<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 26, 1996
REGISTRATION NO. 333-5777
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WASHINGTON REAL ESTATE INVESTMENT TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MARYLAND 53-0261100
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
------------------------
10400 CONNECTICUT AVENUE
KENSINGTON, MARYLAND 20895
(301) 929-5900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
------------------------
MR. LARRY E. FINGER
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
10400 CONNECTICUT AVENUE
KENSINGTON, MARYLAND 20895
(301) 929-5900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
<TABLE>
<S> <C>
JEFFREY E. JORDAN, ESQ. CATHERINE S. GALLAGHER, ESQ.
ARENT FOX KINTNER PLOTKIN & KAHN ANDREWS & KURTH L.L.P.
1050 CONNECTICUT AVENUE, N.W. 1701 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20036 WASHINGTON, D.C. 20006
(202) 857-6473 (202) 662-2700
</TABLE>
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<PAGE> 2
RULE 414 COMPLIANCE
In accordance with Rule 414 promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), the Registrant as successor to Washington
Real Estate Investment Trust, a District of Columbia trust, hereby amends the
Form S-3 Registration Statement filed with the Securities and Exchange
Commission (the "Commission") on June 12, 1996 by its predecessor, hereby adopts
such statement as its own Registration Statement for all purposes of the
Securities Act and the Securities Exchange Act of 1934 and hereby sets forth any
additional information necessary to reflect any material changes made in
connection with or resulting from the succession, or necessary to keep the
Registration Statement from being misleading in any material respect.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 26, 1996
[WASHINGTON REAL ESTATE INVESTMENT TRUST LOGO]
PROSPECTUS
$100,000,000
WASHINGTON REAL ESTATE INVESTMENT TRUST
DEBT SECURITIES
------------------------
Washington Real Estate Investment Trust ("WRIT" or the "Trust") may from
time to time offer, in one or more series, unsecured debt securities with an
aggregate public offering price of up to $100,000,000 (or its equivalent in
another currency based on the exchange rate at the time of sale) in amounts, at
prices and on terms to be determined at the time of offering (the "Securities").
The Securities may be offered in separate series in amounts, at prices and on
terms to be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: the specific title, aggregate principal amount,
currency, form (which may be registered or bearer, or certificated or global),
authorized denominations, maturity, rate (or manner of calculation thereof) and
time of payment of interest, terms for redemption at the option of the Trust or
repayment at the option of the holder, terms for sinking fund payments,
covenants and any initial public offering price.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Trust or to or through underwriters or dealers. If any agents or
underwriters are involved in the sale of any of the Securities, their names, and
any applicable purchase price, fee, commission or discount arrangement between
or among them, will be set forth, or will be calculable from the information set
forth, in an accompanying Prospectus Supplement. See "Plan of Distribution." No
Securities may be sold without delivery of a Prospectus Supplement describing
the method and terms of the offering of such series of Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------------------
The date of this Prospectus is July , 1996.
<PAGE> 4
AVAILABLE INFORMATION
The Trust is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Trust can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices at 7 World Trade Center, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Trust's shares of beneficial interest are listed on
the American Stock Exchange, 86 Trinity Place, New York, New York 10005 and
reports, proxy statements and other information filed by the Trust can be
inspected at such Exchange.
The Trust has filed a registration statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities offered hereby. This prospectus does not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Trust hereby incorporates by reference the following documents filed
with the Commission pursuant to the Exchange Act:
1. The Trust's Annual Report on Form 10-K for the year ended December
31, 1995.
2. The Trust's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
3. The Trust's Proxy Statement dated April 22, 1996.
4. The Trust's Current Report on Form 8-K dated May 31, 1996, as
amended by Amendment No. 1 dated July 25, 1996.
5. The Trust's Form 8-B dated July 10, 1996.
Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination
of the offering of all Securities to which this Prospectus relates shall be
deemed to be incorporated by reference in this Prospectus and shall be a part
hereof from the date of filing of such document. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained in this Prospectus (in the case of a
statement in a previously-filed document incorporated or deemed to be
incorporated by reference herein), in any accompanying Prospectus Supplement
relating to a specific offering of Securities or in any other subsequently filed
document that is also incorporated or deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or any accompanying Prospectus Supplement.
Subject to the foregoing, all information appearing in this Prospectus and each
accompanying Prospectus Supplement is qualified in its entirety by the
information appearing in the documents incorporated by reference.
The Trust will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon their written or oral request, a copy of any or
all of the documents incorporated herein by reference (other than exhibits to
such documents). Written requests for such copies should be addressed to Larry
E. Finger, Washington Real Estate Investment Trust, 10400 Connecticut Avenue,
Kensington, Maryland 20895, telephone (301) 929-5900 or (800) 565-9748.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION........................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................. 2
THE TRUST....................................................................... 3
USE OF PROCEEDS................................................................. 3
RATIOS OF EARNINGS TO FIXED CHARGES............................................. 3
DESCRIPTION OF SECURITIES....................................................... 4
PLAN OF DISTRIBUTION............................................................ 15
LEGAL OPINIONS.................................................................. 15
EXPERTS......................................................................... 16
</TABLE>
2
<PAGE> 5
THE TRUST
The Trust is an equity real estate investment trust investing in income
producing properties principally in the greater Washington-Baltimore region. The
Trust owns a diversified portfolio of 44 properties consisting of 16 office
buildings, 12 shopping centers, 6 high-rise apartment buildings and 10
industrial distribution properties.
WRIT's principal objective is to increase operating income by investing in
high quality real estate with strong growth potential in prime locations and
aggressively managing these properties with active leasing and capital
improvement programs. The percentage leased at March 31, 1996 for the Trust's
properties was 90% for office buildings, 90% for shopping centers, 95% for
apartment buildings and 96% for industrial distribution properties.
Total debt (all medium term) on March 31, 1996 was $46,700,000, which
represented approximately 9% of the market capitalization of the Trust.
WRIT's income from operations and funds from operations per share have
increased for 30 consecutive years. WRIT concentrates on increasing its funds
from operations to achieve its objective of paying increasing dividends to its
shareholders. Consecutive quarterly dividends have been paid for 34 years, and
the annual dividend paid has increased every year for the last 25 years.
The Trust has elected to be taxed as a real estate investment trust under
the Internal Revenue Code. Real estate investment trusts which meet certain
qualifications are relieved of federal income taxes on ordinary income and
capital gains distributed to shareholders.
The Trust is a Maryland business trust, successor to a trust founded in
1960. The principal offices of the Trust are located at 10400 Connecticut
Avenue, Kensington, Maryland 20895, telephone (301) 929-5900 or (800) 565-9748.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Trust intends to use the net proceeds from the sale of Securities for general
business purposes, including the acquisition and/or renovation, expansion or
improvement of income-producing properties or the repayment of indebtedness
drawn under the Trust's lines of credit. It is expected that properties
purchased in the future will be of the same general character as those presently
held by the Trust. Pending such uses, the net proceeds may be invested in short-
term income producing investments such as commercial paper, government
securities or money market funds that invest in government securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Trust's ratios of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ----------------------------------------------
1996 1995 1994 1993 1992 1991
- ------------ ----- ----- ------ ----- -----
<S> <C> <C> <C> <C> <C>
11.54x 12.95x 38.65x 366.95x 45.13x 17.94x
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of income from continued
operations and fixed charges. Fixed charges consist of interest expense
(including interest costs capitalized) and the amortization of debt issuance
costs.
3
<PAGE> 6
DESCRIPTION OF SECURITIES
GENERAL
The Securities will be direct unsecured obligations of the Trust and will
rank equally with all other unsecured and unsubordinated indebtedness of the
Trust. The Securities will be issued under an indenture (the "Indenture")
between the Trust and The First National Bank of Chicago, as trustee (the
"Indenture Trustee"). A form of the Indenture has been filed as an exhibit to
the Registration Statement to which this Prospectus is a part and is available
for inspection at the corporate trust office of the Indenture Trustee at 14 Wall
Street, Eighth Floor, New York, New York 10005. The Indenture will be subject to
and governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made under this heading relating to the Securities and the Indenture
are summaries of the provisions thereof and do not purport to be complete and
are qualified in their entirety by reference to the Indenture and such
Securities. All Section references herein are to sections of the Indenture, and
capitalized terms used but not defined herein shall have the respective meanings
set forth in the Indenture.
TERMS
Except as set forth in any Prospectus Supplement, the Securities may be
issued without limit as to aggregate principal amount, in one or more series, in
each case as established from time to time by the Trust or as established in the
Indenture or in one or more indentures supplemental to such Indenture. All
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 Securities of such series, for issuances of additional Securities of such
series (Section 301).
The Indenture provides that there may be more than one Indenture Trustee
thereunder, each with respect to one or more series of Securities. Any Indenture
Trustee under the Indenture may resign or be removed with respect to one or more
series of Securities, and a successor Indenture Trustee may be appointed to act
with respect to such series (Section 608). In the event that two or more persons
are acting as Indenture Trustee with respect to different series of Securities,
each such Indenture Trustee shall be an Indenture Trustee of a trust under the
Indenture separate and apart from the trust administered by any other Indenture
Trustee (Section 609), and, except as otherwise indicated herein, any action
described herein to be taken by an Indenture Trustee may be taken by each such
Indenture Trustee with respect to, and only with respect to, the one or more
series of Securities for which it is Indenture Trustee under the Indenture.
The Prospectus Supplement relating to the series of Securities being
offered will contain the specific terms thereof, including:
(1) The title of such Securities;
(2) The aggregate principal amount of such Securities and any limit on
such aggregate principal amount;
(3) The percentage of the principal amount at which such Securities will
be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or the method by which any such
portion shall be determined;
(4) The date or dates, or the method for determining such date or dates,
on which the principal of such Securities will be payable;
(5) 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 Securities
will bear interest, if any;
(6) 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
4
<PAGE> 7
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;
(7) The place or places where the principal of (and premium, if any) and
interest, if any, on such Securities will be payable, where such
Securities may be surrendered for registration of transfer or exchange
and where notices or demands to or upon the Trust in respect of such
Securities and the Indenture may be served;
(8) The period or periods within which, the price or prices at which and
the other terms and conditions upon which such Securities may be
redeemed, as a whole or in part, at the option of the Trust, if the
Trust is to have such an option;
(9) The obligation, if any, of the Trust to redeem, repay or purchase such
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 Securities will be redeemed, repaid or purchased, as a
whole or in part, pursuant to such obligation;
(10) If other than U.S. dollars, the currency or currencies in which such
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;
(11) Whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such 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;
(12) The events of default or covenants of such Securities, to the extent
different from those described herein;
(13) Whether such Securities will be issued in certificated or book-entry
form;
(14) Whether such Securities will be in registered or bearer form and, if
in registered form, the denominations thereof if other than $1,000 and
any integral multiple thereof and, if in bearer form, the
denominations thereof and terms and conditions relating thereto;
(15) The applicability, if any, of the defeasance and covenant defeasance
provisions described herein, or any modification thereof;
(16) Whether and under what circumstances the Trust will pay any additional
amounts on such Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Trust will have the option
to redeem such Securities in lieu of making such payment; and
(17) Any other terms of such Securities.
The Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Securities
will not contain any provisions that would limit the ability of the Trust to
incur indebtedness or that would afford holders of Securities protection in the
event of a highly leveraged or similar transaction involving the Trust or in the
event of a change of control. Reference is made to the applicable Prospectus
Supplement for information with respect to any deletions from, modifications of,
or additions to, the events of default or covenants of the Trust that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
5
<PAGE> 8
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Securities will be payable at the corporate trust office of the Indenture
Trustee, which initially shall be c/o First Chicago Trust Company of New York,
14 Wall Street, Eighth Floor, New York, New York 10005; provided that, at the
option of the Trust, payment of interest may be made by check mailed to the
address of the person entitled thereto as it appears in the applicable register
for such Securities or by wire transfer of funds to such person at an account
maintained within the United States (Sections 301, 307 and 1002).
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Security ("Defaulted Interest") will forthwith
cease to be payable to the holder on the applicable Regular Record Date and may
either be paid to the Person in whose name such Security is registered at the
close of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Indenture Trustee, notice
whereof shall be given to the holder of such Security not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more completely described in the Indenture (Section 307).
Subject to certain limitations imposed upon Securities issued in book-entry
form, the Securities of any series will be exchangeable for other Securities of
the same series and of a like aggregate principal amount and tenor of different
authorized denominations upon surrender of such Securities at the corporate
trust office of the Indenture Trustee referred to above. In addition, subject to
certain limitations imposed upon Securities issued in book-entry form, the
Securities of any series may be surrendered for registration of transfer or
exchange thereof at the corporate trust office of the Indenture Trustee. Every
Security surrendered for registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer. No service charge
will be made for any registration of transfer or exchange of any Securities, but
the Trust may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (Section 305). If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Indenture Trustee) initially designated by the Trust with respect to any
series of Securities, the Trust may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent acts, except that the Trust will be required to maintain a
transfer agent in each place of payment for such series. The Trust may at any
time designate additional transfer agents with respect to any series of
Securities (Section 1002).
Neither the Trust nor the Indenture Trustee shall be required to (i) issue,
register the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending at the close of business on the day of
mailing of the relevant notice of redemption; (ii) register the transfer of or
exchange any Security, or portion thereof, called for redemption, except the
unredeemed portion of any Security being redeemed in part; or (iii) issue,
register the transfer of or exchange any Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such
Security not to be so repaid (Section 305).
MERGER, CONSOLIDATION OR SALE
The Trust will be permitted to 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 Trust shall be the continuing entity, or the
successor entity (if other than the Trust) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall expressly assume payment of the principal of (and premium, if any) and
interest on all of the Securities and the due and punctual performance and
observance of all of the covenants and conditions contained in the Indenture;
(b) immediately after giving effect to such transaction and treating any
indebtedness that becomes an obligation of the Trust or any Subsidiary as a
result thereof as having been incurred by the Trust or such Subsidiary at the
time of such transaction, no Event of Default under the Indenture, and no event
which, after notice or the lapse of time, or both, would become
6
<PAGE> 9
such an Event of Default, shall have occurred and be continuing; and (c) an
officer's certificate and legal opinion covering such conditions shall be
delivered to the Indenture Trustee (Sections 801 and 803).
CERTAIN COVENANTS
Limitations on Incurrence of Debt. The Indenture provides that the Trust
will not, and will not permit any Subsidiary to, incur any Debt (as defined
below) if, immediately after giving effect to the incurrence of such Debt and
the application of the proceeds thereof, the aggregate principal amount of all
outstanding Debt of the Trust and its Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting principles is
greater than 60% of the sum of (without duplication) (i) the Trust's Total
Assets as of the end of the calendar quarter covered in the Trust's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under
the Exchange Act, with the Indenture Trustee) prior to the incurrence of such
additional Debt and (ii) any increase in the Trust's Total Assets since the end
of such quarter including, without limitation, any increase in Total Assets
resulting from the incurrence of such additional Debt (such increase together
with the Trust's Total Assets being referred to as "Adjusted Total Assets")
(Section 1011).
In addition to the foregoing limitation on the incurrence of Debt, the
Indenture provides that the Trust will not, and will not permit any Subsidiary
to, incur any Debt secured by any mortgage, lien, charge, pledge, encumbrance or
security interest of any kind upon any of the property of the Trust or any
Subsidiary ("Secured Debt"), whether owned at the date of the Indenture or
thereafter acquired, if, immediately after giving effect to the incurrence of
such additional Secured Debt and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Secured Debt of the Trust and its
Subsidiaries on a consolidated basis is greater than 40% of the Trust's Adjusted
Total Assets (Section 1011).
In addition to the foregoing limitations on the incurrence of Debt, the
Indenture provides that the Trust will not, and will not permit any Subsidiary
to, incur any Debt if the ratio of Consolidated Income Available for Debt
Service (as defined below) to the Annual Service Charge (as defined below) for
the four consecutive fiscal quarters most recently ended prior to the date on
which such additional Debt is to be incurred shall have been less than 1.5 to
1.0, on a pro forma basis after giving effect thereto and to the application of
the proceeds therefrom, and calculated on the assumption that (i) such Debt and
any other Debt incurred by the Trust and its Subsidiaries since the first day of
such four-quarter period and the application of the proceeds therefrom,
including to refinance other Debt, had occurred at the beginning of such period;
(ii) the repayment or retirement of any other Debt by the Trust and its
Subsidiaries since the first day of such four-quarter period had been incurred,
repaid or retired at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility shall be
computed based upon the average daily balance of such Debt during such period);
(iii) in the case of Acquired Debt (as defined below) or Debt incurred in
connection with any acquisition since the first day of such four-quarter period,
the related acquisition had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition being included in such
pro forma calculation; and (iv) in the case of any acquisition or disposition by
the Trust or its Subsidiaries of any asset or group of assets since the first
day of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related repayment
of Debt had occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition or disposition being included in
such pro forma calculation (Section 1011).
For purposes of the foregoing provisions regarding the limitation on the
incurrence of Debt, Debt shall be deemed to be "incurred" by the Trust or a
Subsidiary whenever the Trust or such Subsidiary shall create, assume, guarantee
or otherwise become liable in respect thereof.
Maintenance of Total Unencumbered Assets. The Trust is required to
maintain Total Unencumbered Assets (as defined below) of not less than 150% of
the aggregate outstanding principal amount of the Unsecured Debt (as defined
below) of the Trust (Section 1012).
7
<PAGE> 10
As used herein:
"Acquired Debt" means Debt of a Person (i) existing at the time such Person
becomes a Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Annual Service Charge" as of any date means the maximum amount which is
payable in any period for interest on, and original issue discount of, Debt of
the Trust and its Subsidiaries.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Trust and its Subsidiaries (i)
plus amounts which have been deducted for (a) interest on Debt of the Trust and
its Subsidiaries, (b) provision for taxes of the Trust and its Subsidiaries
based on income, (c) amortization of debt discount, (d) depreciation and
amortization, (e) the effect of any noncash charge resulting from a change in
accounting principles in determining Consolidated Net Income for such period,
(f) amortization of deferred charges and (g) provision for or realized losses on
properties and (ii) less amounts which have been included for gains on
properties.
"Consolidated Net Income" for any period means the amount of consolidated
net income (or loss) of the Trust and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Debt" of the Trust or any Subsidiary means any indebtedness of the Trust
or any Subsidiary, whether or not contingent, in respect of (i) borrowed money
evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any security
interest existing on property owned by the Trust or any Subsidiary, (iii) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the balance deferred
and unpaid of the purchase price of any property except any such balance that
constitutes an accrued expense or trade payable, or all conditional sale
obligations or obligations under any title retention agreement, (iv) the
principal amount of all obligations of the Trust or any Subsidiary with respect
to redemption, repayment or other repurchase of any Disqualified Stock, or (v)
any lease of property by the Trust or any Subsidiary as lessee which is
reflected in the Trust's consolidated balance sheet as a capitalized lease in
accordance with generally accepted accounting principles to the extent, in the
case of items of indebtedness under (i) through (iii) above, that any such items
(other than letters of credit) would appear as a liability on the Trust's
consolidated balance sheet in accordance with generally accepted accounting
principles, and also includes, to the extent not otherwise included, any
obligation by the Trust or any Subsidiary to be liable for, or to pay, as
obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), indebtedness of another person (other than the
Trust or any Subsidiary).
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii)
is convertible into or exchangeable or exercisable for Debt or Disqualified
Stock or (iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the Stated Maturity of the series of Debt
Securities.
"Encumbrance" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other) or
preference, priority or other security agreement, except: (i) liens for taxes
(a) which are not yet delinquent, (b) which are not in an aggregate amount, as
to the Trust and all Subsidiaries, of greater than 10% of Total Assets or (c)
which are being contested in good faith by all appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on
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the books of the Trust or its Subsidiaries, as the case may be, in conformity
with GAAP; (ii) carriers, warehousemen's, mechanic's, materialmen's, repairmen's
or other like liens (a) which are not in an aggregate amount, as to the Trust
and all Subsidiaries, of greater than 10% of Total Assets, (b) which do not
remain unsatisfied or undischarged for a period of more than 90 days or (c)
which are being contested in good faith by all appropriate proceedings; (iii)
pledges or deposits in connection with workers compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements; (iv)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; and (v) easements, rights of way, restrictions,
development orders, plats and other similar encumbrances.
"Subsidiary" means a corporation, partnership or limited liability company,
a majority of the outstanding voting stock, partnership interests or membership
interests, as the case may be, of which is owned or controlled, directly or
indirectly, by the Trust or by one or more other Subsidiaries of the Trust. For
the purposes of this definition, "voting stock" means stock having voting power
for the election of directors, or trustees, as the case may be, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Undepreciated Real
Estate Assets and (ii) all other assets of the Trust and its Subsidiaries
determined in accordance with generally accepted accounting principles (but
excluding accounts receivable and intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance and (ii) all other assets of the
Trust and its Subsidiaries not subject to an Encumbrance determined in
accordance with generally accepted accounting principles (but excluding accounts
receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Trust and its
Subsidiaries on such date, before depreciation and amortization, determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Unsecured Debt" means Debt of the Trust or any Subsidiary which is not
secured by any mortgage, lien, charge, pledge or security interest of any kind
upon any of the properties owned by the Trust or any of its Subsidiaries.
Existence. Except as permitted under "-- Merger, Consolidation or Sale,"
the Trust will be required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Trust shall not be required to preserve any right or
franchise if it determines that the preservation thereof is no longer desirable
in the conduct of its business (Section 1004).
Maintenance of Properties. The Trust will be required 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 Trust may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (Section 1005).
Insurance. The Trust will be required to, and will be required to cause
each of its Subsidiaries to, keep all of its insurable properties insured
against loss or damage at least equal to their then full insurable value with
insurers of recognized responsibility and, if described in the applicable
Prospectus Supplement, having a specified rating from a recognized insurance
rating service (Section 1006).
Payment of Taxes and Other Claims. The Trust will be required 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
Trust or any Subsidiary, and (ii) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a material lien upon the
property of the Trust or any Subsidiary; provided, however, that the Trust shall
not be
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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 (Section 1007).
Provision of Financial Information. Whether or not the Trust is subject to
Section 13 or 15(d) of the Exchange Act, the Trust will be required, within 15
days of each of the respective dates by which the Trust would have been required
to file annual reports, quarterly reports and other documents with the
Commission if the Trust were so subject, to (i) transmit by mail to all holders
of Securities, as their names and addresses appear in the applicable register
for such Securities, without cost to such holders, copies of the annual reports,
quarterly reports and other documents that the Trust would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Trust were subject to such sections, (ii) file with the Indenture Trustee
copies of the annual reports, quarterly reports and other documents that the
Trust would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Trust were subject to such Sections, and
(iii) promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
holder (Section 1008).
Additional Covenants. Any additional covenants of the Trust with respect
to any series of Securities will be set forth in the Prospectus Supplement
relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of Default"
with respect to any series of Securities issued thereunder: (a) default for 30
days in the payment of any installment of interest on any Security of such
series; (b) default in the payment of principal of (or premium, if any, on) any
Security of such series at its maturity; (c) default in making any sinking fund
payment as required for any Security of such series; (d) default in the
performance or breach of any other covenant or warranty of the Trust contained
in the Indenture (other than a covenant added to the Indenture solely for the
benefit of a series of Securities issued thereunder other than such series),
continued for 60 days after written notice as provided in the Indenture; (e) a
default under any bond, debenture, note or other evidence of indebtedness for
money borrowed by the Trust (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 $5,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Trust (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 $5,000,000,
whether such indebtedness now exists or shall hereafter be created which default
shall have resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable or such obligations being accelerated, without such acceleration having
been rescinded or annulled; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of the
Trust or any Significant Subsidiary of the Trust; and (g) any other event of
default provided with respect to a particular series of Securities (Section
501). The term "Significant Subsidiary" means each significant subsidiary (as
defined in Regulation S-X promulgated under the Securities Act) of the Trust.
If an Event of Default under the Indenture with respect to Securities of
any series at the time outstanding occurs and is continuing, then in every such
case the Indenture Trustee or the holders of not less than 25% in principal
amount of the outstanding Securities of that series will have the right to
declare the principal amount (or, if the 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 Securities of that
series to be due and payable immediately by written notice thereof to the Trust
(and to the Indenture Trustee if given by the holders). However, at any time
after such a declaration of acceleration with respect to Securities of such
series (or of all 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 Indenture Trustee, the holders of not less than a
majority in principal amount of outstanding Securities of such series (or of all
Securities then outstanding under the Indenture, as the case may be) may rescind
and annul such declaration and its consequences if (a) the Trust shall have
deposited with the Indenture Trustee all required payments of
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the principal of (and premium, if any) and interest on the Securities of such
series (or of all Securities then outstanding under the Indenture, as the case
may be), plus certain fees, expenses, disbursements and advances of the
Indenture Trustee and (b) all Events of Default, other than the non-payment of
accelerated principal (or specified portion thereof), with respect to Securities
of such series (or of all Securities then outstanding under the Indenture, as
the case may be) have been cured or waived as provided in the Indenture (Section
502). The Indenture also provides that the holders of not less than a majority
in principal amount of the outstanding Securities of any series (or of all
Securities then outstanding under the Indenture, as the case may be) may waive
any past default with respect to such series and its consequences, except a
default (x) in the payment of the principal of (or premium, if any) or interest
on any Security of such series or (y) in respect of a covenant or provision
contained in the Indenture that cannot be modified or amended without the
consent of the holder of each outstanding Security affected thereby (Section
513).
The Indenture Trustee will be required to give notice to the holders of
Securities within 90 days of a default under the 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 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 Security of such series or in the
payment of any sinking fund installment in respect of any Security of such
series) if specified responsible officers of such Indenture Trustee consider
such withholding to be in the interest of such holders (Section 601).
The Indenture provides that no holders of Securities of any series may
institute any proceedings, judicial or otherwise, with respect to such Indenture
or for any remedy thereunder, except in the cases of failure of the 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 Securities of such series,
as well as an offer of indemnity reasonably satisfactory to it (Section 507).
This provision will not prevent, however, any holder of Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Securities at the respective due dates
thereof.
Subject to provisions in the Indenture relating to its duties in case of
default, the Indenture Trustee will not be under any obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
holders of any series of Securities then outstanding under such Indenture,
unless such holders shall have offered to the Indenture Trustee thereunder
reasonable security or indemnity (Section 602). The holders of not less than a
majority in principal amount of the outstanding Securities of any series (or of
all Securities then outstanding under the Indenture, as the case may be) shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or of exercising any trust 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
Indenture, which may involve the Indenture Trustee in personal liability or
which may be unduly prejudicial to the holders of Securities of such series not
joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Trust will be
required to deliver to the Indenture Trustee a certificate, signed by one of
several specified officers of the Trust, stating whether or not such officer has
knowledge of any default under the Indenture and, if so, specifying each such
default and the nature and status thereof (Section 1009).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the 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 Securities issued under the Indenture which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Security affected thereby, (a) change the stated maturity of the principal of,
or any installment of interest (or premium, if any) on, any such Security; (b)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such 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
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provable in bankruptcy, or adversely affect any right of repayment of the holder
of any such Security; (c) change the place of payment, or the coin or currency,
for payment of principal of, premium, if any, or interest on any such Security;
(d) impair the right to institute suit for the enforcement of any payment on or
with respect to any such Security; (e) reduce the above-stated percentage of
outstanding Securities of any series necessary to modify or amend the Indenture,
to waive compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set forth
in the Indenture; or (f) modify any of the foregoing provisions or any of the
provisions relating to the waiver of certain past defaults or certain covenants,
except to increase the required percentage to effect such action or to provide
that certain other provisions may not be modified or waived without the consent
of the holder of such Security (Section 902).
The holders of not less than a majority in principal amount of outstanding
Securities issued under the Indenture will have the right to waive compliance by
the Trust with certain covenants in the Indenture (Section 1013).
Modifications and amendments of the Indenture will be permitted to be made
by the Trust and the Indenture Trustee thereunder without the consent of any
holder of Securities for any of the following purposes: (i) to evidence the
succession of another person to the Trust as obligor under the Indenture; (ii)
to add to the covenants of the Trust for the benefit of the holders of all or
any series of Securities or to surrender any right or power conferred upon the
Trust in the Indenture; (iii) to add events of default for the benefit of the
holders of all or any series of Securities; (iv) to add or change any provisions
of the Indenture to facilitate the issuance of, or to liberalize certain terms
of, Securities in bearer form, or to permit or facilitate the issuance of
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the holders of the Securities of any series in any
material aspect; (v) to change or eliminate any provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there are no Securities outstanding of any series created prior thereto which
are entitled to the benefit of such provision; (vi) to secure the Securities;
(vii) to establish the form or terms of Securities of any series; (viii) to
provide for the acceptance of appointment by a successor Indenture Trustee or
facilitate the administration of the trusts under the Indenture by more than one
Indenture Trustee; (ix) to cure any ambiguity, defect or inconsistency in the
Indenture, provided that such action shall not adversely affect the interests of
holders of Securities of any series issued under such Indenture in any material
respect; or (x) to supplement any of the provisions of the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Securities, provided that such action shall not adversely affect the
interests of the holders of the Securities of any series in any material respect
(Section 901).
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding 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 Securities, (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon declaration of
acceleration of the maturity thereof, (ii) the principal amount of any 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 Security, of the
principal amount (or, in the case of Original Issue Discount Security, the U.S.
dollar equivalent on the issue date of such Security of the amount determined as
provided in (i) above), (iii) the principal amount of an Indexed Security that
shall be deemed outstanding shall be the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
indexed security pursuant to Section 301 of the Indenture, and (iv) Securities
owned by the Trust or any other obligor upon the Securities or any affiliate of
the Trust or of such other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the holders of
Securities of a series (Section 1501). A meeting will be permitted to be called
at any time by the Indenture Trustee, and also, upon request, by the Trust or
the holders of at least 10% in principal amount of the outstanding Securities of
such series, in any such case upon notice given as provided in the Indenture
(Section 1502). Except for any consent that must be given by the holder of each
Security affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is
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present may be adopted by the affirmative vote of the holders of a majority in
principal amount of the outstanding 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 Securities of a series may be adopted at a meeting or adjourned
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Securities of that series. Any resolution passed or decision
taken at any meeting of holders of Securities of any series duly held in
accordance with the Indenture will be binding on all holders of 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 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 Securities of a series, the persons
holding or representing such specified percentage in principal amount of the
outstanding Securities of such series will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, the Indenture provides that if
any action is to be taken at a meeting of holders of Securities of any series
with respect to any request, demand, authorization, direction, notice, consent,
waiver and other action that the Indenture expressly provides may be made, given
or taken by the holders of a specified percentage in principal amount of all
outstanding 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 Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Trust may be permitted under the Indenture to discharge certain
obligations to holders of any series of Securities issued thereunder that have
not already been delivered to the 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 Indenture Trustee, in trust, funds in such currency in which such
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Securities in respect of principal (and premium, if any) and interest to
the date of such deposit (if such Securities have become due and payable) or to
the stated maturity or redemption date, as the case may be (Section 401).
The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Securities of or within any series pursuant to Section 301 of
the Indenture, the Trust may elect either (a) to defease and be discharged from
any and all obligations with respect to such Securities (except for the
obligation to pay additional amounts, if any, upon the occurrence of certain
events of tax, assessment or governmental charge with respect to payments on
such Securities and the obligations to register the transfer or exchange of such
Securities, to replace temporary or mutilated, destroyed, lost or stolen
Securities, to maintain an office or agency in respect of such Securities and to
hold moneys for payment in trust) ("defeasance") (Section 1402) or (b) to be
released from its obligations with respect to such Securities under Sections
1004 to 1008, inclusive, and Sections 1011 and 1012 under the Indenture (being
the restrictions described under "-- Certain Covenants") or, if provided
pursuant to the Indenture, 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 Securities ("covenant defeasance") (Section
1403), in either case upon the irrevocable deposit by the Trust with the
Indenture Trustee, in trust, of an amount, in such currency in which such
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Securities which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor (Section 1404).
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Such a trust will only be permitted to be established if, among other
things, the Trust has delivered to the Indenture Trustee an opinion of counsel
(as specified in the Indenture) to the effect that the holders of such
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 of the
Internal Revenue Service or a change in applicable United States federal income
tax law occurring after the date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the 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 the government which issued the foreign currency
in which the Securities of a particular 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 receiving by
the custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Trust has deposited funds and/or Government Obligations to effect defeasance
or covenant defeasance with respect to Securities of any series, (a) the holder
of a Security of such series is entitled to, and does, elect pursuant to Section
301 of the Indenture or the terms of such 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 Security, or (b) a Conversion Event (as
defined below) occurs in respect of the currency, currency unit or composite
currency in which such deposit has been made, the indebtedness represented by
such Security shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any) and
interest on such Security as they become due out of the proceeds yielded by
converting the amount so deposited in respect of such Security into the
currency, currency unit or composite currency in which such Security becomes
payable as a result of such election or such cessation of usage based on the
applicable market exchange rate (Section 1405). "Conversion Event" means the
cessation of use of (i) a currency, currency unit or composite currency both by
the government of the country which issued such currency and for the settlement
of transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any currency unit or composite currency
other than the ECU for the purposes for which it was established. Unless
otherwise provided in the applicable Prospectus Supplement, all payments of
principal of (and premium, if any) and interest on any Security that is payable
in a foreign currency that ceases to be used by its government of issuance shall
be in U.S. dollars (Section 101).
In the event the Trust effects covenant defeasance with respect to any
Securities and such Securities are declared due and payable because of the
occurrence of any event of default other than the event of default described in
clause (d) under "Events of Default, Notice and Waiver" with respect to Sections
1004 to 1008, inclusive, and Sections 1011 and 1012 of the Indenture (which
sections would no longer be applicable to such Securities) or described in
clause (g) under "Events of Default, Notice and Waiver" with respect to any
other covenant as to which there has been covenant defeasance, the amount in
such currency in which such Securities are payable, and Government Obligations
on deposit with the Indenture Trustee, will be sufficient to pay amounts due on
such Securities at the time of their stated maturity but may not be sufficient
to pay
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amounts due on such Securities at the time of the acceleration resulting from
such event of default. However, the Trust would remain liable to make payment of
such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Securities
of or within a particular series.
GLOBAL SECURITIES
The 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
Securities will be described in the applicable Prospectus Supplement relating to
such series.
PLAN OF DISTRIBUTION
The Trust may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents.
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, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Trust 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, and any discounts or commissions
they receive from the Trust, 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 Trust will be described, in the Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market. The
Trust may elect to list any series of Securities 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 the trading market for the
Securities.
Under agreements the Trust may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Trust against certain liabilities, including liabilities
under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Trust in the ordinary course of
business.
LEGAL OPINIONS
The legality of the Securities offered hereby is being passed upon for the
Trust by Arent Fox Kintner Plotkin & Kahn, Washington, D.C. David M. Osnos, a
trustee of the Trust, is a partner of Arent Fox Kintner Plotkin & Kahn. Andrews
& Kurth L.L.P., Washington, D.C., will act as counsel to any underwriters,
dealers or agents.
15
<PAGE> 18
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Trust's Annual Report on Form 10-K for the year ended December 31, 1995 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
16
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the issuance
and distribution of the Securities being registered, other than underwriting
discounts and commissions:
<TABLE>
<S> <C>
Registration fee -- Securities and Exchange Commission.................... $ 34,483
Blue Sky fees and expenses (including counsel fees)....................... 11,000
Rating agencies fees...................................................... 45,609
Trustee's fees (including counsel fees)................................... 3,000
Accounting fees and expenses.............................................. 38,000
Legal fees and expenses................................................... 40,000
Printing and engraving expenses........................................... 35,000
Miscellaneous expenses.................................................... 17,908
-------
Total........................................................... $225,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Declaration of Trust dated April 5, 1996 provides that no
Trustee or officer of the Registrant shall be personally liable, in tort,
contract or otherwise, in connection with the Registrant's property or the
affairs of the Registrant, or on account of his own acts or omissions to the
Registrant, or to any shareholder, Trustee, officer or agent thereof except (1)
to the extent that it is proved that such Trustee or officer actually received
an improper benefit or profit in money, property, or services, in which case any
such liability shall not exceed the amount of the benefit or profit in money,
property, or services actually received; or (2) to the extent that a judgment or
other final adjudication adverse to such Trustee or officer is entered in a
proceeding based on a finding in the proceeding that such Trustee's or officer's
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding. All persons
shall look solely to the Registrant's property for satisfaction of claims of any
nature in connection with the affairs of the Registrant. The Registrant's
Declaration of Trust further provides for the indemnification of the
Registrant's Trustees and officers to the fullest extent permitted by Section
2-418 of the Maryland General Corporation Law.
II-1
<PAGE> 20
ITEM 16. EXHIBITS
<TABLE>
<C> <C> <S>
1. -- Form of Underwriting Agreement*
2. -- Plan of acquisition, reorganization, arrangement, liquidation or succession
(a) -- Agreement and Articles of Merger dated June 20, 1996**
4. -- Instruments defining the rights of security holders
(a) -- Form of Indenture relating to Securities to be entered into by the Registrant and
The First National Bank of Chicago, as trustee*
(b) -- Form of Securities***
5. -- Opinion of Arent Fox Kintner Plotkin & Kahn re: validity of securities registered
12. -- Statements re computation of ratios*
23. -- Consents of experts and counsel
(a) -- Consent of Price Waterhouse*
(b) -- Consent of Arent Fox Kintner Plotkin & Kahn (counsel): included in exhibit 5
24. -- Power of attorney*
25. -- Statement of eligibility of trustee
(a) -- Statement of eligibility of The First National Bank of Chicago, as trustee*
</TABLE>
- ---------------
* Previously filed.
** Incorporated by reference to Exhibit 1 to the Registrant's Form 8-B dated
July 10, 1996.
*** To be incorporated by reference in connection with the offering of the
offered Securities.
II-2
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kensington, State of Maryland, on the
26th day of July, 1996.
WASHINGTON REAL ESTATE INVESTMENT
TRUST
By: /s/ EDMUND B. CRONIN, JR.
--------------------------------------
EDMUND B. CRONIN, JR.
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
II-3
<PAGE> 22
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- --------------
<S> <C> <C>
/s/ ARTHUR A. BIRNEY* Chairman of the Trustees July 26, 1996
- ------------------------------------------
Arthur A. Birney
/s/ WILLIAM N. CAFRITZ* Trustee July 26, 1996
- ------------------------------------------
William N. Cafritz
/s/ EDMUND B. CRONIN, JR. Trustee, President and Chief July 26, 1996
- ------------------------------------------ Executive Officer
Edmund B. Cronin, Jr.
/s/ BENJAMIN H. DORSEY* Trustee July 26, 1996
- ------------------------------------------
Benjamin H. Dorsey
/s/ LARRY E. FINGER* Senior Vice President and Chief July 26, 1996
- ------------------------------------------ Financial Officer (Principal
Larry E. Finger Accounting Officer)
/s/ B. FRANKLIN KAHN* Trustee July 26, 1996
- ------------------------------------------
B. Franklin Kahn
/s/ DAVID M. OSNOS* Trustee July 26, 1996
- ------------------------------------------
David M. Osnos
/s/ STANLEY P. SNYDER* Trustee July 26, 1996
- ------------------------------------------
Stanley P. Snyder
</TABLE>
- ------------------
* Signed by Edmund B. Cronin, Jr. pursuant to a power of attorney previously
filed.
II-4
<PAGE> 1
Exhibit 5
[Letterhead of Arent Fox Kintner Plotkin & Kahn]
July 25, 1996
Washington Real Estate Investment Trust
10400 Connecticut Avenue, N.W.
Concourse Level
Kensington, MD 20895
Gentlemen:
We have acted as counsel to Washington Real Estate Investment Trust, a
real estate investment trust organized under the laws of Maryland (the
"Trust"), in connection with Form S-3 registration statement no. 333-5777 (the
"Registration Statement") filed by the Trust with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating
to the offering from time to time, as set forth in the prospectus contained in
such Registration Statement (the "Prospectus") and as to be set forth in one or
more supplements to the Prospectus (each, a "Prospectus Supplement") of up to
$100,000,000 aggregate offering price of one or more series of debt securities
("Securities").
The Securities will be issued pursuant to an Indenture dated June 1,
1996 (the "Indenture") between the Trust and The First National Bank of Chicago
(the "Trustee").
We have examined and relied upon the originals or copies of such
records, agreements, documents and other instruments and have made such
inquires of such officers and representatives as we have deemed relevant and
necessary as the basis for the opinions set forth. In such examination, we
have assumed, without independent verification, the genuineness of all
signatures (whether original or photostatic), the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, and
the conformity to original documents of all documents submitted to us as
certified or photostatic copies. We have assumed, without independent
verification, the accuracy of the relevant facts stated therein.
<PAGE> 2
Washington Real Estate Investment Trust
July 25, 1996
Page 2
Based upon the foregoing and subject to the qualifications set forth
below, we are of the opinion that the Securities have been duly authorized by
the Trust and when the Securities have been duly established by the Indenture,
duly authenticated by the Trustee and duly executed and delivered on behalf of
the Trust against payment therefor in accordance with the terms and provisions
of the Indenture and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the Securities will be validly issued and
constitute binding obligations of the Trust.
To the extent that the obligations of the Trust under the Indenture
may be dependent upon such matters, we assume for purposes of this opinion that
the Trustee is duly organized, validly existing and in good standing under the
laws of the jurisdiction of organization of such Trustee; that the Trustee is
in compliance generally with respect to acting as a trustee under the Indenture
and with all applicable laws and regulations; and that the Trustee has the
requisite organizational and legal power and authority to perform its
obligations under the Indenture.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Opinions" in the Prospectus. In giving this consent, we do not hereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Act or the General Rule and Regulation thereunder.
Very truly yours,
ARENT FOX KINTNER PLOTKIN & KAHN
By: /s/ Jeffrey E. Jordan
-----------------------------------
Jeffrey E. Jordan
