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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 25, 1998
Washington Real Estate Investment Trust
(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
Maryland 1-6622 53-0261100
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification
of Incorporation) Number)
</TABLE>
10400 Connecticut Ave., Kensington, Maryland 20895
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (301) 929-5900
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Item 5. Other Events.
On February 25, 1998, Washington Real Estate Investment Trust (the
"Trust") completed the public sale of its $60,000,000 aggregate principal
amount 6.898% MandatOry Par Put Remarketed Securities-SM- due February 25, 2018
("MOPPRS-SM-") and $50,000,000 aggregate principal amount 7 1/4% Senior Notes
due February 25, 2028 (the "Notes"). Attached hereto as exhibits are copies of
the forms of the MOPPRS and the Notes and the Remarketing Agreement with
respect to the MOPPRS.
Item 7. Exhibits.
4(a) Remarketing Agreement dated as of February 20, 1998 between the
Trust and Merrill Lynch, Pierce, Fenner & Smith Incorporated with
respect to the MOPPRS
4(b) Form of MOPPRS
4(c) Form of Notes
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Washington Real Estate Investment Trust
By: /s/ Laura M. Franklin
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Title: Vice President and Chief
Accounting Officer
Date: February 25, 1998
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Exhibit 4(a)
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of February 25, 1998 (this "Agreement"),
between Washington Real Estate Investment Trust, a Maryland real estate
investment trust (the "Company"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch" and, in its capacity as the remarketing dealer
hereunder, the "Remarketing Dealer").
WHEREAS, the Company has issued $60,000,000 aggregate principal amount
of its 6.898% MandatOry Par Put Remarketed Securities-SM- due February 25,
2018 (the "MOPPRS-SM-"), pursuant to an indenture, dated as of August 1, 1996
(the "Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Indenture Trustee"); and
WHEREAS, the MOPPRS are being sold initially pursuant to a distribution
agreement, dated January 16, 1998 (the "Distribution Agreement"), between the
Company and Merrill Lynch; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-23157) under the Securities Act of 1933, as amended (the "1933 Act"), in
connection with the offering of debt securities, including the MOPPRS, which
registration statement was declared effective by order of the Commission on
March 19, 1997, and has filed such amendments thereto and such amended
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such additional amended prospectuses as may
hereafter be required; and
WHEREAS, Merrill Lynch is prepared to act as the Remarketing Dealer with
respect to the remarketing of the MOPPRS on February 25, 2008 (the
"Remarketing Date") pursuant to the terms of, but subject to the conditions
set forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Indenture
(including the form of the MOPPRS).
Section 2. Representations and Warranties. (a) The Company represents
and warrants to the Remarketing Dealer as of the date hereof, the
Notification Date (as defined below), the Determination Date (as defined
below) and the Remarketing Date (each such date being hereinafter referred to
as a "Representation Date"), that (i) it has made all the filings with the
Commission that it is required to make under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the rules and regulations thereunder
(the "1934 Act Regulations") (collectively, the "1934 Act Documents"), (ii)
each 1934 Act Document complies in all material
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respects with the requirements of the 1934 Act and 1934 Act Regulations, and
each 1934 Act Document did not at the time of filing with the Commission, and
as of each Representation Date, as modified or superseded by any subsequently
filed 1934 Act Document on or prior to such Representation Date, will not,
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (iii) the applicable Remarketing Materials (as
defined herein), as of each Representation Date after the date hereof, as
modified or superseded by any subsequently filed 1934 Act Document on or
prior to such Representation Date (or, if applicable, by any document filed
pursuant to the 1933 Act and the rules and regulations thereunder (the "1933
Act Regulations")), will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The Company further represents and warrants to the Remarketing
Dealer as of each Representation Date as follows:
(i) The accountants who certified the financial statements and
supporting schedules thereto included or incorporated by reference in the
1934 Act Documents are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(ii) The financial statements of the Company included or
incorporated by reference in the 1934 Act Documents, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated,
and the statement of operations, shareholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods specified.
Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included or incorporated by reference in the 1934 Act
Documents present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included or incorporated by reference in
the 1934 Act Documents present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included or incorporated by reference in the 1934
Act Documents. Any historical summaries of revenue and certain
operating expenses included or incorporated by reference in the 1934 Act
Documents present fairly the revenue and those operating expenses
included in such summaries of the properties related thereto for the
periods specified in conformity with GAAP. In addition, any pro forma
financial statements of the Company and its subsidiaries and the related
notes thereto included or incorporated by reference in the 1934 Act
Documents present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been
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properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(iii) Since the respective dates as of which information is given
in the 1934 Act Documents, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those arising in the
ordinary course of business, that are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C)
except for regular dividends on the Company's common shares of
beneficial interest, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(iv) The Company has been duly organized and is validly existing as
a real estate investment trust of unlimited duration with transferable
shares of beneficial interest in good standing under the laws of the
State of Maryland, with full power and authority to own, lease and
operate its properties and to conduct its business as described in the
1934 Act Documents and to enter into and perform its obligations under
this Agreement; the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or be in
good standing would not result in a Material Adverse Effect; all of the
issued and outstanding shares of beneficial interest of the Company have
been duly authorized and are validly issued, fully paid and
non-assessable; and none of the outstanding shares of beneficial
interest of the Company were issued in violation of preemptive or other
similar rights of any securityholder of the Company.
(v) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act)
(each a "Subsidiary" and, collectively, the "Subsidiaries") (which term
includes corporations, limited and general partnerships, joint ventures
and other entities, and includes direct and indirect subsidiaries) has
been duly organized and is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its organization, has power and authority to own, lease
and operate its properties and to conduct its business as described in
the 1934 Act Documents and is duly qualified to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the 1934 Act Documents, all of the issued and
outstanding capital stock or other ownership interests of each
Subsidiary
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has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
similar rights of any securityholder of such Subsidiary.
(vi) This Agreement has been duly authorized, executed and delivered
by the Company.
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"), and is a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally,
(2) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), (3) requirements that a
claim with respect to any debt securities issued under the Indenture
that are payable in a foreign currency or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (4) governmental authority to
limit, delay or prohibit the making of payments outside the United
States.
(viii) The MOPPRS have been duly authorized and executed by the
Company and authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the consideration
therefor as provided in the Distribution Agreement, and constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement
thereof may be limited by (1) bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and (2) general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law);
the MOPPRS are in the form contemplated by the Indenture; each Holders
of MOPPRS is entitled to the benefits of the Indenture.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its declaration of trust, partnership agreement, charter,
by-laws or other organizational document or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any property or assets of
the Company or any of its subsidiary is subject (collectively,
"Agreement and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture and the MOPPRS, the
consummation of the transactions
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contemplated herein and in the registration statement relating to the
initial issuance of the MOPPRS (including the issuance and sale of the
MOPPRS and the use of the proceeds from the sale of the MOPPRS as
described in the prospectus relating to the initial issuance of the
MOPPRS under the caption "Use of Proceeds") and the compliance by the
Company with its obligations hereunder and under the Indenture and the
MOPPRS have been duly authorized by all necessary action on the part of
the Company and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any assets, properties or operations of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, defaults, events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
declaration of trust, partnership agreement, charter, by-laws or other
organizational documents of the Company or any of its subsidiaries or
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition that gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(x) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic
or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries,
that is required to be disclosed in the 1934 Act Documents (other than
as disclosed therein), or that might reasonably be expected to result in
a Material Adverse Effect, or that might reasonably be expected to
materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations under
this Agreement, the Indenture and the MOPPRS. The aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject that are not described in the
1934 Act Documents, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the performance by the
Company of its obligations under this Agreement, the Indenture and the
MOPPRS, or in connection with the remarketing of the
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MOPPRS hereunder or the consummation of the transactions contemplated by
this Agreement has been obtained or made and is in full force and effect.
(xii) The Company and its subsidiaries hold all licenses,
certificates and permits from governmental authorities that are
necessary to the conduct of their business the absence of which would
result in a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement would result in a Material
Adverse Effect.
(xiii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiv) The MOPPRS are rated Baa1 by Moody's Investors Service, Inc.
and A- by Standard & Poor's Ratings Service, or such other rating as to
which the Company shall have most recently notified the Remarketing
Dealer pursuant to Section 3(a) hereof.
(xv) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the Company
has met the requirements for qualification as a real estate investment
trust under Sections 856 through 860 of the Internal Revenue Code, as
amended, and the Company's present and contemplated operations, assets
and income continue to meet such requirements.
(xvi) The Company and its subsidiaries have good and marketable
title to, or valid and enforceable leasehold estates in, all items of
real and personal property referred to in the 1934 Act Documents as
owned or leased by them, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those
referred to in the 1934 Act Documents or those that are not material in
amount. The Company has no reason to believe that the lessee under any
lease (excluding leases for which rent payments due for the remainder of
such lease are less than $500,000) calling for annual lease payments in
excess of $500,000 is not financially capable of performing its
obligations thereunder.
(xvii) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; and the Company has no reason to believe that it or
any of its subsidiaries will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect; and the Company and
each of its subsidiaries has obtained title insurance on all of the
properties owned by each of them in an amount at least equal to the
original purchase price to acquire land and improvements and such title
insurance is in full force and effect.
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(xviii) The Company has filed all federal, state and foreign income
tax returns that have been required to be filed and has paid all taxes
indicated by said returns and all assessments received by it to the
extent that such taxes have become due.
(xix) The Company has no knowledge of (a) the unlawful presence of
any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the properties
owned by it or any of its subsidiaries, or of (b) any lawful spills,
releases, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring off such properties as a result of
any construction on or operation and use of such properties, which
presence or occurrence, singly or in the aggregate, would result in a
Material Adverse Effect. In connection with the construction on or
operation and the use of the properties owned by the Company and its
subsidiaries, the Company has no knowledge of any failure to comply with
all applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials which failure would result in a
Material Adverse Effect.
References in the foregoing representations and warranties to the 1934
Act Documents shall be deemed to refer to the Registration Statement (as
defined in Section 3(b) below) and Prospectus (as defined in Section 3(b)
below), in each case including the documents incorporated by reference
therein, if such are required pursuant to Section 3(e) hereof.
(c) Any certificate signed by any trustee or officer of the Company and
delivered to the Remarketing Dealer or to counsel for the Remarketing Dealer
in connection with the remarketing of the MOPPRS shall be deemed a
representation and warranty by the Company to the Remarketing Dealer as to
the matters covered thereby.
Section 3. Covenants of the Company. The Company covenants with the
Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), to
the Remarketing Dealer of (i) any notification or announcement by a
"nationally recognized statistical rating organization" (as defined by the
Commission for purposes of Rule 436(g)(2) under the 1933 Act) with regard to
the ratings of any securities of the Company, including, without limitation,
notification or announcement of a downgrade in or withdrawal of the rating of
any security of the Company or notification or announcement of the placement
of any rating of any securities of the Company under surveillance or review,
including placement on CreditWatch or on Watch List with negative
implications, or (ii) the occurrence at any time of any event set forth in
Section 8(b) of this Agreement.
(b) The Company will furnish to the Remarketing Dealer:
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(i) if required as provided in paragraph (e) below for purposes of
the remarketing, a then currently effective registration statement under
the 1933 Act and a then current prospectus relating to the MOPPRS to be
used by the Remarketing Dealer for remarketing and resale of the MOPPRS
(such registration statement (whether consisting of the registration
statement relating to the initial issuance of the MOPPRS, or any
amendment thereto or a new registration statement) and any amendments
thereto, including any such prospectus (whether consisting of the
prospectus relating to the initial issuance of the MOPPRS or any
amendment or supplement thereto or a new prospectus) relating to the
MOPPRS constituting a part thereof, and all documents incorporated
therein by reference, as from time to time amended or supplemented
pursuant to the 1934 Act, the 1933 Act, or otherwise, are referred to
herein as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to
the Remarketing Dealer by the Company for use in connection with the
remarketing of the MOPPRS that differs from the Prospectus on file at
the Commission at the time the Registration Statement becomes effective,
the term "Prospectus" shall refer to such revised prospectus from and
after the time it is first provided to the Remarketing Dealer for such
use);
(ii) each 1934 Act Document filed after the date hereof; and
(iii) in connection with the remarketing of MOPPRS, such other
information as the Remarketing Dealer may reasonably request from time to
time.
The Company agrees to provide the Remarketing Dealer with as many copies
of the foregoing written materials and other Company approved information as
the Remarketing Dealer may reasonably request for use in connection with the
remarketing of MOPPRS and consents to the use thereof for such purpose.
(c) If, at any time during which the Remarketing Dealer would be
obligated to take any action under this Agreement, any event or condition
known to the Company relating to or affecting the Company, any subsidiary
thereof or the MOPPRS shall occur that could reasonably be expected to cause
any of the reports, documents, materials or information referred to in
paragraph (b) above or any document incorporated therein by reference
(collectively, the "Remarketing Materials") to contain an untrue statement of
a material fact or omit to state a material fact, the Company shall promptly
notify the Remarketing Dealer in writing of the circumstances and details of
such event or condition.
(d) So long as the MOPPRS are outstanding, the Company will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(e) The Company will comply with the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and
the rules and regulations of the
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Commission thereunder so as to permit the completion of the remarketing of
the MOPPRS as freely transferable securities, as contemplated in this
Agreement and in the prospectus relating to the initial issuance of the
MOPPRS. In furtherance of the foregoing, if it shall be necessary, in the
opinion of counsel for the Remarketing Dealer or for the Company to have a
Registration Statement and a Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations and the Commission's
interpretations of the 1933 Act and the 1933 Act Regulations, or if at any
time when a Prospectus is required by the 1933 Act to be delivered in
connection with remarketing and resales of the MOPPRS, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion
of counsel for the Remarketing Dealer or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company, at its expense, will promptly
(i) prepare and file with the Commission such Registration Statement and
Prospectus, or such amendment or supplement as may be necessary to correct
such statement or omission as referred to above or to make the Registration
Statement or the Prospectus comply with such requirements as referred to
above, (ii) furnish to the Remarketing Dealer such number of copies of such
Registration Statement and Prospectus or such amendment, supplement or other
document as the Remarketing Dealer may reasonably request and (iii) furnish
to the Remarketing Dealer an officers' certificate, an opinion (including a
statement as to the absence of material misstatements in or omissions from
the Registration Statement and Prospectus, as amended or supplemented) of
counsel for the Company reasonably satisfactory to the Remarketing Dealer and
a "comfort letter" from the Company's independent accountants, in each case
in form and substance reasonably satisfactory to the Remarketing Dealer, of
the same tenor as the officers' certificate, opinion and comfort letter,
respectively, delivered pursuant to the Distribution Agreement, but modified
to relate to the Registration Statement and Prospectus as amended or
supplemented to the date thereof.
(f) The Company agrees that neither it nor any of its subsidiaries or
affiliates shall defease, purchase or otherwise acquire, or enter into any
agreement to defease, purchase or otherwise acquire, any of the MOPPRS prior
to the remarketing thereof by the Remarketing Dealer, other than pursuant to
Section 4(g) or 4(h) of this Agreement.
(g) Notwithstanding any provision to the contrary set forth in the
Indenture, the Company shall (i) use its best efforts to maintain the MOPPRS
in book-entry form with The Depository Trust Company ("DTC") or any successor
thereto and to appoint a successor depositary to the extent necessary to
maintain the MOPPRS in book-entry form, and (ii) waive any discretionary
right it otherwise has under the Indenture to cause the MOPPRS to be issued
in certificated form.
(h) To the extent that a Registration Statement and a Prospectus are
required as contemplated in paragraph (e) above, the Company will comply with
covenants of the same tenor
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as those set forth in the Distribution Agreement, but modified to relate to
the Registration Statement and Prospectus.
Section 4. Appointment and Obligations of the Remarketing Dealer. (a)
Unless this Agreement is otherwise terminated in accordance with Section 11
hereof, in accordance with the terms, but subject to the conditions, of this
Agreement, the Company hereby appoints Merrill Lynch, and Merrill Lynch
hereby accepts such appointment, as the exclusive Remarketing Dealer with
respect to $60,000,000 aggregate principal amount of MOPPRS, subject further
to repurchase of the MOPPRS in accordance with clause (g) of this section or
redemption of the MOPPRS in accordance with clause (h) of this section.
(b) It is expressly understood and agreed by the parties hereto that the
obligations of the Remarketing Dealer hereunder with respect to the MOPPRS to
be remarketed on the Remarketing Date are conditioned on (i) the issuance and
delivery of such MOPPRS pursuant to the terms and conditions of the
Distribution Agreement and (ii) the Remarketing Dealer's election on the
Notification Date to purchase the MOPPRS for remarketing on the Remarketing
Date. It is further expressly understood and agreed by and between the
parties hereto that, if the Remarketing Dealer has elected to remarket the
MOPPRS pursuant to clause (c) below, the Remarketing Dealer shall not be
obligated to set the Interest Rate to Maturity on any MOPPRS, to remarket any
MOPPRS or to perform any of the other duties set forth herein at any time
after the Notification Date that (i) any of the conditions set forth in
clause (a) of Section 8 hereof shall not have been fully and completely met
to the reasonable satisfaction of the Remarketing Dealer, or (ii) any of the
events set forth in clause (b) of Section 8 hereof shall have occurred.
(c) On a Business Day not later than five Business Days prior to the
Remarketing Date, the Remarketing Dealer shall notify the Company and the
Indenture Trustee as to whether it elects to purchase the MOPPRS on the
Remarketing Date (the "Notification Date"). If, and only if, the Remarketing
Dealer so elects, the MOPPRS shall be subject to mandatory tender to the
Remarketing Dealer for remarketing on the Remarketing Date, subject to the
conditions described herein.
(d) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on and
as of the third Business Day immediately preceding the Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum and will be equal to the sum of 5.598% (the "Base Rate")
plus the Applicable Spread (as defined below), which will be based on the
Dollar Price (as defined below) of the MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the Remarketing Dealer on the Determination Date from the
bids quoted by five Reference Corporate Dealers (as defined below) for the
full aggregate principal amount of the MOPPRS at the Dollar Price, but
assuming
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(i) an issue date equal to the Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the Stated Maturity
Date of the MOPPRS and (iii) a stated annual interest rate, payable
semiannually on each Interest Payment Date for the MOPPRS, equal to the Base
Rate plus the spread bid by the applicable Reference Corporate Dealer. If
fewer than five Reference Corporate Dealers bid as described above, then the
Applicable Spread shall be the lowest of such bid indications obtained as
described above. The Interest Rate to Maturity announced by the Remarketing
Dealer, absent manifest error, shall be binding and conclusive upon the
Beneficial Owners and Holders of the MOPPRS, the Company and the Indenture
Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present value, as
of the Remarketing Date, of the Remaining Scheduled Payments (as defined
below) discounted to the Remarketing Date, on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months), at the Treasury Rate (as
defined below).
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Company in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing
Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable
Treasury Issues (as defined below), assuming a price for the Comparable
Treasury Issues (expressed as a percentage of its principal amount), equal to
the Comparable Treasury Price (as defined below) for such Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as
set forth on "Telerate Page 500" (or such other page as may replace Telerate
Page 500), or (b) if such page (or any successor page) is not displayed or
does not contain such offer prices on the Determination Date, (i) the average
of the Reference Treasury Dealer Quotations for the Remarketing Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations,
or (ii) if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. "Telerate Page 500" means the display designated as "Telerate
Page 500" on Dow Jones Markets Limited (or such other page as may replace
Telerate Page 500 on such service) or such other service displaying the offer
prices specified in (a) above as may replace Dow Jones Markets Limited.
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"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc and their respective successors;
provided, however, that if any of the foregoing or their affiliates shall
cease to be a primary U.S. Government securities dealer in The City of New
York (a "Primary Treasury Dealer"), the Remarketing Dealer shall substitute
therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing
Date to and including the Stated Maturity Date; provided, however, that if
the Remarketing Date is not an Interest Payment Date with respect to the
MOPPRS, the amount of the next succeeding scheduled interest payment thereon,
calculated at the Base Rate only, will be reduced by the amount of interest
accrued thereon, calculated at the Base Rate only, to the Remarketing Date.
(e) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Remarketing Dealer shall notify the
Company, the Indenture Trustee and DTC by telephone, confirmed in writing
(which may include facsimile or other electronic transmission), by 4:00 p.m.,
New York City time, on the Determination Date of the Interest Rate to
Maturity applicable to the MOPPRS effective from and including the
Remarketing Date.
(f) In the event that the MOPPRS are remarketed as provided herein, the
Remarketing Dealer shall make, or cause the Indenture Trustee to make,
payment to the DTC Participant of each tendering Beneficial Owner of MOPPRS
subject to remarketing, by book entry through DTC by the close of business on
the Remarketing Date against delivery through DTC of such Beneficial Owner's
tendered MOPPRS, of 100% of the principal amount of the tendered MOPPRS that
have been purchased for remarketing by the Remarketing Dealer. The Company
shall make, or cause the Indenture Trustee to make, payment of interest to
each Beneficial Owner of MOPPRS due on the Remarketing Date by book entry
through DTC by the close of business on the Remarketing Date.
(g) Subject to Section 11(c) of this Agreement, in the event that (i)
the Remarketing Dealer for any reason does not notify the Company of the
Interest Rate to Maturity by 4:00 p.m., New York City time, on the
Determination Date, or (ii) prior to the Remarketing Date, the Remarketing
Dealer has resigned and no successor has been appointed on or before the
Determination Date, or (iii) the Remarketing Dealer has terminated this
Agreement pursuant to Section 8 or Section 11 hereof at any time after the
Remarketing Dealer elects on the Notification Date to remarket the MOPPRS, or
(iv) the Remarketing Dealer for any reason does not elect, by
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notice to the Company and the Indenture Trustee not later than the
Notification Date, to purchase the MOPPRS for remarketing on the Remarketing
Date, or (v) the Remarketing Dealer for any reason does not purchase all
tendered MOPPRS on the Remarketing Date, the Company shall repurchase the
MOPPRS as a whole on the Remarketing Date at a price equal to 100% of the
principal amount of the MOPPRS plus all accrued and unpaid interest, if any,
on the MOPPRS to the Remarketing Date. In any such case, payment will be
made by the Company through the Indenture Trustee to the DTC Participant of
each tendering Beneficial Owner of MOPPRS, by book-entry through DTC by the
close of business on the Remarketing Date against delivery through DTC of
such Beneficial Owner's tendered MOPPRS.
(h) If the Remarketing Dealer elects to remarket the MOPPRS as provided
in clause (c) above, then not later than the Business Day immediately
preceding the Determination Date, the Company shall notify the Remarketing
Dealer and the Indenture Trustee if the Company irrevocably elects to
exercise its right to redeem the MOPPRS, in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the Optional Redemption Price.
The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the sum of the present values of the
Remaining Scheduled Payments thereon, as determined by the Remarketing
Dealer, discounted to the Remarketing Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate, plus
in either case accrued and unpaid interest from the Remarketing Date on the
principal amount being redeemed to the date of redemption. If the Company
elects to redeem the MOPPRS, it shall pay the redemption price therefor in
same-day funds by wire transfer to an account designated by the Remarketing
Dealer on the Remarketing Date.
(i) The Remarketing Dealer may, in accordance with the terms of the
Indenture, modify the tender and settlement procedures set forth in the
Indenture in order to facilitate the tender and settlement process.
(j) The tender and settlement procedures described above, including
provisions for payment by purchasers of MOPPRS in the remarketing or for
payment to selling Beneficial Owners of tendered MOPPRS, may be modified to
the extent required by DTC or, if agreed to by the Remarketing Dealer in
accordance with Section 8(b)(viii) of this Agreement, to the extent required
to facilitate the tender and remarketing of MOPPRS in certificated form, if
the book-entry system is no longer available for the MOPPRS at the time of
the remarketing.
Section 5. Fees and Expenses. Subject to Section 11 of this Agreement,
for its services in performing its duties set forth herein, the Remarketing
Dealer will not receive any fees or reimbursement of expenses from the
Company.
Section 6. Resignation of the Remarketing Dealer. The Remarketing
Dealer may resign and be discharged from its duties and obligations hereunder
at any time, such resignation to be effective 10 days after delivery of a
written notice to the Company and the Indenture Trustee of such resignation.
The Remarketing Dealer also may resign and be discharged from its duties and
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obligations hereunder at any time, such resignation to be effective
immediately, upon termination of this Agreement in accordance with Section
11(b) hereof. It shall be the sole responsibility of the Company to appoint
a successor Remarketing Dealer.
Section 7. Dealing in the MOPPRS; Purchase of MOPPRS by the Company.
(a) Merrill Lynch, when acting as the Remarketing Dealer or in its individual
or any other capacity, may, to the extent permitted by law, buy, sell, hold
and deal in any of the MOPPRS. Merrill Lynch, as Holder or Beneficial Owner
of the MOPPRS, may exercise any vote or join as a Holder or Beneficial Owner,
as the case may be, in any action that any Holder or Beneficial Owner of
MOPPRS may be entitled to exercise or take pursuant to the Indenture with
like effect as if it did not act in any capacity hereunder. The Remarketing
Dealer, in its capacity either as principal or agent, may also engage in or
have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.
(b) The Company may purchase MOPPRS in the remarketing, provided that
the Interest Rate to Maturity established with respect to MOPPRS in the
remarketing is not different from the Interest Rate to Maturity that would
have been established if the Company had not purchased such MOPPRS.
Section 8. Conditions to Remarketing Dealer's Obligations. The
obligations of the Remarketing Dealer under this Agreement have been
undertaken in reliance on, and shall be subject to,(a) the due performance by
the Company of its obligations and agreements as set forth in this Agreement
and the accuracy of the representations and warranties in this Agreement and
any certificate delivered pursuant hereto, and (b) the further condition that
none of the following events shall have occurred at any time:
(i) the rating of any securities of the Company shall have been
down-graded or put under surveillance or review, including being put on
CreditWatch or Watch List with negative implications, or withdrawn by a
nationally recognized statistical rating organization;
(ii) without the prior written consent of the Remarketing Dealer, the
Indenture (including the MOPPRS) shall have been amended in any manner, or
otherwise contain any provision not contained therein as of the date
hereof, that in either case in the judgment of the Remarketing Dealer
materially changes the nature of the MOPPRS or the remarketing procedures
(it being understood that, notwithstanding the provisions of this clause
(ii), the Company shall not be prohibited from amending the Indenture);
(iii) trading in any securities of the Company shall have been
suspended or materially limited by the Commission or the American Stock
Exchange, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market shall have been
suspended or materially limited, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices shall
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have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or if a banking moratorium
shall have been declared by either Federal or New York authorities;
(iv) there shall have occurred any material adverse change in the
financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in
the judgment of the Remarketing Dealer, impracticable to remarket the
MOPPRS or to enforce contracts for the sale of the MOPPRS;
(v) an Event of Default (as defined in the Indenture), or any
event that, with the giving of notice or passage of time, or both, would
constitute an Event of Default, with respect to the MOPPRS shall have
occurred and be continuing;
(vi) a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, shall have occurred;
(vii) if a Prospectus is required under the 1933 Act to be
delivered in connection with the remarketing of the MOPPRS, the Company
shall fail to furnish to the Remarketing Dealer on the Remarketing Date
the officers' certificate, opinion and comfort letter referred to in
Section 3(e) of this Agreement and such other documents and opinions as
counsel for the Remarketing Dealer may reasonably require for the
purpose of enabling such counsel to pass upon the sale of MOPPRS in the
remarketing as herein contemplated and related proceedings, or in order
to evidence the accuracy and completeness of any of the representations
and warranties, or the fulfillment of any of the conditions, herein
contained; or
(viii) the MOPPRS are not maintained in book-entry form with DTC or
any successor thereto; provided, that the Remarketing Dealer, in its
sole discretion and subject to receipt of an opinion of counsel for the
Company reasonably satisfactory to the Remarketing Dealer, may waive the
foregoing condition if in the Remarketing Dealer's judgment the
Indenture and the MOPPRS can be amended, and they are amended, so as to
permit the remarketing of the MOPPRS in certificated form and otherwise
as contemplated herein;
and the Remarketing Dealer shall have received on the Remarketing Date a
certificate of the chief executive officer and of the chief financial officer
of the Company, dated as of the Remarketing Date, to the effect that (i) the
representations and warranties in this Agreement are
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true and correct with the same force and effect as though expressly made at
and as of the Remarketing Date, (ii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Remarketing Date and (iii) none of the events
specified in the preceding clause (b) has occurred.
(c) In furtherance of the foregoing, the effectiveness of the
Remarketing Dealer's election on the Notification Date to remarket the MOPPRS
shall be subject to the condition that the Remarketing Dealer shall have
received a certificate of the chief executive officer and of the chief
financial officer of the Company, dated as of the Notification Date, to the
effect that (i) the Company has, prior to the Remarketing Dealer's election
on the Notification Date to remarket the MOPPRS, provided the Remarketing
Dealer with notice of all events as required under Section 3(a) of this
Agreement, (ii) the representations and warranties in this Agreement are true
and correct at and as of the Notification Date and (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Notification Date. Such
certificate shall be delivered by the Company to the Remarketing Dealer as
soon as practicable following notification by the Remarketing Dealer to the
Company on the Notification Date of its election to remarket the MOPPRS and
in any event prior to the Determination Date.
In the event of the failure of any of the foregoing conditions, the
Remarketing Dealer may terminate its obligations under this Agreement or
redetermine the Interest Rate to Maturity as provided in Section 11.
Section 9. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Remarketing Dealer and its officers, directors and
employees and each person, if any, who controls the Remarketing Dealer within
the meaning of Section 20 of the 1934 Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of, (A) the failure to have an
effective Registration Statement under the 1933 Act relating to the
MOPPRS, if required, or the failure to satisfy the prospectus delivery
requirements of the 1933 Act because the Company failed to provide the
Remarketing Dealer with a Prospectus for delivery, or (B) any untrue
statement or alleged untrue statement of a material fact contained in
any of the Remarketing Materials (including any incorporated documents),
or (C) the omission or alleged omission therefrom of a material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, or (D) any
violation by the Company of, or any failure by the Company to perform
any of its obligations under, this Agreement, or (E) the acts or
omissions of the Remarketing Dealer in connection with its duties and
obligations to determine the Interest Rate to Maturity hereunder except
that are finally judicially determined to be due to its gross negligence
or willful misconduct;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or
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threatened, or of any claim whatsoever arising out of, or based upon,
any of items (A) through (E) in clause (i) above; provided that (subject
to clause (d) below) such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably
withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Remarketing Dealer), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of, or based upon, any of items (A) through (E)
in clause (i) above to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that the foregoing indemnity shall not apply to any
losses, liabilities, claims, damages and expenses to the extent arising out
of any untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Remarketing Dealer
expressly for use in the Remarketing Materials.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Company, its trustees and each of its officers who signed the Registration
Statement, from and against any loss, liability, claim, damage and expense,
as incurred, but only with respect to untrue statements or omissions made in
the Remarketing Materials in reliance upon and in conformity with information
furnished to the Company in writing by the Remarketing Dealer expressly for
use in such Remarketing Materials. The indemnity agreement in this paragraph
shall extend upon the same terms and conditions to each person, if any, who
controls the Company within the meaning of Section 20 of the 1934 Act.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to clause (a) above, counsel to the indemnified
parties shall be selected by Merrill Lynch, and, in the case of parties
indemnified pursuant to clause (b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or
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proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 9 or Section 10 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission or fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a) (ii) effected without its
written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
9(a)(ii) effected without its consent if such indemnifying party (i)
reimburses such indemnified party in accordance with such request to the
extent it considers such request to be reasonable and (ii) provides written
notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
(e) The indemnity agreements contained in this Section 9 shall remain
operative and in full force and effect, regardless of any investigation made
by or on behalf of the Remarketing Dealer, and shall survive the termination
or cancellation of this Agreement and the remarketing of any MOPPRS hereunder.
Section 10. Contribution. If the indemnification provided for in
Section 9 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Remarketing Dealer on the other hand
from the remarketing of the MOPPRS pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Remarketing Dealer on the other hand in connection
with the acts, failures to act, statements or omissions that resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
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The relative benefits received by the Company on the one hand and the
Remarketing Dealer on the other hand in connection with the remarketing of
the MOPPRS pursuant to this Agreement shall be deemed to be in the same
respective proportions as (i) the aggregate principal amount of the MOPPRS,
and (ii) the aggregate positive difference, if any, between the price at
which the MOPPRS are sold by the Remarketing Dealer in the remarketing and
the price paid by the Remarketing Dealer for the MOPPRS tendered on the
Remarketing Date.
The relative fault of the Company on the one hand and the Remarketing
Dealer on the other hand shall be determined by reference to, among other
things, the responsibility hereunder of the applicable party for any act or
failure to act relating to the losses, liabilities, claims, damages or
expenses incurred or, in the case of any losses, liabilities, claims, damages
or expenses arising out of any untrue or alleged untrue statement of a
material fact contained in any of the Remarketing Materials or the omission
or alleged omission to state a material fact therefrom, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Remarketing Dealer and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Remarketing Dealer agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 10.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 10
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
act or failure to act or untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 10, the Remarketing
Dealer shall not be required to contribute any amount in excess of the amount
by which the total price at which the MOPPRS remarketed by it and resold to
the public were sold to the public exceeds the amount of any damages that the
Remarketing Dealer has otherwise been required to pay by reason of any act or
failure to act for which it is responsible hereunder or any untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 10, each person, if any, who controls the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Remarketing Dealer, and each trustee of the Company, each
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officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
Section 11. Termination of Agreement or Redetermination of Interest
Rate to Maturity.(a) This Agreement shall terminate as to the Remarketing
Dealer on the effective date of the resignation of the Remarketing Dealer
pursuant to Section 6 hereof or the repurchase of the MOPPRS by the Company
pursuant to Section 4(g) hereof or the redemption of the MOPPRS by the
Company pursuant to Section 4(h) hereof.
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Company and the
Indenture Trustee of its election to do so, at any time on or before the
Remarketing Date, in the event that: (i) any of the conditions referred to
or set forth in Section 8(a) hereof have not been met or satisfied in full,
(ii) any of the events set forth in Section 8(b) shall have occurred at any
time or (iii) the Remarketing Dealer determines, in its reasonable
discretion, after consultation with the Company, that it shall not have
received all of the information, whether or not specifically referenced
herein, necessary to fulfill its obligations under this Agreement.
(c) Notwithstanding any provision herein to the contrary, in lieu of
terminating this Agreement pursuant to Section 11(b) above, upon the
occurrence of any of the events set forth therein, the Remarketing Dealer, in
its sole discretion at any time between the Determination Date and 3:30 p.m.,
New York City time, on the Business Day immediately preceding the Remarketing
Date, may elect to purchase the MOPPRS for remarketing and determine a new
Interest Rate to Maturity in the manner provided in Section 4(d) of this
Agreement, except that for purposes of determining the new Interest Rate to
Maturity pursuant to this paragraph the Determination Date referred to
therein shall be the date of such election and redetermination. The
Remarketing Dealer shall notify the Company, the Indenture Trustee and DTC by
telephone, confirmed in writing (which may include facsimile or other
electronic transmission), by 4:00 p.m., New York City time, on the date of
such election, of the new Interest Rate to Maturity applicable to the MOPPRS.
Thereupon, such new Interest Rate to Maturity shall supersede and replace
any Interest Rate to Maturity previously determined by the Remarketing Dealer
and, absent manifest error, shall be binding and conclusive upon the
Beneficial Owners and Holders of the MOPPRS on or after the Remarketing Date,
the Company and the Indenture Trustee; provided, however, that the
Remarketing Dealer, by redetermining the Interest Rate to Maturity upon the
occurrence of any event set forth in Section 11(b) as set forth above, shall
not thereby be deemed to have waived its right to determine a new Interest
Rate to Maturity or terminate this Agreement upon the occurrence of any other
event set forth in Section 11(b).
(d) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party,
except that, in the case of termination pursuant to Section 11(b) of this
Agreement, the Company shall reimburse the Remarketing Dealer for all of its
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the
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Remarketing Dealer, and except further as set forth in Section 11(e) below.
Sections 1, 9, 10, 11(d) and 11(e) shall survive such termination and remain
in full force and effect.
(e) In the case of either (i) termination of this Agreement after the
Remarketing Dealer's election on the Notification Date to remarket the
MOPPRS, pursuant to Section 11(b) or (ii) termination of this Agreement due
to the occurrence, prior to the Remarketing Dealer's election on the
Notification Date to remarket the MOPPRS, of any event set forth in Section
8(b)(ii), (v) or (viii), upon the request of the Remarketing Dealer, the
Company shall immediately following the Call Price Determination Date (as
defined below) pay the Remarketing Dealer, in same-day funds by wire transfer
to an account designated by the Remarketing Dealer, the fair market value,
calculated as set forth below, of the Remarketing Dealer's right to purchase
and remarket the MOPPRS pursuant to this Agreement (the "Call Price").
In the case of termination of this Agreement pursuant to Section 11(b)
after the Remarketing Dealer elects on the Notification Date to remarket the
MOPPRS, the Call Price shall be equal to the excess of (i) the Dollar Price
of the MOPPRS determined as provided in Section 4 over (ii) the aggregate
principal amount of the MOPPRS.
In the case of termination of this Agreement due to the occurrence,
prior to the Remarketing Dealer's election on the Notification Date to
remarket the MOPPRS, of any event set forth in Section 8(b)(ii), (v) or
(viii), the Call Price shall be determined in good faith by the Remarketing
Dealer on a commercially reasonable basis by reference to, among other
factors, the formulation set forth in the preceding paragraph.
The Remarketing Dealer shall determine the applicable Call Price on the
Business Day immediately following the date of termination or notification of
the occurrence, prior to the Remarketing Dealer's election on the
Notification Date to remarket the MOPPRS, of any event set forth in Section
8(b)(ii), (v) or (viii), as the case may be, or as soon as practicable
thereafter (the "Call Price Determination Date"). The Remarketing Dealer
shall promptly notify the Company of the Call Price Determination Date and
the Call Price by telephone, confirmed in writing (which may include
facsimile or other electronic transmission). The Call Price, absent manifest
error, shall be binding and conclusive upon the parties hereto.
(f) This Agreement shall not be subject to termination by the Company.
Section 12. Remarketing Dealer's Performance; Duty of Care. The duties
and obligations of the Remarketing Dealer shall be determined solely by the
express provisions of this Agreement and the Indenture. No implied covenants
or obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of
this Agreement and the Indenture, as to the truth of the statements expressed
in any of such documents. The Remarketing Dealer shall be protected in acting
upon any document or communication
21
<PAGE>
reasonably believed by it to have been signed, presented or made by the
proper party or parties. The Remarketing Dealer shall incur no liability
hereunder to any Beneficial Owner or Holder of MOPPRS in its individual
capacity or as Remarketing Dealer for any action or failure to act in
connection with the remarketing or otherwise. The Remarketing Dealer shall
incur no liability to the Company with respect to calculation of the Interest
Rate to Maturity, except as a result of gross negligence or willful
misconduct on its part.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 14. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the earlier of the first day
thereafter on which no MOPPRS are outstanding or the completion of the
remarketing of the MOPPRS. Regardless of any termination of this Agreement
pursuant to any of the provisions hereof, the obligations of the Company
pursuant to Sections 9, 10 and 11 hereof shall remain operative and in full
force and effect until fully satisfied.
Section 15. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person
without the prior written consent of the Remarketing Dealer. This Agreement
shall inure to the benefit of and be binding upon the Company and the
Remarketing Dealer and their respective successors and assigns, and will not
confer any benefit upon any other person, partnership, association or
corporation other than persons, if any, controlling the Remarketing Dealer
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, or any indemnified party to the extent provided in Section 9 hereof, or
any person entitled to contribution to the extent provided in Section 10
hereof. The terms "successors" and "assigns" shall not include any purchaser
of any MOPPRS merely because of such purchase.
Section 16. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used
in the interpretation of any provisions of this Agreement.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of
rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
22
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Section 18. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 19. Amendments. This Agreement may be amended by any
instrument in writing signed by each of the parties hereto so long as this
Agreement as amended is not inconsistent with the Indenture in effect as of
the date of any such amendment.
Section 20. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing (which may include facsimile or
other electronic transmission) and shall be deemed to have been validly given
or made when delivered or mailed, registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
(a) to the Company:
Washington Real Estate Investment Trust
10400 Connecticut Avenue
Kensington, Maryland 20895
Attention: Larry E. Finger
Facsimile No.: (301)929-5910
(b) to Merrill Lynch:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1307
Attention: Swaps Option Desk
Facsimile No.: (212) 449-8920
With a copy to: Scott Primrose/Transaction Management Group
Facsimile No.: (212) 449-2234
or to such other address as the Company or the Remarketing Dealer shall
specify in writing.
23
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IN WITNESS WHEREOF, each of the Company and the Remarketing Dealer has
caused this Agreement to be executed in its name and on its behalf by one of
its duly authorized officers as of the date first above written.
WASHINGTON REAL ESTATE
INVESTMENT TRUST
By: /s/ Edmund B. Cronin, Jr.
---------------------------------
Edmund B. Cronin, Jr.
President and Chief Executive Officer
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By: /s/ Elizabeth Anne Casey
----------------------------------
Name: Elizabeth Anne Casey
Title: Vice President
24
<PAGE>
Exhibit 4(b)
Unless this certificate is presented by an authorized representative of The
Depository Trust Company ("DTC") (55 Water Street, New York, New York) to the
Trust (as defined below) or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of DTC
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for securities in
certificated form, this security may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of
DTC or by DTC or any such nominee to a successor depositary or a nominee of
such successor depositary.
REGISTERED CUSIP NO.: PRINCIPAL AMOUNT:
No. 2 939671AB9 $60,000,000
WASHINGTON REAL ESTATE INVESTMENT TRUST
6.898% MandatOry Par Put Remarketed Securities-SM- ("MOPPRS-SM-")
due February 25, 2018
(Medium-Term Notes)
ORIGINAL ISSUE DATE: INTEREST RATE STATED MATURITY DATE:
February 25, 1998 TO REMARKETING February 25, 2018
DATE: 6.898%
REMARKETING DATE: INTEREST RATE
February 25, 2008 TO MATURITY: To be determined as provided herein and
set forth in the records of the Trustee
AUTHORIZED DENOMINATION: INTEREST PAYMENT DATE(S):
$1,000 and integral multiples thereof February 25 and August 25
_______
"MandatOry Par Put Remarketed Securities-SM-" and "MOPPRS-SM-" are service
marks owned by Merrill Lynch & Co., Inc.
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<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST, a Maryland real estate
investment trust (hereinafter called the "Trust," which term shall include
any successor trust or entity under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., a nominee of The
Depository Trust Company ("DTC"), or its registered assigns, upon
presentation, the principal amount of SIXTY MILLION DOLLARS ($60,000,000), on
the Stated Maturity Date specified above (or any earlier redemption date or
repurchase date) (each such Stated Maturity Date, redemption date or
repurchase date being hereinafter referred to as the "Maturity Date" with
respect to the principal repayable on such date) and to pay interest thereon,
at the Interest Rate per annum specified above to February 25, 2008 (the
"Remarketing Date"), and thereafter, subject to the terms and conditions set
forth herein, at the Interest Rate determined by the Remarketing Dealer (as
defined below) in accordance with the procedures set forth below (the
"Interest Rate to Maturity"), until the principal hereof is paid or duly made
available for payment. The Trust will pay interest in arrears on each
Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date. Interest on
this MOPPRS will be computed on the basis of a 360-day year of twelve 30-day
months.
If, pursuant to the Remarketing Agreement, dated as of the date hereof
(the "Remarketing Agreement), among Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Remarketing Dealer (the "Remarketing Dealer"), and the
Trust, the Remarketing Dealer elects to remarket the MOPPRS, then, except as
otherwise set forth herein, (i) this MOPPRS shall be subject to mandatory
tender to the Remarketing Dealer for remarketing on the Remarketing Date, on
the terms and subject to the conditions set forth herein, and (ii) on and
after the Remarketing Date, this MOPPRS shall bear interest at the Interest
Rate to Maturity determined by the Remarketing Dealer in accordance with the
procedures set forth in Section 3 herein.
Interest on this MOPPRS will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from, and including, the Original Issue Date if no interest
has been paid or duly provided for) to, but excluding, the applicable
Interest Payment Date or the Maturity Date, as the case may be. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, subject to certain exceptions described herein, be paid to the
person in whose name this MOPPRS (or one or more predecessor MOPPRS) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined below) immediately preceding such Interest
Payment Date (the "Regular Record Date"); provided, however, that interest
payable on the Maturity Date will be payable to the person to whom the
principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest")
will forthwith cease to be payable to the holder on any Regular Record Date,
and shall be paid to the person in whose name this MOPPRS is registered at
the close of business on a special record date (the "Special Record Date")
for the payment of such Defaulted Interest to be fixed by the Trustee
hereinafter referred to, of which notice shall be given to the holder of
this MOPPRS by the Trustee not more than 15 days nor less than 10 days prior
to such Special Record Date or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this MOPPRS
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<PAGE>
may be listed, and upon such notice as may be required by such exchange, all
as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
MOPPRS due on the Maturity Date will be made in immediately available funds
upon presentation and surrender of this MOPPRS (and, with respect to any
applicable repayment of this MOPPRS, a duly completed election form as
contemplated on the reverse hereof) at the corporate trust office of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of
New York, currently located c/o First Chicago Trust Company of New York, 14
Wall Street, Eighth Floor - Window 2, New York, New York, 10005, or at such
other paying agency in The City of New York, State of New York, as the Trust
may determine. Payment of interest due on any Interest Payment Date other
than the Maturity Date will be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register
kept for the MOPPRS pursuant to Section 305 of the Indenture.
If any Interest Payment Date or the Maturity Date falls on a day that is
not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the
same force and effect as if made on the date such payment was due, and no
interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date or the Maturity Date, as the case may be.
As used herein, "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York are
authorized or required by law, regulation, executive order or governmental
decree to be closed.
The Trust is obligated to make payment of principal, premium, if any,
and interest in respect of this MOPPRS in U.S. Dollars.
Reference is hereby made to the further provisions of this MOPPRS set
forth on the reverse hereof.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this MOPPRS shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, Washington Real Estate Investment Trust has caused
this MOPPRS to be duly executed this 25th day of February, 1998.
WASHINGTON REAL ESTATE INVESTMENT TRUST
By:
----------------------------------------
Edmund B. Cronin, Jr.
President and Chief Executive Officer
Attest:
By:
--------------------------
Laura M. Franklin
Assistant Secretary
[SEAL]
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<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated 6.898% MandatOry Par
Put Remarketed Securities-SM- Due February 25, 2018 referred to in the
within-mentioned Indenture.
Dated: February 25, 1998 THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
--------------------------------------
Authorized Signatory
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<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
6.898% MandatOry Par Put Remarketed Securities-SM- ("MOPPRS-SM-")
due February 25, 2018
(Medium-Term Note)
1. INDENTURE. (a) This MOPPRS is one of a duly authorized issue of
senior debt securities of the Trust (the "Securities") issued under an
Indenture, dated as of August 1, 1996 (the "Indenture"), among theTrust and
The First National Bank of Chicago, as Trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture with respect to
the MOPPRS), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trust, the
Trustee, and the holders of the MOPPRS, and of the terms upon which the
MOPPRS are authenticated and delivered. This Security is designated as
"6.898% MandatOry Par Put Remarketed Securities-SM- Due February 25, 2018"
("MOPPRS"), which MOPPRS are limited to $60,000,000 aggregate principal
amount, subject to the provisions of the Indenture. All terms used but not
defined in this MOPPRS shall have the meanings assigned to such terms in the
Indenture. Except where the context otherwise requires, all references in
this MOPPRS to "herein" or "hereof" or similar terms shall include the
Indenture.
(b) This MOPPRS is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof.
(c) This MOPPRS will not be subject to any sinking fund.
2. MANDATORY TENDER. Provided that on a Business Day not later than
five Business Days prior to the Remarketing Date the Remarketing Dealer
notifies the Trust and the Trustee of its election to purchase the MOPPRS on
the Remarketing Date (the "Notification Date"), the MOPPRS shall be subject
to mandatory tender to the Remarketing Dealer, and the Remarketing Dealer
shall be obligated to purchase the MOPPRS, for remarketing on the Remarketing
Date, subject in each case to the conditions described herein and set forth
in the Remarketing Agreement.
3. DETERMINATION OF INTEREST RATE TO MATURITY. (a) Subject to the
Remarketing Dealer's election to remarket the MOPPRS as provided in Section 2
hereof and the Remarketing Agreement, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on and
as of the third Business Day immediately preceding the Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to the sum of 5.598% (the "Base Rate")
plus the Applicable Spread, which will be based on the Dollar Price of the
MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the Remarketing Dealer on the Determination Date from the
bids quoted by five Reference Corporate Dealers for the full aggregate
principal amount of the MOPPRS at the Dollar Price, but assuming (i) an issue
date equal to the
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<PAGE>
Remarketing Date, with settlement on such date without accrued interest, (ii)
a maturity date equal to the Stated Maturity Date of the MOPPRS, and (iii) a
stated annual interest rate, payable semi-annually on each Interest Payment
Date, equal to the Base Rate plus the spread bid by the applicable Reference
Corporate Dealer. If fewer than five Reference Corporate Dealers bid as
described above, then the Applicable Spread shall be the lowest of such bid
indications obtained as described above. The Interest Rate to Maturity
announced by the Remarketing Dealer, absent manifest error, shall be binding
and conclusive upon the beneficial owners and Holders of the MOPPRS, the
Trust and the Trustee.
"Dollar Price" means the present value, as of the Remarketing Date, of
the Remaining Scheduled Payments discounted to the Remarketing Date, on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months), at the Treasury Rate.
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Trust in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing
Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable
Treasury Issues, assuming a price for the Comparable Treasury Issues
(expressed as a percentage of its principal amount), equal to the Comparable
Treasury Price for the Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as
set forth on "Telerate Page 500" (or such other page as may replace Telerate
Page 500), or (b) if such page (or any successor page) is not displayed or
does not contain such offer prices on the Determination Date, (i) the average
of the Reference Treasury Dealer Quotations for the Remarketing Date, after
excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Remarketing Dealer obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. "Telerate Page 500" means the display designated
as "Telerate Page 500" on Dow Jones Markets Limited (or such other page as
may replace Telerate Page 500 on such service) or such other service
displaying the offer prices specified in (a) above as may replace Dow Jones
Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
-7-
<PAGE>
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc and
their respective successors; provided, however, that if any of the foregoing
or their affiliates shall cease to be a primary U.S. government securities
dealer in The City of New York (a "Primary Treasury Dealer"), the Remarketing
Dealer shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing
Date to and including the Stated Maturity Date; provided, however, that if
the Remarketing Date is not an Interest Payment Date with respect to the
MOPPRS, the amount of the next succeeding scheduled interest payment thereon,
calculated at the Base Rate only, will be reduced by the amount of interest
accrued thereon, calculated at the Base Rate only, to the Remarketing Date.
(b) Notwithstanding any provision herein to the contrary, upon the
occurrence of any Termination Event (as defined below), the Remarketing
Dealer, in its sole discretion at any time between the Determination Date and
3:30 p.m., New York City time, on the Business Day immediately preceding the
Remarketing Date, may elect to purchase the MOPPRS for remarketing and
determine a new Interest Rate to Maturity in the manner provided in Section
3(a) hereof, except that for purposes of determining the new Interest Rate to
Maturity pursuant to this paragraph, the Determination Date referred to
therein shall be the date of such election and redetermination. The
Remarketing Dealer shall notify the Trust, the Trustee and DTC by telephone,
confirmed in writing (which may include facsimile or other electronic
transmission), by 4:00 p.m., New York City time, on the date of such
election, of the new Interest Rate to Maturity applicable to the MOPPRS.
Thereupon, such new Interest Rate to Maturity shall supersede and replace any
Interest Rate to Maturity previously determined by the Remarketing Dealer
and, absent manifest error, shall be binding and conclusive upon the
beneficial owners and Holders of the MOPPRS on or after the Remarketing Date,
the Trust and the Trustee.
"Termination Event" means any event as specified in Section 11(b) of the
Remarketing Agreement.
4. REPURCHASE. In the event that (i) the Remarketing Dealer for any
reason does not notify the Trust of the Interest Rate to Maturity by 4:00
p.m., New York City time, on the Determination Date, or (ii) prior to the
Remarketing Date, the Remarketing Dealer has resigned and no successor has
been appointed on or before the Determination Date, or (iii) the Remarketing
Dealer has terminated the Remarketing Agreement pursuant to Section 8 or
Section 11 thereof at any time after the Remarketing Dealer elects on the
Notification Date to remarket the MOPPRS, or (iv) the Remarketing Dealer for
any reason does not elect to purchase the MOPPRS for remarketing on the
Remarketing Date, or (v) the Remarketing Dealer for any reason does not
purchase all tendered MOPPRS on the Remarketing Date, the Trust shall
repurchase the MOPPRS as a whole on the Remarketing Date at a price equal to
100% of the principal amount of the MOPPRS plus all accrued
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<PAGE>
and unpaid interest, if any, on the MOPPRS to the Remarketing Date. In any
such case, payment will be made by the Trust through the Trustee to the DTC
participant of each tendering beneficial owner of MOPPRS, by book-entry
through DTC by the close of business on the Remarketing Date against delivery
through DTC of such beneficial owner's tendered MOPPRS.
5. REDEMPTION. (a) This MOPPRS will be subject to redemption at the
option of the Trust from the Remarketing Dealer on the Remarketing Date, in
whole but not in part, at the Optional Redemption Price. To exercise its
option to redeem the MOPPRS, the Trust must notify the Remarketing Dealer and
the Trustee not later than the Business Day immediately preceding the
Determination Date. The "Optional Redemption Price" shall be the greater of
(i) 100% of the principal amount of the MOPPRS and (ii) the sum of the
present values of the Remaining Scheduled Payments thereon, as determined by
the Remarketing Dealer, discounted to the Remarketing Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate, plus in either case accrued and unpaid interest from the
Remarketing Date on the principal amount being redeemed to the date of
redemption. If the Trust elects to redeem the MOPPRS, it shall pay the
redemption price therefor in same-day funds by wire transfer to an account
designated by the Remarketing Dealer on the Remarketing Date.
(b) After the Remarketing Date, this MOPPRS shall be subject to
redemption at the option of the Trust, in whole or in part, at any time, in
increments of U.S. $1,000 (provided that any remaining principal amount
hereof shall be at least U.S. $1,000), at a redemption price determined by
the Trust equal to the sum of (i) the principal amount of the MOPPRS being
redeemed, plus accrued and unpaid interest thereon to the redemption date,
and (ii) the Make-Whole Amount, if any (the "Redemption Price"). For purposes
of redemption after the Remarketing Date, interest shall be calculated at the
Interest Rate to Maturity.
If notice has been given as provided in the Indenture and funds for the
redemption of any MOPPRS called for redemption shall have been made available
on the redemption date referred to in such notice, such MOPPRS shall cease to
bear interest on the date fixed for such redemption specified in such notice
and the only right of the Holders from and after the redemption date shall be
to receive payment of the Redemption Price upon surrender of such MOPPRS in
accordance with such notice.
Notice of any optional redemption of any MOPPRS shall be given to
Holders at their addresses, as shown in the security register for the MOPPRS,
not less than 30 nor more than 60 days prior to the date fixed for
redemption. The notice of redemption shall specify, among other items, the
Redemption Price and the principal amount of the MOPPRS held by such Holder
to be redeemed. If less than all of the MOPPRS are to be redeemed, the
particular MOPPRS to be redeemed shall be selected by such method as the
Trustee deems fair and appropriate.
"Make-Whole Amount" shall mean, in connection with any optional
redemption of any MOPPRS, the excess, if any, of (i) the aggregate present
value as of the date of such redemption of each dollar of principal being
redeemed and the amount of any interest (exclusive of interest accrued
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<PAGE>
to the date of redemption) that would have been payable in respect of each
such dollar if such redemption had not been made, determined by discounting,
on a semi-annual basis, such principal and interest at the applicable
Reinvestment Rate (determined on the third Business Day preceding the date
such notice of redemption is given) from the respective dates on which such
principal and interest would have been payable if such redemption had not
been made, over (ii) the aggregate principal amount of the MOPPRS being
redeemed.
"Reinvestment Rate" shall mean .25% plus the yield on treasury
securities at a constant maturity for the most recent week under the heading
"Week Ending" published in the most recent Statistical Release under the
caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity, as of the
payment date of the principal being redeemed. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purpose of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" shall mean the statistical release designated
"H.15(519)" or any successor publication that is published weekly by the
Federal Reserve System and that establishes yields on actively traded United
States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under
the Indenture, then such other reasonably comparable index that shall be
designated by the Trust.
6. EFFECT OF EVENTS OF DEFAULT. If an Event of Default, as defined in
the Indenture, shall occur and be continuing, the principal of, and the
Make-Whole Amount, if any, on the MOPPRS may be declared due and payable in
the manner and with the effect provided in the Indenture.
7. DEFEASANCE. The Indenture contains provisions for defeasance of (i)
in the case of this clause (i), after the Remarketing Date, the entire
indebtedness of the MOPPRS or (ii) certain restrictive covenants and Events
of Default with respect to the MOPPRS, in each case upon compliance with
certain conditions set forth therein, which provisions apply to the MOPPRS.
Subject to the forgoing, prior to the Remarketing Date, neither the Trust nor
any of its subsidiaries or affiliates shall defease, purchase or otherwise
acquire, or enter into any agreement to defease, purchase or otherwise
acquire, any of the MOPPRS prior to the remarketing thereof by the
Remarketing Dealer.
8. AMENDMENT AND MODIFICATION. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Trust and the rights of the holders of the
MOPPRS at any time by the Trust and the Trustee with the consent of the
holders of not less than a majority of the aggregate principal amount of all
MOPPRS at the time outstanding and affected thereby. The Indenture also
contains
-10-
<PAGE>
provisions permitting the holders of specified percentages in principal
amount of the MOPPRS at the time outstanding, on behalf of the holders of all
MOPPRS, to waive compliance by the Trust with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this MOPPRS shall
be conclusive and binding upon such holder and upon all future holders of
this MOPPRS and other MOPPRS issued upon the registration or transfer hereof
or in exchange heretofore or in lieu hereof, whether or not notation of such
consent or waiver is made upon this MOPPRS.
9. OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. No
reference herein to the Indenture and no provision of this MOPPRS or of the
Indenture shall alter or impair the obligation of the Trust, which is
absolute and unconditional, to pay principal, premium, if any, and interest
in respect of this MOPPRS at the times, places and rate or formula, and in
the coin or currency, herein prescribed.
10. TRANSFER AND EXCHANGE. As provided in the Indenture and subject to
certain limitations therein and herein set forth, the transfer of this MOPPRS
is registrable in the Security Register of the Trust upon surrender of this
MOPPRS for registration of transfer at the office or agency of the Trust in
any place where the principal hereof and any premium or interest hereon are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trust and the Security Registrar duly executed
by, the holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new MOPPRS, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this MOPPRS is exchangeable for a like aggregate
principal amount of MOPPRS of different authorized denominations but
otherwise having the same terms and conditions, as requested by the holder
hereof surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Trust may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this MOPPRS for registration of transfer,
the Trust, the Trustee and any agent of the Trust or the Trustee may treat
the holder in whose name this MOPPRS is registered as the owner thereof for
all purposes, whether or not this MOPPRS be overdue, and neither the Trust,
the Trustee nor any such agent shall be affected by notice to the contrary.
11. GOVERNING LAW. The Indenture and this MOPPRS shall be governed by
and construed in accordance with the laws of the State of New York.
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
- ----------------------------------
- ----------------------------------
...............................................................................
(Please Print or Typewrite Name and Address, including
Zip Code, of Assignee)
...............................................................................
the within MOPPRS of Washington Real Estate Investment Trust and ______________
hereby does irrevocably constitute and appoint
...............................................................................
Attorney to transfer said MOPPRS on the books of the within-named Trust with
full power of substitution in the premises.
Dated: ........................................................................
Signature: ....................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within MOPPRS in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:. ........................................................
NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution"
that is a member or participant in a "signature guarantee program" (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).
-12-
<PAGE>
Exhibit 4(c)
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trust (as
defined below) or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.*
Unless and until it is exchanged in whole or in part for Notes in a
certificated form, this Note may not be transferred except as a whole by DTC
to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC
or by DTC or any such nominee to a successor depository or a nominee of such
successor depository.*
REGISTERED CUSIP No.: PRINCIPAL AMOUNT
No.: 1 939671AA1 $50,000,000
WASHINGTON REAL ESTATE INVESTMENT TRUST
MEDIUM-TERM NOTE
(Fixed Rate)
ORIGINAL ISSUE DATE: February 25, 1998 INTEREST RATE: 7.25%
STATED MATURITY DATE: February 25, 2028
INTEREST PAYMENT DATES: DEFAULT RATE: Not Applicable
[ ] January 1 and July 1
[X ] Other: February 25 and August 25
REDEMPTION: The Notes may be redeemed at any time at the option of the Trust
at the Redemption Price set forth herein
INITIAL REDEMPTION PERCENTAGE: Not Applicable
ANNUAL REDEMPTION PERCENTAGE REDUCTION: Not Applicable
OPTIONAL REPAYMENT: None [ ] Check if an Original Issue
Discount Note
Issue Price:
<TABLE>
<S> <C>
SPECIFIED CURRENCY: [ X ] U.S. Dollars AUTHORIZED DENOMINATION:
[ ] Other:________ [ X ] $1,000 and integral multiples thereof
EXCHANGE RATE AGENT: Not Applicable [ ] Other:________________________________
ADDENDUM ATTACHED: [ ] Yes OTHER/ADDITIONAL PROVISIONS:
[ X ] No ______________________________________
</TABLE>
- --------------------------------------
* This paragraph applies to Global Securities only.
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<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST, a Maryland real estate
investment trust (hereinafter called the "Trust", which term shall include
any successor trust or corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Cede & Co., or registered
assigns, upon presentation, the principal sum of Fifty Million Dollars
($50,000,000) on the Stated Maturity Date specified above (or any Redemption
Date or Optional Repayment Date, each as defined on the reverse hereof) (each
such Stated Maturity Date, Redemption Date or Optional Repayment Date being
hereinafter referred to as the "Maturity Date" with respect to the principal
repayable on such date) and to pay interest thereon, at the Interest Rate per
annum specified above, until the principal hereof is paid or duly made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at the Default Rate per annum specified above
on any overdue principal, premium and/or interest. The Trust will pay
interest in arrears on each Interest Payment Date, if any, specified above,
commencing with the first Interest Payment Date next succeeding the Original
Issue Date specified above, and on the Maturity Date; provided, however, that
if the Original Issue Date occurs between a Record Date (as defined below)
and the next succeeding Interest Payment Date, interest payments will
commence on the second Interest Payment Date next succeeding the Original
Issue Date to the Holder of this Note on the Record Date with respect to such
second Interest Payment Date. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this
Note shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Interest on this Note will accrue from and including the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from and including the Original Issue Date if no interest
has been paid or duly provided for) to but excluding the applicable Interest
Payment Date or the Maturity Date, as the case may be (each, an "Interest
Period"). The interest so payable, and punctually paid or duly provided for
on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day as defined below) immediately preceding such Interest
Payment Date (the "Record Date"); provided, however, that interest payable on
the Maturity Date will be payable to the Person to whom the principal hereof
and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") shall forthwith
cease to be payable to the Holder on such Record Date, and shall be paid to
the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee hereinafter referred to, notice whereof shall be given to the Holder
of this Note by the Trustee not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Note may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds
upon presentation and surrender of this
2
<PAGE>
Note (and, with respect to any applicable repayment of this Note, a duly
completed election form as contemplated on the reverse hereof) at the
corporate trust office of the Trustee maintained for that purpose in the
Borough of Manhattan, The City of New York, currently located c/o First
Chicago Trust Company of New York, 14 Wall Street, Eighth Floor, New York,
New York 10005, or at such other paying agency in the Borough of Manhattan,
The City of New York, as the Trust may determine; provided, however, that if
such payment is to be made in a Specified Currency other than United States
dollars as set forth below, such payment will be made by wire transfer of
immediately available funds to an account with a bank designated by the
holder hereof at least 15 calendar days prior to the Maturity Date, provided
that such bank has appropriate facilities therefor and that this Note (and,
if applicable, a duly completed repayment election form) is presented and
surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest due on any Interest Payment Date other than
the Maturity Date will be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register
maintained at the aforementioned office of the Trustee; provided, however,
that a holder of U.S.$10,000,000 (or, if the Specified Currency specified
above is other than United States dollars, the equivalent thereof in the
Specified Currency) or more in aggregate principal amount of Notes (whether
having identical or different terms and provisions) will be entitled to
receive interest payments on such Interest Payment Date by wire transfer of
immediately available funds if appropriate wire transfer instructions have
been received in writing by the Trustee not less than 15 calendar days prior
to such Interest Payment Date. Any such wire transfer instructions received
by the Trustee shall remain in effect until revoked by such holder.
If any Interest Payment Date or the Maturity Date falls on a day that is
not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the
same force and effect as if made on the date such payment was due, and no
interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date or the Maturity Date, as the case may be, to
the date of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or executive order to close in
The City of New York; provided, however, that if the Specified Currency is
other than United States dollars and any payment is to be made in the
Specified Currency in accordance with the provisions hereof, such day is also
not a day on which banking institutions are authorized or required by law,
regulation or executive order to close in the Principal Financial Center (as
defined below) of the country issuing the Specified Currency unless the
Specified Currency is European Currency Units ("ECU"), in which case such day
is also not a day that appears as an ECU non-settlement day on the display
designated as "ISDE" on the Reuter Monitor Money Rates Service (or is not a
day designated as an ECU non-settlement day by the ECU Banking Association)
or, if ECU non-settlement days do not appear on that page (and are not so
designated), a day that is not a day on which payments in ECU cannot be
settled in the international interbank market). "Principal Financial Center"
means the capital city of the country issuing the Specified Currency, except
that with respect to United States dollars, Australian dollars, Canadian
dollars, Deutsche marks, Dutch
3
<PAGE>
guilders, Italian lire, Swiss francs and ECU, the "Principal Financial
Center" shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam,
Milan, Zurich and Luxembourg, respectively.
The Trust is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is
other than United States dollars, any such amounts so payable by the Trust
will be converted by the Exchange Rate Agent specified above into United
States dollars for payment to the holder of this Note; provided, however,
that the holder of this Note may elect to receive such amounts in such
Specified Currency pursuant to the provisions set forth below.
If the Specified Currency is other than United States dollars and the
holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or
interest in respect of this Note in the Specified Currency, any United States
dollar amount to be received by the holder of this Note will be based on the
highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of whom may be the Exchange Rate Agent) selected by the
Exchange Rate Agent and approved by the Trust for the purchase by the quoting
dealer of the Specified Currency for United States dollars for settlement on
such payment date in the aggregate amount of the Specified Currency payable
to all holders of Notes scheduled to receive United States dollar payments
and at which the applicable dealer commits to execute a contract. All
currency exchange costs will be borne by the holder of this Note by
deductions from such payments. If three such bid quotations are not
available, payments on this Note will be made in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency by submitting a written request for such
payment to the Trustee at its corporate trust office in The City of New York
on or prior to the applicable Record Date or at least 15 calendar days prior
to the Maturity Date, as the case may be. Such written request may be mailed
or hand delivered or sent by cable, telex or other form of facsimile
transmission. The holder of this Note may elect to receive all or a
specified portion of all future payments in the Specified Currency in respect
of such principal, premium, if any, and/or interest and need not file a
separate election for each payment. Such election will remain in effect
until revoked by written notice to the Trustee, but written notice of any
such revocation must be received by the Trustee on or prior to the applicable
Record Date or at least 15 calendar days prior to the Maturity Date, as the
case may be.
Except as set forth below, if the Specified Currency is other than
United States dollars or a composite currency and the holder of this Note
shall have duly made an election to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if the Specified Currency is not available
due to the imposition of exchange controls or other circumstances beyond the
control of the Trust, the Trust will be entitled
4
<PAGE>
to satisfy its obligations to the holder of this Note by making such payment
in United States dollars on the basis of the Market Exchange Rate (as defined
below), computed by the Exchange Rate Agent, on the second Business Day prior
to such payment date or, if such Market Exchange Rate is not then available,
on the basis of the most recently available Market Exchange Rate or as
otherwise specified on the face hereof. The "Market Exchange Rate" for the
Specified Currency means the noon dollar buying rate in The City of New York
for cable transfers for the Specified Currency as certified for customs
purposes by (or if not so certified, as otherwise determined by) the Federal
Reserve Bank of New York. Any payment made under such circumstances in
United States dollars will not constitute an Event of Default (as defined in
the Indenture).
If the Specified Currency is a composite currency and the holder of this
Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of
this Note in the Specified Currency and if such composite currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the control of the Trust, then the Trust will be entitled to satisfy
its obligations to the holder of this Note by making such payment in United
States dollars. The amount of each payment in United States dollars shall be
computed by the Exchange Rate Agent on the basis of the equivalent of the
composite currency in United States dollars. The component currencies of the
composite currency for this purpose (collectively, the "Component Currencies"
and each, a "Component Currency") shall be the currency amounts that were
components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in
United States dollars shall be calculated by aggregating the United States
dollar equivalents of the Component Currencies. The United States dollar
equivalent of each of the Component Currencies shall be determined by the
Exchange Rate Agent on the basis of the Market Exchange Rate on the second
Business Day prior to the required payment or if such Market Exchange Rate is
not then available, on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise specified on
the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error,
be conclusive for all purposes and binding on the Holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum
hereto, which further provisions shall have the same force and effect as if
set forth on the face hereof.
5
<PAGE>
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Washington Real Estate Investment Trust has caused
this Note to be duly executed.
WASHINGTON REAL ESTATE INVESTMENT TRUST
Dated: February 25, 1998 By:
-------------------------------------
Edmund B. Cronin, Jr.
President and Chief Executive Officer
Attest:
By:
----------------------------------
Laura M. Franklin
Assistant Secretary
[SEAL]
6
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
-------------------------------
Authorized Signatory
7
<PAGE>
WASHINGTON REAL ESTATE INVESTMENT TRUST
MEDIUM-TERM NOTE
(Fixed Rate)
This Note is one of a duly authorized issue of senior debt securities of
the Trust (herein called the "Debt Securities"), issued and to be issued in
one or more series under an Indenture, dated as of August 1, 1996, as
amended, modified or supplemented from time to time (the "Indenture"),
between the Trust and The First National Bank of Chicago (herein called the
"Trustee", which term includes any successor trustee under the Indenture with
respect to the Notes), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trust, the
Trustee and the Holders of the Debt Securities and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Debt Securities designated as "Medium-Term Notes
Due Nine Months or More From Date of Issue" (the "Notes"). All terms used
but not defined in this Note specified on the face hereof or in an Addendum
hereto shall have the meanings assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in minimum
denominations of U.S.$1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the
following paragraphs, will not be redeemable or repayable prior to the Stated
Maturity Date.
This Note will be subject to redemption at the option of the Trust on
any date, in whole or from time to time in part in increments of U.S.$1,000
or the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S.$1,000 or such minimum Authorized
Denomination), at the Redemption Price (as defined below), on notice given no
more than 60 nor less than 30 calendar days prior to the date fixed for
redemption (the "Redemption Date") and in accordance with the provisions of
the Indenture. The "Redemption Price" shall equal the sum of (i) the
principal amount of the Notes being redeemed plus accrued and unpaid interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Notes.
The following definitions apply with respect to any redemption or
accelerated payment of the Notes of this series:
"Make-Whole Amount" means, in connection with any optional redemption of
any Notes, the excess, if any, of (i) the aggregate present value as of the
date of such redemption of each dollar of principal being redeemed and the
amount of interest (exclusive of interest accrued to the date of redemption)
that would have been payable in respect of each such dollar if such
redemption had not been made, determined by discounting, on a semi-annual
basis, such principal and interest at the applicable Reinvestment Rate
(determined on the third Business Day preceding the date such notice
8
<PAGE>
of redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made, over
(ii) the aggregate principal amount of the Notes being redeemed.
"Reinvestment Rate" means .25% plus the yield on treasury securities at
a constant maturity for the most recent week under the heading "Week Ending"
published in the most recent Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of
the principal of the Notes being redeemed or paid. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the
Indenture, then such other reasonably comparable index which shall be
designated by the Trust.
This Note will be subject to repayment by the Trust at the option of the
holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S. $1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office in the City of
New York not more than 60 nor less than 30 calendar days prior to the
Repayment Date. Exercise of such repayment option by the holder hereof will
be irrevocable. In the event of repayment of this Note in part only, a new
Note of like tenor for the unrepaid portion hereof and otherwise having the
same terms as this Note shall be issued in the name of the holder hereof upon
the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals
of the Discount, as defined below) and, in the event of any redemption of
this Note (if applicable), multiplied by the Initial Redemption Percentage
(as adjusted by the Annual Redemption Percentage Reduction, if applicable)
and (2) any unpaid interest on this Note accrued from the Original Issue Date
to the Redemption Date, Repayment Date or date of acceleration of maturity,
as the case may be. The difference between the Issue Price and 100% of the
principal amount of this Note is referred to herein as the "Discount".
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<PAGE>
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year
convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption
that the maturity of this Note will not be accelerated. If the period from
the Original Issue Date to the initial Interest Payment Date (the "Initial
Period") is shorter than the compounding period for this Note, a
proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then
such period will be divided into a regular compounding period and a short
period, with the short period being treated as provided in the preceding
sentence.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Trust on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Trust, in each case, upon compliance by the Trust with certain conditions set
forth in the Indenture, which provisions apply to this Note.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Debt Securities at any time by the
Trust and the Trustee with the consent of the Holders of not less than a
majority in principal amount of all Debt Securities at the time outstanding
and affected thereby. The Indenture also contains provisions permitting the
Holders of not less than a majority of the aggregate principal amount of the
outstanding Debt Securities of any series, on behalf of the Holders of all
such Debt Securities, to waive compliance by the Trust with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit
the Holders of not less than a majority of the aggregate principal amount of
the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the Holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Trust, which is
absolute and unconditional, to pay the principal, premium, if any, and
interest in respect of this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register
of the Trust upon surrender of this Note for registration of transfer at the
office or agency or the Trust in any place where the principal hereof and any
premium or interest hereon are payable, duly endorsed by, or accompanied by a
written
10
<PAGE>
instrument of transfer in form satisfactory to the Trust and the Security
Registrar for the Notes duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes of this
series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denominations but otherwise
having the same terms and conditions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Trust may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Trust, the Trustee and any agent of the Trust or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Trust, the
Trustee nor any such agent shall be affected by notice to the contrary.
The obligations of the Trust under the Indenture and this Note and all
documents delivered in the name of the Trust in connection herewith and
therewith do not and shall not constitute personal obligations of the
trustees, officers, employees, agents or shareholders of the Trust or any of
them, and shall not involve any claim against or personal liability on the
part of any of them, and all persons including the Trustee shall look solely
to the assets of the Trust for the payment of any claim thereunder or for the
performance thereof and shall not seek recourse against such trustees,
officers, employees, agents or shareholders of the Trust or any of them or
any of their personal assets for such satisfaction. The performance of the
obligations of the Trust under the Indenture and this Note and all documents
delivered in the name of the Trust in connection therewith shall not be
deemed a waiver of any rights or powers of the Trust, trustees or
shareholders under the Trust's Declaration of Trust.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ___ Custodian ___
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act _____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
12
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
.....................................
...............................................................................
(Please Print or Typewrite Name and Address, including
Zip Code, of Assignee)
...............................................................................
the within Note of Washington Real Investment Trust and _____________________
hereby does irrevocably constitute and appoint
...............................................................................
Attorney to transfer said Note on the books of the within-named Trust with full
power of substitution in the premises.
Dated: ........................................................................
Signature: ....................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed: ........................................................
NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution"
that is a member or participant in a "signature guarantee program" (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).
<PAGE>
D:\KEV\NOTE.WPD
