As filed with the Securities and Exchange Commission on October 2, 2003
Registration 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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LEXINGTON CORPORATE PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
Maryland 13-3717318
(State or Other (I.R.S. Employer
Jurisdiction Identification Number)
of Incorporation or
Organization)
355 Lexington Avenue
New York, NY 10017
(212) 692-7260
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
T. Wilson Eglin With copies to:
Chief Executive Officer, President Mark Schonberger, Esq.
and Chief Operating Officer Paul, Hastings, Janofsky & Walker LLP
Lexington Corporate Properties Trust 75 East 55th Street
355 Lexington Avenue New York, New York 10022
New York, NY 10017 (212) 318-6000
(212) 692-7260
(Name, Address, Including Zip Code,
and Telephone Number, Including
Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Title of each class of Amount to Offering Aggregate Amount of
securities Be Price Offering Registration
to be registered Registered Per Unit Price Fee
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Common shares of
beneficial interest,
par value $0.0001
per share
Preferred shares of
beneficial interest, par
value $0.0001 per share (1) (2) $400,000,000.00(3) $32,360.00
Debt Securities
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(1) There are being registered hereunder an indeterminate number of common
shares, an indeterminate number of preferred shares and an indeterminate
principal amount of debt securities as may be issued by the registrant from
time to time, and an indeterminate number of common shares as shall be
issuable upon conversion of such preferred shares and debt securities. In
accordance with Rule 415(a)(4) under the Securities Act of 1933, the
aggregate offering price for all the shares of common stock that the
Registrant may sell from time to time in "at the market" offerings pursuant
to this Registration Statement will not exceed 10% of the aggregate market
value of the Registrant's outstanding common stock calculated as of the
date 60 days prior to the filing this Registration Statement.
(2) The proposed maximum offering price per unit will be determined, from time
to time, by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(3) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933, as amended,
and based upon the maximum aggregate offering price of all securities being
registered.
------------------------------------------
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant will file a
further amendment which specifically states that this Registration Statement
will thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement will become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
==============================================================================
Subject to Completion
Preliminary Prospectus dated October 1, 2003
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$400,000,000.00
LEXINGTON CORPORATE PROPERTIES TRUST
Common Shares Of Beneficial Interest
Preferred Shares Of Beneficial Interest
Debt Securities
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We are Lexington Corporate Properties Trust, a self-managed and
self-administered real estate investment trust formed under the laws of the
State of Maryland. This prospectus relates to the public offer and sale by us of
one or more series of (i) common shares of beneficial interest, par value
$0.0001 per share, (ii) preferred shares of beneficial interest, par value
$0.0001 per share, and (iii) senior or subordinated debt securities. The
aggregate public offering price of the common shares, preferred shares and debt
securities covered by this prospectus, which we refer to collectively as the
securities, will not exceed $400,000,000.00 (or its equivalent based on the
exchange rate at the time of sale). The securities may be offered, separately or
together, in separate classes or series, in amounts, at prices and on terms to
be determined at the time of the offering and set forth in one or more
supplements to this prospectus.
The specific terms of the securities will be set forth in the applicable
prospectus supplement and will include, where applicable: (i) in the case of
common shares, any 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 public offering price;
and (iii) 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
our option or repayment at the option of the holder thereof, terms for sinking
fund payments, terms for conversion into common or preferred shares, covenants
and any public offering price. 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 our declaration of trust
or otherwise appropriate to preserve our status as a real estate investment
trust for federal income tax purposes. See "RESTRICTIONS ON TRANSFERS OF CAPITAL
STOCK AND ANTI-TAKEOVER PROVISIONS" beginning on page 19 of this prospectus.
The applicable prospectus supplement will also contain information, where
appropriate, about the risk factors and federal income tax considerations
relating to, and any listing on a securities exchange of, the securities covered
by that prospectus supplement.
We may offer the securities directly, through agents designated by us from
time to time, 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 the applicable 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 those securities.
Our common shares and 8.05% Series B Cumulative Redeemable Preferred Stock
are traded on the New York Stock Exchange under the symbols "LXP" and "LXP_pb,"
respectively.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS __________________.
The information contained in this prospectus and the accompanying prospectus is
not complete and may be changed. This prospectus and the accompanying prospectus
are not an offer to sell these securities and are not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Table of Contents
-----------------
Page
----
Cautionary Statements Concerning Forward-Looking Information................ii
About This Prospectus.......................................................ii
Our Company..................................................................1
Description Of Our Common Shares.............................................2
Description Of Our Preferred Shares..........................................4
Description Of Our Debt Securities...........................................8
Restrictions On Transfers Of Capital Stock And Anti-Takeover Provisions.....19
Use Of Proceeds.............................................................23
Plan of Distribution........................................................23
Ratios of EBITDA and Earnings to Combined Fixed Charges and Preferred
Share Dividends.......................................................24
Experts.....................................................................24
Legal Matters...............................................................24
Where You Can Find More Information.........................................24
Incorporation Of Certain Documents By Reference.............................24
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CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION
Certain information included or incorporated by reference in this
prospectus and any applicable prospectus supplement may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, ("Securities Act") and Section 21E of the Securities Exchange Act of
1934, as amended, and as such may involve known and unknown risks, uncertainties
and other factors which may cause our actual results, performance or
achievements to be materially different from future results, performance or
achievements expressed or implied by these forward-looking statements.
Forward-looking statements, which are based on certain assumptions and describe
our future plans, strategies and expectations, are generally identifiable by use
of the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend," "project," or the negative of these words or other similar
words or terms. Factors which could have a material adverse effect on our
operations and future prospects include, but are not limited to, changes in
economic conditions generally and the real estate market specifically, adverse
developments with respect to our tenants, legislative/regulatory changes
including changes to laws governing the taxation of REITs, availability of debt
and equity capital, interest rates, competition, supply and demand for
properties in our current and proposed market areas, policies and guidelines
applicable to REITs and the other factors described under the heading "RISK
FACTORS" in any supplement to this prospectus. These risks and uncertainties
should be considered in evaluating any forward-looking statements contained or
incorporated by reference in this prospectus.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed or incorporated by reference in this prospectus
and any applicable prospectus supplement may not occur and actual results could
differ materially from those anticipated or implied in the forward-looking
statements.
ABOUT THIS PROSPECTUS
All references to "the Company," "we," "our" and "us" in this prospectus
mean Lexington Corporate Properties Trust and all entities owned or controlled
by us except where it is made clear that the term means only the parent company.
The term "you" refers to a prospective investor.
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OUR COMPANY
We are a self-managed and self-administered real estate investment trust,
commonly referred to as a REIT, formed under the laws of the State of Maryland.
Our primary business is the acquisition, ownership and management of a
geographically diverse portfolio of net leased office, industrial and retail
properties. Substantially all of our properties are subject to triple net
leases, which are generally characterized as leases in which the tenant bears
all or substantially all of the costs and cost increases for real estate taxes,
utilities, insurance and ordinary repairs and maintenance.
We grow our portfolio primarily by acquiring properties from corporations
and other entities in sale-leaseback transactions and from developers of
newly-constructed properties built to suit the needs of a corporate tenant. We
have diversified our portfolio by geographical location, tenant industry
segment, lease term expiration and property type with the intention of providing
steady internal growth with low volatility. We believe that such diversification
should help insulate us from regional recession, industry specific downturns and
price fluctuations by property type. As part of our ongoing efforts, we expect
to continue to effect portfolio and individual property acquisitions and
dispositions, through joint ventures and for our own account, expand existing
properties, extend lease maturities in advance of expiration and refinance
outstanding indebtedness when advisable. We also expect to continue to enter
into joint ventures with third-party investors as a means of creating additional
growth and expanding the revenue realized from advisory and asset management
activities.
Our operating partnership structure enables us to acquire properties by
issuing to sellers, as a form of consideration, limited partnership interests in
any of our three operating partnership subsidiaries. We refer to these limited
partnership interests as OP units. The OP units are redeemable, after certain
dates, for our common shares. We believe that this structure facilitates our
ability to raise capital and to acquire portfolio and individual properties by
enabling us to structure transactions which may defer tax gains for a
contributor of property while preserving our available cash for other purposes,
including the payment of dividends and distributions.
Our principal executive offices are located at 355 Lexington Avenue, New
York, New York 10017, our telephone number is (212) 692-7260 and our Internet
address is www.lxp.com.
1
DESCRIPTION OF OUR COMMON SHARES
The following summary of the material terms and provisions of our common
shares does not purport to be complete and is subject to the detailed provisions
of our declaration of trust and our By-Laws, each of which is incorporated by
reference into this prospectus. You should carefully read each of these
documents in order to fully understand the terms and provisions of our common
shares. For information on incorporation by reference, and how to obtain copies
of these documents, see the sections entitled "WHERE YOU CAN FIND MORE
INFORMATION" on page 24 of this prospectus and "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" on page 24 of this prospectus.
General
Under our declaration of trust, our board of trustees has authority to
issue 80,000,000 common shares. Under Maryland law, our shareholders generally
are not responsible for our debts or obligations as a result of their status as
shareholders.
Terms
Subject to the preferential rights of any other shares or series of equity
securities and to the provisions of our declaration of trust regarding excess
shares, holders of our common shares are entitled to receive dividends on our
common shares if, as and when authorized and declared by our board of trustees
out of assets legally available therefor and to share ratably in those of our
assets legally available for distribution to our shareholders in the event that
we liquidate, dissolve or wind up, after payment of, or adequate provision for,
all of our known debts and liabilities and the amount to which holders of any
class of shares classified or reclassified or having a preference on
distributions in liquidation, dissolution or winding up have a right.
Subject to the provisions of our 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 otherwise provided in our
declaration of trust with respect to any other class or series of shares, the
holders of our 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 our 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 trustees.
Holders of our common shares have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any of our securities.
We furnish our shareholders with annual reports containing audited
consolidated financial statements and an opinion thereon expressed by an
independent public accounting firm.
Subject to the provisions of our declaration of trust regarding excess
shares, all of our common shares will have equal dividend, distribution,
liquidation and other rights and will have no preference, appraisal or exchange
rights.
Pursuant to the Maryland REIT Law, a real estate investment trust
generally cannot amend its declaration of trust or merge unless approved by the
affirmative vote of shareholders holding at least two-thirds of the shares
entitled to vote on the matter unless a lesser percentage (but not less than a
majority of all of the votes to be cast on the matter) is set forth in our
declaration of trust. Our declaration of trust provides that those actions, with
the exception of certain amendments to our declaration of trust for which a
higher vote requirement has been set, will be valid and effective if authorized
by holders of a majority of the total number of shares of all classes
outstanding and entitled to vote thereon.
Restrictions on Ownership
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (which is commonly referred to as the Code), not more than 50%
in value of its outstanding capital shares may be owned, directly or indirectly,
by five or fewer individuals (as defined in the Code to include certain
entities) during the last
2
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.
See "RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK AND ANTI-TAKEOVER PROVISIONS"
beginning on page 19 of this prospectus.
Transfer Agent
The transfer agent and registrar for our common shares is Mellon Investor
Services, LLC.
3
DESCRIPTION OF OUR PREFERRED SHARES
The following summary of the material terms and provisions of our
preferred shares does not purport to be complete and is subject to the detailed
provisions of our declaration of trust (including any applicable articles
supplementary, amendment or annex to our declaration of trust designating the
terms of a series of preferred shares) and our By-Laws, each of which is
incorporated by reference into this prospectus. You should carefully read each
of these documents in order to fully understand the terms and provisions of our
preferred shares. For information on incorporation by reference, and how to
obtain copies of these documents, see the sections entitled "WHERE YOU CAN FIND
MORE INFORMATION" on page 24 of this prospectus and "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" on page 24 of this prospectus.
General
Under our declaration of trust, we have authority to issue 10,000,000
preferred shares from time to time, in one or more series, as authorized by our
board of trustees. As of the date of this prospectus, the only series of
preferred shares that are outstanding are our 8.05% Series B Cumulative
Redeemable Preferred Stock. See "-Terms of Our 8.05% Series B Cumulative
Redeemable Preferred Stock" below; all of our Series A Senior Cumulative
Convertible Preferred Stock, par value $0.0001 per share, were converted into
our common shares in April 2002.
Subject to limitations prescribed by Maryland law and our declaration of
trust, our board of trustees is authorized to fix the number of shares
constituting each series of preferred shares and the terms, preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms or conditions of
redemption. The preferred shares will, when issued against payment therefor, be
fully paid and nonassessable and will not be subject to preemptive rights. Our
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 common shares might receive a premium for their
common shares over the then-current market price of their shares.
Terms
Reference is made to the applicable prospectus supplement relating to the
preferred shares offered thereby for specific terms, including:
(1) the title and stated value of the preferred shares;
(2) the number of preferred shares offered, the liquidation
preference per share and the offering price of the preferred shares;
(3) the dividend rate(s), period(s), and/or payment date(s) or
method(s) of calculation thereof applicable to the preferred shares;
(4) the date from which dividends on the preferred shares shall
accumulate, if applicable;
(5) the provisions for a sinking fund, if any, for the preferred
shares;
(6) the provisions for redemption, if applicable, of the preferred
shares;
(7) any listing of the preferred shares on any securities exchange;
(8) the terms and conditions, if applicable, upon which the preferred
shares will be convertible into common shares, including the conversion
price (or manner of calculation thereof);
(9) a discussion of federal income tax considerations applicable to
the preferred shares;
4
(10) the relative ranking and preferences of the preferred shares as
to dividend rights and rights upon our liquidation, dissolution or
winding-up of our affairs;
(11) any limitations on issuance of any series of preferred shares
ranking senior to or on a parity with the preferred shares as to dividend
rights and rights upon our liquidation, dissolution or winding-up of our
affairs;
(12) any limitations on direct or beneficial ownership of our
securities and restrictions on transfer of our securities, in each case as
may be appropriate to preserve our status as a REIT; and
(13) any other specific terms, preferences, rights, limitations or
restrictions of the preferred shares.
Rank
Unless otherwise specified in the applicable prospectus supplement, the
preferred shares rank, with respect to dividend rights and rights upon our
liquidation, dissolution or winding-up, and allocation of our earnings and
losses: (i) senior to all classes or series of our common shares, and to all
equity securities ranking junior to the preferred shares, (ii) on a parity with
all equity securities issued by us the terms of which specifically provide that
such equity securities rank on a parity with the preferred shares; and (iii)
junior to all equity securities issued by us the terms of which specifically
provide that such equity securities rank senior to the preferred shares. As used
in this prospectus, the term "equity securities" does not include convertible
debt securities.
Dividends
Subject to any preferential rights of any outstanding securities or series
of securities, the holders of preferred shares will be entitled to receive
dividends, when, as and if declared by our board of trustees, out of assets
legally available for payment. Dividends will be paid at such rates and on such
dates as will be set forth in the applicable prospectus supplement. Dividends
will be payable to the holders of record of preferred shares as they appear on
our share transfer books on the applicable record dates fixed by our board of
trustees. Dividends on any series of our preferred shares may be cumulative or
non-cumulative, as provided in the applicable prospectus supplement.
Redemption
If so provided in the applicable prospectus supplement, the preferred
shares offered thereby will be subject to mandatory redemption or redemption at
our option, 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.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding-up
of our affairs, and before any distribution or payment shall be made to the
holders of any common shares or any other class or series of shares ranking
junior to our preferred shares, the holders of our preferred shares shall be
entitled to receive, after payment or provision for payment of our debts and
other liabilities, out of our assets 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 our remaining assets. In the event that, upon
any such voluntary or involuntary liquidation, dissolution or winding-up of our
affairs, the legally available assets are insufficient to pay the amount of the
liquidating distributions on all of our outstanding preferred shares and the
corresponding amounts payable on all of our other outstanding equity securities
ranking on a parity with the preferred shares in the distribution of assets upon
our liquidation, dissolution or winding-up of our affairs, then the holders of
our preferred shares and the
5
holders of such other outstanding equity securities shall share ratably in any
such distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled.
If liquidating distributions are made in full to all holders of our
preferred shares, our remaining assets shall be distributed among the holders of
any other classes or series of equity securities ranking junior to the preferred
shares in the distribution of assets upon our liquidation, dissolution or
winding-up of our affairs, according to their respective rights and preferences
and in each case according to their respective number of shares.
If we consolidate or merge with or into, or sell, lease or convey all or
substantially all of our property or business to, any corporation, trust or
other entity, such transaction shall not be deemed to constitute a liquidation,
dissolution or winding-up of our affairs.
Voting Rights
Unless otherwise from time to time required by law, or as otherwise
indicated in the applicable prospectus supplement, holders of our preferred
shares will not have any voting rights.
Conversion Rights
The terms and conditions, if any, upon which our preferred shares are
convertible into common shares will be set forth in the applicable prospectus
supplement. Such terms will include the number of common shares into which the
preferred shares are convertible, the conversion price (or manner of calculation
thereof), the conversion period, provisions as to whether conversion will be at
the option of the holders of the preferred shares or at our option, the events
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such preferred shares.
Restrictions on Ownership
For us to qualify as a REIT under the Code, not more than 50% in value of
our outstanding capital shares 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 us in meeting this requirement, we
may take certain actions to limit the beneficial ownership, directly or
indirectly, by a single person of our outstanding equity securities, including
any series of our preferred shares. Therefore, the applicable amendment or annex
to our declaration of trust designating the terms of a series of preferred
shares may contain provisions restricting the ownership and transfer of such
preferred shares. The applicable prospectus supplement will specify any
additional ownership limitation relating to the preferred shares being offered
thereby. See "RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK AND ANTI-TAKEOVER
PROVISIONS" beginning on page 19 of this prospectus.
Transfer Agent
The transfer agent and registrar for our preferred shares will be set
forth in the applicable prospectus supplement.
Terms of Our 8.05% Series B Cumulative Redeemable Preferred Stock
General. In June 2003, we sold 3,160,000 preferred shares of beneficial
interest classified as 8.05% Series B Cumulative Redeemable Preferred Stock,
which we refer to as the Series B Preferred Shares. The Series B Preferred
Shares are not convertible into our common shares and are listed on the New York
Stock Exchange under the symbol "LXP_pb."
Dividends. The holders of the Series B Shares are entitled to receive
cumulative cash dividends at a rate of 8.05% of the $25.00 liquidation
preference per year (equivalent to $2.0125 per year per share).
Liquidation Preference. If we liquidate, dissolve or wind up, holders of
our Series B Preferred Shares will have the right to receive $25.00 per share,
plus accrued and unpaid dividends (whether or not declared) to and
6
including the date of payment before any payments are made to the holders of our
common shares and any other capital shares ranking junior to the Series B
Preferred Shares as to liquidation rights.
Redemption. We may not redeem the Series B Preferred Shares prior to June
19, 2008, except in limited circumstances relating to the preservation of our
status as a REIT. On or after June 19, 2008, we may, at our option, redeem the
Series B Preferred Shares, in whole or in part, at any time and from time to
time, for cash equal to $25.00 per share, plus any accrued and unpaid dividends,
if any, to and including the date of redemption.
Conversion. The Series B Preferred Shares are not convertible into, or
exchangeable for, any other property or securities, except that we may exchange
shares of the Series B Preferred Shares for shares of excess stock in order to
ensure that we remain a qualified REIT for federal income tax purposes.
Rank. With respect to the payment of dividends and amounts upon
liquidation, dissolution or winding up, the Series B Preferred Share rank
(i) senior to all classes or series of our common shares and to all equity
securities ranking junior to our Series B Preferred Shares, (ii) on a parity
with all equity securities issued by us the terms of which specifically provide
that such equity securities rank on a parity with our Series B Preferred Shares,
and (iii) junior to all equity securities issued by us the terms of which
specifically provide that such equity securities rank senior to our Series B
Preferred Shares.
Voting Rights. Holders of the Series B Preferred Shares will generally
have no voting rights. However, if we do not pay dividends on the Series B
Preferred Shares for six or more quarterly periods (whether or not consecutive),
the holders of the Series B Preferred Shares voting together as a class with the
holders of all other classes or series of our equity securities ranking on
parity with the Series B Preferred Shares which are entitled to similar voting
rights, will be entitled to vote at the next annual meeting of our shareholders
for the election of two additional trustees to serve on our board of trustees
until all unpaid cumulative dividends have been paid or declared and set apart
for payment.
7
DESCRIPTION OF OUR DEBT SECURITIES
We will issue our debt securities under one or more separate indentures
between us and a trustee that we will name in the applicable supplement to this
prospectus. A form of the indenture is attached as an exhibit to the
registration statement of which this prospectus is a part. Following its
execution, the indenture will be filed with the SEC and incorporated by
reference in the registration statement of which this prospectus is a part.
The following summary describes certain material terms and provisions of
the indenture and our debt securities. This summary is not complete and is
subject to, and is qualified in its entirety by reference to, the provisions of
the indenture. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the series in the applicable supplement to
this prospectus. You should read the indenture for more details regarding the
provisions we describe below and for other provisions that may be important to
you. For information on incorporation by reference, and how to obtain a copy of
the indenture, see the sections entitled "WHERE YOU CAN FIND MORE INFORMATION"
on page 24 of this prospectus and "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" on page 24 of this prospectus.
General
The debt securities will be direct obligations of the Company, which may
be secured or unsecured 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 in the form filed as
an exhibit to the Registration Statement of which this prospectus is a part (the
"Form of Indenture"). As provided in the Form of Indenture, the specific terms
of any Debt Security issued pursuant to an indenture will be set forth in one or
more Supplemental Indentures, each dated as of a date of or prior to the
issuance of the debt securities to which it relates (the "Supplemental
Indentures" and each a "Supplemental Indenture"). 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 (an "Indenture Trustee"), which may be
the same Indenture Trustee, 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 statements made
under this heading relating to the debt securities and the Indentures are
summaries of the provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indentures and such debt
securities.
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 federal income tax
considerations unique to such debt securities. 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 limits 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 Supplemental Indentures. 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.
8
The Form of Indenture provides that the Company may, but need not,
designate more than one Indenture Trustee thereunder, each with respect to one
or more series of debt securities. Any Indenture Trustee under an Indenture may
resign or be removed with respect to one or more series of debt securities and a
successor Indenture Trustee may be appointed to act with respect to such series.
If two or more persons are acting as Indenture Trustee with respect to different
series of debt securities, each such Indenture Trustee shall be an Indenture
Trustee of a trust under the applicable Indenture separate and apart from the
trust administered by any other Indenture Trustee, and, except as otherwise
indicated herein, any action described herein to be taken by each Indenture
Trustee may be taken by each such Indenture Trustee with respect to, and only
with respect to, the one or more series of debt securities for which it is
Indenture 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 secured or unsecured or 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 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 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
with respect to 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;
9
(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 so, the identity of the depository for such debt
securities;
(14) Whether such debt securities will be in registered or bearer form
or both 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;
(18) The provisions, if any, relating to the security provided for
such debt securities; and
(19) 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, any special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable prospectus supplement.
Except as may be set forth in any prospectus supplement, neither the debt
securities nor the Indenture will 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,
regardless of whether such indebtedness, transaction or change of control is
initiated or supported by the Company, any affiliate of the Company or any other
party. However, certain restrictions on ownership and transfers of the common
shares and preferred shares are designed to preserve the Company's status as a
REIT and, therefore, may act to prevent or hinder a change of control. See
"RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK AND ANTI-TAKEOVER PROVISIONS"
beginning on page 19 of this prospectus. 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.
10
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.
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 applicable
Indenture Trustee, the address of which will be stated in the applicable
prospectus supplement; provided, however, 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 applicable register for such debt
securities or by wire transfer of funds to such person at an account maintained
within the United States.
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 Indenture 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 Indenture 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 Indenture 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 Indenture 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 Indenture 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 (a) 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, is organized under the laws of any domestic
jurisdiction and assumes the Company's obligations to pay principal of (and
premium, if any) and interest on all of the debt securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in each Indenture; (b) 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 (c) an officers' certificate and legal opinion covering such
conditions shall be delivered to each Indenture Trustee.
11
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, by-laws and statute) and franchises;
provided, however, that the Company will 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 by appropriate
proceedings.
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
with insurers of recognized responsibility and, if described in the applicable
prospectus supplement, having a specified rating from a recognized insurance
rating service, in such amounts and covering all such risks as shall be
customary in the industry in accordance with prevailing market conditions and
availability.
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.
Provision of Financial Information. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Indentures will require the
Company, within 15 days of each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject, (i) to file with
the applicable Indenture Trustee copies of the annual reports, quarterly reports
and other documents that the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections and (ii) to supply, promptly upon written request
and payment of the reasonable cost of duplication and delivery, copies of such
documents to any prospective holder.
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 $30,000,000 or under any mortgage,
indenture or instrument under which
12
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any 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 $30,000,000, whether such indebtedness exists on the date of
such Indenture or shall thereafter be created, with such obligations being
accelerated and not 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.
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 Indenture 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 Indenture 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 Indenture 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 Indenture 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 than outstanding under the applicable
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Indenture 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
(x) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series or (y) in respect of a covenant or provision
contained in the applicable Indenture that cannot be modified or amended without
the consent of the holder of each outstanding Debt Security affected thereby.
The Indentures will require each Indenture 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 Indenture 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 to any Debt Security of such series) if specified
responsible officers of such Indenture Trustee consider such withholding to be
in the interest of such holders.
The Indentures will provide that no holder of debt securities of any
series may institute any proceeding, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the case of failure of the
applicable Indenture 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, an Indenture 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
Indenture 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 Indenture
Trustee, or of exercising any trust
13
or power conferred upon such Indenture Trustee. However, an Indenture Trustee
may refuse to follow any direction which is in conflict with any law or the
applicable Indenture, which may involve such Indenture 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 Indenture 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
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 outstanding debt securities of any series necessary
to modify or amend the applicable Indenture, to waive compliance with certain
provisions thereof or certain defaults and consequences thereunder or to reduce
the quorum or voting requirements set forth in 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 Indenture 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 interest 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 be 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 Indenture Trustee or facilitate the
administration of the trusts under an Indenture by more than one Indenture
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
14
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 securities 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 an 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 issued thereunder. A meeting may be
called at any time by the applicable Indenture Trustee, and also, upon request
by the Company or the holders of at least 25% in principal amount of the
outstanding debt securities of such series, in any such case 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 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
15
payment of Senior Debt. The Subordinated Indenture will not restrict the amount
of Senior Indebtedness 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 Indebtedness may
recover less, ratably, than senior 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, or 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 part or otherwise,
(iv) indebtedness of partnerships and joint ventures which is included in the
consolidated financial statements of the Company, (v) 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 (vi) any binding commitment of the real estate investment,
in each case other than (a) any such indebtedness, obligation or liability
referred to in clauses (i) through (vi) above as to which, in the instrument
creating or evidencing the same pursuant to which the same is outstanding,
it is provided 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
restriction 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 Indenture 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 Indenture 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 with respect to 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 (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 Subordinated debt
securities which are convertible or exchangeable, the right to convert or
exchange) with respect to such debt securities ("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 Indenture 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
16
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 Indenture 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 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 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 (a) 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, (b) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities, or (c) 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.
If 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 Indenture 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
17
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 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 Indenture
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 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 an Indenture Trustee
for the payment of the principal of or any premium or interest on any Debt
Security which remain unclaimed at the end of one year 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.
18
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK AND ANTI-TAKEOVER PROVISIONS
Restrictions Relating To REIT Status
For us to qualify as a REIT under the Code, among other things, not more
than 50% in value of the outstanding shares of our capital stock 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, and such
shares of our capital stock must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of 12 months or during a
proportionate part of a shorter taxable year (in each case, other than the first
such year). To assist us in continuing to remain a qualified REIT, our
declaration of trust, subject to certain exceptions, provides that no holder may
own, or be deemed to own by virtue of the attribution provisions of the Code,
more than 9.8% of our equity shares, defined as common shares or preferred
shares. We refer to this restriction as the Ownership Limit. Our board of
trustees may waive the Ownership Limit if evidence satisfactory to our board of
trustees and our tax counsel is presented that the changes in ownership will not
then or in the future jeopardize our status as a REIT. Any transfer of equity
shares or any security convertible into equity shares that would create a direct
or indirect ownership of equity shares in excess of the Ownership Limit or that
would result in our disqualification as a REIT, including any transfer that
results in the equity shares being owned by fewer than 100 persons or results in
us being "closely held" within the meaning of Section 856(h) of the Code, will
be null and void, and the intended transferee will acquire no rights to such
equity shares. The foregoing restrictions on transferability and ownership will
not apply if our board of trustees determines that it is no longer in our best
interests to attempt to qualify, or to continue to qualify, as a REIT.
Equity shares 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 us as
trustee of a trust for the exclusive benefit of the transferees to whom such
shares of our capital stock 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 our discovery that equity shares have been transferred in
violation of the provisions of our declaration of trust will be repaid to us
upon demand. The excess shares are not treasury shares, but rather constitute a
separate class of our issued and outstanding shares. The original
transferee-shareholder may, at any time the excess shares are held by us in
trust, transfer the interest in the trust representing the excess shares to any
individual whose ownership of the equity shares exchanged into such excess
shares would be permitted under our declaration of trust, at a price not in
excess of the price paid by the original transferee-shareholder for the equity
shares that were exchanged into excess shares, or, if the transferee-shareholder
did not give value for such shares, a price not in excess of the market price
(as determined in the manner set forth in our declaration of trust) on the date
of the purported transfer. Immediately upon the transfer to the permitted
transferee, the excess shares will automatically be exchanged for equity shares
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 our option, to have acted as an agent on our
behalf in acquiring the excess shares and to hold the excess shares on our
behalf.
In addition to the foregoing transfer restrictions, we will have the
right, for a period of 90 days during the time any excess shares are held by us
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 equity shares by
the original transferee-shareholder or the market price (as determined in the
manner set forth in our declaration of trust) of the equity shares on the date
we exercise our option to purchase. The 90-day period begins on the date on
which we receive written notice of the transfer or other event resulting in the
exchange of equity shares for excess shares.
Each shareholder will be required, upon demand, to disclose to us in
writing any information with respect to the direct, indirect and constructive
ownership of beneficial interests as our 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 Limit may have the effect of precluding an acquisition of
control unless our board of trustees determines that maintenance of REIT status
is no longer in our best interests.
19
Authorized Capital
Under our declaration of trust, we have authority to issue up to
130,000,000 shares of beneficial interest par value $0.0001 per share, of which
80,000,000 shares are classified as common shares, 40,000,000 shares are
classified as excess shares and 10,000,000 shares are classified as preferred
shares. We may issue such shares (other than reserved shares) from time to time
in the discretion of our board of trustees to raise additional capital, acquire
assets, including additional real properties, redeem or retire debt or for any
other business purpose. In addition, the undesignated preferred shares may be
issued in one or more additional classes with such designations, preferences
and relative, participating, optional or other special rights including, without
limitation, preferential dividend or voting rights, and rights upon liquidation,
as will be fixed by our board of trustees. Our board of trustees is authorized
to classify and reclassify any unissued shares of our capital stock by setting
or changing, in any one or more respects, the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
or terms or conditions of redemption of such shares. This authority includes,
without limitation, subject to the provisions of our declaration of trust,
authority to classify or reclassify any unissued shares into a class or classes
of preferred shares, preference shares, special shares or other shares, and to
divide and reclassify shares of any class into one or more series of that class.
In some circumstances, the issuance of preferred shares, or the exercise
by our board of trustees of its right to classify or reclassify shares, could
have the effect of deterring individuals or entities from making tender offers
for our common shares or seeking to change incumbent management.
Maryland Law
Maryland law includes certain other provisions which may also discourage
a change in control of management. Maryland law provides that, unless an
exemption applies, we may not engage in any "business combination" with an
"interested stockholder" or any affiliate of an interested stockholder for a
period of five years after the interested stockholder became an interested
stockholder, and thereafter may not engage in a business combination with such
interested stockholder unless the combination is recommended by our board of
trustees and approved by the affirmative vote of at least (i) 80% of the votes
entitled to be cast by the holders of all of our outstanding voting shares,
and (ii) 66 2/3% of the votes entitled to be cast by all holders of outstanding
voting shares other than voting shares held by the interested stockholder.
An "interested stockholder" is defined, in essence, as any person owning
beneficially, directly or indirectly, 10% or more of the outstanding voting
shares of a Maryland real estate investment trust. The voting requirements
do not apply at any time to business combinations with an interested
stockholder or its affiliates if approved by our board of trustees prior to
the time the interested stockholder first became an interested stockholder.
Additionally, if the business combination involves the receipt of consideration
by our shareholders in exchange for common shares that satisfies certain
"fair price" conditions, such supermajority voting requirements do not apply.
Maryland law 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 owned by the acquiror or by officers or
trustees who are employees of the trust. "Control shares" are voting shares
that, if aggregated with all other shares previously acquired by that person,
would entitle the acquiror to exercise voting power in electing trustees within
one of the following ranges of voting power:
o one-tenth or more but less than one-third;
o one-third or more but less than a majority; or
o a majority or more of all voting power.
Control shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained shareholder approval.
A "control share acquisition" means the acquisition of ownership of or the
power to direct the exercise of voting power of issued and outstanding control
shares, subject to certain exceptions. A person who has made or
20
proposes to make a control share acquisition, upon satisfaction of certain
conditions (including an undertaking to pay expenses), may compel the trust's
board of trustees to call a special meeting of shareholders, to be held within
50 days of demand, to consider the voting rights of the shares. If no request
for a meeting is made, the 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 permitted 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, as of the date of the last control share acquisition
or of any meeting of shareholders at which the voting rights of such shares were
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 entitled to vote, all other shareholders may exercise appraisal
rights. The fair value of the shares as determined for purposes of the appraisal
rights may not be less than the highest price per share paid in the control
share acquisition, and certain limitations and restrictions otherwise applicable
to the exercise of dissenters' rights do not apply in the context of a control
share acquisition.
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 our declaration of trust
or by-laws prior to the control share acquisition. No such exemption appears in
our declaration of trust or by-laws. The control share acquisition statute could
have the effect of discouraging offers to acquire us and of increasing the
difficulty of consummating any such offer.
Certain Elective Provisions of Maryland Law
Publicly-held Maryland statutory real estate investment trusts ("REITs")
may elect to be governed by all or any part of Maryland law provisions relating
to extraordinary actions and unsolicited takeovers. The election to be governed
by one or more of these provisions can be made by a Maryland REIT in its
declaration of trust or bylaws ("charter documents") or by resolution adopted by
its board of trustees so long as the REIT has at least three trustees who, at
the time of electing to be subject to the provisions, are not:
o officers or employees of the REIT;
o persons seeking to acquire control of the REIT;
o trustees, officers, affiliates or associates of any person seeking to
acquire control; or
o nominated or designated as trustees by a person seeking to acquire
control.
Articles supplementary must be filed with the Maryland State Department of
Assessments and Taxation if a Maryland REIT elects to be subject to any or all
of the provisions by board resolution or bylaw amendment. Shareholder approval
is not required for the filing of these articles supplementary.
The Maryland law provides that a REIT can elect to be subject to all or
any portion of the following provisions, notwithstanding any contrary provisions
contained in that REIT's existing charter documents:
Classified Board: The REIT may divide its board into three classes which,
to the extent possible, will have the same number of trustees, the terms of
which will expire at the third annual meeting of shareholders after the election
of each class;
Two-thirds Shareholder Vote to Remove Trustees Only for Cause: The
shareholders may remove any trustee only by the affirmative vote of at least
two-thirds of all votes entitled to be cast by the shareholders generally in the
election of trustees, but a trustee may not be removed without cause;
Size of Board Fixed by Vote of Board: The number of trustees will be
fixed only by resolution of the board;
21
Board Vacancies Filled by the Board for the Remaining Term: Vacancies that
result from an increase in the size of the board, or the death, resignation, or
removal of a trustee, may be filled only by the affirmative vote of a majority
of the remaining trustees even if they do not constitute a quorum. Trustees
elected to fill vacancies will hold office for the remainder of the full term of
the class of trustees in which the vacancy occurred, as opposed to until the
next annual meeting of shareholders, and until a successor is elected and
qualified; and
Shareholder Calls of Special Meetings: Special meetings of shareholders
may be called by the secretary of the REIT only upon the written request of
shareholders entitled to cast at least a majority of all votes entitled to be
cast at the meeting and only in accordance with procedures set out in the
Maryland General Corporation Law.
We have not elected to be governed by these specific provisions. However,
our declaration of trust and/or bylaws, as applicable, already provide for an
80% vote to remove trustees only for cause, and that the number of trustees may
be determined by a resolution of our Board, subject to a minimum number. In
addition, we can elect to be governed by any or all of the provisions of the
Maryland law at any time in the future.
22
USE OF PROCEEDS
Unless otherwise described in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities for general
corporate purposes, which may include the acquisition of additional properties,
the repayment of outstanding indebtedness or the improvement of certain
properties already in our portfolio.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters or dealers, directly
to one or more purchasers, through agents or through a combination of any such
methods of sale.
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.
We may sell equity securities in an offering "at the market" as defined in
Rule 415 under the Securities Act or negotiated transactions. One or more of
A.G. Edwards & Sons, Inc., Bear, Stearns & Co. Inc., Cantor Fitzgerald & Co.,
Friedman, Billings, Ramsey & Co., Inc., Raymond James & Associates, Inc. and
Wachovia Capital Markets, LLC may act as underwriters in connection with such an
offering. None of the broker-dealers listed in the preceding sentence shall be
an underwriter in connection with any offering of our equity securities unless
such broker-dealer is named as an underwriter in the applicable prospectus
supplement. Unless the prospectus supplement states otherwise, our agent in "at
the market" or negotiated transactions will act on a best-efforts basis for the
period of its appointment.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company and/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.
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.
23
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SHARE DIVIDENDS
The following table sets forth our historical ratio of earnings to
combined fixed charges and preference dividends for the periods indicated:
Six
Months
Ended
June 30, Year Ended December 31,
-------- -------------------------------------------
2003 2002 2001 2000 1999 1998
-------- ------ ------ ------ ------ ------
Ratio of Earnings
to Combined Fixed
Charges and
Preferred Share
Dividends 1.34 1.81 1.41 1.55 1.57 1.49
The ratios of earnings to fixed charges were computed by dividing earnings
by charges. For this purpose, earnings consist of pre-tax income from continued
operations plus fixed charges (excluding capitalized interest). Fixed charges
consist of interest expense and the amortization of debt issuance costs.
EXPERTS
The consolidated financial statements and related financial statement
schedule included in our Annual Report on Form 10-K as of and for the year ended
December 31, 2002, as updated by the Current Report on Form 8-K filed on
September 30, 2003 and incorporated by reference into this prospectus, have been
incorporated herein by reference in reliance on the report, also incorporated
herein by reference, of KPMG LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Paul, Hastings,
Janofsky & Walker LLP, New York, New York. Seth M. Zachary, a partner of Paul,
Hastings, Janofsky & Walker LLP, is presently serving on our board of trustees
and will continue to do so at least until the 2004 Annual Meeting of
Shareholders. As of September 4, 2003, Mr. Zachary beneficially owned 42,383
common shares. Certain legal matters under Maryland law, including the legality
of the Securities covered by this prospectus, will be passed on for us by Piper
Rudnick LLP, Baltimore, Maryland.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any materials that we have filed with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
We file information electronically with the SEC. The SEC maintains an Internet
site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. The address
of the SEC's Internet site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange
24
Act of 1934, as amended, which is commonly referred to as the Exchange Act
(although with respect to the Form 8-Ks listed below, we are only incorporating
by reference those portions of such Form 8-Ks that were deemed "filed" with the
SEC and not those portions that were deemed "furnished" to the SEC):
1. Our Annual Report on Form 10-K (Commission File No. 1-12386) for the year
ended December 31, 2002.
2. Our Definitive Proxy Statement on Schedule 14-A (Commission File No.
1-12386), dated April 15, 2003.
3. Our Quarterly Report on Form 10-Q (Commission File No. 1-12386) for the
quarter ended March 31, 2003.
4. Our Quarterly Report on Form 10-Q (Commission File No. 1-12386) for the
quarter ended June 30, 2003.
5. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on
April 28, 2003.
6. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on May
6, 2003.
7. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on
June 11, 2003.
8. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on
July 24, 2003.
9. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on
September 9, 2003.
10. Our Current Report on Form 8-K (Commission File No. 1-12386), filed on
September 30, 2003.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Patrick Carroll, Chief Financial Officer
Lexington Corporate Properties Trust
355 Lexington Avenue
New York, New York 10017
(212) 692-7260
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on the front of
those documents.
25
=================================== =========================================
No dealer, salesperson or any other
person has been authorized to give
any information or to make any
representations other than those
contained in or incorporated by $400,000,000.00
reference in this prospectus in
connection with the offer made by
this prospectus, and, if given or
made, such information or
representations must not be relied
upon as having been authorized by LEXINGTON CORPORATE
us. This prospectus does not PROPERTIES TRUST
constitute an offer to sell, or a
solicitation of an offer to buy any
security other than the redemption
shares offered hereby, nor does it
constitute an offer to sell or a
solicitation of any offer to buy
any of the redemption shares Common Shares of Beneficial Interest
offered by anyone in any
jurisdiction in which such offer or
solicitation is not authorized, or Preferred Shares of Beneficial Interest
in which the person making such
offer or solicitation is not
qualified to do so, or to any Debt Securities
person to whom 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 time subsequent to the date
hereof. ---------------------------------------
------------------ PROSPECTUS
---------------------------------------
The date of this prospectus is _______
=================================== =========================================
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the approximate amount of the fees and
expenses (other than underwriting discounts and commissions) incurred in
connection with the sale and distribution of the securities being registered
hereby. All amounts are estimated except the Commission registration fee:
Securities and Exchange Commission registration fee... $ 32,360.00
New York Stock Exchange listing fee................... 25,000.00
Printing and engraving costs.......................... 1,500.00
Accounting fees and expense........................... 5,000.00
Legal fees and expenses............................... 20,000.00
Miscellaneous......................................... 2,000.00
-----------
TOTAL........................................... $ 85,860.00
===========
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
Our trustees and officers are and will be indemnified against certain
liabilities under Maryland law, and under our declaration of trust. Our
declaration of trust requires us to indemnify our trustees and officers to the
fullest extent permitted from time to time by the laws of Maryland. Our
declaration of trust also provides that, to the fullest extent permitted under
Maryland law, our trustees and officers will not be liable to us or our
shareholders for money damages.
Section 2-418 of the Maryland General Corporation Law of generally permits
indemnification of any trustee made a party to any proceedings by reason of
service as a trustee unless it is established that (i) the act or omission of
such person was material to the matter giving rise to the proceeding and was
committed in bad faith or was the result of active and deliberate dishonesty; or
(ii) such person actually received an improper personal benefit in money
property or services; or (iii) in the case of any criminal proceeding, such
person had reasonable cause to believe that the act or omission was unlawful.
The indemnity may include judgments, penalties, fines, settlements and
reasonable expenses actually incurred by the trustee in connection with the
proceeding; but, if the proceeding is one by or in the right of the corporation,
indemnification is not permitted with respect to any proceeding in which the
trustee has been adjudged to be liable to the corporation, or if the proceeding
is one charging improper personal benefit to the trustee, whether or not
involving action in the trustee's official capacity, indemnification of the
trustee is not permitted if the trustee was adjudged to be liable on the basis
that personal benefit was improperly received. The termination of any proceeding
by conviction or upon a plea of nolo contendere or its equivalent, or any entry
of an order of probation prior to judgment, creates a rebuttable presumption
that the trustee did not meet the requisite standard of conduct required for
permitted indemnification. The termination of any proceeding by judgment, order
or settlement, however, does not create a presumption that the trustee failed to
meet the requisite standard of conduct for permitted indemnification.
The foregoing reference is necessarily subject to the complete text of our
declaration of trust and the statute referred to above and is qualified in its
entirety by reference thereto.
We have also entered into indemnification agreements with certain officers
and trustees for the purpose of indemnifying such persons from certain claims
and action in their capacities as such.
II-1
ITEM 16. EXHIBITS.
EXHIBIT NO. EXHIBIT
3.1 Declaration of Trust of the Company, dated December 31, 1997 (filed
as Exhibit 3.1 to the Company's Current Report on Form 8-K filed
January 16, 1998)*
3.2 By-Laws of the Company (filed as Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "1997
10-K")*
3.3 Articles of Amendment of Declaration of Trust of the Company (filed
as Exhibit 3.3 to the Company's Registration Statement on Form S-4
(File No. 333-70790))*
3.4 Amendment No. 1 to By-Laws of the Company (filed as Exhibit 3.3 to
the Company's Registration Statement on Form 8-A filed June 17,
2003)*
4.1 Specimen of Common Shares Certificate of the Company (filed as
Exhibit 3.2 to the 1997 10-K)*
4.2 Specimen of 8.05% Series B Cumulative Redeemable Preferred Stock
Certificate of the Company (filed as Exhibit 4.1 to the Company's
Registration Statement on Form 8-A filed on June 17, 2003)*
4.3 Form of Indenture Relating to Debt Securities +
4.4 Articles Supplementary 8.05% Series B Cumulative Redeemable
Preferred Stock (filed as Exhibit 3.4 to the Company's Registration
Statement on Form 8-A filed June 17, 2003)*
5.1 Opinion of Piper Rudnick LLP +
12.1 Ratio of Earnings to Combined Fixed Charges and Preferred Dividends+
23.1 Consent of Piper Rudnick LLP (included as part of Exhibit 5.1)+
23.2 Consent of KPMG LLP+
24 Power of Attorney (included on signature page hereto)+
----------------
* Incorporated by reference
+ Filed herewith
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;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
II-2
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
(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, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement will be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(e) The undersigned registrant hereby undertakes (i) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4)or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective; and (ii) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
II-3
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 New York, State of New York, on October 1, 2003.
LEXINGTON CORPORATE PROPERTIES TRUST
By: /s/ T. Wilson Eglin
-------------------
T. Wilson Eglin
Chief Executive Officer, President
and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints T. Wilson Eglin and E. Robert Roskind, jointly
and severally, his attorneys-in-fact, each with power of substitution for him in
any and all capacities, to sign any amendments to this Registration Statement,
to file the same, with the exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ E. Robert Roskind
---------------------------- Chairman of the Board October 1, 2003
E. Robert Roskind and Trustee
/s/ Richard J. Rouse
---------------------------- Chief Investment October 1, 2003
Richard J. Rouse Officer, Vice Chairman
of the Board and Trustee
/s/ T. Wilson Eglin
---------------------------- Chief Executive October 1, 2003
T. Wilson Eglin Officer, President,
Chief Operating Officer
and Trustee
/s/ Patrick Carroll
---------------------------- Chief Financial October 1, 2003
Patrick Carroll Officer, Executive Vice
President and Treasurer
/s/ Paul R. Wood
---------------------------- Vice President, Chief October 1, 2003
Paul R. Wood Accounting Officer and
Secretary
/s/ Geoffrey Dohrmann
---------------------------- Trustee October 1, 2003
Geoffrey Dohrmann
/s/ Carl D. Glickman
---------------------------- Trustee October 1, 2003
Carl D. Glickman
/s/ Kevin Lynch
---------------------------- Trustee October 1, 2003
Kevin Lynch
/s/ Stanley R. Perla
---------------------------- Trustee October 1, 2003
Stanley R. Perla
/s/ Seth M. Zachary
---------------------------- Trustee October 1, 2003
Seth M. Zachary
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
3.1 Declaration of Trust of the Company, dated December 31, 1997
(filed as Exhibit 3.1 to the Company's Current Report on Form 8-K
filed January 16, 1998)*
3.2 By-Laws of the Company (filed as Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997
(the "1997 10-K")*
3.3 Articles of Amendment of Declaration of Trust of the Company
(filed as Exhibit 3.3 to the Company's Registration Statement on
Form S-4 (File No. 333-70790))*
3.4 Amendment No. 1 to By-Laws of the Company (filed as Exhibit 3.3
to the Company's Registration Statement on Form 8-A filed June
17, 2003)*
4.1 Specimen of Common Shares Certificate of the Company (filed as
Exhibit 3.2 to the 1997 10-K)*
4.2 Specimen of 8.05% Series B Cumulative Redeemable Preferred Stock
Certificate of the Company (filed as Exhibit 4.1 to the Company's
Registration Statement on Form 8-A filed on June 17, 2003)*
4.3 Form of Indenture Relating to Debt Securities +
4.4 Articles Supplementary 8.05% Series B Cumulative Redeemable
Preferred Stock (filed as Exhibit 3.4 to the Company's
Registration Statement on Form 8-A filed June 17, 2003)*
5.1 Opinion of Piper Rudnick LLP +
12.1 Ratio of Earnings to Combined Fixed Charges and Preferred
Dividends+
23.1 Consent of Piper Rudnick LLP (included as part of Exhibit 5.1)+
23.2 Consent of KPMG LLP+
24 Power of Attorney (included on signature page hereto)+
----------------
* Incorporated by reference
+ Filed herewith