the same scope of coverage afforded by provisions in the Declaration of Trust
and the Bylaws, it provides greater assurance to trustees and officers that
indemnification will be available because, as a contract, it cannot be modified
unilaterally in the future by the Board of Trustees or by the Company's
shareholders to eliminate the rights it provides.
FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to
continue to operate, in such a manner as to qualify as a REIT under the Code,
but no assurance can be given that it will at all times so qualify.
22
<PAGE> 24
The provisions of the Code pertaining to REITs are highly technical
and complex. The following is a brief and general summary of certain
provisions that currently govern the federal income tax treatment of the
Company and its shareholders. For the particular provisions that govern the
federal income tax treatment of the Company and its shareholders, reference is
made to Sections 856 through 860 of the Code and the regulations thereunder.
The following summary is qualified in its entirety by such reference.
Under the Code, if certain requirements are met in a taxable year, a
REIT generally will not be subject to federal income tax with respect to income
that it distributes to its shareholders. If the Company fails to qualify
during any taxable year as a REIT, unless certain relief provisions are
available, it will be subject to tax (including any applicable alternative
minimum tax) on its taxable income at regular corporate rates, which could have
a material adverse effect upon its shareholders.
In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its shareholders out of current or accumulated earnings
and profits will be taxed to shareholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the shareholders.
To the extent that distributions to shareholders exceed current or accumulated
earnings and profits, they will constitute a return of capital, rather than
dividend or capital gain income, and will reduce the basis for the
shareholder's shares of beneficial interest with respect to which the
distribution is paid or, to the extent that they exceed such basis, will be
taxed in the same manner as gain from the sale of those shares of beneficial
interest.
Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Securities offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. Foreign investors also
should consult their own tax advisors concerning the tax consequences of an
investment in the Company, including the possibility of United States income
tax withholding on Company distributions.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratios of earnings to
fixed charges of the Company and its predecessor for the periods shown:
<TABLE>
<CAPTION>
Six Months Ended Year Ended January 26- January 1- Year Ended December 31,
June 30, December 31, December 31, January 25, -----------------------
1996 1995 1994 1994(1)(2) 1993(1) 1992(1) 1991(1)(2)
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio . . . . . 1.81x 1.40x 1.83x .89x 1.22x 1.17x .70x
</TABLE>
- ------------------------------
(1) Ratios for the period January 1 - January 25, 1994 and the years ended
December 31, 1993, 1992, and 1991 reflect periods prior to the
recapitalization and initial public offering of the Company on January
26, 1994.
(2) The earnings for these periods were inadequate to cover fixed charges
as follows:
Period January 1 - January 25, 1994 $ 146,000
Year ended December 31, 1991 5,014,000
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of net income (loss) before
minority interest and extraordinary items plus fixed charges. Fixed charges
consist of interest expense, capitalized interest, credit enhancement fees and
loan cost amortization. To date, the Company has not issued any Preferred
Shares; therefore, the ratios of earnings to combined fixed charges and
Preferred Shares dividend requirements are the same as the ratios of earnings
to fixed charges presented above.
23
<PAGE> 25
PLAN OF DISTRIBUTION
The Company may sell Securities to or through one or more underwriters
or dealers for public offering and sale by or through them, directly to one or
more individual, institutional or other purchasers, through agents or through a
combination of any such methods of sale. Direct sales to investors may also be
accomplished through subscription rights distributed to the Company's
shareholders on a pro rata basis, which may or may not be transferrable. In
connection with any distribution of subscription rights to shareholders, if all
of the underlying Securities are not subscribed for, the Company may sell the
unsubscribed Securities directly to third parties or may engage the services of
one or more underwriters, dealers or agents, including standby underwriters, to
sell the unsubscribed Securities to third parties.
The distribution of the Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices (any of which may represent a
discount from the prevailing market prices).
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities, for
whom they may act as agents, in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers, and agents that
participate in the distribution of Securities may be deemed to be underwriters
under the Securities Act, and any discounts or commissions they receive from
the Company and any profit on the resale of Securities they realize may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such underwriter or agent will be identified, and any such compensation
received from the Company will be described, in the applicable Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Common Shares which are listed on the NYSE. Any Common Shares
sold pursuant to a Prospectus Supplement will be listed on the NYSE, subject to
official notice of issuance. The Company may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so.
It is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of, or the trading market for, the Securities.
Under agreements into which the Company may enter, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant
to delayed delivery contracts ("Contracts") providing for payment and delivery
on the date or dates stated in such Prospectus Supplement. Each Contract will
be for an amount no less than, and the aggregate principal amounts of
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the applicable Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of the Company. Contracts will
not be subject to any conditions except (i) the purchase by an institution of
the Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
such institution is subject, and (ii) if Securities are being sold to
underwriters, the Company shall have sold to such underwriters the total
principal amount of the Securities less the principal amount thereof covered by
the Contracts. If in conjunction with the sale of Securities to institutions
under Contracts, Securities are also being sold to the public, the consummation
of the sale under the Contracts shall occur simultaneously with the
consummation of the sale to the public. The underwriters and such other agents
will not have any responsibility in respect of the validity or performance of
such contracts.
24
<PAGE> 26
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in
certain states Securities may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Securities offered hereby may not
simultaneously engage in market making activities with respect to the
Securities for a period of two business days prior to the commencement of such
distribution.
LEGAL MATTERS
Certain legal matters, including the legality of the Securities, will
be passed upon for the Company by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The financial statements and schedules referred to and incorporated by
reference in this Prospectus or elsewhere in the Registration Statement of
which this Prospectus is a part have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in giving said report.
25
<PAGE> 27
==============================================================================
No person has been authorized in connection with the offering made
hereby to give any information or to make any representation not contained in
this Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company or any other
person. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the Securities offered hereby to any person or by
anyone in any jurisdiction in which it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of Debt Securities . . . . . . . . . . . . . . . . . . . . . 3
Description of Preferred Shares . . . . . . . . . . . . . . . . . . . . . 13
Description of Common Shares . . . . . . . . . . . . . . . . . . . . . . 18
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 19
Restrictions on Transfers of Shares of Beneficial Interest . . . . . . . 19
Certain Provisions of Maryland Law and of the Company's
Declaration of Trust and Bylaws . . . . . . . . . . . . . . . . . . . . 20
Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . 22
Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . 23
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
==============================================================================
==============================================================================
$300,000,000
Gables Residential Trust
Debt Securities
Preferred Shares
Common Shares
Warrants
----------------
PROSPECTUS
----------------
OCTOBER __, 1996
=============================================================================
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated fees and expenses payable
by the Company in connection with the issuance and distribution of the
Securities registered hereby (all amounts except the registration fee and NASD
fee are estimated):
<TABLE>
<S> <C>
Registration fee . . . . . . . . . . . . . . . . . . . . . . . . . $ 90,125
NASD fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500
Printing and duplicating expenses . . . . . . . . . . . . . . . . . 2,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . 10,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . 5,000
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . . 3,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,375
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $135,000
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Company's Declaration of Trust and the partnership agreement of
Gables Realty Limited Partnership, a Delaware limited partnership and operating
subsidiary of the Company, provide certain limitations on the liability of the
Company's trustees and officers for monetary damages to the Company. The
Declaration of Trust and the Bylaws obligate the Company to indemnify its
trustees and officers, and permit the Company to indemnify its employees and
other agents, against certain liabilities incurred in connection with their
service in such capacities. These provisions could reduce the legal remedies
available to the Company and the shareholders against these individuals.
The Company's Bylaws require it to indemnify, to the full extent of
Maryland law, any present or former trustee or officer (and such person's
spouse and children) (an "Indemnitee") who is or was a party or threatened to
be made a party to any proceeding by reason of his or her service in that
capacity, against all expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the
proceeding, provided that the Company shall have received a written affirmation
by the Indemnitee that he or she has met the standard of conduct necessary for
indemnification by the Company as authorized by the Bylaws. The Company shall
not be required to indemnify an Indemnitee if (a) it is established that (i)
the Indemnitee's act or omission was committed in bad faith or was the result
of active or deliberate dishonesty, (ii) the Indemnitee actually received an
improper personal benefit in money, property or services or (iii) in the case
of a criminal proceeding, the Indemnitee had reasonable cause to believe that
the Indemnitee's act or omission was unlawful, (b) the proceeding was initiated
by the Indemnitee, (c) the Indemnitee received payment for such expenses
pursuant to insurance or otherwise or (d) the proceeding arises under Section
16 of the Exchange Act. Pursuant to the Bylaws, the Indemnitee is required to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met. The Company's Bylaws
permit the Company to provide such other and further indemnification or payment
or reimbursement of expenses as may be permitted by the MGCL or to which the
Indemnitee may be entitled. The Bylaws of Gables GP, Inc., a Texas corporation
and wholly owned subsidiary of the Company, contain similar provisions that are
consistent with Texas law.
The Company has entered into indemnification agreements with each of
the Company's officers and trustees. The indemnification agreements require,
among other matters, that the Company indemnify its officers and trustees to
the fullest extent permitted by law and advance to the officers and trustees
all related expenses, subject to reimbursement if it is subsequently determined
that indemnification is not permitted. The Company must also indemnify and
advance all expenses incurred by officers and trustees seeking to enforce their
rights under the indemnification agreements and cover officers and trustees
under the Company's trustees' and officers' liability insurance. Although the
form of indemnification agreement offers substantially the same scope of
coverage afforded by law, it provides assurance to
II-1
<PAGE> 29
trustees and officers that indemnification will be available because such
contracts cannot be modified unilaterally in the future by the Board of
Trustees or the shareholders to eliminate the rights they provide.
ITEM 16. EXHIBITS.
4.1 Amended and Restated Declaration of Trust of the Company
(incorporated by reference to the Company's Registration
Statement on Form S-11 (File No. 33-70570), as amended).
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference to the Company's Annual Report on Form 10-K for the
fiscal year ending December 31, 1993).
4.3 Indenture for Senior Debt Securities (incorporated by
reference to the Company's Registration Statement on Form S-3
(File No. 33-93672), as amended).
4.4 Form of Senior Debt Security (included in Exhibit No. 4.3).
4.5 Indenture for Subordinated Debt Securities (incorporated by
reference to the Company's Registration Statement on Form S-3
(File No. 33-93672), as amended).
4.6 Form of Subordinated Debt Security (included in Exhibit No.
4.5).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the Securities being registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.
12.1 Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included as part of
Exhibits 5.1 and 8.1 hereto).
24.1 Powers of Attorney (included on the signature page hereof).
25.1* Statement of Eligibility and Qualification of Senior Trustee.
25.2* Statement of Eligibility and Qualification of Subordinate
Trustee.
- ----------------------------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any acts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated offering
range may be reflected in the form of prospectus
II-2
<PAGE> 30
filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the undersigned registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference
in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof; and
(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.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 15 above, 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 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 and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section
305(b)(2) of the Act.
(e) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period,
to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription
period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent
reoffering thereof. If any public offering by the
underwriters is to be made on terms differing from those set
forth on the cover page of the prospectus, a post-effective
amendment will be filed to set forth the terms of such
offering.
II-3
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia on this 16th day of
October, 1996.
GABLES RESIDENTIAL TRUST
By: /s/ Marcus E. Bromley
--------------------------------------
Marcus E. Bromley
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Gables Residential Trust hereby severally constitute Marcus E.
Bromley, John T. Rippel and Perry M. Parrott, Jr., and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly, to
sign for us and in our names in the capacities indicated below, the
Registration Statement filed herewith and any and all amendments to said
Registration Statement, and generally to do all such things in our names and in
our capacities as officers and directors to enable Gables Residential Trust to
comply with the provisions of the Securities Act of 1933 and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ Marcus E. Bromley Chairman of the Board of Trustees October 16, 1996
- ------------------------------- and Chief Executive Officer (Principal
Marcus E. Bromley Executive Officer)
/s/ Marvin R. Banks, Jr. Chief Financial Officer (Principal Financial October 16, 1996
- ------------------------------- Officer and Principal Accounting Officer)
Marvin R. Banks, Jr.
/s/ John T. Rippel President, Chief Operating Officer October 16, 1996
- ------------------------------- and Trustee
John T. Rippel
/s/ Perry M. Parrott, Jr. Senior Vice President-Development/Acquisitions October 16, 1996
- ------------------------------- and Trustee
Perry M. Parrott, Jr.
/s/ David M. Holland Trustee October 16, 1996
- -------------------------------
David M. Holland
/s/ Peter D. Linneman Trustee October 16, 1996
- -------------------------------
Peter D. Linneman
/s/ Lauralee E. Martin Trustee October 16, 1996
- -------------------------------
Lauralee E. Martin
/s/ John W. McIntyre Trustee October 16, 1996
- -------------------------------
John W. McIntyre
</TABLE>
II-4
<PAGE> 32
EXHIBIT INDEX
Exhibit No. Description
4.1 Amended and Restated Declaration of Trust of the Company
(incorporated by reference to the Company's Registration
Statement on Form S-11 (File No. 33-70570), as amended).
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference to the Company's Annual Report on Form 10-K for the
fiscal year ending December 31, 1993).
4.3 Indenture for Senior Debt Securities (incorporated by
reference to the Company's Registration Statement on Form S-3
(File No. 33-93672), as amended).
4.4 Form of Senior Debt Security (included in Exhibit No. 4.3).
4.5 Indenture for Subordinated Debt Securities (incorporated by
reference to the Company's Registration Statement on Form S-3
(File No. 33-93672), as amended).
4.6 Form of Subordinated Debt Security (included in Exhibit No.
4.5).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the Securities being registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.
12.1 Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included as part of
Exhibits 5.1 and 8.1 hereto).
24.1 Powers of Attorney (included on the signature page hereof).
25.1* Statement of Eligibility and Qualification of Senior Trustee.
25.2* Statement of Eligibility and Qualification of Subordinate
Trustee.
- ----------------------------------
* To be filed by amendment.
II-5
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD] GOODWIN, PROCTER & HOAR LLP
October 16, 1996
Gables Residential Trust
2859 Paces Ferry Road
Suite 1450
Atlanta, Georgia 30339
Re: Legality of Securities to be Registered Under
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Gables
Residential Trust, a Maryland real estate investment trust (the "Company"), in
connection with the Company's registration statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), relating
to an indeterminate amount of Debt Securities, Preferred Shares, Common Shares
and Warrants (as such terms are defined in the Registration Statement)
authorized for issuance under the Company's Amended and Restated Declaration of
Trust (the "Declaration of Trust"), with an aggregate public offering price of
up to $300,000,000 (such securities being referred to collectively as the
"Securities"). The Registration Statement provides that the Securities may be
offered separately or together, in separate series, in amounts, at prices and
on terms to be set forth in one or more prospectus supplements (each a
"Prospectus Supplement") to the Prospectus contained in the Registration
Statement.
In connection with rendering this opinion, we have examined the
Declaration of Trust of the Company, as amended to the date hereof and on file
with the Maryland State Department of Assessments and Taxation; the Amended and
Restated Bylaws of the Company; such records of corporate proceedings of the
Company as we deem appropriate for the purposes of this opinion; and the
Registration Statement and the exhibits thereto.
We express no opinion concerning the laws of any jurisdictions other
than the laws of the United States of America and The Commonwealth of
Massachusetts and the Maryland General Corporation Law.
<PAGE> 2
Gables Residential Trust
October 16, 1996
Page 2
Based upon the foregoing, we are of the opinion that, when
specifically authorized for issuance by the Company's Board of Trustees or an
authorized committee thereof (the "Authorizing Resolution") and when issued as
described in the Registration Statement and a Prospectus Supplement that is
consistent with the Authorizing Resolution, and upon receipt by the Company of
the consideration provided for in the Authorizing Resolution (which
consideration is not less than the $.01 par value per share in the case of
Common Shares or Preferred Shares), the Securities will be legally issued,
fully paid and nonassessable, and in the case of Debt Securities and Warrants
binding obligations of the Company.
The foregoing assumes that all requisite steps will be taken to comply
with the requirements of the Securities Act and applicable requirements of
state laws regulating the offer and sale of securities.
We hereby consent to being named as counsel to the Company in the
Registration Statement, to the references therein to our firm under the caption
"Legal Matters" and to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 8.1
[LETTERHEAD] GOODWIN, PROCTER & HOAR LLP
October 16, 1996
Gables Residential Trust
2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, GA 30339
Re: Certain Federal Income Tax Matters
Ladies and Gentlemen:
These opinions are delivered to you in our capacity as counsel to
Gables Residential Trust (the "Company") in connection with the Company's
registration statement on Form S-3 (the "Registration Statement") filed by the
Company with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, relating to an indeterminate amount of Debt Securities,
Preferred Shares, Common Shares and Warrants (as such terms are defined in the
Registration Statement) authorized for issuance under the Company's Amended and
Restated Declaration of Trust and with an aggregate public offering price of
$300,000,000. These opinions relate to the Company's qualification for federal
income tax purposes as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended (the "Code"), and the accuracy of the
statements in the Registration Statement set forth under the caption "Federal
Income Tax Considerations."
In rendering the following opinions, we have examined the Amended and
Restated Declaration of Trust and Amended and Restated Bylaws of the Company,
and such other records, certificates and documents as we have deemed necessary
or appropriate for purposes of rendering the opinions set forth herein.
We have reviewed the Registration Statement and the descriptions set
forth therein of the Company and its investments and activities. We have
relied upon the representations of the Company and its affiliates and certain
officers thereof (including, without limitation, representations contained in a
representation letter dated as of this date) regarding the manner in which the
Company has been and will continue to be owned and operated. We have neither
independently investigated nor verified such representations, and we assume
that such representations are true, correct and complete and that all
representations made "to the best of the knowledge and belief" of any person(s)
or party(ies) are and will be true, correct and complete as if made without
such qualification. We assume that the Company has been and
<PAGE> 2
Gables Residential Trust
October 16, 1996
Page 2
will be operated in accordance with applicable laws and the terms and
conditions of applicable documents, and that the descriptions of the Company
and its investments, and the proposed investments, activities, operations and
governance of the Company set forth in the Registration Statement continue to
be true. In addition, we have relied on certain additional facts and
assumptions described below.
In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the
conformity to the original documents of all documents submitted to us as
copies, (iv) the conformity of final documents to all documents submitted to us
as drafts, (v) the authority and capacity of the individual or individuals who
executed any such documents on behalf of any person, (vi) the accuracy and
completeness of all records made available to us, and (vii) the factual
accuracy of all representations, warranties and other statements made by all
parties. We have also assumed, without investigation, that all documents,
certificates, warranties and covenants on which we have relied in rendering the
opinions set forth below and that were given or dated earlier than the date of
this letter continue to remain accurate, insofar as relevant to the opinions set
forth herein, from such earlier date through and including the date of this
letter.
The discussion and conclusions set forth below are based upon the
Code, the Income Tax Regulations and Procedure and Administration Regulations
promulgated thereunder and existing administrative and judicial interpretations
thereof, all of which are subject to change. No assurance can therefore be
given that the federal income tax consequences described below will not be
altered in the future.
Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution, recordkeeping and other requirements
of the Code necessary for a corporation to qualify as a REIT, we are of the
opinion that:
1. Commencing with the Company's first taxable year ended
December 31, 1994, the Company has been organized in
conformity with the requirements for qualification as a "real
estate investment trust" under the Code, and its method of
operation, as described in the representations referred to
above, will enable it to continue to meet the requirements for
qualification and taxation as a "real estate investment trust"
under the Code.
<PAGE> 3
Gables Residential Trust
October 16, 1996
Page 3
2. The Statements in the Registration Statement set forth under
the caption "Federal Income Tax Considerations" to the extent
such information constitutes matters of law, summaries of
legal matters, or legal conclusions, have been reviewed by us
and are accurate in all material respects.
We express no opinion with respect to the transactions described in
the Registration Statement other than those expressly set forth herein. You
should recognize that our opinions are not binding on the IRS and that the IRS
may disagree with the opinions contained herein. Although we believe that our
opinions will be sustained if challenged, there can be no assurance that this
will be the case. Except as specifically discussed above, the opinions
expressed herein are based upon the law as it currently exists. Consequently,
future changes in the law may cause the federal income tax treatment of the
transactions described herein to be materially and adversely different from
that described above.
We consent to being named as Counsel to the Company in the
Registration Statement, to the references in the Registration Statement to our
firm and to the inclusion of a copy of this opinion letter as an exhibit to the
Registration Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 12.1
Gables Residential Trust
Ratios of earnings to fixed charges
Dollars in thousands
<TABLE>
<CAPTION>
Gables Residential Trust Gables Residential Trust Predecessor
--------------------------------------- ----------------------------------------
Year ended 12-31
Six months Year ended 1-26-94 - 1-1-94 - -----------------------------
ended 6-30-96 12-31-95 12-31-94 1-25-94 1993 1992 1991
--------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income (loss) before
minority interest and
extraordinary items $12,875 $18,369 $15,972 $ (92) $4,520 $2,433 $(1,664)
----------------------------------- --------------------------------------
Plus Fixed Charges:
Interest expense 8,991 13,088 8,345 1,043 12,253 11,431 12,162
Credit enhancement fees 303 710 661 35 591 511 515
Interest capitalized 2,428 7,481 3,031 54 1,053 160 3,350
Loan cost amortization expense 667 932 893 234 1,132 1,112 768
Loan cost amortization capitalized 199 1,508 1,176 0 110 25 0
----------------------------------- --------------------------------------
Total fixed charges (1) 12,588 23,719 14,106 1,366 15,139 13,239 16,795
Less:
Interest capitalized 2,428 7,481 3,031 54 1,053 160 3,350
Loan cost amortization capitalized 199 1,508 1,176 0 110 25 0
Adjusted earnings (2) 22,836 33,099 25,871 1,220 18,496 15,487 11,781
----------------------------------- --------------------------------------
Ratio (2 divided by 1) 1.81 1.40 1.83 0.89 1.22 1.17 0.70
=================================== ======================================
Coverage deficiency (146) (5,014)
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 29, 1996
included in Gables Residential Trust's (the "Company") Annual Report on Form
10-K for the fiscal year ended December 31, 1995, as amended by Form 10-K/A as
filed on April 26, 1996, our report dated June 22, 1996 included in the
Company's Current Report on Form 8-K/A dated April 23, 1996 as filed on July 2,
1996, our report dated August 9, 1996 included in the Company's Current Report
on Form 8-K dated July 26, 1996 as filed on August 16, 1996 and to all
references to our firm included in this registration statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
October 17, 1996
<PAGE> 1
[LETTERHEAD] GOODWIN, PROCTER & HOAR LLP
October 17, 1996
VIA EDGAR
Filing Desk
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Gables Residential Trust: Registration Statement on Form S-3
Ladies and Gentlemen:
Transmitted herewith for filing on behalf of Gables Residential Trust
(the "Company") pursuant to Section 6 of the Securities Act of 1933, as
amended, and Rule 402 thereunder, is the Company's Registration Statement on
Form S-3 (the "Registration Statement"), relating to the registration of $300
million of an indeterminate amount of the Company's debt securities, preferred
shares of beneficial interest, par value $.01 per share, common shares of
beneficial interest, par value $.01 per share, and warrants.
Additionally, a wire transfer in the amount of $90,125.00,
representing payment of the registration fee, has been wired to the SEC's
lockbox with Mellon Bank.
If you have any questions or comments with respect to the attached
document please do not hesitate to telephone me at (617) 570-1019 or Ettore
Santucci of this office at (617) 570-1531.
Very truly yours,
/s/ Bradley A. Jacobson
--------------------------------
Bradley A. Jacobson
