REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WASHINGTON REAL ESTATE INVESTMENT TRUST
(Exact name of Registrant as specified in its charter)
MARYLAND 53-0261100
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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6110 EXECUTIVE BOULEVARD
SUITE 800
ROCKVILLE, MARYLAND 20852
(301) 984-9400
(Address, including zip code, and telephone number of Registrant's principal
executive offices)
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MR. LARRY E. FINGER
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
6110 EXECUTIVE BOULEVARD
SUITE 800
ROCKVILLE, MARYLAND 20852
(301) 984-9400
(Name, address, including zip code, and telephone number of agent for service)
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THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
JEFFREY E. JORDAN, ESQ. CATHERINE S. GALLAGHER, ESQ.
Arent Fox Kintner Plotkin & Kahn, PLLC Andrews & Kurth L.L.P.
1050 Connecticut Avenue, N.W. 1701 Pennsylvania Avenue, N.W.-Suite 300
Washington, D.C. 20036 Washington, D.C. 20006
(202) 857-6473 (202) 662-2700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS REGISTRANT
DETERMINES BASED ON MARKET CONDITIONS AND OTHER FACTORS.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------ ------------------------ ---------------------- ----------------------- ---------------------
TITLE OF EACH CLASS OF SECURITIES AGGREGATE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED(1) REGISTERED (2) OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
UNIT PRICE (2)(3)
- ------------------------------------ ------------------------ ---------------------- ----------------------- ---------------------
<S><C>
++++ ++++
Common Shares(4) + $300,000,000 (6) + $300,000,000 $83,400(7)
+ +
Preferred Shares(5) + +
+ +
Common Share Warrants (6) + +
+ +
Debt Securities ++++ ++++
- ------------------------------------ ------------------------ ---------------------- ----------------------- ---------------------
</TABLE>
(1) This registration statement also covers delayed delivery contracts that
the registrant may issue. The party purchasing the contracts may be
required to purchase common shares, preferred shares or debt securities.
The contracts may be issued together with the offered securities to which
they relate. In addition, offered securities registered under this
registration statement may be sold separately, together or as units with
other offered securities registered under this registration statement.
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(2) In U.S. dollars or their equivalent denominated in one or more foreign
currencies or units of two or more foreign currencies or composite
currencies, such as European currency units.
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for common shares or preferred
shares that are issued upon conversion of preferred shares or debt
securities registered under this registration statement. The aggregate
maximum public offering price of all offered securities issued under this
registration statement will not exceed $300,000,000.
(4) Includes an indeterminate number of common shares that may be issued
from time to time at indeterminate prices or upon conversion of preferred
shares or debt securities registered under this registration statement or
upon exercise of common share warrants registered under this registration
statement.
(5) Includes an indeterminate number of preferred shares that may be issued
from time to time at indeterminate prices or upon conversion of debt
securities registered under this registration statement.
(6) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933.
(7) Calculated pursuant to Rule 457(o) of the rules and regulations under
the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED JUNE 30, 1999
PROSPECTUS
$300,000,000
WASHINGTON REAL ESTATE INVESTMENT TRUST
6110 EXECUTIVE BOULEVARD, SUITE 800
ROCKVILLE, MARYLAND 20852
(301) 984-9400
COMMON SHARES
PREFERRED SHARES
COMMON SHARE WARRANTS
DEBT SECURITIES
Washington Real Estate Investment Trust may offer from time to time its
o common shares of beneficial interest,
o preferred shares of beneficial interest,
o warrants to purchase common shares, and
o unsecured senior or subordinated debt securities,
up to an aggregate amount of $300,000,000 or an equivalent amount in one or more
foreign currencies or composite currencies, including European currency units.
We may sell the offered securities in one or more ways: (a) directly,
(b) through agents we designate from time to time or (c) to or through
underwriters or dealers. If we use any agents or
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underwriters in selling any of the offered securities, the prospectus supplement
that we will provide will identify the agents and underwriters and describe any
applicable purchase price, fee, commission or discount arrangement.
Our common shares of beneficial interest are listed on the New York
Stock Exchange under the symbol "WRE".
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE OFFERED SECURITIES OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is ________ _, 1999.
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TABLE OF CONTENTS
PAGE
----
About This Prospectus .......................................................3
Washington Real Estate Investment Trust......................................3
Use of Proceeds..............................................................4
Ratios of Earnings to Fixed Charges and Debt Service Coverage................4
Description of Shares........................................................5
Description of Common Share Warrants........................................15
Description of Debt Securities..............................................16
Plan of Distribution........................................................41
Legal Opinions..............................................................42
Experts.....................................................................42
Where You Can Find More Information.........................................43
2
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC using a shelf registration process. Under this process, we may sell the
common shares, the preferred shares, the common share warrants and the debt
securities described in this prospectus in one or more offerings up to a total
amount of $300,000,000. We may sell the offered securities in any combination --
separately, together or as units with other offered securities -- in one or more
series or amounts and at prices and on other terms that we determine at the time
of sale.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement containing information about the specific terms and method
of the offering. The prospectus supplement may also add, update or change the
information in this prospectus. You should read both this prospectus and the
applicable prospectus supplement, together with additional information that we
refer to under "Where You Can Find More Information," before making an
investment decision.
WASHINGTON REAL ESTATE INVESTMENT TRUST
Washington Real Estate Investment Trust, which is also known as WRIT,
is a self-administered and self-managed equity real estate investment trust
investing in income producing properties in the Mid-Atlantic area with a
principal focus in the greater Washington-Baltimore region. WRIT owns a
diversified portfolio of 55 properties consisting of 20 office buildings, 12
retail shopping centers, 8 apartment buildings and 15 industrial/flex
properties.
WRIT's principal objective is to invest in high quality real estate in
prime locations and proactively manage, lease and develop its properties through
ongoing capital improvement programs to improve their economic performance.
During the quarter ended March 31, 1999, the economic occupancy rates of our
properties were:
office buildings 98.4%
retail centers 94.2%
apartment buildings 95.4%
industrial/flex properties 93.6%
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overall portfolio 96.5%
WRIT's total debt on March 31, 1999 was approximately $293 million.
WRIT's income from operations per share has increased for 33
consecutive years. WRIT concentrates on increasing its income from operations
and funds from operations to achieve its objective of paying increasing
dividends to its shareholders. WRIT has paid consecutive quarterly
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dividends to its shareholders for 36 years, and the annual dividend paid has
increased every year for the past 28 years.
WRIT is a Maryland REIT, successor to a trust founded in 1960. Our
principal offices are located at 6110 Executive Boulevard, Suite 800, Rockville,
Maryland 20852, telephone (301) 984-9400 or (800) 565-9748.
USE OF PROCEEDS
Unless we state otherwise in our prospectus supplement, we intend to
use the net proceeds from the sale of offered securities for general business
purposes, including the acquisition, renovation, expansion or improvement of
income-producing properties or the repayment of debt. We expect that properties
that we purchase in the future will be of the same general character as those we
presently own. We may also use the net proceeds to acquire another REIT or other
company that invests in income producing properties, although we do not have a
specific plan to do so. Until we use the net proceeds for the purposes described
above, we may invest them in short-term income producing investments, such as
commercial paper, government securities or money market funds that invest in
government securities and/or commercial paper.
RATIOS OF EARNINGS TO FIXED CHARGES AND DEBT SERVICE COVERAGE
The following table sets forth WRIT's ratios of earnings to fixed
charges and debt service coverage for the periods shown:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
3/31/99 YEAR ENDED DECEMBER 31,
------------------ ----------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S><C>
Earnings to fixed charges 2.62 3.00x 4.09x 6.11x 12.95x 38.66x
Debt service coverage 3.54 4.06x 5.34x 7.54x 15.11x 45.14x
</TABLE>
We computed the ratios of earnings to fixed charges by dividing
earnings by fixed charges. For this purpose, earnings consist of income from
continuing operations plus fixed charges. Fixed charges consist of interest
expense, including interest costs capitalized, and the amortized costs of debt
issuance.
We computed debt service coverage by dividing income before gain on
sale of real estate,
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interest expense, depreciation and amortization by the sum of interest expense
(excluding the amortized costs of debt issuance) plus mortgage principal
amortization.
DESCRIPTION OF SHARES
GENERAL
WRIT is authorized to issue 100,000,000 common shares with a par value
of $.01 per share. Under Maryland law and WRIT's declaration of trust, WRIT may
increase the aggregate number of authorized common shares without shareholder
approval. As of March 31, 1999, there were 35,709,789 common shares outstanding.
WRIT's board of trustees intends to propose to amend WRIT's declaration
of trust to authorize WRIT to issue preferred shares with a par value of $.01
per share. The preferred shares amendment will also include modifications to the
declaration of trust to distinguish the rights of the holders of common shares
and the holders of preferred shares. Adoption of the preferred shares amendment
will require the approval of the holders of 70% of WRIT's outstanding common
shares at a meeting of WRIT's shareholders. No preferred shares may be issued
prior to the adoption of the preferred shares amendment.
We describe below some of the terms of the common shares and preferred
shares. In addition, we describe selected provisions of WRIT's declaration of
trust and selected provisions of Maryland law. We will describe in a prospectus
supplement the specific terms of any series of preferred shares. The
descriptions in this prospectus and the applicable prospectus supplement are not
complete and may not contain all of the information that may be important to
you. To obtain further information, you should refer to the provisions of WRIT's
declaration of trust dated April 5, 1996, the amendment to the declaration of
trust dated September 21, 1998, the bylaws, the preferred shares amendment to be
proposed and any applicable amendment to the declaration of trust fixing the
terms of a series of preferred shares.
COMMON SHARES
Holders of common shares are entitled to receive dividends and
distributions when and as declared by the board of trustees after payment of, or
provision for, any cumulated dividends and distributions on and any required
redemptions of any preferred shares then outstanding. Holders of common shares
have one vote per share. Voting rights are not cumulative. This means that in
the election of trustees at a shareholders' meeting, the holders of a majority
of the outstanding common shares can cast all of their votes for each trustee to
be elected and elect all of the trustees then standing for election, and the
votes held by the holders of the remaining common shares will not be
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sufficient to elect any trustee.
The declaration of trust establishes the number of trustees at not less
than three nor more than seven and divides the trustees into three classes to be
elected on a staggered basis. Those trustees are elected by the holders of the
common shares. If the preferred shares amendment is proposed and adopted, the
board of trustees could establish a series of preferred stock having the right
to elect up to two additional trustees, but less than a majority of the
trustees, under specified circumstances and for specified periods, which we
describe below.
Under the preferred shares amendment, the board of trustees could
reclassify any unissued common shares in one or more classes and could amend the
declaration of trust to decrease, as well as increase, the aggregate number of
common shares authorized without shareholder approval.
Upon liquidation of WRIT, holders of common shares would receive their
pro rata share of the distributable assets of WRIT remaining after the
satisfaction of preferential rights of any preferred shares and the satisfaction
of all debts and liabilities of WRIT. Holders of common shares do not have any
preference, conversion, exchange, preemptive or redemption rights.
The common shares are listed on the New York Stock Exchange. American
Stock Transfer & Trust Company, New York, New York, is the transfer agent for
the common shares.
PREFERRED SHARES
GENERAL. The following description of preferred shares is based upon
the terms of the preferred shares amendment that WRIT's board of trustees
intends to propose. Following shareholder approval of the preferred shares
amendment, the board of trustees will be authorized, without further shareholder
action, to issue preferred shares, in one or more series, with designations,
preferences, rights and limitations as the board of trustees approves. Under the
preferred shares amendment, WRIT will be authorized to issue 500,000 preferred
shares with a par value of $.01 per share, but the board of trustees could amend
the declaration of trust to increase or decrease the aggregate number of
preferred shares authorized without shareholder approval.
The preferred shares are proposed to have the dividend, liquidation,
redemption, conversion and voting rights described below unless the prospectus
supplement relating to a particular series of preferred shares indicates
otherwise. You should refer to the prospectus supplement relating to the
particular series of preferred shares offered for specific terms, including:
(1) the title of the preferred shares;
(2) the number of shares included in the series offered;
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(3) the offering price of the preferred shares;
(4) the liquidation preference per share;
(5) the dividend rate or method of calculation, the payment dates
and the payment periods, including, if applicable, the dates
from which dividends will accumulate;
(6) any voting rights provisions;
(7) any redemption provisions;
(8) any sinking fund provisions;
(9) any conversion provisions; and
(10) any other terms, rights, preferences or limitations.
The prospectus supplement also may discuss the federal income tax considerations
applicable to the preferred shares offered.
The preferred shares, when issued, will be fully paid and
nonassessable. Unless otherwise indicated in the prospectus supplement relating
to a particular series of preferred shares, each series of preferred shares will
rank equally with each other series of preferred shares as to dividends and
distributions in the event of a liquidation and, in all cases, will be senior to
the common shares.
DIVIDEND RIGHTS. Holders of preferred shares of each series will be
entitled to receive, when declared by the board of trustees, cash dividends at
the rates and on the dates described in the prospectus supplement relating to
the series of preferred shares, out of WRIT's assets legally available for that
purpose. The rates may be fixed or variable or both and may be cumulative,
noncumulative or partially cumulative.
As long as any preferred shares are outstanding, no dividends will be
declared or paid and no distributions will be made on the common shares, other
than a dividend payable in common shares, unless the accrued dividends on each
series of preferred shares have been fully paid or declared and set apart for
payment and, if the applicable prospectus supplement so indicates, WRIT has set
apart any required amounts for any sinking funds for each series of preferred
shares.
When dividends are not paid in full upon any series of preferred shares
and any other series of preferred shares ranking equally as to dividends with
that series of preferred shares, all dividends
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declared upon that series of preferred shares and any other series of preferred
shares ranking equally as to dividends will be paid ratably in proportion to the
amount of accrued dividends to which they are entitled.
Each series of preferred shares will be entitled to dividends as
described in the prospectus supplement relating to that series. Different series
of preferred shares may be entitled to dividends at different dividend rates or
based upon different methods of determination.
RIGHTS UPON LIQUIDATION. Upon any voluntary or involuntary liquidation,
dissolution or winding up of WRIT, the holders of each series of preferred
shares will be entitled to receive out of the assets of WRIT available for
distribution to shareholders the amount stated or determined on the basis
described in the prospectus supplement relating to that series. If, upon any
voluntary or involuntary liquidation, dissolution or winding up of WRIT, the
amounts payable on the preferred shares of any series and any other shares of
stock of WRIT ranking as to distribution equally with that series of preferred
shares are not paid in full, the holders of preferred shares of that series and
of the other shares will share ratably in any distribution of assets of WRIT in
proportion to the full preferential amounts to which they are entitled or on
another basis as described in the applicable prospectus supplement. Any rights
of the holders of any series of preferred shares to participate in the assets of
WRIT remaining after the holders of other series of preferred shares have been
paid their liquidation preferences upon any liquidation, dissolution or winding
up of WRIT will be described in the prospectus supplement relating to that
series.
REDEMPTION. Subject to the terms of WRIT's outstanding debt, a series
of preferred shares may be redeemable, in whole or in part, at the option of
WRIT or the option of the holder. In each case, the applicable prospectus
supplement will describe the terms of any redemption rights including the number
of shares, the price, the dates and the type of consideration.
If, after giving notice of redemption to the holders of a series of
preferred shares, WRIT deposits with a designated bank funds sufficient to
redeem those preferred shares, then after that deposit, all preferred shares
called for redemption will no longer be outstanding for any purpose, other than
the right to receive the redemption price and the right to convert those
preferred shares into other classes of capital stock of WRIT.
CONVERSION RIGHTS. A series of preferred shares may be convertible. The
prospectus supplement for any series of preferred shares will describe the terms
on which shares of that series may be converted into common shares or any other
security issuable by WRIT.
VOTING RIGHTS. A holder of preferred shares will not be entitled to
vote except as indicated in the prospectus supplement relating to a particular
series of preferred shares or except as expressly required by Maryland law.
Voting rights are proposed to be limited. The board of trustees may not
establish a series of preferred shares having voting rights in addition to the
following:
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(1) the right to elect up to two additional trustees, constituting
less than a majority of the trustees, following WRIT's failure
to pay required dividends on the series of preferred shares
for a specified number of quarterly periods, and the right to
remove those trustees;
(2) the right to approve any transaction resulting in WRIT's
issuing any class or series of preferred shares ranking senior
to the series of preferred shares as to the payment of
dividends or distributions or the distribution of assets on
liquidation;
(3) the right to approve any amendment to the declaration of trust
if the amendment would materially and adversely alter the
rights, preferences or privileges of the series of preferred
shares;
(4) the right to approve any merger in which WRIT is not the
surviving entity, unless the terms of the merger provide that:
o the holders of the preferred shares will receive
equity securities of the surviving entity with
preferences, rights and privileges substantially
equivalent to the preferences, rights and privileges
of the series of preferred shares, and
o upon completion of the merger there will not be
outstanding equity securities of the surviving entity
ranking as to distribution rights and liquidation
preferences senior to the equity securities of the
surviving entity received by the holders of the
preferred shares, other than securities issued for
WRIT's securities outstanding before the merger which
were senior as to distribution rights and liquidation
preferences to the series of preferred shares.
(5) the right to vote on the termination of WRIT; and
(6) other voting rights as are expressly required by law.
Except as indicated otherwise in the prospectus supplement relating to
a particular series of preferred shares, each full share will be entitled to one
vote on matters on which holders of preferred shares are entitled to vote and
fractional shares will not be entitled to any vote.
TRANSFER AGENT AND REGISTRAR. WRIT will select the transfer agent,
registrar and dividend disbursement agent for a series of preferred shares,
which will be described in the applicable prospectus supplement. The registrar
for preferred shares will send notices to shareholders of any meetings at which
holders of preferred shares have the right to vote on any matter.
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BUSINESS COMBINATION PROVISIONS
WRIT's declaration of trust provides that any merger, consolidation or
liquidation of WRIT, or any sale of all or substantially all of its assets, must
be approved by a majority of WRIT's trustees. In addition, if any of those
transactions involves a related shareholder, the transaction must be approved by
a majority of trustees not appointed or nominated by or acting on behalf of the
related shareholder or an affiliate or associate of the related shareholder. A
related shareholder is a person or entity beneficially owning, directly or
indirectly, 5% or more of the outstanding shares, including among his or its
shares those owned by an affiliate or associate.
As permitted by Maryland law, WRIT has expressly elected to be governed
by the special voting requirements of Title 3, Subtitle 6, of the Maryland
Corporations and Associations Article, which we refer to as the Special Voting
Article. The Special Voting Article establishes special requirements with
respect to a business combination between an interested stockholder and a
Maryland corporation unless exemptions are applicable. The Special Voting
Article prohibits a merger and other specified or similar transactions between a
Maryland corporation and an interested stockholder for a five-year period and
requires a super majority vote for those transactions after the end of the
five-year period. For the purposes of the Special Voting Article and the Control
Share Article, which we describe below, a Maryland corporation includes a
Maryland real estate investment trust. We refer to them collectively in this
section as a Maryland company.
An interested stockholder is a person owning beneficially, directly or
indirectly, 10% or more of the outstanding voting stock of a Maryland company.
Business combinations include any merger or similar transaction subject to a
statutory vote and additional transactions involving transfers of assets or
securities in specified amounts to interested stockholders or their affiliates.
Unless an exemption is available, a business combination may not be
consummated between a Maryland company and an interested stockholder for a
period of five years after the date on which the shareholder became an
interested stockholder. After that five-year period, a business combination may
not be consummated unless recommended by the board of the Maryland company and
approved by the affirmative vote of at least 80% of the votes entitled to be
cast by all holders of outstanding shares of voting stock and 66 2/3% of the
votes entitled to be cast by all holders of outstanding shares of voting stock
other than the interested stockholder. These provisions do not apply if the
company's stockholders receive a minimum price, as defined in the Special Voting
Article, for their shares and they receive the consideration in cash or in the
same form as previously paid by the interested stockholder for its shares and if
other conditions are met.
A business combination with an interested stockholder that is approved
by the board of a Maryland company at any time before an interested stockholder
first becomes an interested stockholder is not subject to the special voting
requirements or fair price provisions of the Special Voting Article. An
amendment to a Maryland company's charter electing not to be subject to the
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foregoing requirements must be approved by the affirmative vote of at least 80%
of the votes entitled to be cast by all holders of outstanding shares of voting
stock and 66 2/3% of the votes entitled to be cast by holders of outstanding
shares of voting stock who are not interested stockholders. The amendment will
not be effective until 18 months after the vote of stockholders and does not
apply to any business combination of a company with a stockholder who was an
interested stockholder on the date of the stockholder vote.
As permitted by Maryland law, WRIT has also expressly elected to be
governed by the control share provisions of Title 3, Subtitle 7, of the Maryland
Corporations and Associations Article, which we refer to as the Control Share
Article. Under the Control Share Article, control shares of a Maryland company
acquired in a control share acquisition have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on the
matter, excluding shares of stock owned by the acquiror or by officers or
directors who are employees of the company. Control shares are voting shares of
stock that, if aggregated with all other shares of stock previously acquired by
the acquiror, would entitle the acquiror to exercise voting power in electing
directors or trustees within one of the following ranges of voting power: (1)
20% or more but less than 33 1/3%, (2) 33 1/3% or more but less than a majority
or (3) a majority of all voting power. Control shares do not include shares the
acquiring person is then entitled to vote as a result of having previously
obtained shareholder approval. A control share acquisition is, subject to
specified exceptions, the acquisition of, ownership of or the power to direct
the exercise of voting power with respect to control shares.
A person who has made or proposes to make a control share acquisition
upon satisfaction of specified conditions, including an undertaking to pay
expenses, may compel the board of directors to call a special meeting of
shareholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the Maryland company may
itself present the question at any shareholders' meeting.
If voting rights for control shares are not approved at the meeting or
if the acquiring person does not deliver an acquiring person statement as
permitted by the statute, then subject to specified conditions and limitations,
the Maryland company may redeem any or all of the control shares, except those
for which voting rights have previously been approved, for fair value, without
regard to the absence of voting rights for the control shares. Fair value will
be determined as of the date of the meeting of the shareholders at which the
voting rights of the control shares are considered but not approved. If no
meeting is held, fair value will be determined as of the date of the last
acquisition of control shares by the acquiring person. If voting rights for
control shares are approved at a shareholders' meeting and the acquiror becomes
entitled to a majority of the shares entitled to vote, all other shareholders
may exercise appraisal rights. The fair value of the shares as determined for
purposes of the appraisal rights may not be less than the highest price per
share paid in the control share acquisition. Some limitations and restrictions
otherwise applicable to the exercise of dissenters' rights do not apply in the
context of a control share acquisition.
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The Control Share Article does not apply to
o shares acquired in a merger, consolidation or share exchange if the
Maryland company is a party to the transaction,
o acquisitions approved or exempted by the charter or bylaws of the
Maryland company or
o shares acquired before November 4, 1988 or under a contract entered
into before November 4, 1988.
The Special Voting Article and the Control Share Article may have the
effect of discouraging unilateral tender offers or other takeover proposals,
which some shareholders might consider in their interests or that might provide
a substantial premium for their shares. The Control Share Article in particular
has the effect of making a unilateral tender offer or other takeover of WRIT
more difficult. The provisions could also have the effect of insulating current
management against the possibility of removal and could, by possibly reducing
temporary fluctuations in market price caused by accumulations of shares,
deprive shareholders of opportunities to sell their shares at a temporarily
higher market price.
RESTRICTIONS ON OWNERSHIP
For WRIT to qualify as a REIT under the Internal Revenue Code, in any
taxable year, not more than 50% in value of WRIT's outstanding shares may be
owned, directly or indirectly, by five or fewer individuals during the last six
months of the year, and the shares must be owned by 100 or more persons during
at least 335 days of a taxable year or a proportionate part of a taxable year
less than 12 months. To meet these and other requirements, the trustees have the
power to redeem or prohibit the transfer of a sufficient number of shares to
maintain or bring the ownership of the shares into conformity with the
requirements. In that regard, the declaration of trust provides that if any
person is or becomes at any time the beneficial owner, directly or indirectly,
of more than 10% of WRIT's outstanding shares or if WRIT's tax status is or can
be endangered by the purchase or retention of shares by any person, the trustees
may in their sole discretion (1) repurchase any or all shares held by that
person or (2) refuse to sell, transfer or deliver shares to that person. The
preferred shares amendment if adopted would amend this provision in the
declaration of trust to clarify that the 10% threshold applies to all of the
outstanding shares computed on the basis of the value of the shares.
The purchase price for any shares repurchased will be (1) the cost or
the last sale price of the shares as of the date immediately preceding the day
on which the demand for repurchase is mailed, whichever price is higher, or (2)
the amount provided in the terms of that class or series of shares
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called for repurchase, if the preferred shares amendment is adopted. From the
date fixed for repurchase by the trustees, and so long as payment of the
purchase price for the shares to be repurchased has been made or provided for,
the holder of any shares called for repurchase will cease to be entitled to
distributions, voting rights and other benefits with respect to those shares,
except the right to payment of the purchase price for the shares.
The declaration of trust includes provisions to ensure that any rent
paid to WRIT by a sister corporation not become disqualified as rent from real
property by virtue of Section 856(d)(2)(B) of the Internal Revenue Code. For
purposes of these provisions, a sister corporation is a corporation the shares
of which are owned by exactly or substantially the same persons and in exactly
or substantially the same numbers as are the shares of WRIT. Under these
provisions, if the trustees, at any time and in good faith, are of the opinion
that direct or indirect ownership of shares has or may become concentrated to an
extent that would cause any rent to be paid to WRIT by a sister corporation, if
one existed, to fail to qualify or be disqualified as rent from real property by
virtue of Section 856(d)(2)(B) of the Internal Revenue Code, the trustees have
the power
o by lot or other means they believe equitable to call for
purchase from any shareholder the number of shares that will
be sufficient in the opinion of the trustees to maintain or
bring the direct or indirect ownership of shares in conformity
with the requirements of Section 856(d)(2)(B), and
o to refuse to register the transfer of shares to any person
whose acquisition of shares would, in the opinion of the
trustees, result in WRIT's being unable to comply with Section
856(d)(2)(B).
These provisions will apply even if a sister corporation does not exist
(1) at the time the trustees determine that the ownership of shares has or may
become so concentrated, or (2) at the time the trustees call shares for purchase
or refuse to register the transfer of shares. The purchase price for the shares
purchased under these provisions will be equal to
o the fair market value of the shares as reflected in the
closing price for the shares on the principal stock exchange
on which the shares are listed or, if the shares are not
listed, then the last bid for the shares, as of the close of
business on the date fixed by the trustees for the purchase
or, if no such quotation is available, as will be determined
in good faith by trustees, or
o the other amount provided in the terms of the class or series
of shares called for repurchase, if the preferred shares
amendment is adopted.
From the date fixed for purchase by the trustees, the holder of any shares
called for purchase will cease to be entitled to dividends, voting rights and
other benefits with respect to those shares, except
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the right to payment of the purchase price fixed as described above.
To further assure that ownership of the shares does not become
concentrated, the declaration of trust provides that if any transfer of shares
would prevent amounts received by WRIT from a sister corporation, if one
existed, from qualifying as rents from real property as defined in Section
856(d) of the Internal Revenue Code, by virtue of the application of Section
856(d)(2)(B) of the Internal Revenue Code, the transfer will be void from
inception and the intended transferee of the shares will be treated as never
having had an interest in those shares. If this provision is invalid by virtue
of any legal decision, statute, rule or regulation, then the transferee of the
shares will be treated as having acted as an agent on behalf of WRIT in
acquiring those shares and as holding those shares on WRIT's behalf.
Furthermore, the declaration of trust provides that shareholders will be
required upon demand to disclose to the trustees in writing information with
respect to their direct and indirect ownership of the shares that the trustees
deem necessary to determine whether WRIT satisfies the provisions of Sections
856(a)(5) and (6) and Section 856(d) of the Internal Revenue Code or the
regulations under such sections or to comply with the requirements of any other
taxing authority.
Under an amendment to the declaration of trust, a provision has been
added to the declaration of trust specifying that (1) the share ownership
limitation provisions described above, or any other provision of the declaration
of trust, will not preclude the settlement of any transaction entered through
the facilities of the New York Stock Exchange or any other national securities
exchange or automated inter-dealer quotation system and (2) the occurrence of
the settlement of any transaction will not negate the effect of the share
ownership limitation provisions or any other provision of the declaration of
trust.
The share ownership limitation provisions, like the business
combination provisions, may deter or render more difficult an attempt by a third
party to obtain control of WRIT if the attempt is not supported by the board of
trustees.
TAXATION
WRIT has elected to be taxed as a REIT under the Internal Revenue Code.
A REIT that meets specified qualifications is relieved of federal income taxes
on ordinary income and capital gains distributed to shareholders. In the opinion
of Arent Fox Kintner Plotkin & Kahn, PLLC, legal counsel for WRIT, WRIT has
qualified as a REIT for the years 1994-1998 and its present and contemplated
method of operation will put it in a position to continue to qualify as a REIT.
David M. Osnos, a trustee, is a member of Arent Fox.
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DESCRIPTION OF COMMON SHARE WARRANTS
WRIT may issue common share warrants for the purchase of common shares.
WRIT may issue common share warrants independently or together with any other
offered securities offered by any prospectus supplement. Common share warrants
may be attached to or separate from the other offered securities. Each series of
common share warrants will be issued under a separate warrant agreement to be
entered into between WRIT and a warrant agent identified in the applicable
prospectus supplement. The warrant agent will act solely as an agent of WRIT in
connection with the common share warrants of a series and will not assume any
obligation or relationship of agency or trust for any holders or beneficial
owners of common share warrants.
The applicable prospectus supplement will describe the terms of the
common share warrants, including, where applicable, the following:
(1) the title of the common share warrants;
(2) the aggregate number of the common share warrants;
(3) the price or prices at which the common share warrants will be
issued;
(4) the designation, number and terms of the common shares
purchasable upon exercise of the common share warrants;
(5) the designation and terms of any other offered securities with
which the common share warrants are issued and the number of
such common share warrants issued with each offered security;
(6) the date, if any, on and after which the common share warrants
and the related common shares will be separately transferable;
(7) the price at which the common shares purchasable upon exercise
of the common share warrants may be purchased;
(8) the date on which the right to exercise the common share
warrants will commence and the date on which the right will
expire;
(9) the minimum and maximum amount of the common share warrants
that may be exercised at any one time;
(10) information with respect to any book-entry procedures;
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(11) a discussion of federal income tax considerations; and
(12) any other material terms of the common share warrants,
including terms, procedures and limitations relating to their
exchange and exercise.
DESCRIPTION OF DEBT SECURITIES
GENERAL
WRIT will issue senior debt securities under a senior indenture dated
as of August 1, 1996, as supplemented from time to time, between WRIT and The
First National Bank of Chicago, as senior indenture trustee. WRIT will issue
subordinated debt securities under a subordinate indenture between WRIT and a
commercial bank we will select to act as subordinated indenture trustee. We use
the term indenture trustee to refer to the senior indenture trustee or
subordinated indenture trustee, as appropriate. We refer to the senior indenture
and the subordinated indenture together as the indentures and individually as an
indenture. The senior indenture and the form of the subordinated indenture are
filed as exhibits to the registration statement of which this prospectus is a
part. The indentures will be available for inspection at the corporate trust
offices of the senior indenture trustee and the subordinated indenture trustee
and as described below under "Where You Can Find More Information." The
indentures are subject to and governed by the Trust Indenture Act of 1939.
We describe below some of the terms of the debt securities and some of
the provisions of the indentures. We will describe in a prospectus supplement
the specific terms of the debt securities and the extent to which the provisions
described below apply. The descriptions in this prospectus and the applicable
prospectus supplement are not complete and may not contain all of the
information that may be important to you. To obtain further information, you
should refer to the provisions of the indentures and the debt securities. We
have included in this prospectus references to sections of the indentures to
help you locate those provisions in the indentures.
TERMS
The debt securities will be direct, unsecured obligations of WRIT. The
senior debt securities will rank equally with all other unsecured and
unsubordinated debt of WRIT. Payments on the subordinated debt securities will
be subordinated to the prior payment in full of WRIT's senior debt, as described
in this section under "Subordination." Each indenture provides that WRIT may
issue debt securities without limit as to aggregate principal amount, in one or
more series, in each case as established from time to time in, or under
authority granted by, a resolution of WRIT's board of
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trustees or as established in one or more supplemental indentures. WRIT may
issue debt securities with terms different from those of debt securities
previously issued. Debt securities of one series may be issued at different
times and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the debt securities of that series, for issuances of
additional debt securities of that series. (Section 301 of each indenture).
More than one indenture trustee may be appointed under either
indenture, with each indenture trustee acting as to one or more series of debt
securities. Any indenture trustee may resign or be removed as to one or more
series of debt securities, and a successor indenture trustee may be appointed to
act regarding that series. (Section 608 of each indenture). If two or more
persons are appointed as indenture trustee regarding different series of debt
securities, each will act under the applicable indenture as an indenture trustee
of a trust separate from the trust administered by any other indenture trustee.
(Section 609 of each indenture). Except as otherwise indicated in this
prospectus, an indenture trustee may act only with respect to the one or more
series of debt securities for which it is indenture trustee under the applicable
indenture.
The prospectus supplement relating to the series of debt securities
being offered will contain information on the specific terms of the debt
securities including:
(1) the title of the debt securities and whether the debt securities
are senior or subordinated;
(2) the aggregate principal amount of the debt securities and any
limit on the aggregate principal amount;
(3) the percentage of the principal amount of the debt securities
that will be issued and, if less than the entire principal
amount will be issued
o the portion of the principal amount payable upon declaration of
acceleration of the maturity of the debt securities,
o the portion of the principal amount of the debt securities that
is convertible into common shares or preferred shares, or
o the method by which any portion will be determined;
(4) if the debt securities are convertible, in connection with
preserving WRIT's status as a REIT, any applicable limitations
on the ownership or transferability of the common shares or
preferred shares into which the debt securities are
convertible;
(5) the date or dates, or the method for determining the date or
dates, on which the
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principal of the debt securities will be payable and the amount
of principal payable;
(6) the interest rate or rates, which may be fixed or variable, of
the debt securities, or the method by which the rate or rates
will be determined, if the debt securities will bear interest;
(7) the date or dates, or the method for determining the date or
dates, from which interest will accrue;
(8) the dates on which interest will be payable;
(9) the record dates for interest payment dates, or the method by
which the dates will be determined;
(10) the persons to whom interest will be payable;
(11) the basis upon which interest will be calculated if other than
that of a 360-day year of twelve 30-day months;
(12) the place or places where the principal of, any premium and
interest on the debt securities will be payable;
(13) the place where the debt securities may be surrendered for
registration of transfer or exchange;
(14) the place where notices to or demands upon WRIT relating to
the debt securities and the applicable indenture may be
delivered;
(15) if WRIT has a redemption option, the times, prices,
currencies, currency units or composite currencies and other
terms and conditions upon which WRIT may redeem the debt
securities, in whole or in part;
(16) any obligation of WRIT to redeem, repay or purchase the debt
securities under any sinking fund or similar provision or at
the option of a holder of the debt securities, and the times,
the prices, the currencies, currency units or composite
currencies and other terms and conditions upon which WRIT will
redeem, repay or purchase the debt securities, in whole or in
part, under the obligation;
(17) if other than U.S. dollars, the currency or currencies in
which the debt securities will be denominated and payable,
which may be a foreign currency or units of two or more
foreign currencies or a composite currency or currencies, and
the related terms and
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conditions;
(18) whether the amount of payments of principal of, any premium or
interest on the debt securities may be determined with
reference to an index, formula or other method, which index,
formula or method may, but need not be, based on currencies,
currency units or composite currencies, and the manner by
which the amounts will be determined;
(19) whether the principal of, any premium or interest on the debt
securities are to be payable, at the election of WRIT or a
holder of the debt securities, in currencies, currency units
or composite currencies other than that in which the debt
securities are denominated or stated to be payable and
o the times when the election may be made,
o the terms and conditions upon which the election may be made,
o the time and manner of determining the exchange rate between
the currencies, currency units or composite currencies in which
the debt securities are denominated or stated to be payable,
o the identity of the exchange rate agent responsible for
determining the exchange rate, and
o the currencies, currency units or composite currencies in which
the debt securities are to be payable;
(20) any provisions granting special rights to the holders of the
debt securities upon the occurrence of any specified events;
(21) any deletions from, modifications of or additions to the
events of default or covenants of WRIT relating to the debt
securities, whether or not the events of default or covenants
are consistent with the events of default or covenants in the
applicable indenture;
(22) whether the debt securities will be issued in certificated or
book-entry form;
(23) whether the debt securities will be in registered or bearer
form and, if in registered form, the denominations if other
than $1,000 or any integral multiple, and if in bearer form,
the denominations and other terms and conditions;
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(24) whether the debt securities will be subject to the defeasance
and covenant defeasance provisions described in this
prospectus, and any modification of those provisions;
(25) whether and under what circumstances WRIT will pay any
additional amounts on the debt securities relating to any tax,
assessment or governmental charge and, if so, whether WRIT
will have the option to redeem the debt securities in lieu of
making the payment; and
(26) any other terms of the debt securities consistent with the
provisions of the applicable indenture. (Section 301 of each
indenture).
WRIT may issue debt securities at a discount below their principal
amount. If that occurs, the debt securities may provide for less than their
entire principal amount to be payable upon declaration of acceleration of the
maturity of the debt securities. We refer to those debt securities as original
issue discount securities. The applicable prospectus supplement will describe
the special U.S. federal income tax, accounting and other considerations
applicable to original issue discount securities.
Except as described below under "Covenants" and as may be described in
any prospectus supplement, the indentures will not contain any provisions
o limiting WRIT's ability to incur indebtedness or
o affording holders of debt securities protection in the event of
a highly leveraged or similar transaction involving WRIT or in
the event of a change in control of WRIT.
The applicable prospectus supplement will provide information regarding any
deletions from, modifications of, or additions to the events of default or
covenants of WRIT that are described below, including any addition of a covenant
or other provision providing protection for risks similar to those referred to
above.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable prospectus supplement, the
debt securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples of $1,000, and the debt
securities of any series issued in bearer form will be issuable in denominations
of $5,000. (Section 302 of each indenture).
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Unless otherwise described in the applicable prospectus supplement, the
principal of, any premium and interest on any series of senior debt securities
will be payable at the corporate trust office of the senior indenture trustee,
which initially will be c/o First Chicago Trust Company of New York, 14 Wall
Street, Eighth Floor, New York, New York 10005. Unless otherwise described in
the applicable prospectus supplement, the principal of, any premium and interest
on any series of subordinated debt securities will be payable at the corporate
trust office of the subordinated indenture trustee. WRIT may instead pay
interest on any series of debt securities by check mailed to the address of the
person entitled to the payment as it appears in the applicable register for the
debt securities or by wire transfer of funds to that person at an account
maintained within the United States. (Sections 301, 307 and 1002 of each
indenture).
Any interest not punctually paid or duly provided for on any interest
payment date will cease to be payable to the holder of the debt security on the
applicable regular record date and may be paid to the person in whose name the
debt security is registered at the close of business on a special record date
for the payment of defaulted interest to be fixed by the indenture trustee. If
that occurs, notice will be given to the holder of the debt security not less
than 10 days prior to the special record date. Alternatively, defaulted interest
may be paid at any time in any other lawful manner. (Section 307 of each
indenture).
Subject to limitations imposed upon debt securities issued in
book-entry form, the debt securities of any series will be exchangeable for
other debt securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of the
debt securities at the corporate trust office of the applicable indenture
trustee. In addition, subject to limitations imposed upon debt securities issued
in book-entry form, the debt securities of any series may be surrendered for
conversion, registration of transfer or exchange at the corporate trust office
of the applicable indenture trustee. Every debt security surrendered for
conversion, registration of transfer or exchange must be properly endorsed or
accompanied by a written instrument of transfer. No service charge will be made
for any registration of transfer or exchange of any debt securities, but WRIT
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with the registration of transfer or exchange.
(Section 305 of each indenture). If WRIT designates a transfer agent, in
addition to the applicable indenture trustee, regarding any series of debt
securities, WRIT may at any time rescind the designation of the transfer agent
or approve a change in the location through which the transfer agent acts, but
WRIT is required to maintain a transfer agent in each place of payment for each
series of debt securities. WRIT may at any time designate additional transfer
agents regarding any series of debt securities.
(Section 1002 of each indenture).
Neither WRIT nor any indenture trustee will be required to:
o issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
before any selection of debt securities of
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that series to be redeemed and ending at the close of business on
the day of mailing of the notice of redemption;
o register the transfer of or exchange any debt security, or portion
of any debt security, called for redemption, except the unredeemed
portion of any debt security being redeemed in part; or
o issue, register the transfer of or exchange any debt security that
has been surrendered for repayment at the option of the holder,
except any portion of the debt security not being repaid. (Section
305 of each indenture).
MERGER, CONSOLIDATION OR SALE
WRIT will be permitted to consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into, any other
entity if:
o WRIT will be the continuing entity, or the successor entity formed
by or resulting from any consolidation or merger with WRIT or
receiving the transfer of assets from WRIT will expressly assume
payment of the principal of, any premium and interest on all of the
debt securities and the due and punctual performance and observance
of all of the covenants and conditions in each indenture;
o immediately after giving effect to the transaction, and treating any
debt that becomes an obligation of WRIT or any subsidiary as a
result of the transaction as having been incurred by WRIT or the
subsidiary at the time of the transaction, no event of default under
an indenture, and no event which, after notice or the lapse of time,
or both, would become an event of default, has occurred and is
continuing; and
o an officer's certificate and legal opinion covering these conditions
are delivered to the indenture trustee. (Sections 801 and 803 of
each indenture).
COVENANTS
In this part of the prospectus, we use several capitalized terms to
refer to defined terms. We describe the definitions of those terms after the
paragraph in which we use them for the first time.
SENIOR INDENTURE LIMITATIONS ON INCURRENCE OF DEBT. The senior
indenture provides that WRIT will not, and will not permit any Subsidiary to,
incur any additional Debt if, immediately after giving effect to the incurrence
of the additional Debt and the application of the proceeds from the
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incurrence of the additional Debt, the aggregate principal amount of all
outstanding Debt of WRIT and its Subsidiaries on a consolidated basis determined
in accordance with generally accepted accounting principles is greater than 60%
of the sum of, without duplication:
o WRIT's Total Assets as of the end of the calendar quarter covered in
WRIT's annual report on Form 10-K or quarterly report on Form 10-Q,
as the case may be, most recently filed with the SEC, or if these
reports are not permitted to be filed under the Securities Exchange
Act, with the indenture trustee, before the incurrence of the
additional Debt; and
o any increase in WRIT's Total Assets since the end of the last
reported quarter including any increase in Total Assets resulting
from the incurrence of the additional Debt. We refer to this
increase together with WRIT's Total Assets as Adjusted Total Assets.
(Section 1011 of the senior indenture).
"Subsidiary" means a corporation, partnership or limited liability
company, a majority of the outstanding voting stock, partnership interests or
membership interests of which is owned or controlled, directly or indirectly, by
WRIT or by one or more other Subsidiaries of WRIT. For the purposes of this
definition, "voting stock" means stock having voting power for the election of
directors or trustees, whether at all times or only so long as no senior class
of stock has the voting power by reason of any contingency.
"Debt" of WRIT or any Subsidiary means any debt of WRIT or any
Subsidiary, whether or not contingent, in connection with:
(1) borrowed money evidenced by bonds, notes, debentures or similar
instruments;
(2) debt secured by any mortgage, pledge, lien, charge,
encumbrance or any security interest existing on property
owned by WRIT or any Subsidiary;
(3) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit actually issued or
amounts representing the balance deferred and unpaid of the
purchase price of any property except any balance that
constitutes an accrued expense or trade payable, or all
conditional sale obligations or obligations under any title
retention agreement;
(4) the principal amount of all obligations of WRIT or any
Subsidiary with respect to redemption, repayment or other
repurchase of any Disqualified Stock; or
(5) any lease of property by WRIT or any Subsidiary as lessee that
is reflected in WRIT's consolidated balance sheet as a
capitalized lease in accordance with generally accepted
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accounting principles to the extent, in the case of items of
debt under clauses (1) through (3) above, that any of those
items, other than letters of credit, would appear as a
liability on WRIT's consolidated balance sheet in accordance
with generally accepted accounting principles. This includes,
to the extent not otherwise included, any obligation by WRIT
or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise, other than for purposes of collection
in the ordinary course of business, debt of another person,
other than WRIT or any Subsidiary.
"Disqualified Stock" means any Capital Stock that by its terms, or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable, upon the happening of any event or otherwise:
o matures or is mandatorily redeemable, under a sinking fund
obligation or otherwise;
o is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock; or
o is redeemable at the option of the holder, in whole or in part, in
each case on or before the stated maturity of the series of debt
securities.
"Capital Stock" means any capital stock, including preferred stock,
shares, interests, participations or other ownership interests however
designated and any rights, other than debt securities convertible into or
exchangeable for corporate stock, warrants or options to purchase.
"Total Assets" as of any date means the sum of
o the Undepreciated Real Estate Assets; and
o all other assets of WRIT and its Subsidiaries determined in
accordance with generally accepted accounting principles, but
excluding accounts receivable and intangibles.
"Undepreciated Real Estate Assets" as of any date means the original
cost plus capital improvements of real estate assets of WRIT and its
Subsidiaries on that date, before depreciation and amortization, determined on a
consolidated basis in accordance with generally accepted accounting principles.
In addition to the limitations on the incurrence of Debt described
above, the senior indenture provides that WRIT will not, and will not permit any
Subsidiary to, incur any Secured Debt, whether owned at the date of the senior
indenture or subsequently acquired, if, immediately after giving effect to the
incurrence of the additional Secured Debt and the application of the proceeds,
the aggregate principal amount of all outstanding Secured Debt of WRIT and its
Subsidiaries on a consolidated basis is greater than 40% of WRIT's Adjusted
Total Assets. (Section 1011 of the senior
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indenture.) "Secured Debt" means any Debt secured by any mortgage, lien, charge,
pledge, encumbrance or security interest of any kind upon any of the property of
WRIT or any Subsidiary.
The senior indenture also provides that WRIT will not, and will not
permit any Subsidiary to, incur any additional Debt if the ratio of Consolidated
Income Available for Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended before the date on which the
additional Debt is to be incurred is less than 1.5 to 1.0, on a pro forma basis
after giving effect to the incurrence of that Debt and to the application of the
proceeds from the incurrence of that Debt. The ratio is calculated assuming
that:
o the additional Debt and any other Debt incurred by WRIT and its
Subsidiaries since the first day of the four-quarter period and the
application of the proceeds, including to refinance other Debt, had
occurred at the beginning of that period;
o the repayment or retirement of any other Debt by WRIT and its
Subsidiaries since the first day of the four-quarter period had been
incurred, repaid or retired at the beginning of the period, except
that, in making this computation, the amount of Debt under any
revolving credit facility will be computed based upon the average
daily balance of that Debt during the period;
o in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of the four-quarter period, the
acquisition had occurred as of the first day of the period with the
appropriate adjustments relating to the acquisition included in the
pro forma calculation; and
o in the case of any acquisition or disposition by WRIT or its
Subsidiaries of any asset or group of assets since the first day of
the four-quarter period, whether by merger, stock purchase or sale,
or asset purchase or sale, the acquisition or disposition or any
related repayment of Debt had occurred as of the first day of that
period with the appropriate adjustments relating to the acquisition
or disposition included in the pro forma calculation. (Section 1011
of the senior indenture).
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income of WRIT and its Subsidiaries
o plus amounts that have been deducted for
(1) interest on Debt of WRIT and its Subsidiaries,
(2) provision for taxes of WRIT and its Subsidiaries based on
income,
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(3) amortization of debt discount,
(4) depreciation and amortization,
(5) the effect of any noncash charge resulting from a change in
accounting principles in determining Consolidated Net Income for
such period,
(6) amortization of deferred charges and
(7) provision for or realized losses on properties,
o less amounts which have been included for gains on disposition of
properties.
"Consolidated Net Income" for any period means the amount of
consolidated net income or loss of WRIT and its Subsidiaries for that period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Annual Service Charge" as of any date means the maximum amount that is
payable in any period for interest on, and original issue discount of, Debt of
WRIT and its Subsidiaries.
"Acquired Debt" means Debt of a person
o existing at the time the person becomes a Subsidiary or
o assumed in connection with the acquisition of assets from the
person,
in each case, other than Debt incurred in connection with, or in contemplation
of, the person becoming a Subsidiary or the acquisition. Acquired Debt will be
treated as incurred on the date of the related acquisition of assets from any
person or the date the acquired person becomes a Subsidiary.
For purposes of the provisions limiting the incurrence of Debt, Debt is
treated as incurred by WRIT or a Subsidiary whenever WRIT or a Subsidiary
creates, assumes, guarantees or otherwise becomes liable on the Debt.
MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. The senior indenture also
provides that WRIT is required to maintain Total Unencumbered Assets of not less
than 150% of the aggregate outstanding principal amount of WRIT's Unsecured
Debt. (Section 1012 of the senior indenture).
"Total Unencumbered Assets" means the sum of
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o those Undepreciated Real Estate Assets not subject to an
Encumbrance; and
o all other assets of WRIT and its Subsidiaries not subject to an
Encumbrance determined in accordance with generally accepted
accounting principles, but excluding accounts receivable and
intangibles.
"Encumbrance" means any mortgage, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, statutory or other
lien or preference, priority or other security agreement, except:
o liens for taxes that (1) are not yet delinquent, (2) are not in an
aggregate amount, as to WRIT and all Subsidiaries, greater than 10%
of Total Assets or (3) are being contested in good faith by all
appropriate proceedings, if adequate reserves relating to the taxes
are maintained on the books of WRIT or its Subsidiaries, as the case
may be, in conformity with generally accepted accounting principals;
o carrier's, warehousemen's, mechanic's, materialmen's, repairmen's or
other similar liens that (1) are not in an aggregate amount, as to
WRIT and all Subsidiaries, greater than 10% of Total Assets, (2) do
not remain unsatisfied or undischarged for a period of more than 90
days or (3) are being contested in good faith by all appropriate
proceedings;
o pledges or deposits in connection with workers compensation,
unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
o deposits to secure the performance of bids, trade contracts, other
than for borrowed money, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a similar
nature incurred in the ordinary course of business; and
o easements, rights of way, restrictions, development orders, plats
and other similar encumbrances.
"Total Assets" as of any date means the sum of
o the Undepreciated Real Estate Assets; and
o all other assets of WRIT and its Subsidiaries determined in
accordance with generally accepted accounting principles, but
excluding accounts receivable and intangibles.
"Unsecured Debt" means Debt of WRIT or any Subsidiary that is not
secured by any
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mortgage, lien, charge, pledge or security interest of any kind upon any of the
properties owned by WRIT or any of its Subsidiaries.
EXISTENCE. Except as described under the section below entitled
"Merger, Consolidation or Sale," WRIT will be required to do everything
necessary to preserve and keep in full force and effect its existence, rights
and franchises. But WRIT will not be required to preserve any right or franchise
if it determines that the preservation of the right or franchise is no longer
desirable in the conduct of its business. (Section 1004 of each indenture).
MAINTENANCE OF PROPERTIES. To the extent WRIT believes it necessary for
the proper conduct of business, WRIT will be required to keep all of its
material properties used in the conduct of its business or the business of any
Subsidiary in good condition, repair and working order and supplied with all
necessary equipment and to make all necessary repairs and improvements of those
properties. (Section 1005 of each indenture).
INSURANCE. WRIT will be required to, and will be required to cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage at least equal to their then full insurable value with insurers
of recognized responsibility and, if described in the applicable prospectus
supplement, having a specified rating from a recognized insurance rating
service. (Section 1006 of each indenture).
PAYMENT OF TAXES AND OTHER CLAIMS. WRIT will be required to pay or
discharge before they become delinquent (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of WRIT or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies that, if unpaid, might by law become a
material lien upon the property of WRIT or any Subsidiary. But WRIT will not be
required to pay or discharge any tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith. (Section 1007 of
each indenture).
PROVISION OF FINANCIAL INFORMATION. Whether or not WRIT is subject to
Section 13 or 15(d) of the Securities Exchange Act, WRIT will be required,
within 15 days of each of the dates by which WRIT would have been required to
file annual reports, quarterly reports and other documents with the SEC if WRIT
were subject to those sections, to
o mail to all holders of debt securities, as their names and addresses
appear in the applicable register for those debt securities, without
cost to the holders, copies of the annual reports, quarterly reports
and other documents that WRIT would have been required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act if
WRIT were subject to those sections;
o file with the applicable indenture trustee copies of the annual
reports, quarterly reports
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and other documents that WRIT would have been required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act if
WRIT were subject to those sections; and
o promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of those documents to any
prospective holder. (Section 1008 of each indenture).
ADDITIONAL COVENANTS. The prospectus supplement will describe any
additional covenants of WRIT relating to any series of debt securities.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each of the following is an Event of Default with respect to any series
of debt securities issued under either indenture:
(1) default for 30 days in the payment of any installment of interest
or any additional amount payable on any debt security of that
series;
(2) default in the payment of principal or any premium on any debt
security of that series at its maturity;
(3) default in making any sinking fund payment if required for any debt
security of that series;
(4) breach or default in the performance of any other covenant or
warranty of WRIT contained in the indenture, other than a covenant
added to the indenture solely for the benefit of another series of
debt securities issued under the indenture, if the breach or
default continues for 60 days after written notice as provided in
the indenture;
(5) default under any bond, debenture, note or other evidence of debt
for money borrowed by WRIT -- including obligations under leases
required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles but not including any
indebtedness or obligations for which recourse is limited to
property purchased -- in an aggregate principal amount in excess of
$5,000,000, whether the debt now exists or is subsequently created,
if default results in the debt becoming or being declared due and
payable before the date on which it would otherwise have become due
and payable or results in the obligations being accelerated,
without the acceleration having been rescinded;
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(6) default under any mortgage, indenture or instrument under which any
debt may be issued or by which any debt may be secured or
evidenced, for money borrowed by WRIT -- including leases required
to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles but not including debt or
obligations for which recourse is limited to property purchased --
in an aggregate principal amount in excess of $5,000,000, whether
the debt now exists or is subsequently created, if default results
in the debt becoming or being declared due and payable before the
date on which it would otherwise have become due and payable or
results in the obligations being accelerated, without the
acceleration have been rescinded;
(7) specified events relating to bankruptcy, insolvency,
reorganization, receivership or liquidation of WRIT or any
Significant Subsidiary of WRIT; and
(8) any other event of default under the terms of the debt securities
of that series. (Section 501 of each indenture).
"Significant Subsidiary" means any Subsidiary that meets any of the
following:
o WRIT and its other Subsidiaries' investments in and advances to the
Subsidiary exceed 10% of the total assets of WRIT and its
Subsidiaries consolidated as of the end of the most recently
completed fiscal year;
o WRIT's and its other Subsidiaries' proportionate share of the total
assets of the Subsidiary exceeds 10% of the total assets of WRIT and
its Subsidiaries consolidated as of the end of the most recently
completed fiscal year; or
o WRIT and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the
Subsidiary exceeds 10% of the income of WRIT and its Subsidiaries
consolidated for the most recently completed fiscal year.
If an Event of Default occurs and continues under any indenture
relating to debt securities of any series at the time outstanding, then the
indenture trustee or the holders of 25% or more in principal amount of the
outstanding debt securities of that series may declare the principal amount of,
and any premium on, all of the debt securities of that series to be due and
payable immediately. If the debt securities of that series are original issue
discount securities or indexed securities, then only the portion of the
principal amount as may be specified in the terms of those securities plus any
premium on those securities may be declared due and payable. To declare an
acceleration, an indenture trustee must provide written notice to WRIT. If the
holders declare an acceleration, they must provide written notice to WRIT and to
the indenture trustee.
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At any time after a declaration of acceleration relating to debt
securities of a series, or of all debt securities then outstanding under the
applicable indenture, has been made, but before a judgment or decree for payment
of the money due has been obtained by the indenture trustee, the holders of a
majority in principal amount of outstanding debt securities of the series, or of
all debt securities then outstanding under the applicable indenture, may rescind
the declaration and its consequences if:
o WRIT has deposited with the applicable indenture trustee all
required payments of the principal of, any premium, interest, and
any additional amounts, on the debt securities of the related
series, or of all debt securities then outstanding under the
applicable indenture, plus fees, expenses, disbursements and
advances of the indenture trustee; and
o all Events of Default, other than the non-payment of accelerated
principal, or specified portion of the principal and any premium or
interest, relating to debt securities of that series, or of all debt
securities then outstanding under the applicable indenture, have
been cured or waived as provided in the applicable indenture.
(Section 502 of each indenture).
The holders of a majority in principal amount of the outstanding debt
securities of any series, or of all debt securities then outstanding under the
applicable indenture, may waive any past default relating to that series and its
consequences, except a default (1) in the payment of the principal of or any
premium, interest or additional amounts payable on any debt security of that
series or (2) relating to a covenant or provision contained in the applicable
indenture that cannot be modified or amended without the consent of the holder
of each outstanding debt security affected. (Section 513 of each indenture).
Each indenture trustee will be required to give notice to the holders
of debt securities within 90 days of a default under the applicable indenture
unless the default has been cured or waived. But the indenture trustee may
withhold notice to the holders of any series of debt securities of any default
relating to that series, except a default in the payment of the principal of,
any premium, interest or additional amount payable on any debt security of that
series or in the payment of any sinking fund installment relating to any
security of that series, if specified responsible officers of the indenture
trustee consider withholding notice to be in the interest of the holders of that
series. (Section 601 of each indenture).
No holder of debt securities of any series may institute any
proceeding, judicial or otherwise, relating to the indenture or for any remedy
under the indenture, unless the indenture trustee fails to act within 60 days
after it has received a written request to institute proceedings relating to a
continuing Event of Default from the holders of 25% or more in principal amount
of the outstanding debt securities of that series, as well as an offer of
indemnity reasonably satisfactory to it. (Section 507 of each indenture). But
this provision does not prevent any holder of debt securities from instituting
suit to enforce payment of the principal of and any premium, interest and
additional
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amount payable on the debt securities on the due dates of those payments.
(Section 508 of each indenture).
Subject to provisions in each indenture relating to the indenture
trustee's duties if a default occurs, each indenture trustee will not be
obligated to exercise any of its rights or powers under the applicable indenture
at the request or direction of any holders of any series of debt securities then
outstanding under the indenture, unless the holders have offered to the
indenture trustee reasonable security or indemnity. (Section 602 of each
indenture). The holders of a majority in principal amount of the outstanding
debt securities of any series, or of all debt securities then outstanding under
the applicable indenture, will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the indenture
trustee, or of exercising any trust or power conferred upon the indenture
trustee. But an indenture trustee may refuse to follow any direction that (1) is
in conflict with any law or the indenture, (2) may involve the indenture trustee
in personal liability or (3) may be unduly prejudicial to the holders of debt
securities of that series not joining in the direction. (Section 512 of each
indenture).
Within 120 days after the close of each fiscal year, WRIT will be
required to deliver to each indenture trustee a certificate, signed by one of
several specified officers of WRIT, stating whether that officer has knowledge
of any default under the applicable indenture and, if so, specifying each known
default and its nature and status. (Section 1009 of each indenture).
MODIFICATION OF THE INDENTURES
Each indenture may be modified or amended only with the consent of the
holders of a majority in principal amount of all outstanding debt securities
affected by the modification or amendment. But no modification or amendment may,
without the consent of the holder of each debt security affected by the
modification or amendment:
(1) change the stated maturity of the principal of, any premium or
any installment of principal of or interest payable on any debt
security;
(2) reduce the principal amount of, the rate or amount of interest
on, any premium payable on redemption of, or additional amounts
payable with respect to any debt security,
(3) reduce the amount of principal of an original issue discount
security that would be due and payable upon declaration of
acceleration of the maturity of any debt security or would be
provable in bankruptcy or adversely affect any right of repayment
of the holder of that debt security;
(4) change the place or the currency for payment of principal of, any
premium, interest or
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any additional amounts payable on any debt security;
(5) impair the right to institute suit for the enforcement of any
payment on or with respect to any debt security;
(6) reduce the percentage in principal amount of outstanding debt
securities of any series necessary to modify or amend the
applicable indenture, to waive compliance with provisions of the
indenture or specified defaults and consequences under the
indenture or to reduce the quorum or voting requirements provided
in the indenture; or
(7) modify any of the foregoing provisions or any of the provisions
relating to the waiver of past defaults or covenants, except to
increase the required percentage to effect the action or to
provide that other provisions may not be modified or waived
without the consent of the holder of each affected debt security.
(Section 902 of each indenture).
The holders of a majority in principal amount of outstanding debt
securities issued under either indenture may waive compliance by WRIT with
specified covenants and conditions in the indenture. (Section 1013 of each
indenture).
WRIT and the applicable indenture trustee may modify or amend each
indenture without the consent of any holder of debt securities for any of the
following purposes:
(1) to evidence the succession of another person to WRIT and the
assumption by any successor of WRIT's covenants in the
indenture and in the debt securities;
(2) to add to the covenants of WRIT for the benefit of the holders
of all or any series of debt securities or to surrender any
right or power conferred upon WRIT in the applicable indenture;
(3) to add Events of Default for the benefit of the holders of all
or any series of debt securities;
(4) to add or change any provision of the applicable indenture to
facilitate the issuance of, or to liberalize terms of, debt
securities in bearer form, or to permit or facilitate the
issuance of debt securities in uncertificated form, if that
action will not adversely affect the interests of the holders
of the debt securities of any series in any material respect;
(5) to change or eliminate any provision of the applicable
indenture, but any change or elimination will become effective
only when there are no debt securities outstanding of any
series created before the change or elimination that are
entitled to the benefit of that provision;
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(6) to secure the debt securities;
(7) to establish the form or terms of debt securities of any
series;
(8) to provide for the acceptance of appointment by a successor
indenture trustee or facilitate the administration of the
trusts under the applicable indenture by more than one
indenture trustee;
(9) to cure any ambiguity, defect or inconsistency in the
applicable indenture, if that action will not adversely affect
the interests of holders of debt securities of any series
issued under that indenture in any material respect; or
(10) to supplement any provision of the indenture to the extent
necessary to permit or facilitate defeasance and discharge of
any series of debt securities, if that action will not
adversely affect the interests of the holders of the debt
securities of any series in any material respect.
(Section 901 of each indenture).
Each indenture provides that in determining whether the holders of the
requisite principal amount of outstanding debt securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver under
the indenture or whether a quorum is present at a meeting of holders of debt
securities,
o the principal amount of an original issue discount security that
will be treated as outstanding will be the amount of the principal
of that debt security that would be due and payable as of the date
of the determination upon declaration of acceleration of the
maturity of that debt security;
o the principal amount of any debt security denominated in a foreign
currency that will be treated as outstanding will be the U.S. dollar
equivalent, determined on the issue date for that debt security, of
the principal amount or, in the case of original issue discount
security, the U.S. dollar equivalent on the issue date of that debt
security of the amount determined as provided in the clause above;
o the principal amount of an indexed security that will be treated as
outstanding will be the principal face amount of that indexed
security at original issuance, unless otherwise provided with
respect to that indexed security under specified provisions of the
indenture; and
o debt securities owned by WRIT, any other obligor on the debt
securities or any affiliate of WRIT or of that other obligor will be
disregarded. (Section 101 of each indenture).
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Each indenture contains provisions for convening meetings of the
holders of debt securities of a series. (Section 1501 of each indenture). A
meeting may be called at any time by the applicable indenture trustee, and also,
upon request, by WRIT or the holders of at least 10% in principal amount of the
outstanding debt securities of that series, if notice is given as provided in
the applicable indenture. (Section 1502 of each indenture).
Any resolution presented at a meeting or adjourned meeting properly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding debt
securities of that series. But any resolution relating to any request or demand
that may be made, notice or consent that may be given, or waiver or action that
may be taken by the holders of a specified percentage, which is less than a
majority in principal amount of the outstanding debt securities of a series, may
be adopted at a meeting or adjourned meeting properly reconvened at which a
quorum is present by the affirmative vote of the holders of that specified
percentage in principal amount of the outstanding debt securities of that
series. The provisions described above in this paragraph do not apply to those
situations where modifications or amendments of the applicable indenture require
the consent of the holders of each debt security affected. (Section 1504 of each
indenture).
Any resolution passed or decision taken at any meeting of holders of
debt securities of any series properly held in accordance with the applicable
indenture will be binding on all holders of debt securities of that series. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the outstanding debt securities of a series. But if any action is to be taken
at the meeting relating to a consent or waiver that may be given by the holders
of not less than a specified percentage in principal amount of the outstanding
debt securities of a series, the persons holding or representing that specified
percentage in principal amount of the outstanding debt securities of that series
will constitute a quorum (Section 1504 of each indenture).
Despite the foregoing provisions, if any action is to be taken at a
meeting of holders of debt securities of any series relating to any request,
demand, notice, consent, waiver or other action that the indenture expressly
provides may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding debt securities affected by that action, or
of the holders of that series and one or more additional series:
o no minimum quorum requirement will apply to the meeting, and
o the principal amount of the outstanding debt securities of the
series that vote in favor of the request, demand, notice, consent,
waiver or other action will be taken into account in determining
whether that request, demand, notice, consent, waiver or other
action has been made, given or taken under the indenture. (Section
1504 of each indenture).
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SUBORDINATION
Upon any distribution to creditors of WRIT in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the subordinated debt securities will be subordinated, to the extent provided in
the subordinated indenture, to the prior payment in full of all Senior Debt,
which we define below. (Sections 1601 and 1602 of the subordinated indenture).
But WRIT's obligation to make payment of the principal and interest on the
subordinated debt securities will not otherwise be affected. (Section 1608 of
the subordinated indenture). No payment of principal or interest may be made on
the subordinated debt securities at any time if a default on Senior Debt exists
that permits the holders of the Senior Debt to accelerate its maturity and the
default is the subject of judicial proceedings or WRIT receives notice of the
default. (Section 1603 of the subordinated indenture). After all Senior Debt is
paid in full and until the subordinated debt securities are paid in full,
holders will be subrogated to the rights of holders of Senior Debt to the extent
that distributions otherwise payable to holders of the subordinated debt have
been applied to the payment of Senior Debt. (Section 1607 of the subordinated
indenture). By reason of the subordination, if assets are distributed upon
insolvency, some general creditors of WRIT may recover more, ratably, than
holders of the subordinated debt securities.
"Senior Debt" as defined in the subordinated indenture means the
principal of and interest on, or substantially similar payments to be made by
WRIT regarding the following, whether outstanding at the date of execution of
the subordinated indenture or subsequently incurred, created or assumed:
(1) debt of WRIT for money borrowed or represented by purchase-money
obligations;
(2) debt of WRIT evidenced by notes, debentures, bonds, or other
securities issued under the provisions of an indenture, fiscal
agency agreement or other instrument;
(3) obligations of WRIT as lessee under leases of property either
made as part of any sale and leaseback transaction to which
WRIT is a party or otherwise;
(4) debt of partnerships and joint ventures that is included in
WRIT's consolidated financial statements;
(5) debt, obligations and liabilities of others as to which WRIT is
liable contingently or otherwise to pay or advance money or
property or as guarantor, endorser or otherwise or which WRIT
has agreed to purchase or otherwise acquire; and
(6) any binding commitment of WRIT to fund any real estate
investment or to fund any investment in any entity making the
real estate investment, in each case other than:
o any debt, obligation or liability referred to in the preceding
clauses as to which
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the instrument creating or evidencing the debt, obligation or
liability, provides that the debt, obligation or liability is
not superior in right of payment to the subordinated debt
securities or ranks equally with the subordinated debt
securities;
o any debt, obligation or liability that is subordinated to debt
of WRIT, to substantially the same extent as or to a greater
extent than the subordinated debt securities are subordinated;
and
o the subordinated debt securities. (Section 101 of the
subordinated indenture).
At March 31, 1999, Senior Debt aggregated approximately $293 million in
principal amount. The subordinated indenture does not restrict the creation of
additional Senior Debt. But the senior indenture contains limitations on WRIT's
incurrence of indebtedness. See "Covenants -- Senior Indenture Limitations on
Incurrence of Debt."
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under each indenture, WRIT may discharge obligations to holders of any
series of debt securities issued under the indenture that have not already been
delivered to the applicable indenture trustee for cancellation and that either
have become due and payable or will become due and payable within one year. To
do so WRIT must irrevocably deposit in trust with the applicable indenture
trustee, funds in currencies, currency units or composite currencies in which
those debt securities are payable in an amount sufficient to pay the entire debt
on those debt securities including principal, any premium, interest and any
additional amounts payable to the date of the deposit, if the debt securities
have become due and payable, or, if they have not, to the stated maturity or
redemption date. (Section 401 of each indenture).
Each indenture provides that, if specified provisions of the indenture
are made applicable to the debt securities of or within any series, WRIT may
elect either:
(1) defeasance, which means WRIT elects to be discharged from any
and all obligations relating to those debt securities, except
for the obligations
o to pay any additional amounts upon the occurrence of certain
events of tax, assessment or governmental charge with respect
to payments on those debt securities;
o to register the transfer or exchange of those debt securities;
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o to replace temporary or mutilated, destroyed, lost or stolen
debt securities;
o to maintain an office or agency regarding those debt
securities; and
o to hold moneys for payment in trust (Section 1402 of each
indenture); or
(2) covenant defeasance, which means WRIT elects to be released from
its obligations under specified covenants relating to those debt
securities, which are the covenants described above under
"Covenants" and, if provided under the indenture, its
obligations relating to any other covenant. WRIT may omit to
comply with those obligations and the omission will not
constitute a default or an Event of Default as to those debt
securities. (Section 1403 of each indenture).
To elect defeasance or covenant defeasance, WRIT must irrevocably
deposit in trust with the applicable indenture trustee, an amount sufficient to
pay the principal of, any premium and interest on those debt securities, and any
mandatory sinking fund or similar payments, on the scheduled due dates. The
amount deposited may be in currencies, currency units or composite currencies in
which those debt securities are payable at stated maturity, or Government
Obligations, which we define below, or both. But the scheduled payment of
principal and interest on any Government Obligations deposited must be before
the scheduled due date of the principal of, any premium and interest on the debt
securities. (Section 1404 of each indenture).
"Government Obligations" means securities that are:
o direct obligations of the United States of America or the government
that issued the foreign currency in which the debt securities of a
particular series are payable for the payment of which its full
faith and credit is pledged; or
o obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States of America or the
government that issued the foreign currency in which the debt
securities of a particular series are payable, the payment of which
is unconditionally guaranteed as a full faith and credit obligation
by the United States of America or other government if the
obligations are not callable or redeemable at the option of the
issuer. Those obligations may include a depository receipt issued by
a bank or trust company as custodian with respect to the Government
Obligation or a specific payment of interest on or principal of the
Government Obligation held by the custodian for the account of the
holder of a depository receipt. But, except as required by law, the
custodian must not be authorized to make any deduction from the
amount payable to the holder of the depository receipt from any
amount received by the custodian in regard to the Government
Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by the depository receipt.
(Section
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101 of each indenture).
A defeasance trust or covenant defeasance trust may be established only
if WRIT has delivered to the applicable indenture trustee an opinion of counsel,
as specified in each indenture, to the effect that the holders of the defeased
debt securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the defeasance or covenant defeasance
and will be subject to United States federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if the
defeasance or covenant defeasance had not occurred. In the case of defeasance,
the opinion of counsel must also refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable United States federal income
tax law occurring after the date of the indenture. (Section 1404 of each
indenture).
Unless otherwise described in the applicable prospectus supplement, if
after WRIT has deposited funds or Government Obligations or both to effect
defeasance or covenant defeasance relating to debt securities of any series, (1)
the holder of a debt security of the series is entitled to, and does, under
specified provisions of the indenture or the terms of the debt security, elect
to receive payment in a currency, currency unit or composite currency other than
that in which the deposit has been made, or (2) a Conversion Event, which we
define below, occurs in regard to the currency, currency unit or composite
currency in which the deposit has been made, the debt represented by the debt
security will be treated as fully discharged and satisfied through the payment
of the principal of, any premium, and interest on the debt security as they
become due out of the proceeds yielded by converting the amount so deposited
into the currency, currency unit or composite currency in which the debt
security becomes payable as a result of the election or the Conversion Event
based on the applicable market exchange rate.
(Section 1405 of each indenture).
"Conversion Event" means the ceasing the use of:
o a foreign currency, currency unit or composite currency both by the
government of the country that issued the currency and for the
settlement of transactions by a central bank or other public
institutions of or within the international banking community;
o the European currency unit both within the European monetary system
and for the settlement of transactions by public institutions of or
within the European Communities; or
o any currency unit or composite currency other than the European
currency unit for the purposes for which it was established.
(Section 101 of each indenture).
Unless otherwise indicated in the applicable prospectus supplement, all
payments of principal of, any premium, and interest on any debt security that is
payable in a foreign currency that ceases to be used by its government of
issuance will be in U.S. dollars.
39
<PAGE>
If WRIT effects covenant defeasance relating to any debt securities and
the debt securities are declared due and payable because an Event of Default
occurs, there is a risk that the amount in the currency, currency unit or
composite currency in which the debt securities are payable, and Government
Obligations on deposit with the applicable indenture trustee, though sufficient
to pay amounts due on the debt securities at the time of their stated maturity,
may not be sufficient to pay amounts due on the debt securities at the time of
the acceleration resulting from the Event of Default. But WRIT would remain
liable to make payment of the amounts due at the time of acceleration.
The applicable prospectus supplement may further describe any
provisions, permitting defeasance or covenant defeasance, including any
modifications to the provisions described above, relating to the debt securities
of or within a particular series.
CONVERSION RIGHTS
If the debt securities are convertible into common shares or preferred
shares, the applicable prospectus supplement will describe the terms and
conditions of conversion. The terms will include:
o whether the debt securities are convertible into common shares or
preferred shares,
o the conversion price or manner of calculation,
o the conversion period,
o whether conversion will be at the option of the holders or WRIT,
o the events requiring an adjustment of the conversion price and
o provisions affecting conversion in the event of the redemption of
the debt securities.
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in
the form of one or more global securities that will be deposited with, or on
behalf of, a depositary identified in the applicable prospectus supplement
relating to that series. Global securities may be issued in either registered or
bearer form and in either temporary or permanent form. The applicable prospectus
supplement will describe the specific terms of the depositary arrangement
relating to that series of debt securities.
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<PAGE>
PLAN OF DISTRIBUTION
WRIT may sell the offered securities under any applicable prospectus
supplement to one or more underwriters for public offering and sale by them or
may sell the offered securities to investors directly or through agents. WRIT
will name any underwriter or agent involved in the offer and sale of the offered
securities in the applicable prospectus supplement.
Underwriters may offer and sell the offered securities at a fixed price
or prices, which may be changed, at prices related to the prevailing market
prices at the time of sale or at negotiated prices. WRIT also may, from time to
time, authorize underwriters acting as WRIT's agents to offer and sell the
offered securities upon the terms and conditions described in the applicable
prospectus supplement. In connection with the sale of offered securities,
underwriters may receive compensation from WRIT in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
offered securities for whom they may act as agent. Underwriters may sell offered
securities to or through dealers, and the dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by WRIT to underwriters or agents in
connection with the offering of offered securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be described in the applicable prospectus supplement. Underwriters, dealers
and agents participating in the distribution of the offered securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the offered securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with WRIT, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If indicated in the applicable prospectus supplement, WRIT will
authorize dealers acting as WRIT's agents to solicit offers by specified
institutions to purchase offered securities from WRIT at the public offering
price set forth in that prospectus supplement under delayed delivery contracts
providing for payment and delivery on the date or dates stated in the prospectus
supplement. Each delayed delivery contract will be for an amount not less than,
and the aggregate principal amount of offered securities sold under those
contracts will be not less nor more than, the amounts stated in the applicable
prospectus supplement. When approved by WRIT, delayed delivery contracts may be
made with institutions including commercial and savings banks, insurance
companies, pension funds, investment companies, and educational and charitable
institutions. Delayed delivery contracts will not be subject to any conditions
except:
o the purchase by an institution of the offered securities covered by
those contracts will not at the time of delivery be prohibited under
the laws of any jurisdiction in the United
41
<PAGE>
States to which the institution is subject, and
o if the offered securities are being sold to underwriters, WRIT must
sell them the total principal amount of the offered securities less
the principal amount covered by those contracts.
Some of the underwriters and their affiliates may engage in
transactions with and perform services for WRIT and its subsidiaries in the
ordinary course of business.
LEGAL OPINIONS
The legality of the offered securities is being passed upon for WRIT by
Arent Fox Kintner Plotkin & Kahn, PLLC, Washington, D.C. David M. Osnos, a
trustee of WRIT, is a member of Arent Fox. Andrews & Kurth L.L.P., Washington,
D.C., will act as counsel to any underwriters, dealers or agents.
EXPERTS
The audited financial statements and schedules incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.
The historical summary of gross income and direct operating expenses
for the year ended December 31, 1997 of Northern Virginia Industrial Park
included in WRIT's Current Report on Form 8-K filed October 15, 1998, which we
incorporate by reference in this prospectus, is incorporated in reliance on the
report dated September 30, 1998 of Stoy, Malone & Company, P.C., which we also
incorporate by reference, and on the authority of that firm as experts in
auditing and accounting.
The historical summary of gross income and direct operating expenses
for the year ended December 31, 1997 of Woodburn Medical Park included in WRIT's
Current Report on Form 8-K filed December 15, 1998, which we incorporate by
reference in this prospectus, is incorporated in reliance on the report dated
December 4, 1998 of Stoy, Malone & Company, P.C., which we also incorporate by
reference, and on the authority of that firm as experts in auditing and
accounting.
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information filing requirements of the Securities
Exchange Act of 1934 and we file reports, proxy statements and other information
with the SEC. You may read and copy these reports, proxy statements and other
information at the SEC's public reference room located at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the SEC's regional offices located at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. You may obtain information on the
operation of the SEC's public reference rooms by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
statements and other information regarding issuers, including us, that file
electronically with the SEC. The address of that site is http://www.sec.gov.
Because our common shares are listed on the New York Stock Exchange,
you also may read our reports, proxy statements and other information at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
We have filed with the SEC a registration statement relating to the
offered securities on Form S-3 under the Securities Act of 1933. This prospectus
does not contain all the information in the registration statement. We have
omitted parts of it in accordance with the SEC's rules and regulations. For
further information, you should refer to the registration statement including
its exhibits and amendments.
The SEC permits us to incorporate by reference in this prospectus some
information that is contained in other documents we file with the SEC. This
means that we may disclose important information by referring you to other
documents that contain the information, including documents that we file after
the date of this prospectus. The information that is incorporated by reference
is considered to be part of this prospectus.
We incorporate by reference the documents listed below:
1. Our annual report on Form 10-K for the year ended December 31, 1998,
filed with the SEC on March 10, 1999;
2. Our proxy statement dated March 30, 1999, filed with the SEC on
March 26, 1999;
3. Our quarterly report on Form 10-Q for the quarter ended March 31,
1999, filed with the SEC on May 11, 1999;
4. Our current report on Form 8-K dated February 17, 1999, filed with
the SEC on
43
<PAGE>
February 24, 1999;
5. Our current report on Form 8-K dated April 26, 1999, filed with the
SEC on May 3, 1999;
6. Our current report on Form 8-K dated September 30, 1998, filed with
the SEC on October 15, 1998;
7. Our current report on Form 8-K dated November 30, 1998, filed with
the SEC on December 15, 1998;
8. Our Form 8-B, filed with the SEC on July 10, 1996; and
9. Each document that we file after the date of this prospectus under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act and
before the termination of this offering.
Information in this prospectus may add to, update or change information
in a previously filed document incorporated by reference in this prospectus. In
that case, you should rely on the information in this prospectus. Information in
a document filed after the date of this prospectus may add to, update or change
information in this prospectus or in a previously filed document incorporated by
reference in this prospectus. In that case, you should rely on the information
in the later filed document.
At your request, we will provide you without charge a copy of the
documents incorporated by reference in this prospectus, other than exhibits to
those documents. You may request a copy of the documents incorporated by
reference by writing or telephoning us at Washington Real Estate Investment
Trust, 6110 Executive Boulevard, Suite 800, Rockville, Maryland 20852, telephone
(301) 984-9400 or (800) 565-9748.
44
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All amounts other than the registration
fee are estimated.
Registration fee -- Securities and Exchange Commission $83,400
Rating agencies fees 150,000
Trustee's fees (including counsel fees) 15,000
Accounting fees and expenses 200,000
Legal fees and expenses 200,000
Printing and engraving expenses 175,000
Miscellaneous expenses 76,600
--------
Total $900,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant's declaration of trust dated April 5, 1996 provides that
no trustee or officer of the registrant will be personally liable, in tort,
contract or otherwise, in connection with the registrant's property or the
affairs of the registrant, or on account of his own acts or omissions to the
registrant, or to any shareholder, trustee, officer or agent of the registrant
except (1) to the extent that it is proved that the trustee or officer actually
received an improper benefit or profit in money, property, or services, in which
case the liability will not exceed the amount of the benefit or profit in money,
property, or services actually received; or (2) to the extent that a judgment or
other final adjudication adverse to the trustee or officer is entered in a
proceeding based on a finding in the proceeding that the trustee's or officer's
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding. All persons
must look solely to the registrant's property for satisfaction of claims of any
nature in connection with the affairs of the registrant.
II-1
<PAGE>
The registrant's declaration of trust further provides for the
indemnification of the registrant's trustees and officers to the fullest extent
permitted by Section 2-418 of the Maryland General Corporation Law.
ITEM 16. EXHIBITS
1. -- Form of Underwriting Agreement
(a) -- Form of Underwriting Agreement for debt securities*
(b) -- Form of Underwriting Agreement for preferred shares, common
shares and common share warrants*
2. -- Plan of acquisition, reorganization, arrangement, liquidation or
succession
(a) -- Agreement and Articles of Merger dated June 20, 1996**
4. -- Instruments defining the rights of security holders
(a) -- Declaration of trust dated April 5, 1996. Incorporated by
reference to exhibit 3 of Form 8-B dated July 10, 1996.
(b) -- Amendment to declaration of trust dated September 21, 1998.
Incorporated by reference to exhibit 3 of Form 10-Q for the
quarter ended September 30, 1998.
(c) -- Amendment to declaration of trust dated June 24, 1999. (to be
filed by amendment)
(d) -- Form of amendment to the registrant's declaration of trust
that the board of trustees intends to propose with respect to
preferred shares. Incorporated by reference to exhibit A of proxy
statement dated March 30, 1999.
(e) -- Form of Articles of Amendment setting forth the designations
of a series of preferred shares ****
(f) -- Indenture relating to senior securities, dated as of August
1, 1996, between the registrant and The First National Bank of
Chicago, as trustee***
(g) -- Form of Indenture relating to subordinated securities*
(h) -- Form of senior securities ****
II-2
<PAGE>
(i) -- Form of subordinated securities ****
(j) -- Form of common share warrant agreement ****
5. -- Opinion of Arent Fox Kintner Plotkin & Kahn, PLLC regarding validity of
securities registered
12. -- Statements regarding computation of ratios
23. -- Consents of experts and counsel
(a) -- Consent of Arthur Andersen LLP
(b) -- Consent of Stoy, Malone & Company, P.C.
(c) -- Consent of Arent Fox Kintner Plotkin & Kahn, PLLC (counsel):
included in exhibit 5
24. -- Power of attorney: included on signature page
25. -- Statement of eligibility of trustee
(a) -- Statement of eligibility and qualification on Form T-1 of The
First National Bank of Chicago, as Senior Indenture trustee
(b) -- Statement of eligibility and qualification on Form T-1 of
Subordinated Indenture Trustee ****
* Incorporated by reference to the exhibit of the same designation in the
registrant's Registration Statement on Form S-3 (File No. 333-23157) dated
March 12, 1997.
** Incorporated by reference to exhibit 99 to the registrant's Form 8-B dated
July 10, 1996.
*** Incorporated by reference to exhibit 4 to the registrant's Form 8-K dated
August 13, 1996.
**** To be filed by amendment or incorporated by reference in connection with
the offering of the offered securities.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities
II-3
<PAGE>
registered hereby, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
PROVIDED, HOWEVER, that the undertakings set forth in
paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to
II-4
<PAGE>
directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective.
(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed a new registration statement relating to
the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering
thereof.
The undersigned registrant hereby undertakes to file an application
for purposes of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rockville, State of Maryland, on the 30th day of
June, 1999.
WASHINGTON REAL ESTATE INVESTMENT TRUST
By: /S/ EDMUND B. CRONIN, JR.
---------------------------------------
Edmund B. Cronin, Jr
PRESIDENT AND CHIEF EXECUTIVE OFFICER
II-6
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Edmund B. Cronin, Jr. and Larry E. Finger, and
each of them, his true and lawful attorney-in-fact and agent with power of
substitution and resubstitution, for him, and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post effective
amendments) to this registration statement on Form S-3, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
SEC granting unto said attorney-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done to comply with the provisions of the Securities Act and all
requirements of the SEC hereby ratifying and confirming all that said
attorneys-in-fact or either of them, or their or his or her substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated:
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ ARTHUR A. BIRNEY Chairman of Trustees June 30, 1999
- --------------------------
ARTHUR A. BIRNEY
/S/ EDMUND B. CRONIN, JR. Trustee, President and
- -------------------------- Chief Executive Officer June 30, 1999
EDMUND B. CRONIN, JR.
Trustee ___________, 1999
- --------------------------
JOHN M. DERRICK, JR.
/S/ LARRY E. FINGER Senior Vice President
- -------------------------- and Chief Financial Officer June 30, 1999
LARRY E. FINGER
II-7
<PAGE>
/S/ LAURA FRANKLIN Vice President and
- -------------------------- Chief Accounting Officer June 30, 1999
LAURA FRANKLIN
/S/ CLIFFORD M. KENDALL Trustee June 30, 1999
- --------------------------
CLIFFORD M. KENDALL
/S/ JOHN P. MCDANIEL Trustee June 30, 1999
- --------------------------
JOHN P. MCDANIEL
Trustee ___________, 1999
- --------------------------
DAVID M. OSNOS
Trustee ___________, 1999
- --------------------------
SUSAN J. WILLIAMS
II-8
Exhibit 5
[Letterhead of Arent Fox Kintner Plotkin & Kahn, PLLC]
June 30, 1999
Washington Real Estate Investment Trust
6110 Executive Boulevard
Suite 800
Rockville, MD 20852
Gentlemen:
We have acted as counsel to Washington Real Estate Investment Trust, a
real estate investment trust organized under the laws of Maryland (the "Trust"),
in connection with the Form S-3 registration statement (the "Registration
Statement") being filed by the Trust with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), relating to the
offering from time to time, as set forth in the prospectus contained in such
Registration Statement (the "Prospectus") and as to be set forth in one or more
supplements to the Prospectus (each, a "Prospectus Supplement"), of up to
$300,000,000 aggregate offering price of (i) the Trust's common shares of
beneficial interest ("Common Shares"), (ii) one or more series of the Trust's
preferred shares of beneficial interest ("Preferred Shares"), (iii) warrants to
purchase Common Shares ("Warrants") and/or (iv) one or more series of the
Trust's debt securities ("Debt Securities").
The senior Debt Securities ("Senior Debt Securities") will be issued
pursuant to an Indenture dated August 1, 1996 (the "Senior Indenture") between
the Trust and The First National Bank of Chicago (the "Senior Trustee"), and the
subordinated Debt Securities ("Subordinated Debt Securities") will be issued
pursuant to a form of Indenture (the "Subordinated Indenture") between the Trust
and a commercial bank to be identified (the "Subordinated Trustee"). The
Preferred Shares will be issued pursuant to an amendment to the Trust's
Declaration of Trust (the "Declaration of Trust") and one or more certificates
of designation filed pursuant to the Declaration of Trust. The Warrants will be
issued pursuant to one or more forms of Warrant Agreement (the "Warrant
Agreement") between the Trust and a commercial bank to be identified (the
"Warrant Agent").
We have examined and relied upon the originals or copies of such
records, agreements, documents and other instruments and have made such
inquiries of such officers and representatives of the Trust as we have deemed
relevant and necessary as the basis for the
<PAGE>
Washington Real Estate Investment Trust
June 30, 1999
Page 2
opinions set forth. In such examination, we have assumed, without independent
verification, the genuineness of all signatures (whether original or
photostatic), the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photostatic copies. We have
assumed, without independent verification, the accuracy of the relevant facts
stated therein.
The opinions expressed in this letter concern only the effect of the
laws of the State of New York, the State of Maryland and federal law as
currently in effect, and we express no opinion on the law of any other
jurisdiction. We assume no obligation to supplement this letter if any of the
applicable laws change in any manner.
Based upon the foregoing and subject to the qualifications set forth
below, we are of the opinion that:
1. The Senior Indenture and the Subordinated Indenture have been duly
authorized by the Trust. The Senior Indenture is, and the Subordinated Indenture
when duly executed and delivered by the Trust will be, the legally valid and
binding agreement of the Trust.
2. When the Senior Debt Securities have been duly established pursuant
to the Senior Indenture, duly authenticated by the Senior Trustee and duly
executed and delivered on behalf of the Trust against payment therefor in
accordance with the terms and provisions of the Senior Indenture and as
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement, the Senior Debt Securities will be validly issued and constitute
binding obligations of the Trust.
3. When the Subordinated Debt Securities have been duly established
pursuant to the Subordinated Indenture, duly authenticated by the Subordinated
Trustee and duly executed and delivered on behalf of the Trust against payment
therefor in accordance with the terms and provisions of the Subordinated
Indenture and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the Subordinated Debt Securities will be
validly issued and constitute binding obligations of the Trust.
4. When the Trust's shareholders have duly approved the proposed
amendment to the Declaration of Trust authorizing the issuance of Preferred
Shares (the "Preferred Share Amendment"), the Preferred Shares have been duly
established pursuant to the Declaration of Trust and the applicable certificate
of designation and the Preferred Shares have been issued and delivered on behalf
of the Trust against payment therefor as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, the Preferred Shares will
be validly issued, fully paid and nonassessable.
<PAGE>
Washington Real Estate Investment Trust
June 30, 1999
Page 3
5. The Common Shares to be sold by the Trust, when issued and delivered
on behalf of the Trust against payment therefor as contemplated by the
Registration Statement and/or the applicable Prospectus Supplement, will be
validly issued, fully paid and nonassessable.
6. When the Trust's Board of Trustees has approved the Warrant
Agreement, the Warrants have been duly established pursuant to the Warrant
Agreement and the Warrants have been issued and delivered on behalf of the Trust
against payment therefor as contemplated by the Registration Statement and/or
the applicable Prospectus Supplement, the Warrants will be validly issued and
constitute binding obligations of the Trust.
7. Based upon our review of the Declaration of Trust, the actual
operations of the Trust to date and the proposed continuing method of operation
of the Trust, as set forth, or incorporated by reference, in the Prospectus and
assuming that the Trust will continue to operate in the manner in which it has
to date, according to the policies and in the manner stated in the Declaration
of Trust and as set forth, or incorporated by reference, in the Prospectus, the
Trust will continue to qualify as a Real Estate Investment Trust pursuant to the
Internal Revenue Code of 1986, and under present law the federal income tax
treatment of the Trust will be as set forth in the Prospectus under the heading
"Description of Shares -- Taxation."
To the extent that the obligations of the Trust under the Senior
Indenture or Subordinated Indenture may be dependent upon such matters, we
assume for purposes of this opinion that the Senior Trustee or the Subordinated
Trustee, as appropriate, will be duly organized, validly existing and in good
standing under the laws of the jurisdiction of organization of such Trustee;
that such Trustee will be in compliance generally with respect to acting as a
trustee under the applicable Indenture and with all applicable laws and
regulations; and that such Trustee will have the requisite organizational and
legal power and authority to perform its respective obligations under such
applicable Indenture.
To the extent that the obligations of the Trust under the Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the Warrant Agent will be duly organized, validly existing and in
good standing under the laws of the jurisdiction of organization of such Agent;
that such Agent will be in compliance generally with respect to acting as an
agent under the Warrant Agreement and with all applicable laws and regulations;
and that such Agent will have the requisite organizational and legal power and
authority to perform its obligations under such Warrant Agreement.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm under the captions
"Description of Shares -- Taxation" and "Legal Opinions" in the Prospectus. In
giving this consent, we do not hereby admit that we come within
<PAGE>
Washington Real Estate Investment Trust
June 30, 1999
Page 4
the category of persons whose consent is required under Section 7 of the Act or
the General Rules and Regulations thereunder.
Very truly yours,
ARENT FOX KINTNER PLOTKIN & KAHN, PLLC
Exhibit 12
<TABLE>
<CAPTION>
Calculation of Earnings to Fixed Charges
($ in thousands)
March 31 Year Ended December 31,
------------- -------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Pre-tax income from
continuing operations $ 8,449 $ 34,300 $ 30,136 $ 27,964 $ 26,103 $ 23,122
------------ ------------ ----------- ------------ ------------ -----------
Adjustments for fixed charges:
Interest expense 5,038 16,413 9,404 5,356 2,170 614
Amortization of debt
service costs 193 751 334 118 15 0
------------- ------------ ----------- ------------ ------------ -----------
5,231 17,164 9,738 5,474 2,185 614
------------- ------------ ----------- ------------ ------------ -----------
Earnings as adjusted $ 13,680 $51,464 $39,874 $33,438 $ 28,288 $ 23,736
------------- ------------ ----------- ------------ ------------ -----------
Ratio of earnings to fixed charges:
Earnings as adjusted (A) 13,680 51,464 39,874 33,438 28,288 23,736
Fixed charges (B) 5,231 17,164 9,738 5,474 2,185 614
Ratio of (A) to (B) 2.62 3.00 4.09 6.11 12.95 38.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Calculation of Debt Service Coverage Ratio
($ in thousands)
March 31 Year Ended December 31,
------------ --------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Earnings before interest,
taxes, depreciation and
amortization (EBITDA):
Pre-tax income from
continuing operations $ 8,449 $34,300 $ 30,136 $ 27,964 $ 26,103 $ 23,122
------------ ----------- ---------- ----------- ---------- ---------
Adjustments for Debt Service:
Depreciation and
amortization 4,451 15,399 10,911 7,784 5,084 3,933
Administrative depreciation 167 413 139 66 63 45
Interest expense 5,038 16,413 9,404 5,356 2,170 614
Amortization of debt service
costs 193 751 334 118 -- --
------------ ----------- ---------- ----------- ---------- ---------
Earnings before interest,
taxes, depreciation and
amortization $18,298 $67,276 $50,924 $ 41,288 $ 33,420 $ 27,714
------------ ----------- ---------- ----------- ---------- ---------
Debt service:
Interest expense 5,038 16,413 9,404 5,356 2,170 614
Principal amortization 134 172 129 117 42 --
------------ ----------- ---------- ----------- ---------- ---------
Debt service $ 5,172 $16,585 $ 9,533 $ 5,473 $ 2,212 $ 614
------------ ----------- ---------- ----------- ---------- ---------
EBITDA (A) 18,298 67,276 50,924 41,288 33,420 27,714
Debt service (B) 5,172 16,585 9,533 5,473 2,212 614
Ratio of (A) to (B) 3.54 4.06 5.34 7.54 15.11 45.14
</TABLE>
Exhibit 23(a)
[Letterhead of Arthur Andersen LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the reference to our
firm in the Registration Statement Form S-3 and related Prospectus of Washington
Real Estate Investment Trust for the registration of securities and to the
incorporation by reference therein of our report dated February 9, 1999 with
respect to the consolidated financial statements Washington Real Estate
Investment Trust in its Annual Report (Form 10-K) for the year ended December
31, 1998, filed with the Securities and Exchange Commission.
/s/ Arthur Andersen LLP
Washington, D.C.
June 28, 1999
Exhibit 23(b)
[Letterhead of Stoy, Malone & Company, P.C.]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 and the related Prospectus of our report dated September 30, 1998,
relating to the audited historical summary of gross income and direct operating
expenses of Northern Virginia Industrial Park for the year ended December 31,
1997, which report is included in the Trust's Current Report on Form 8-K dated
October 15, 1998, and of our report dated December 4, 1998, relating to the
audited historical summary of gross income and direct operating expenses of
Woodburn Medical Park for the year ended December 31, 1997, which report is
included in the Trust's Current Report on Form 8-K dated November 30, 1998.
STOY, MALONE & COMPANY, P.C.
/s/ Stoy, Malone & Company, P.C.
Bethesda, Maryland
June 29, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)_
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
--------------------
WASHINGTON REAL ESTATE INVESTMENT TRUST
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
MARYLAND 53-0261100
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
6110 EXECUTIVE BOULEVARD
SUITE 800
ROCKVILLE, MARYLAND 20852
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington D.C..
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 25th day of June,
1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/Sandra L. Caruba
-----------------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
* EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S
WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 25, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture by and between
Washington Real Estate Investment Trust and The First National Bank of Chicago,
as Trustee, the undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY /s/Sandra L. Caruba
-----------------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
<PAGE>
EXHIBT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin).................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)........................................... 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A).............. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)........... 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,684,756 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
----
RC-C).................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses.............................. 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve.................................. 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
----
reserve (item 4.a minus 4.b and 4.c)...................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)....................................... 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases).................. 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M).............................. 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................ 2130 201,068 8.
9. Customers'liability to this bank on acceptances outstanding .............. 2155 9.
10.Intangible assets (from Schedule RC-M).................................... 2143 285,709 10.
11.Other assets (from Schedule RC-F)......................................... 2160 2,987,184 11.
12.Total assets (sum of items 1 through 11).................................. 2170 68,940,410 12.
</TABLE>
- -------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
LIABILITIES ---------
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
----
from Schedule RC-E, part 1)................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1).................... 6631 9,740,100 13.a1
(2) Interest-bearing............................ 6636 12,423,564 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
----
IBFs (from Schedule RC-E, part II)... 2200 19,273,426 13.b
(1) Noninterest bearing....................... 6631 334,741 13.b1
(2) Interest-bearing.......................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 173,505 15.a
b. Trading Liabilities(from Schedule RC-D)............................. RCFD 3548 4,824,567 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less............ 2332 7,453,761 16.a
b. With original maturity of more than one year. A547 330,300 16.b
c. With original maturity of more than three years .............. A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... 2920 265,041 18.
19. Subordinated notes and debentures................ 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)........... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.... 3838 0 23.
24. Common stock..................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 3,239,836 25.
26. a. Undivided profits and capital reserves........ 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................... 8434 (37,357) 26.b
c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES....... 4336 0 26.c
27. Cumulative foreign currency translation adjustments......... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)............ 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............ 3300 68,940,410 29.
Memorandum
To be reporte only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1996.........................................................RCFD 6724..... N/A M.1.
1 = Independent audit of the bank conducted in accordance 4.= Directors'examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
_____________
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
