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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
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): January 16, 1998
Washington Real Estate Investment Trust
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<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 January 16, 1998, Washington Real Estate Investment Trust entered
into a Distribution Agreement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated, BT Alex. Brown Incorporated, First Chicago Capital Markets,
Inc. and Salomon Brothers Inc with respect to the public sale, from time to
time, of up to $135,546,875 of the Trust's Medium Term Notes (the "Notes").
Attached hereto as exhibits are copies of the Distribution Agreement and the
forms of the Notes.
Item 7. Exhibits.
1. Distribution Agreement dated January 16, 1998 between Washington
Real Estate Investment Trust and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, BT Alex. Brown Incorporated, First Chicago Capital Markets,
Inc. and Salomon Brothers Inc
4.(a). Form of Fixed Rate Notes
4.(b). Form of Floating Rate Notes
23.(a). Consent of Stoy, Malone & Company, P.C.
23.(b). Consent of McGladrey & Pullen, LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has 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
-----------------------------------
Title: Vice President and Chief
Accounting Officer
Dated: January 16, 1998
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WASHINGTON REAL ESTATE INVESTMENT TRUST
Medium-Term Notes
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
January 16, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
BT ALEX. BROWN INCORPORATED
One South Street
Baltimore, MD 21202
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Chicago, Illinois 60670
SALOMON BROTHERS INC
7 World Trade Center
New York, New York 10048
Dear Sirs:
Washington Real Estate Investment Trust, a Maryland real estate investment
trust (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, BT Alex. Brown Incorporated, First
Chicago Capital Markets, Inc. and Salomon Brothers Inc (each, an "Agent", and
collectively, the "Agents") with respect to the issue and sale by the Company of
its Medium-Term Notes Due Nine Months or More From Date of Issue (the "Notes").
The Notes are to be issued pursuant to an Indenture, dated as of August 1, 1996,
as amended or modified from time to time (the "Indenture"), between the Company
and The First National Bank of Chicago, as trustee (the "Trustee"). As of the
date hereof, the Company has authorized the issuance and sale of up to U.S.
$135,546,875 aggregate initial offering price of Notes (or its equivalent, based
upon the applicable exchange rate on the applicable trade date, in such
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foreign or composite currencies as the Company shall designate at the time of
issuance) to or through the Agents pursuant to the terms of this Agreement.
It is understood, however, that the Company may from time to time authorize
the issuance of additional Notes and that such additional Notes may be sold
to or through the Agents pursuant to the terms of this Agreement, all as
though the issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to one or
more Agents as principal for resale to investors and other purchasers and for
the sale of Notes by the Company directly to investors (as may from time to time
be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-23157) for the
registration of its common shares of beneficial interest, preferred shares of
beneficial interest, warrants to purchase common shares of beneficial
interest and debt securities, including the Notes, under the Securities Act
of 1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), and the Company
has filed such post-effective amendments thereto as may be required prior to
any acceptance by the Company of an offer for the purchase of Notes. Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission and the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such
registration statement (as so amended, if applicable) is referred to herein
as the "Registration Statement"; and the final prospectus and all applicable
amendments or supplements thereto (including the final prospectus supplement
and pricing supplement relating to the offering of Notes), in the form first
furnished to the applicable Agent(s), are collectively referred to herein as
the "Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to any acceptance by the Company of
an offer for the purchase of Notes; provided, further, that if the Company
files a registration statement with the Commission pursuant to Rule 462(b) of
the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then
after such filing, all references to the "Registration Statement" shall also
be deemed to include the Rule 462(b) Registration Statement. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
Registration Statement became effective and any prospectus furnished by the
Company after the Registration Statement became effective and before any
acceptance by the Company of an offer for the purchase of Notes which omitted
information to be included upon pricing in a form of prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations. For
purposes of this Agreement, all references to the Registration Statement,
Prospectus or preliminary prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "disclosed", "contained", "included", or "stated" (or
other references of like import) in the
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Registration Statement, Prospectus or preliminary prospectus shall be deemed
to include all such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement, Prospectus
or preliminary prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be.
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold exclusively to
or through the Agents. The Company agrees that it will not appoint any other
agents to act on its behalf, or to assist it, in the placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the solicitation
of offers for the purchase of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records with
respect to the aggregate initial offering price of Notes sold, or of otherwise
monitoring the availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
Company, such Agent, acting solely as agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for purchase of the Notes, in whole or in
part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
such Agent on an agency basis and accepted by the Company, the Company shall (i)
hold such Agent harmless against
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any loss, claim or damage arising from or as a result of such default by the
Company and (ii) pay to such Agent any commission to which it would otherwise
be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
from the Company by one or more Agents as principal shall be purchased, and any
Notes the placement of which an Agent arranges as agent of the Company shall be
placed by such Agent, in reliance on the representations, warranties, covenants
and agreements of the Company contained herein and on the terms and conditions
and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to the
Agent as principal is referred to herein as a "Settlement Date"), and as of any
time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of the
Company. 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 Prospectus and
to enter into this Agreement and to consummate the transactions
contemplated in the Prospectus; 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 to so qualify
or be in good standing would not result in a material adverse change in the
condition, financial or otherwise, or 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"); 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 security holder of the Company.
(ii) Due Incorporation, Good Standing and Due Qualifications of
Significant Subsidiaries. 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), if any, 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
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power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus 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 to
so qualify or be in good standing would not result in a Material Adverse
Effect; except as otherwise stated in the Prospectus, all of the issued
and outstanding capital stock or other ownership interests of each
Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
other similar rights of any security holder of such Subsidiary.
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement (including any Rule 462(b) Registration
Statement) has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with; the
Indenture has been duly qualified under the 1939 Act; at the respective
times that the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto (including the filing
of the Company's most recent Annual Report on Form 10-K with the Commission
(the "Annual Report on Form 10-K")) became effective and at each
Representation Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; each
preliminary prospectus and prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations; each preliminary
prospectus and the Prospectus delivered to the applicable Agent(s) for use
in connection with the offering of Notes will, at the time of such
delivery, be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T; and at the date hereof, at the date of the Prospectus
and at each Representation Date, the Prospectus did not include and will
not include an untrue statement of a material fact and did not omit and
will not omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and
in conformity with
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information furnished to the Company in writing by the Agents expressly
for use in the Registration Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply, in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") and, when read
together and with the other information in the Prospectus, at the date
hereof, at the date of the Prospectus and at each Representation Date, did
not and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(v) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, 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 in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Registration Statement and Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement and the
Prospectus. Any historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus 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 in the Registration Statement and the Prospectus
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 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.
(vii) No Material Changes. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein,
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(A) there has been no event or occurrence that would result in 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, which 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.
(viii) Authorization, etc., of this Agreement, the Indenture and
the Notes. This Agreement has been duly authorized, executed and delivered
by the Company; the Indenture has been duly authorized, executed and
delivered by the Company 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 other 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; the Notes have been duly authorized by the
Company for offer, sale, issuance and delivery pursuant to this Agreement
and, when issued, authenticated and delivered in the manner provided for in
the Indenture and delivered against payment of the consideration therefor,
will 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 other 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 Notes 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; the Notes will be
substantially in a form previously certified to the Agents; and each holder
of Notes will be entitled to the benefits of the Indenture.
(ix) Description of the Indenture and the Notes. The Indenture and
the Notes conform and will conform in all material respects to the
statements relating thereto contained in the Prospectus and are
substantially in the form filed or incorporated by reference, as the case
may be, as an exhibit to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents
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incorporated by reference therein or to be filed as exhibits thereto which
have not been so described and filed as required.
(xi) Absence of Defaults and Conflicts. 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 subsidiaries is subject, except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture, the Notes and
any other agreement or instrument entered into or issued or to be entered
into or issued by the Company in connection with the transactions
contemplated by the Prospectus, the consummation of the transactions
contemplated in the Prospectus (including the issuance and sale of the
Notes and the use of proceeds therefrom as described in the Prospectus) and
the compliance by the Company with its obligations hereunder and under the
Indenture, the Notes and such other agreements or instruments 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 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, 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 which it or any
of them may be bound or to which any property or assets of the Company or
any of its subsidiaries is subject (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.
(xii) Absence of Proceedings. There is not pending or threatened
any 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 which is required to be disclosed in the
Registration Statement and the Prospectus (other than as stated therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the assets, properties or operations thereof or the performance by
the Company of its obligations under this Agreement, the Indenture and the
Notes or the consummation of the transactions contemplated in the
Prospectus. The aggregate of all pending legal or governmental proceedings
to which the
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Company or any of its subsidiaries is a party or of which any of their
respective assets, properties or operations is the subject which are not
described in the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xiii) Filings, Approvals, etc. 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 Notes, or in connection with the
transactions contemplated in the Prospectus (except such additional steps
as may be necessary to qualify the Notes for public offering by the Agents
under state securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(xiv) Possession of Licenses and Permits. The Company and its
subsidiaries hold all licenses, certificates and permits from governmental
authorities which 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 subsidiary has infringed any patents, patent rights, trade
names, trademarks or copyrights, which infringement would result in a
Material Adverse Effect.
(xv) REIT Status. 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) Title to Property. 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 Prospectus
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 Prospectus or which 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) Insurance. 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
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original purchase price to acquire land and improvements and such title
insurance is in full force and effect.
(xviii) Taxes. The Company has filed all Federal, State and foreign
income tax returns which 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) Investment Company Act. The Company is not, and upon the
issuance and sale of the Notes as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not be,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(xx) Commodity Exchange Act. The Notes, upon issuance, will be
excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules and
regulations of the Commodity Futures Trading Commission under the Commodity
Exchange Act (the "Commodity Exchange Act Regulations").
(xxi) Ratings. The Medium-Term Note Program under which the Notes
are issued (the "Program"), as well as the Notes, 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 Agents pursuant to Section 4(a) hereof.
(xxii) Environmental Laws. 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 represents that, as of the date of this Agreement and will
represent that, as of each Settlement Date and each Representation Date, it
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.
(xxiii) Doing Business with Cuba. The Company has complied and will
comply with the provisions of Florida H.B. 1771, codified as Section
517.075 of the Florida Statutes, 1987, as amended, and all regulations
promulgated thereunder relating to issuers doing business in Cuba or is
exempt therefrom.
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(b) Additional Certifications. Any certificate signed by any officer of
the Company and delivered to one or more Agents or to counsel for the Agents in
connection with an offering of Notes to one or more Agents as principal or
through an Agent as agent shall be deemed a representation and warranty by the
Company to such Agent or Agents as to the matters covered thereby on the date of
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
SECTION 3. Purchase as Principal, Solicitations as Agent.
(a) Purchase as Principal. Notes purchased from the Company by the
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto.
The Agents may engage the services of any broker or dealer in connection with
the resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes
from the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letters pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant to
which such Agents agree to purchase Notes from the Company as principal and one
or more of such Agents shall fail at the Settlement Date to purchase the Notes
which it or they are obligated to purchase (the "Defaulted Notes"), then the
nondefaulting Agents shall have the right, within 24 hours thereafter, to make
arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of Notes to be so purchased by
all of such Agents on the Settlement Date, the nondefaulting Agents shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective initial underwriting
obligations bear to the underwriting obligations of all nondefaulting
Agents; or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10%
of the aggregate principal amount of Notes to be so purchased by all of
such Agents on the
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Settlement Date, such agreement shall terminate without liability on the
part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default
which does not result in a termination of such agreement, either the
nondefaulting Agents or the Company shall have the right to postpone the
Settlement Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase the Notes
upon the terms set forth in the Prospectus. The Agents are not authorized to
appoint sub-agents with respect to Notes sold through them as agent. All Notes
sold through an Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed to between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, such
Agent will suspend solicitation of purchases from the Company until such time as
the Company has advised such Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon by the Company and the applicable
Agent(s) and specified in a pricing supplement to the Prospectus (each, a
"Pricing Supplement") to be prepared by the Company in connection with each sale
of Notes. Except as otherwise specified in the applicable Pricing Supplement,
the Notes will be issued in denominations of U.S. $1,000 or any larger amount
that is an integral multiple of U.S. $1,000. Administrative procedures with
respect to the issuance and sale of the Notes (the "Procedures") shall be agreed
upon from time to time among the Company, the Agents and the Trustee. The
Agents and the Company agree to perform, and the Company agrees to cause the
Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
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SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or of any order preventing or suspending the use of
any preliminary prospectus or the initiation of any proceedings for that purpose
and (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of the Program or any
such debt securities, or the withdrawal by any nationally recognized statistical
rating organization of its rating of the Program or any such debt securities.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) Filing or Use of Amendments. The Company will give the Agents notice
of its intention to file or prepare any additional registration statement with
respect to the registration of additional Notes, any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933 Act
Regulations) or any amendment or supplement to the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus
(other than an amendment or supplement providing solely for the determination of
the variable terms of the Notes or relating solely to the offering of securities
other than the Notes), whether pursuant to the 1933 Act, the 1934 Act or
otherwise, and will furnish to the Agents copies of any such document a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such document to which the Agents or counsel for the
Agents shall object.
(c) Delivery of the Registration Statement. The Company has furnished to
the Agents and to counsel for the Agents, without charge, signed and conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and signed and conformed copies of all consents and certificates of experts.
The Registration Statement and each amendment thereto furnished to the Agents
will be identical to any electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) Delivery of the Prospectus. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the
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Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Agent, without charge, such
number of copies of the Prospectus (as amended or supplemented) as such Agent
may reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Agents will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the opinion of counsel for the Agents or counsel for the
Company, to amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement 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
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or to amend
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company shall give immediate notice,
confirmed in writing, to the Agents to cease the solicitation of offers for the
purchase of Notes in their capacity as agents and to cease sales of any Notes
they may then own as principal, and the Company will promptly prepare and file
with the Commission, subject to Section 4(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agents, without charge, such number of copies of
such amendment or supplement as the Agents may reasonably request. In addition,
the Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be reported interim financial statement information related
to the Company with respect to each of the first three quarters of any fiscal
year or preliminary financial statement information with respect to any fiscal
year, the Company shall furnish such information to the Agents, confirmed in
writing, and shall cause the Prospectus to be amended or supplemented to include
financial information with respect thereto and
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corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the 1933
Act or the 1933 Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented, to include such audited consolidated financial
statements and the report or reports, and consent or consents to such inclusion,
of the independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of such
financial statements or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act Regulations.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between one or more Agents acting as principal and the Company,
between the date of the agreement by such Agent(s) to purchase the related Notes
from the Company and the Settlement Date with respect thereto, the Company will
not, without the prior written consent of such Agent(s), issue, sell, offer or
contract to sell, grant any option for the sale of, or otherwise dispose of, any
debt securities of the Company (other than the Notes that are to be sold
pursuant to such agreement or commercial paper in the ordinary course of
business).
(l) Use of Proceeds. The Company will use the net proceeds received by it
from the issuance and sale of the Notes in the manner specified in the
Prospectus under the caption "Use of Proceeds".
(m) Suspension of Certain Obligations. The Company shall not be required
to comply with the provisions of subsections (f), (g) or (h) of this Section
during any period from the time (i) the Agents shall have suspended solicitation
of offers for the purchase of Notes in their capacity as agents pursuant to a
request from the Company and (ii) no Agent shall then hold any Notes purchased
from the Company as principal, as the case may be, until the time the Company
shall determine that solicitation of offers for the purchase of Notes should be
resumed or an Agent shall subsequently purchase Notes from the Company as
principal.
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SECTION 5. Conditions of Agents' Obligations.
The obligations of one or more Agents to purchase Notes from the Company as
principal and to solicit offers for the purchase of Notes as agent of the
Company, and the obligations of any purchasers of Notes sold through an Agent as
agent of the Company, will be subject to the accuracy of the representations and
warranties on the part of the Company herein contained or contained in any
certificate of an officer of the Company delivered pursuant to the provisions
hereof, to the performance and observance by the Company of all its covenants
and other obligations hereunder and to the following additional conditions
precedent:
(a) Effectiveness of Registration Statement. The Registration Statement
(including any Rule 462(b) Registration Statement) has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents.
(1) Opinion of Company Counsel. The favorable opinion of Arent Fox
Kintner Plotkin & Kahn, counsel to the Company, to the effect that:
(i) The Company has been duly organized and is validly existing
as a real estate investment trust in good standing under the laws of
the State of Maryland, with trust power and authority to own, lease
and operate its properties and conduct its business as described in
the Prospectus and to enter into this Agreement and to consummate the
transactions contemplated in the Prospectus; and the conditions for
use of a registration statement on Form S-3 have been satisfied.
(ii) The Company is duly qualified to transact business 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 to so qualify would not result in a
Material Adverse Effect.
(iii) Each Subsidiary 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 and
has corporate or partnership power and authority, as the case may be,
to own, lease and operate its properties and to conduct its business
as described in the Prospectus. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and
outstanding capital stock or other ownership interests of each
Subsidiary have been duly authorized and are validly issued, are fully
paid and non-assessable and, to the best of the knowledge of such
counsel, are owned by the Company, directly or through subsidiaries,
free
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and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. To such counsel's knowledge, none of
the outstanding shares of capital stock of any Subsidiary was issued
in violation of preemptive or other similar rights of any security
holder of such Subsidiary
(iv) Each Subsidiary of the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(v) All of the issued and outstanding shares of beneficial
interest of the Company have been duly authorized and validly issued
by the Company and are fully paid and non-assessable, and none of such
shares of beneficial interest was issued in violation of preemptive or
other similar rights of any security holder of the Company arising by
operation of law or, to such counsel's knowledge, otherwise.
(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 (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes 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 (A) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally, (B) general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at
law), (C) 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 (D) governmental authority to limit, delay or
prohibit the making of payments outside the United States.
(viii) The Notes have been duly authorized by the Company for
offer, sale, issuance and delivery pursuant to this Agreement and,
when issued, authenticated and delivered in the manner provided for in
the Indenture and delivered against payment of the consideration
therefor, will 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 (A)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally, (B) general
equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), (C) requirements that a claim
with respect to any Notes payable in a foreign currency or composite
currency (or a
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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 (D) governmental authority to
limit, delay or prohibit the making of payments outside the United
States; and the Notes, in the forms certified on the date hereof,
are in the form contemplated by, and each registered holder thereof
is entitled to the benefits of, the Indenture.
(ix) The Indenture and the Notes, in the forms certified on the
date hereof, conform in all material respects to the statements
relating thereto contained in the Prospectus and are in substantially
the form filed or incorporated by reference, as the case may be, as an
exhibit to the Registration Statement.
(x) The statements in the Prospectus under "Description of Debt
Securities", "Description of Notes", "Special Provisions Relating to
Foreign Currency Notes" and "Certain United States Federal Income Tax
Considerations" and in the Registration Statement under Item 15,
insofar as such statements constitute a summary of documents referred
to therein or matters of law, are accurate summaries and fairly and
correctly present the information called for with respect to such
documents and matters in all material respects.
(xi) To such counsel's knowledge, 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.
(xii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement
or the Prospectus which are not so filed, incorporated by reference or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects (except that such counsel need
express no opinion as to the financial statements, schedules and other
financial information included or incorporated by reference therein).
(xiii) The execution, delivery and performance of this
Agreement, the Indenture and the Notes and any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated in the
Prospectus, the consummation of the transactions contemplated in the
Prospectus (including the issuance and sale of the Notes and the use
of the proceeds therefrom as described in the Prospectus) and the
compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by the Company and do not
constitute a breach of any of the terms or provisions of, or
constitute a material default under, (a) the declaration of trust,
partnership agreement, charter, by-laws, or other organizational
document of the Company or any of its subsidiaries, (b) certain
specified agreements which are set forth on a schedule
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to such opinion to which the Company is a party, (c) any order known
to such counsel of any court or government agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties.
(xiv) Such counsel knows of no material legal proceedings
pending or threatened against the Company.
(xv) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
performance by the Company of its obligations under this Agreement,
the Indenture or the Notes or the consummation of the transactions
contemplated in the Prospectus (other than as may be required by state
securities or Blue Sky laws, as to which such counsel need express no
opinion) except such as have been obtained or made.
(xvi) The investments of the Company described in the Prospectus
are permitted investments under its declaration of trust.
(xvii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Internal Revenue
Code, as amended, for the fiscal years ended December 31, 1992 through
December 31, 1996, and the Company's present method of operation and
its assets and contemplated income are such that the Company is in a
position under present law to so qualify for the fiscal year ended
December 31, 1997 and the fiscal year ending December 31, 1998, and
under the present law the federal income tax treatment of the Company
will be as set forth in the Prospectus under the heading "Description
of Shares".
(xviii) The Indenture has been duly qualified under the 1939
Act.
(xix) The Registration Statement has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act and no proceedings for that purpose
have been initiated or are pending or threatened by the Commission.
(xx) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom and the
Trustee's Statement of Eligibility on Form T-1 (the "Form T-1"), as to
which such counsel need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
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(xxi) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus complied when so filed as
to form in all material respects with the 1934 Act and the 1934 Act
Regulations.
(xxii) The Notes, in the forms certified on the date hereof,
will be excluded or exempted under, or beyond the purview of, the
Commodity Exchange Act.
(xxiii) The Company is not, and upon the issuance and sale of the
Notes and the application of the net proceeds therefrom as described
in the Prospectus will not be, an "investment company" within the
meaning of the 1940 Act.
(2) Opinion of Counsel to the Agents. The favorable opinion of
Andrews & Kurth L.L.P., counsel to the Agents, covering the matters
referred to in subsection (a)(1) under the subheadings (vi), (vii), (viii),
(ix), (xviii), (xix) and (xx) above.
(3) Disclosure Documents. In giving their opinions required by
subsection (a)(1) and (a)(2), respectively, of this Section 5, Arent Fox
Kintner Plotkin & Kahn and Andrews & Kurth L.L.P. shall each additionally
state that nothing has come to their attention that would lead them to
believe that the Registration Statement or any post-effective amendment
thereto (except for financial statements, supporting schedules and other
financial data included therein or omitted therefrom and for the Form T-1,
as to which such counsel need make no statement), at the time the
Registration Statement or any post-effective amendment thereto (including
the filing of the Company's Annual Report on Form 10-K with the Commission)
became effective or at the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom, as to which
such counsel need make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was
delivered or at date hereof (or, if such opinion is being delivered in
connection with the purchase of Notes from the Company by one or more
Agents as principal pursuant to Section 7(c) hereof, at the date of any
agreement by such Agent or Agents to purchase Notes as principal and at the
Settlement Date with respect thereto, as the case may be) included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
With respect to such statement, Arent Fox Kintner Plotkin & Kahn and
Andrews & Kurth L.L.P. may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(c) Officers' Certificate. On the date hereof, there shall not have been,
since the respective dates as of which information is given in the Prospectus,
any 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
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course of business, and the Agents shall have received a certificate of
the President or a Vice President of the Company and of the chief financial
officer and chief accounting officer of the Company, dated as of the date
hereof, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties of the Company herein contained are true
and correct with the same force and effect as though expressly made at and as of
the date of such certificate, (iii) the Company has performed or complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the date of such certificate and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
best of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Arthur Andersen LLP. On the date hereof, the Agents
shall have received a letter from Arthur Andersen LLP, dated as of the date
hereof and in form and substance satisfactory to the Agents, to the effect that:
(i) They are independent accountants with respect to the Company and
its subsidiaries within the meaning of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations.
(ii) It is their opinion that the consolidated financial statements
and supporting schedule(s) of the Company and its subsidiaries and included
or incorporated by reference in the Registration Statement and the
Prospectus and audited by them and covered by their opinions therein comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations.
(iii) based upon limited procedures set forth in detail in such letter
(which shall include, without limitation, the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, with respect to the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement), nothing has come to their
attention which causes them to believe that:
(1) any material modifications should be made to the unaudited
condensed consolidated financial statements included or incorporated
by reference in the Registration Statement for them to be in
conformity with generally accepted accounting principles;
(2) the unaudited condensed consolidated financial statements
included or incorporated by reference in the Registration Statement do
not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act as it applies
to Form 10-Q and the related published rules and regulations;
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(3) at a specified date not more than three days prior to the
date of such letter, there was any change in the capitalization of the
Company and its subsidiaries, any decrease in total assets, any change
in long-term debt or any change in short-term borrowings of the
Company and its subsidiaries, as compared with the amounts shown in
the most recent consolidated balance sheet incorporated by reference
in the Registration Statement; or
(4) during the period from the date of the most recent
consolidated balance sheet incorporated by reference in the
Registration Statement to a specified date not more than three days
prior to the date of such letter, there were any decreases, as
compared with the corresponding period in the preceding year, in real
estate rental revenue, net income or net income per share of the
Company and its subsidiaries; except in all cases for changes,
increases or decreases which the Registration Statement discloses have
occurred or may occur;
(iv) in addition to the limited procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are derived from the general accounting records of the
Company and its subsidiaries, which are included or incorporated by
reference in the Registration Statement and which are specified by you, and
have compared such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them
to be in agreement; and
(v) based upon limited procedures set forth in detail in such letter,
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the historical amounts
in the compilation of those statements.
(e) Comfort Letter of Price Waterhouse LLP. On the date hereof, the
Agents shall have received a letter from Price Waterhouse LLP, dated as of the
date hereof and in form and substance satisfactory to the Agents, to the effect
that (i) they are independent accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations, and (ii) it is their opinion that the
consolidated financial statements of the Company and its subsidiaries audited by
them and covered by their opinions included or incorporated by reference into
the Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.
(f) Comfort Letter of Stoy, Malone & Company, P.C.. On the date hereof,
the Agents shall have received a letter from Stoy, Malone & Company, P.C., dated
as of the date hereof and in
22
<PAGE>
form and substance satisfactory to the Agents, to the effect that (i) they
are independent accountants with respect to the Company and its subsidiaries
and certain properties and assets acquired by the Company and its
subsidiaries, within the meaning of the 1933 Act and the 1933 Act
Regulations; and (ii) it is their opinion that the historical financial
statements for the properties or assets that have been audited by them and
covered by their opinions included or incorporated by reference into the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
(g) Comfort Letter of McGladrey & Pullen, LLP. On the date hereof, the
Agents shall have received a letter from McGladrey & Pullen, LLP, dated as of
the date hereof and in form and substance satisfactory to the Agents, to the
effect that (i) they are independent accountants with respect to the Company and
its subsidiaries and certain properties and assets acquired by the Company and
its subsidiaries, within the meaning of the 1933 Act and the 1933 Act
Regulations; and (ii) it is their opinion that the historical financial
statements for the properties or assets that have been audited by them and
covered by their opinions included or incorporated by reference into the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.
(h) Additional Documents. On the date hereof, counsel to the Agents shall
have been furnished with such documents and opinions as such counsel may require
for the purpose of enabling such counsel to pass upon the issuance and sale of
Notes 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; and all proceedings
taken by the Company in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
applicable Agent or Agents by notice to the Company at any time and any such
termination shall be without liability of any party to any other party, except
as provided in Section 10 hereof, and except that Sections 8, 9, 11, 14 and 15
hereof shall survive any such termination and remain in full force and effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent as Agent.
Delivery of Notes sold through an Agent as an agent of the Company shall be
made by the Company to such Agent for the account of any purchaser only against
payment therefor in immediately available funds. In the event that a purchaser
shall fail either to accept delivery of or to make payment for a Note on the
date fixed for settlement, such Agent shall promptly notify the Company and
deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure occurred for any reason other than default by such Agent
in the performance of its
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<PAGE>
obligations hereunder, the Company will reimburse such Agent on an equitable
basis for its loss of the use of the funds for the period such funds were
credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent or Agents or to the purchaser or its agent, as the case may be, of
the Notes relating to such acceptance or sale, as the case may be, as though
made at and as of each such time (it being understood that such representations
and warranties shall relate to the Registration Statement and Prospectus as
amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a certificate dated
the date of filing with the Commission or the date of effectiveness of such
amendment, or supplement, as applicable, or the date of such sale, as the case
may be, in form satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 5(c) hereof which were last
furnished to the Agents are true and correct at the time of such filing or
effectiveness of such amendment or supplement, as applicable, or the time of
such sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
Section 5(c) hereof, modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such certificate (it being understood that, in the case of clause (ii) above,
any such certificate shall also include a certification that 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 since the date of the agreement by
such Agent(s) to purchase Notes from the Company as principal).
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<PAGE>
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents the written opinion of Arent Fox Kintner Plotkin & Kahn, counsel to the
Company, or other counsel satisfactory to the Agent(s), dated the date of filing
with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
and substance satisfactory to the Agent(s), of the same tenor as the opinion
referred to in Section 5(b)(1) and 5(b)(3) hereof, but modified, as necessary,
to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of such
opinion, counsel last furnishing such opinion to the Agents shall furnish the
Agent(s) with a letter substantially to the effect that the Agent(s) may rely on
such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
one or more Agents as principal, the Company shall cause Arthur Andersen LLP,
Price Waterhouse LLP, Stoy, Malone & Company, P.C. and McGladrey & Pullen, LLP
forthwith to furnish to the Agent(s) letters, dated the date of filing with the
Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form satisfactory
to the Agent(s), of the same tenor as the letters referred to in Sections 5(d),
5(e), 5(f) and 5(g) hereof but modified to relate to the Registration Statement
and Prospectus as amended and supplemented to the date of such letter.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
25
<PAGE>
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(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 any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such Agent),
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above.
provided however; that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any Agent
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company and its Trustees and Officers. Each Agent
severally agrees to indemnify and hold harmless the Company, its trustees, each
of its officers 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 against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. 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
26
<PAGE>
which it may have otherwise than on account of this indemnity agreement. In
the case of parties indemnified pursuant to Section 8(a) hereof, counsel to
the indemnified parties shall be selected by the applicable Agent(s) and, in
the case of parties indemnified pursuant to Section 8(b) hereof, 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 the 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 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 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) included 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 of fault, culpability or
a failure to act by or on behalf of any indemnified party.
SECTION 9. Contribution.
If the indemnification provided for in Section 8 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 applicable
Agent(s), on the other hand, from the offering of the Notes that were the
subject of the claim for indemnification 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 the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, in connection with the offering of the
Notes that were the subject of the claim for indemnification shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
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<PAGE>
The relative fault of the Company, on the one hand, and the applicable
Agent(s), on the other hand, shall be determined by reference to, among other
things, whether any 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 applicable Agent(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Agents agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the applicable Agent(s) were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 9. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 9 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 applicable untrue statement
or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent shall be
required to contribute any amount in excess of the amount by which the total
discount or commission received by such Agent in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission and (ii) 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. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
For purposes of this Section 9, each person, if any, who controls an Agent
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 such Agent, and each trustee of
the Company, each officer of the Company 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 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
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<PAGE>
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, photocopying and delivery of this Agreement and the
Indenture;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form and the cost of obtaining CUSIP or other identification
numbers for the Notes;
(d) The fees and disbursements of the Company's accountants and counsel,
of the Trustee and its counsel, and of any calculation agent or exchange rate
agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of Notes
on a securities exchange;
(h) The fees and expenses incurred with respect to any filing with the
National Association of Securities Dealers, Inc. ("NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto or
thereto shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Agents or any controlling person of an
Agent, or by or on behalf of the Company, and shall survive each delivery of and
payment for the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 30 days' written notice of such termination to
the other party hereto.
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<PAGE>
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any 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, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if such Notes are denominated and/or payable in, or indexed
to, one or more foreign or composite currencies, in the international financial
markets, or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development or event 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 such
Agent(s), impracticable to market such Notes or enforce contracts for the sale
of such Notes, or (iii) trading in any securities of the Company has been
suspended or limited by the Commission or a national securities exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by the
relevant authorities in the country or countries of origin of any foreign
currency or currencies in which such Notes are denominated or payable, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review, its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Prospectus, at the time
it was required to be delivered to a purchaser of such Notes, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances existing at
the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
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SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Washington Real Estate Investment Trust
10400 Connecticut Avenue
Kensington, MD 20895
Attention: Mr. Larry E. Finger
Telecopy No.: (301) 929-5910
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, NY 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
BT Alex. Brown Incorporated
130 Liberty Street
New York, NY 10006
Attention: Warren H. Spar
Telecopy No.: (212) 669-5492
First Chicago Capital Markets, Inc.
One First National Plaza
Chicago, IL 60670
Attention: Corporate Securities Structuring
Telecopy No.: (312) 732-4172
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Attention: Medium Term Note Department
Telecopy No.: (212) 783-2274
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<PAGE>
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Parties.
This Agreement shall inure to the benefit of and be binding upon the Agents
and the Company and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and trustees referred to in Sections 8 and
9 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and respective
successors and said controlling persons and officers and trustees and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes shall be deemed to be a successor by reason
merely of such purchase.
SECTION 15. GOVERNING LAW; FORUM.
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR PROCEEDING
BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR ARISING UNDER
THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL COURT OF
APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW
YORK.
SECTION 16. Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 17. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts hereof shall constitute
a single instrument.
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If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
WASHINGTON REAL ESTATE INVESTMENT TRUST
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------
Authorized Signatory
BT ALEX. BROWN INCORPORATED
By:
---------------------------------
Authorized Signatory
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
---------------------------------
Authorized Signatory
SALOMON BROTHERS INC
By:
---------------------------------
Authorized Signatory
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<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
--------------- ----------------
From 9 months to less than 1 year......... .125%
From 1 year to less than 18 months........ .150
From 18 months to less than 2 years....... .200
From 2 years to less than 3 years......... .250
From 3 years to less than 4 years......... .350
From 4 years to less than 5 years......... .450
From 5 years to less than 6 years......... .500
From 6 years to less than 7 years......... .550
From 7 years to less than 10 years........ .600
From 10 years to less than 15 years....... .625
From 15 years to less than 20 years....... .700
From 20 years to 30 years................. .750
Greater than 30 years. . . *
______________________
* As agreed to by the Company and the applicable Agent at the time of sale.
<PAGE>
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign currency or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
/ / LIBOR Reuters Page:
/ / LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052,
/ / Weekly Average
/ / Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
<PAGE>
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from ___________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letters pursuant to Section 7(d) of the Distribution Agreement.
<PAGE>
[FACE OF NOTE]
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.: FXR-__________ 939671 $__________
WASHINGTON REAL ESTATE INVESTMENT TRUST
MEDIUM-TERM NOTE
(Fixed Rate)
ORIGINAL ISSUE DATE: _________ __, ____ INTEREST RATE: ____%
STATED MATURITY DATE: ________ __, ____
INTEREST PAYMENT DATES: DEFAULT RATE: ____%
[ ] January 1 and July 1
[ ] Other:
INITIAL REDEMPTION DATE: _____________
INITIAL REDEMPTION PERCENTAGE: ____%
ANNUAL REDEMPTION PERCENTAGE REDUCTION: ____%
OPTIONAL REPAYMENT DATES: _____________ [ ] Check if an Original Issue
Discount Note
Issue Price: _____%
SPECIFIED CURRENCY: [ ] U.S. Dollars AUTHORIZED DENOMINATION:
[ ] Other:____ [ ] $1,000 and integral
multiples thereof
[ ] Other:_________________
EXCHANGE RATE AGENT: _____________
ADDENDUM ATTACHED: [ ] Yes OTHER/ADDITIONAL PROVISIONS:____
[ ] No ________________________________
____________________________________________
* This paragraph applies to Global Securities only.
1
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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 ________________________, or registered
assigns, upon presentation, the principal sum of _____________________ 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
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<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: ______________ By: __________________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
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>
[REVERSE OF NOTE]
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 two 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 on or after the Initial Redemption Date, if any, specified on the
face hereof, 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),
together with unpaid interest accrued thereon to the date fixed for
redemption (each, a "Redemption Date"), on notice given no more than 60 nor
less than 30 calendar days prior to the Redemption Date and in accordance
with the provisions of the Indenture. The "Redemption Price" shall initially
be the Initial Redemption Percentage specified on the face hereof multiplied
by the unpaid principal amount of this Note to be redeemed. The Initial
Redemption Percentage shall decline at each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction, if any,
specified on the face hereof until the Redemption Price is 100% of unpaid
principal amount to be redeemed. In the event of redemption of this Note in
part only, a new Note of like tenor for the unredeemed 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.
8
<PAGE>
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".
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.
9
<PAGE>
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 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
10
<PAGE>
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.
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:
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)
Additional abbreviations may also be used though not in the above list.
11
<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>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Trust to
repay this Note (or portion hereof specified below) pursuant to its terms at a
price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at ______________________________________, not more than 60 nor less
than 30 calendar days prior to the Repayment Date, this Note with this
"Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if
the Specified Currency is other than United States dollars, the minimum
Authorized Denomination specified on the face hereof)) which the holder
elects to have repaid and specify the denomination or denominations (which
shall be an Authorized Denomination) of the Notes to be issued to the holder
for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $______ ________________________________
Notice: The signature(s) on this
Option to Elect Repayment must
Date:_________________ correspond with the name(s) as
written upon the face of this Note
in every particular, without
alteration or enlargement or any
change whatsoever.
<PAGE>
[FACE OF NOTE]
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.: FLR-__________ 939671 $__________
WASHINGTON REAL ESTATE INVESTMENT TRUST
MEDIUM-TERM NOTE
(Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Page Designated CMT Telerate Page:
[ ] LIBOR Telerate Page Designated CMT Maturity Index:
DESIGNATED LIBOR CURRENCY:
INDEX MATURITY: INITIAL INTEREST RATE: ____% INTEREST PAYMENT DATE(S):
SPREAD (PLUS OR SPREAD MULTIPLIER: INITIAL INTEREST RESET
MINUS): DATE:
MINIMUM INTEREST RATE: % MAXIMUM INTEREST RATE: % INTEREST RESET
DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION PERCENTAGE
DATE: PERCENTAGE: % REDUCTION: %
OPTIONAL REPAYMENT DATE(S): CALCULATION AGENT:
_______________________________
* This paragraph applies to Global Securities only.
1
<PAGE>
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
[ ] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[ ] United States dollars [ ] $1,000 and integral multiples thereof
[ ] Other: [ ] Other:
EXCHANGE RATE AGENT:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
2
<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 ________________________,
or registered assigns, upon presentation, the principal sum of
_____________________ 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 a rate per annum equal to the Initial Interest Rate specified above until
the Initial Interest Reset Date specified above and thereafter at a rate
determined in accordance with the provisions specified above and on the
reverse hereof with respect to one or more Interest Rate Bases 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 (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;
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 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 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
3
<PAGE>
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 other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date
shall be postponed to the next succeeding Business Day, except that if LIBOR
is an applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. If the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and 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 the
Maturity Date to the date of such payment on the next succeeding Business Day.
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
4
<PAGE>
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 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
5
<PAGE>
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.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms
set forth in such Addendum or such "Other/Additional Provisions".
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.
6
<PAGE>
IN WITNESS WHEREOF, Washington Real Estate Investment Trust has caused this
Note to be duly executed.
WASHINGTON REAL ESTATE INVESTMENT
TRUST
Dated:_________________ By: ____________________________
Name:
Title:
Attest:
By: _________________________
Name:
Title:
7
<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
8
<PAGE>
[REVERSE OF NOTE]
WASHINGTON REAL ESTATE INVESTMENT TRUST
MEDIUM-TERM NOTE
(Floating 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 two 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 on or after the Initial Redemption Date, if any, specified on the
face hereof, 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),
together with unpaid interest accrued thereon to the date fixed for
redemption (each, a "Redemption Date"), on notice given no more than 60 nor
less than 30 calendar days prior to the Redemption Date and in accordance
with the provisions of the Indenture. The "Redemption Price" shall initially
be the Initial Redemption Percentage specified on the face hereof multiplied
by the unpaid principal amount of this Note to be redeemed. The Initial
Redemption Percentage shall decline at each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction, if any,
specified on the face hereof until the Redemption Price is 100% of unpaid
principal amount to be redeemed. In the event of redemption of this Note in
part only, a new Note of like tenor for the unredeemed 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.
9
<PAGE>
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".
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 so as to cause an assumed yield on
the Note to be constant. 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), a constant coupon rate equal to the initial interest rate applicable
to this Note 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.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note", this Note shall be designated as a "Regular Floating Rate Note"
and, except as set forth below or on the face hereof, shall bear interest
at the rate determined by reference to the applicable Interest Rate Basis
or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any, in each case as specified on the face hereof.
Commencing on the Initial
10
<PAGE>
Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset as of each Interest Reset Date specified on the face
hereof; provided, however, that the interest rate in effect for the period,
if any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the face
hereof as a "Floating Rate/Fixed Rate Note", then, except as set forth
below or on the face hereof, this Note shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread, if any, and/or (b) multiplied by the Spread
Multiplier, if any. Commencing on the Initial Interest Reset Date, the
rate at which interest on this Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that (y) the interest rate in
effect for the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate and (z) the interest
rate in effect for the period commencing on the Fixed Rate Commencement
Date specified on the face hereof to the Maturity Date shall be the Fixed
Interest Rate specified on the face hereof or, if no such Fixed Interest
Rate is specified, the interest rate in effect hereon on the day
immediately preceding the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on the face
hereof as an "Inverse Floating Rate Note", then, except as set forth below
or on the face hereof, this Note shall bear interest at the Fixed Interest
Rate minus the rate determined by reference to the applicable Interest Rate
Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied
by the Spread Multiplier, if any; provided, however, that, unless otherwise
specified on the face hereof, the interest rate hereon shall not be less
than zero. Commencing on the Initial Interest Reset Date, the rate at
which interest on this Note shall be payable shall be reset as of each
Interest Reset Date; provided, however, that the interest rate in effect
for the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate.
Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as defined
below) immediately preceding such Interest Reset Date or (ii) if such day is not
an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date.
If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next succeeding Business
Day, except that if LIBOR is an applicable Interest Rate Basis and such Business
Day falls in the next succeeding calendar month, such Interest Reset Date shall
be the immediately preceding Business Day. In addition, if the Treasury Rate is
an applicable Interest Rate Basis is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
11
<PAGE>
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 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); provided, further, that if LIBOR is an
applicable Interest Rate Basis, such day is also a London Business Day (as
defined below). "London Business Day" means any day on which dealings in the
Designated LIBOR Currency (as defined below) are transacted in the London
interbank market.
"Principal Financial Center" means (i) the capital city of the country
issuing the Specified Currency (except as described in the immediately
preceding paragraph with respect to ECU) or (ii) the capital city of the
country to which the Designated LIBOR Currency, if applicable, relates (or,
in the case of ECU, Luxembourg), except in each case, that with respect to
United States dollars, Australian dollars, Canadian dollars, Deutsche marks,
Dutch guilders, Italian lire and Swiss francs, the "Principal Financial
Center" shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam,
Milan (solely in the case of clause (i) above) and Zurich, respectively.
The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate
will be the second Business Day immediately preceding the applicable Interest
Reset Date; the "Interest Determination Date" with respect to the Eleventh
District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the Federal
Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the
Index (as defined below); and the "Interest Determination Date" with respect
to LIBOR shall be the second London Business Day immediately preceding the
applicable Interest Reset Date, unless the Designated LIBOR Currency is
British pounds sterling, in which case the "Interest Determination Date" will
be the applicable Interest Reset Date. The "Interest Determination Date"
with respect to the Treasury Rate shall be the day in the week in which the
applicable Interest Reset Date falls on which day Treasury Bills (as defined
below) are normally auctioned (Treasury Bills are normally sold at an auction
held on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday); provided, however, that if an
auction is held on the Friday of the week preceding the applicable Interest
Reset Date, the Interest Determination Date shall be such preceding Friday;
provided, further, that if the "Interest Determination Date" would otherwise
fall on an Interest Reset Date, then such Interest Reset Date will be
postponed to the next succeeding Business Day. If the interest rate of this
Note is determined with reference to two or more Interest Rate Bases
specified on the face hereof, the "Interest Determination Date" pertaining to
this Note shall be the most recent Business Day which is at least two
Business Days prior to the applicable Interest Reset Date on which each
Interest Rate
12
<PAGE>
Basis is determinable. Each Interest Rate Basis shall be determined as of
such date, and the applicable interest rate shall take effect on the related
Interest Reset Date.
CD Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the
applicable Interest Determination Date (a "CD Rate Interest Determination
Date") as the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified on the face
hereof as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)") under the heading "CDS (Secondary Market)", or, if
not published by 3:00 P.M., New York City time, on the related Calculation
Date (as defined below), the rate on such CD Rate Interest Determination Date
for negotiable United States dollar certificates of deposit of the Index
Maturity as published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit". If such rate is not yet published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent specified on
the face hereof and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers in negotiable United
States dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United
States money market banks for negotiable United States dollar certificates of
deposit with a remaining maturity closest to the Index Maturity in an amount
that is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the CD Rate determined as of
such CD Rate Interest Determination Date will be the CD Rate in effect on
such CD Rate Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for
the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as applicable, for the week, or the month, as
applicable, ended immediately preceding the week or the month, as applicable,
in which the related CMT Rate Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page or is not displayed by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate
for such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published or is not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the
CMT Rate on such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal
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<PAGE>
Reserve System or the United States Department of the Treasury that the
Calculation Agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in the relevant H.15(519).
If such information is not provided by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market
offered rates as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity Index
and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market
offered rates as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date of three Reference Dealers in The City of
New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of
the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index and
in an amount of at least U.S.$100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate
will be based on the arithmetic mean of the offered rates obtained and
neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers selected by the
Calculation Agent are quoting as mentioned herein, the CMT Rate determined as
of such CMT Rate Interest Determination Date will be the CMT Rate in effect
on such CMT Rate Interest Determination Date. If two Treasury Notes with an
original maturity as described in the second preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity
Index, the Calculation Agent will obtain quotations for the Treasury Note
with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified on the face hereof (or any other page
as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified on the face hereof, the Designated CMT Telerate Page shall
be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will
be calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be 2 years.
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<PAGE>
Commercial Paper Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial
Paper Rate shall be determined as of the applicable Interest Determination
Date (a "Commercial Paper Rate Interest Determination Date") as the Money
Market Yield (as defined below) on such date of the rate for commercial paper
having the Index Maturity as published in H.15(519) under the heading
"Commercial Paper-Nonfinancial". In the event that such rate is not
published by 3:00 P.M., New York City time, on such Calculation Date, then
the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be the Money Market Yield of the rate for commercial
paper having the Index Maturity as published in Composite Quotations under
the heading "Commercial Paper" (with an Index Maturity of one month or three
months being deemed to be equivalent to an Index Maturity of 30 days or 90
days, respectively). If such rate is not yet published in either H.15(519)
or Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for commercial paper
having the Index Maturity placed for an industrial issuer whose bond rating
is "Aa", or the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate determined as of such Commercial Paper Rate Interest
Determination Date will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
-----------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the Interest Period for which interest is being
calculated.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of
Funds Rate, the Eleventh District Cost of Funds Rate shall be determined as
of the applicable Interest Determination Date (an "Eleventh District Cost of
Funds Rate Interest Determination Date") as the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding
the month in which such Eleventh District Cost of Funds Rate Interest
Determination Date falls, as set forth under the caption "11th District" on
Telerate Page 7058 as of 11:00 A.M., San Francisco time, on such Eleventh
District Cost of Funds Rate Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on such Eleventh District Cost of Funds Rate
Interest Determination Date, then the Eleventh District Cost of Funds Rate on
such Eleventh District Cost of Funds Rate Interest Determination Date shall
be the monthly weighted average cost of funds paid by member institutions of
the Eleventh Federal Home Loan Bank District that was most recently announced
(the "Index") by the FHLB of San Francisco
15
<PAGE>
as such cost of funds for the calendar month immediately preceding such
Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such
Eleventh District Cost of Funds Rate Interest Determination Date for the
calendar month immediately preceding such Eleventh District Cost of Funds
Rate Interest Determination Date, the Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost of Funds Rate Interest
Determination Date will be the Eleventh District Cost of Funds Rate in effect
on such Eleventh District Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds
Rate shall be determined as of the applicable Interest Determination Date (a
"Federal Funds Rate Interest Determination Date") as the rate on such date
for United States dollar federal funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not published by 3:00 P.M., New
York City time, on the Calculation Date, the rate on such Federal Funds Rate
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/Effective Rate". If such rate is not published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the related Calculation Date, then the Federal Funds Rate on such Federal
Funds Interest Determination Date shall be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction
in overnight United States dollar federal funds arranged by three leading
brokers of federal funds transactions in The City of New York selected by the
Calculation Agent, prior to 9:00 A.M., New York City time, on such Federal
Funds Rate Interest Determination Date; provided, however, that if the
brokers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate determined as of such Federal Funds
Rate Interest Determination Date will be the Federal Funds Rate in effect on
such Federal Funds Rate Interest Determination Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination
Date") in accordance with the following provisions:
(i) if (a) "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the Designated LIBOR Page (as
defined below) by its terms provides only for a single rate, in which case
such single rate will be used) for deposits in the Designated LIBOR Currency
having the Index Maturity, commencing on the applicable Interest Reset Date,
that appear (or, if only a single rate is required as aforesaid, appears) on
the Designated LIBOR Page (as defined below) as of 11:00 A.M., London time,
on such LIBOR Interest Determination Date, or (b) "LIBOR Telerate" is
specified on the face hereof, or if neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified on the face hereof as the method for calculating
LIBOR, the rate for deposits in the Designated LIBOR Currency having the
Index Maturity, commencing on such Interest Reset Date, that appears on the
Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date. If fewer than two such offered rates appear, or if no
such rate appears, as applicable, LIBOR on such LIBOR Interest Determination
Date shall be determined in accordance with the provisions described in
clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as
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<PAGE>
specified in clause (i) above, the Calculation Agent shall request the
principal London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Designated
LIBOR Currency for the period of the Index Maturity, commencing on the
applicable Interest Reset Date, to prime banks in the London interbank market
at approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for a
single transaction in such Designated LIBOR Currency in such market at such
time. If at least two such quotations are so provided, then LIBOR on such
LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, then LIBOR on
such LIBOR Interest Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 A.M., in the applicable Principal
Financial Center, on such LIBOR Interest Determination Date by three major
banks in such Principal Financial Center selected by the Calculation Agent
for loans in the Designated LIBOR Currency to leading European banks, having
the Index Maturity and in a principal amount that is representative for a
single transaction in such Designated LIBOR Currency in such market at such
time; provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR determined as of
such LIBOR Interest Determination Date shall be LIBOR in effect on such LIBOR
Interest Determination Date.
"Designated LIBOR Currency" means the currency or composite currency
specified on the face hereof as to which LIBOR shall be calculated. If no
such currency or composite currency is specified on the face hereof, the
Designated LIBOR Currency shall be United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on the
face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) on the page designated on the face hereof (or any other
page as may replace such page on such service) for the purpose of displaying
the London interbank rates of major banks for the Designated LIBOR Currency,
or (b) if "LIBOR Telerate" is specified on the face hereof or neither "LIBOR
Reuters" nor "LIBOR Telerate" is specified on the face hereof as the method
for calculating LIBOR, the display on the Dow Jones Telerate Service (or any
successor service) for the purpose of displaying the London interbank rates
of major banks for the Designated LIBOR Currency.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under
the heading "Bank Prime Loan". If such rate is not published prior to 3:00
P.M., New York City time, on the related Calculation Date, then the Prime
Rate shall be the arithmetic mean of the rates of interest publicly announced
by each bank that appears on the Reuters Screen USPRIME1 Page (as defined
below) as such bank's prime rate or base lending rate as in effect for such
Prime Rate Interest Determination Date. If fewer than four such rates appear
on the Reuters Screen USPRIME1 Page for such Prime Rate Interest
Determination Date, the Prime Rate shall be the arithmetic mean of the prime
rates or base lending rates quoted on the basis of the actual number of days
in the year divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date by four major money center banks in
The City of New York selected by the Calculation Agent. If fewer than four
such quotations are so provided, the Prime Rate shall be the
17
<PAGE>
arithmetic mean of four prime rates quoted on the basis of the actual number
of days in the year divided by a 360-day year as of the close of business on
such Prime Rate Interest Determination Date as furnished in The City of New
York by the major money center banks, if any, that have provided such
quotations and by as many substitute banks or trust companies as necessary to
obtain such four prime rate quotations, provided such substitute banks or
trust companies are organized and doing business under the laws of the United
States, or any State thereof, each having total equity capital of at least
U.S.$500 million and being subject to supervision or examination by Federal
or State authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the banks or trust companies so selected by
the Calculation Agent are not quoting as mentioned in this sentence, the
Prime Rate determined as of such Prime Rate Interest Determination Date will
be the Prime Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen USPRIME1 Page" means the display on the Reuter Monitor
Money Rates Service (or any successor service) on the USPRIME1 page (or such
other page as may replace the USPRIME1 page on that service) for the purpose
of displaying prime rates or base lending rates of major United States banks.
Treasury Rate. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined
as of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the
United States ("Treasury Bills") having the Index Maturity, as such rate is
published in H.15(519) under the heading "Treasury bills-auction average
(investment)" or, if not published by 3:00 P.M., New York City time, on the
related Calculation Date, the auction average rate of such Treasury Bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the
United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity are not reported as
provided above by 3:00 P.M., New York City time, on such Calculation Date, or
if no such Auction is held, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three leading primary United States
government securities dealers selected by the Calculation Agent, for the
issue of Treasury Bills with a remaining maturity closest to the Index
Maturity; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate determined as of such Treasury Rate Interest Determination Date will be
the Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law
of general application.
18
<PAGE>
The Calculation Agent shall calculate the interest rate hereon on or
before each Calculation Date. The "Calculation Date", if applicable,
pertaining to any Interest Determination Date shall be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity
Date, as the case may be. At the request of the Holder hereof, the
Calculation Agent will provide to the Holder hereof the interest rate hereon
then in effect and, if determined, the interest rate that will become
effective as a result of a determination made for the next succeeding
Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying the
principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each
day in the applicable Interest Period. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for each such date
shall be computed by dividing the interest rate applicable to such day by 360
if the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of
Funds Rate, the Federal Funds Rate, LIBOR or the Prime Rate is an applicable
Interest Rate Basis or by the actual number of days in the year if the CMT
Rate or the Treasury Rate is an applicable Interest Rate Basis. Unless
otherwise specified as the Day Count Convention on the face hereof, the
interest factor for this Note, if the interest rate is calculated with
reference to two or more Interest Rate Bases, shall be calculated in each
period in the same manner as if only the Applicable Interest Rate Basis
specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards, and all amounts
used in or resulting from such calculation on this Note shall be rounded, in
the case of United States dollars, to the nearest cent or, in the case of a
Specified Currency other than United States dollars, to the nearest unit
(with one-half cent or unit being rounded upwards).
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
19
<PAGE>
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 or formula, 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 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
20
<PAGE>
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.
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:
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)
Additional abbreviations may also be used though not in the above list.
21
<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>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Trust to
repay this Note (or portion hereof specified below) pursuant to its terms at a
price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, currently located at
__________________________, not more than 60 nor less than 30 calendar days
prior to the Repayment Date, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_______ __________________________________________
Notice: The signature(s) on this Option to
Date:__________________ Elect Repayment must correspond with the
name(s) as written upon the face of this Note
in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' CONSENT
We consent to the Incorporation by reference in the Registration Statement of
Washington Real Estate Investment Trust (the "Trust") on Form S-3 (File
No. 333-23157) of: (i) our report dated May 31, 1996, included in the Trust's
Report on form 8-K dated May 31, 1996 and relating to the audited historical
summary of gross income and direct operating expenses of Maryland Trade Center
I and II for the year ended December 31, 1995; (ii) our report dated
October 17, 1997, included in the Trust's Report on Form 8-K dated October 31,
1997 and relating to the audited historical summary of gross income and direct
operating expenses of 1600 Wilson Boulevard for the year ended December 31,
1996; and (iii) our report dated November 12, 1997, included in the Trust's
Report on Form 8-K dated November 21, 1997 and relating to the audited
historical summary of gross income and direct operating expenses of Bethesda
Hill Apartments for the year ended December 31, 1996. We consent to the
reference to us under the heading "Experts" in the prospectus, which is part
of the Registration Statement.
/s/ Stoy, Malone & Company, P.C.
- --------------------------------
STOY, MALONE & COMPANY, P.C.
Bethesda, Maryland
January 16, 1998
<PAGE>
Independent Auditor's Consent
We consent to the incorporation by reference in this Registration Statement
of Washington Real Estate Investment Trust on Form S-3 of our report dated
November 17, 1997, included in the Trust's Report on Form 8-K dated November
12, 1997 and to the reference to us under the heading "Experts" in the
prospectus, which is part of the Registration Statement.
/s/ McGladrey & Pullen, LLP
----------------------------
MCGLADREY & PULLEN, LLP
Minneapolis, Minnesota
January 16, 1998
