<PAGE>
As filed with the Securities and Exchange Commission on January 9, 2001.
Registration
No. 333-70753
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE
AMENDMENT NO. 2
ON FORM S-2
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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B.F. Saul Real Estate Investment Trust
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(Exact name of registrant as specified in its charter)
Maryland
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(State or other jurisdiction of incorporation or organization)
6712
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(Primary standard industrial classification code number)
52-6053341
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(I.R.S. employer identification number)
8401 Connecticut Avenue, Chevy Chase, Maryland 20815 301-986-6000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Henry Ravenel, Jr.
8401 Connecticut Avenue, Chevy Chase, Maryland 20815 301-986-6000
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(Name, address including zip code, and telephone number,
including area code, of agent for service)
Copies of correspondence to:
Thomas H. McCormick, Esq.
Shaw Pittman
2300 N Street, N.W.
Washington, D.C. 20037
(202) 663-8000
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
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, check the following box. /X/
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. / /
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. / /
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION DATED JANUARY 9, 2001
$70,704,000
B.F. SAUL REAL ESTATE INVESTMENT TRUST
UNSECURED NOTES
Due one year to ten years from date of issue Interest payable each six
months from date of issue and at maturity
Minimum Investment: $5,000
Note Maturities Interest Rate
From Issue Date Per Annum
--------------- -------------
One Year 5.0%
Two Years 7.0%
Three Years 9.0%
Four Years 9.5%
Five to Ten Years 10.0%
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Per Note Total
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Public Offering Price 100% $ 70,704,000
Proceeds to Trust Before Expenses 100% $ 70,704,000
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-------------------------
There is no established trading market for the notes, and the Trust does
not anticipate that an active trading market will be established. These notes
are unsecured obligations and are not guaranteed or insured by the FDIC or any
other government agency. Furthermore, an investment in the notes involves
significant risks.
See "Risk Factors" beginning on page 6 for a discussion of material risks
that you should consider before you invest in the notes being sold by this
prospectus.
The date of this prospectus is ____________.
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUMMARY .......................................................... 4
RISK FACTORS ................................................................ 6
FORWARD LOOKING STATEMENTS DISCLOSURE........................................ 11
USE OF PROCEEDS ............................................................. 11
PLAN OF DISTRIBUTION ........................................................ 11
HOW TO PURCHASE NOTES ....................................................... 11
DESCRIPTION OF NOTES ........................................................ 11
EXPERTS ..................................................................... 15
LEGAL MATTERS ............................................................... 15
AVAILABLE INFORMATION ....................................................... 15
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document is incorporated in this Prospectus by reference
and made a part hereof:
1. Annual Report on Form 10-K of the Trust for the fiscal year ended
September 30, 2000, which has been filed with the Commission pursuant
to the Exchange Act and which accompanies this Prospectus.
The Trust will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein, except for the
exhibits to such documents. Such request should be directed to B.F. Saul Real
Estate Investment Trust, 7200 Wisconsin Avenue, Suite 903, Bethesda, Maryland
20814, Attention: Henry Ravenel, Jr. (telephone number (301) 986-6207).
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. To
understand this offering fully, you should read the entire prospectus carefully,
including the "Risk Factors" section and the financial statements and the notes
to those statements.
B.F. Saul Real Estate Investment Trust
The B.F. Saul Real Estate Investment Trust operates as a Maryland statutory real
estate investment trust. Our principal business activity is the ownership and
development of income-producing properties. In addition, we own 80% of the
outstanding common stock of Chevy Chase Bank, F.S.B., whose assets accounted for
96% of our consolidated assets at September 30, 2000. By virtue of our ownership
of a majority interest in Chevy Chase Bank, we are considered to be a savings
and loan holding company subject to certain government regulations.
Our long-term business objectives are to increase cash flow from operations and
to maximize the capital appreciation of our real estate. Our properties are
located predominantly in the mid-atlantic and southeastern regions of the United
States and consist principally of hotels, office and industrial projects and
undeveloped land parcels.
Chevy Chase Bank, F.S.B.
Chevy Chase Bank is a federally chartered and federally insured stock savings
bank which conducts business primarily in the metropolitan Washington, D.C.
area. The bank has its home office in McLean, Virginia and its executive offices
in Chevy Chase, Maryland. At September 30, 2000, the bank had total assets of
$10.7 billion and total deposits of $7.0 billion. Based on total consolidated
assets at September 30, 2000, Chevy Chase Bank is the largest bank headquartered
in the Washington, D.C. metropolitan area.
Address of the Real Estate Trust
The executive offices of the Real Estate Trust are located at 8401 Connecticut
Avenue, Chevy Chase, Maryland 20815 and the sales office is located at 7200
Wisconsin Avenue, Suite 903, Bethesda, Maryland 20814. Our telephone number is
301-986-6207.
Dependence on Payments from Chevy Chase Bank to Fund Trust Expenses
During the past five fiscal years, we had sufficient funds available to pay our
required interest, debt and ground rent expenses. On a consolidated basis, our
total available earnings exceeded our fixed charges by $77.4 million, $85.7
million, $166.0 million, $61.2 million and $22.0 million in fiscal years 2000,
1999, 1998, 1997 and 1996. However, the fixed charges of our real estate
operations have exceeded the revenues generated by our real estate operations
for the past five fiscal years. As a result, we have had to depend on the
receipt of dividends and tax sharing payments from Chevy Chase Bank to pay our
fixed charges, including payment of principal and interest on the notes.
Excluding the dividend and tax sharing payments from Chevy Chase Bank, our fixed
charges would have exceeded our available earnings by $3.9 million, $10.3
million, $18.5 million, $19.0 million and $24.2 million in fiscal years 2000,
1999, 1998, 1997 and 1996.
<PAGE>
THE OFFERING
Securities Offered..... We are offering $70,704,000 in principal
amount of notes with varying interest
rates as fixed from time to time by us.
As of December 31, 2000, we had $45,859,000
in principal amount of notes available
to be issued.
Maturity Date.......... The notes will mature from one to ten
years from the date of issue, as selected
by you.
Interest Payment Dates. Interest on the notes will be payable each
six months after the date of issue and at
maturity.
Seniority.............. The notes will be unsecured obligations
and will rank junior to our secured debt,
which at September 30, 2000 totaled $509.4
million. In addition, the notes will rank
equally with all of our other unsecured
debt, which totaled $81.8 million at
September 30, 2000.
Set Asides............. We have not set aside any money for the
purpose of paying principal and interest
on the notes.
Independent Review..... No independent rating agency has reviewed
the terms of the notes to determine
whether they are a suitable investment.
Redemption............. At our sole option, we can repurchase from
you for the same price you paid us any
note that has been outstanding for more
than one year. We can redeem the note on
the first anniversary of the date of issue
or on any interest payment date
afterwards.
Covenants.............. The indenture under which the notes will
be sold does not impose any restrictions
on our ability to pay dividends, make
distributions to our shareholders, incur
debt or issue additional securities.
Claims of Noteholders.. You will not have any claim on the
assets of Chevy Chase Bank and you may
look only to our earnings and assets for
the payment of interest and principal on
your notes.
Use of Proceeds........ We will use the net proceeds of the
offering of these notes primarily to repay
maturing notes. Any proceeds not used to
repay maturing notes will be used for
other general corporate purposes.
<PAGE>
RISK FACTORS
An investment in these notes involves significant risks and therefore is
suitable only for persons who understand those risks and their consequences and
who are able to lose their entire investment. You should consider the following
risks in addition to the other information set forth in this prospectus before
making your investment decision.
Risks Relating to these Notes
The notes are not secured by the Real Estate Trust or Chevy Chase Bank and you
will only be paid principal and interest on your notes after other debts have
been paid.
You are only entitled to receive payments of principal and interest on your
notes from the funds and assets of the Real Estate Trust available after our
secured debt and other senior obligations have been paid. As of September 30,
2000, our secured debt was $509.4 million, including $200 million of debt
secured by the common stock of Chevy Chase Bank owned by us. In addition, we
will pay principal and interest on your notes at the same time we make payments
on our other unsecured debt, which totaled $81.8 million as of September 30,
2000.
During the past five fiscal years, we had sufficient funds available to pay our
required interest, debt and ground rent expenses. On a consolidated basis, our
total available earnings exceeded our fixed charges by $77.4 million, $85.7
million, $166.0 million, $61.2 million and $22.0 million in fiscal years 2000,
1999, 1998, 1997 and 1996. However, the fixed charges of our real estate
operations have exceeded the revenues generated by our real estate operations
for the past five fiscal years. As a result, we have had to depend on the
receipt of dividends and tax sharing payments from Chevy Chase Bank to pay our
fixed charges, including payment of principal and interest on the notes.
Excluding the dividend and tax sharing payments from Chevy Chase Bank, our fixed
charges would have exceeded our available earnings by $3.9 million, $10.3
million, $18.5 million, $19.0 million and $24.2 million in fiscal years 2000,
1999, 1998, 1997 and 1996.
During fiscal years 2000, 1999, 1998, 1997 and 1996, we paid $56.2 million,
$40.6 million, $34.2 million, $30.7 million and $30.8 million in principal and
interest on our secured and unsecured notes. Based on our secured and unsecured
notes outstanding as of September 30, 2000, we will be required to pay $30.2
million, $31.4 million and $34.2 million in principal and interest in fiscal
years 2001, 2002 and 2003.
If we are unable to pay principal and interest on your notes, you are only
entitled to be paid from the assets of the Real Estate Trust; you will not have
any claim on any of the assets of Chevy Chase Bank.
We are using the proceeds from the sale of these notes primarily to repay
maturing notes. As a result, we will need to rely on other sources of funds to
pay principal and interest on your notes.
We are using the proceeds from the sale of these notes primarily to repay
maturing notes and are not investing the proceeds in the Real Estate Trust's
business or setting aside money to pay principal and interest on the notes. As a
result, we will need to rely on other sources of funds to pay principal and
interest on your notes. In the future, our ability to make these payments will
depend on our available cash and our ability to borrow additional funds. In
addition, we may sell additional notes in the future as a source of funds to pay
principal and interest on your notes However, we cannot guarantee that we will
have sufficient funds in the future to make payments of principal and interest
on your notes.
The terms of the notes do not limit our ability to pay dividends, make
distributions, issue additional securities or borrow money, any of which may
diminish our ability to make payments on your notes.
The indenture under which the notes will be issued does not include certain
covenants intended to protect the rights of investors which are customary in
indentures for similar public debt securities. In particular, the indenture does
not limit our ability to pay dividends, make distributions, issue additional
securities or borrow money. However, our ability to pay dividends, make
distributions, issue additional securities and borrow money is limited by
various other agreements to which we are a party, including the indenture for
our outstanding 9 3/4% Senior Secured Notes due 2008. For more information about
the terms of the notes, see the disclosure under the subheading "Description of
the Notes."
We can repurchase the notes from you before you have received the full benefit
of your investment.
At our option, we can repurchase from you at the same price you paid us any note
that has been outstanding for more than one year. If market interest rates are
lower at the time we repurchase your notes than they were when you bought the
notes, you may not be able to reinvest your money at the same rate as your note.
Furthermore, if we choose to repurchase any of the notes prior to maturity, we
will have less money available to pay principal and interest on the remaining
outstanding notes.
No independent rating agency, underwriter, broker or dealer has reviewed the
terms of the notes to determine if they are a suitable investment for you.
We have not used and do not intend to use an underwriter or selling agent to
sell these notes. In addition, the notes have not been rated by an independent
rating agency. As a result, you will not have the benefit of an independent
review of the Real Estate Trust, the terms of the notes and the accuracy and
completeness of the information contained in the prospectus that a rating
agency, underwriter or other selling agent might provide if they were involved
in selling the notes. The officers of the Real Estate Trust who will be selling
these notes to you are not registered with the Securities and Exchange
Commission as brokers or dealers, so they will not be in a position to determine
the suitability of these notes for your investment profile and objectives. You
must decide for yourself or seek investment advice to determine whether these
notes represent a suitable investment for you.
We have not set aside or reserved any money for the purpose of paying principal
and interest on the notes.
Risks Relating to Our Business
Our ability to raise enough money to pay principal and interest on your notes is
limited by several factors.
We primarily rely on external sources of funds to repay principal on maturing
debt, including on the notes, and to make capital improvements. In the past,
these external sources of funds have included sales of debt securities,
including sale of the notes, refinancings of maturing mortgage debt, asset
sales, dividends paid by Chevy Chase Bank and tax sharing payments from Chevy
Chase Bank under a tax sharing agreement. In 2001 and beyond, we will be
required to raise substantial additional amounts of cash from these external
sources. Our ability to raise that cash depends on various factors including:
o Our ability to sell these notes. At present, we are selling these notes
principally to pay outstanding notes as they mature. If we do not sell enough
new notes to repay maturing notes, we will need to raise funds from other
sources. In fiscal 2000, we sold $15.6 million in new notes and repaid
principal on $14.2 million in maturing notes.
o Our continued receipt of dividends and tax sharing payments from Chevy Chase
Bank. To meet our cash needs, we rely substantially on dividends paid on the
common stock of Chevy Chase Bank, of which we own 80%, and payments made by
Chevy Chase Bank under the tax sharing agreement. The availability and amount
of tax sharing payments and/or dividends in the future depends primarily on
(1) Chevy Chase Bank's operating performance and income, (2) restrictions
imposed by Chevy Chase Bank's regulators, and (3) in the case of tax sharing
payments, the continued consolidation of Chevy Chase Bank and its
subsidiaries with the Real Estate Trust for federal income tax purposes. If
Chevy Chase Bank does not pay sufficient dividends or make sufficient
payments under the tax sharing agreement, we will need to raise funds from
other sources. In fiscal 2000, Chevy Chase Bank paid us $12.8 million in
dividends and $6.6 million in tax sharing payments.
The Real Estate Trust has historically experienced losses, before taking into
account asset sales, which may affect our ability to pay principal and interest
on the notes.
In the last twelve years, we have lost money before accounting for gains from
the sale of properties and before the consolidation of Chevy Chase Bank into our
financial statements. For the fiscal year ended September 30, 2000, this loss
was $(3.8 million). If we did not consolidate Chevy Chase Bank into our
financial statements, our overall operating results in fiscal 2000 and prior
years would have been worse. If we continue to operate at a loss, our ability to
pay principal and interest on the notes will be significantly diminished.
Each year, the fixed expenses of our real estate operations are greater than our
earnings generated by our real estate operations available to pay those
expenses, which may hurt our ability to pay principal and interest on the notes.
During the past five fiscal years, we had sufficient funds available to pay our
required interest, debt and ground rent expenses. On a consolidated basis, our
total available earnings exceeded our fixed charges by $77.4 million, $85.7
million, $166.0 million, $61.2 million and $22.0 million in fiscal years 2000,
1999, 1998, 1997 and 1996. However, the fixed charges of our real estate
operations have exceeded the revenues generated by our real estate operations
for the past five fiscal years. As a result, we have had to depend on the
receipt of dividends and tax sharing payments from Chevy Chase Bank to pay our
fixed charges, including payment of principal and interest on the notes.
Excluding the dividend and tax sharing payments from Chevy Chase Bank, our fixed
charges would have exceeded our available earnings by $3.9 million, $10.3
million, $18.5 million, $19.0 million and $24.2 million in fiscal years 2000,
1999, 1998, 1997 and 1996. If we are unable to fund any future shortfall between
available earnings and required payments with payments from Chevy Chase Bank or
from other sources, our ability to pay principal and interest on the notes may
be diminished.
Our business of owning and developing real estate properties is inherently
risky.
Most of our operating expenses and almost all of our debt service payments
associated with the operation of our income-producing properties are fixed,
while the income generated from these properties can significantly fluctuate,
for example by reductions in occupancy and rental rates. In addition, the
operating expenses of income-producing properties can increase due to inflation
and other general economic factors outside our control. As a result, our ability
to pay the fixed costs with cash flow produced by our income-producing
properties is highly dependent on our ability to maintain or increase rental
income and hotel sales revenue.
Rental income, which is a major source of our revenues, is susceptible to
numerous risks, including adverse changes in national or local economic
conditions and other factors which might impair the ability of existing tenants
to make rental payments and reduce the demand of new tenants for vacant space.
Hotel income, another major source of our revenues, is also susceptible to rapid
declines if customer demand decreases because advance bookings represent only a
small portion of overall revenues and can be cancelled. In addition, the
profitability of our income-producing properties can be reduced by an increase
in real estate taxes or other governmental action.
Real estate investments, including ours, tend to be relatively illiquid, meaning
that they can not be sold quickly for cash. This lack of liquidity limits our
ability to promptly change the types of properties we own in response to changes
in economic, demographic, social, financial and investment conditions.
Risks Relating to the Business of Chevy Chase Bank
The following risk factors relate to the business of Chevy Chase Bank. This
information is important because it affects Chevy Chase Bank's ability to pay
dividends and to make tax sharing payments to us.
Chevy Chase Bank's operating results may be negatively affected by an increase
in interest rates, which may affect the ability of the bank to pay dividends to
the Real Estate Trust.
Chevy Chase Bank's operating results depend in large part on the difference
between the interest the bank receives from its loans, leases, securities and
other assets and the interest it pays on its deposits and liabilities. In
general, the bank's liabilities have shorter terms and adjust more quickly to
changes in market interest rates than its assets. In addition, the sale of the
bank's credit card portfolio in 1998 and the recent demand for fixed rate rather
than adjustable rate loans have resulted in more of the bank's assets consisting
of loans that do not adjust as quickly to changes in market interest rates.
Accordingly, an increase in market interest rates could negatively affect the
operating results of the bank and may hurt the bank's ability to pay us
dividends.
Chevy Chase Bank continues to grow its residential mortgage, automobile and
commercial loan portfolios; automobile and commercial loans are riskier than
residential mortgage loans.
Chevy Chase Bank continues to grow its consumer and commercial lending business.
Automobile and commercial loans have shorter terms and higher interest rates
than residential mortgage loans, but are generally riskier than residential
mortgage loans. The bank, through one of its subsidiaries, also makes automobile
loans to applicants who have adverse credit events in their credit history.
These loans typically experience higher rates of delinquencies, repossessions
and losses than loans originated under the bank's traditional lending program.
If these loans are unprofitable or further additions to the bank's allowance for
loan losses become necessary, the ability of the bank to pay dividends to us may
be adversely affected.
Chevy Chase Bank's allowance for losses might not be sufficient to cover its
actual losses from its loan and real estate portfolios. If the losses are
greater than expected, the bank may not be able to pay dividends to the Real
Estate Trust and, as a result, the Real Estate Trust will have less money
available to pay principal and interest on the notes.
Chevy Chase Bank records on its financial statements an allowance for possible
losses from its loan, lease and real estate portfolios. It is possible that the
bank will suffer losses in excess of its allowance for losses, or that future
evaluations of the bank's asset portfolios will require significant increases in
the allowance for losses as a result of changes in economic conditions,
regulatory examinations or the bank's own internal review process. As a result,
the bank may be unable to pay us the same amount of, or any, dividends in the
future.
Chevy Chase Bank's ability to pay dividends to the Real Estate Trust is limited
by government regulations.
Federal regulations provide that Chevy Chase Bank may not pay dividends to the
Real Estate Trust unless the bank is at least "adequately capitalized" as
defined in the regulations. At September 30, 2000, the bank was
"well-capitalized" and thus exceeded the tests established for "adequately
capitalized" institutions. However, the Office of Thrift Supervision has
discretion to lower the bank's capital adequacy category. The bank's ability to
maintain its capital ratios at the required levels depends on a number of
factors, including general economic conditions in the metropolitan Washington,
D.C. area. The Office of Thrift Supervision retains the discretion to limit the
bank's dividends based on general concerns over the safety and soundness of the
bank.
The indentures for the bank's outstanding subordinated debt place restrictions
on the bank's ability to pay dividends to the Real Estate Trust, which may
result in less money available to the Real Estate Trust to pay principal and
interest on the notes.
The indentures for the bank's outstanding 9 1/4% Subordinated Debentures due
2005 and 9 1/4% Subordinated Debentures due 2008 restrict the bank's ability to
pay dividends on its common stock to the Real Estate Trust.
The Office of Thrift Supervision may require the Real Estate Trust to make cash
payments to Chevy Chase Bank.
In an agreement with the predecessor agency to the Office of Thrift Supervision,
the Real Estate Trust agreed to maintain the regulatory capital of Chevy Chase
Bank at certain minimum levels and to contribute additional capital to the bank
if necessary to meet those requirements. If the bank is unable to maintain its
capital at the prescribed levels, the Office of Thrift Supervision could require
the Real Estate Trust to contribute capital to the bank. Such a payment would
reduce the funds available to the Real Estate Trust to pay principal and
interest on the notes.
In addition, if Chevy Chase Bank becomes "undercapitalized" as defined by
federal regulations, the bank would be required to file a capital restoration
plan outlining the steps it will take to become "adequately capitalized." The
Office of Thrift Supervision could choose not to accept the plan unless the Real
Estate Trust guaranteed in writing the bank's compliance with the plan. If we
refused to provide such a guarantee, the bank could be subject to more
restrictive regulatory actions and would not be able to pay us dividends.
We may be required to make payments to Chevy Chase Bank under the tax sharing
agreement.
If in any fiscal year Chevy Chase Bank has a net operating loss, we would be
required under the tax sharing agreement with the bank to make payments to the
bank if we or any of our affiliated companies use that loss to offset our
taxable income. If Chevy Chase Bank has a net operating loss that is not used by
us in that year to offset our taxable income, Chevy Chase Bank can use those
losses to obtain a refund from the IRS of taxes paid in previous years or to
obtain a refund from us of tax sharing payments paid by the bank to the Real
Estate Trust, or both, depending on the amount of losses and the taxable year in
which they occurred.
At September 30, 2000, the maximum amount we could be required to pay Chevy
Chase Bank as a result of a carryback of the bank's losses as described above
was $6.6 million. Additionally, Chevy Chase Bank owes the Real Estate Trust $3.6
million in tax sharing payments at September 30, 2000. The tax sharing payment
will be made during the fiscal year ending September 30, 2001. After this
payment is made to the Real Estate Trust, the Real Estate Trust could be subject
to the same repayment requirement discussed above as a result of a carryback of
bank losses. If we are required to make these payments, our funds available to
pay principal and interest on the notes will be reduced.
Chevy Chase Bank's business is concentrated in the metropolitan Washington, D.C.
area and would be negatively impacted by an economic downturn in the local
economy.
Chevy Chase Bank's principal deposit and lending market is concentrated in the
metropolitan Washington, D.C. area. Accordingly, an economic downturn in the
local economy would negatively impact the overall financial performance of the
bank and its ability to pay dividends to the Real Estate Trust. If the bank is
unable to pay dividends to the Real Estate Trust, the Real Estate Trust will
have less money available to pay principal and interest on the notes.
Other Risks
The Real Estate Trust's Declaration of Trust does not contain investment or
borrowing limitations which protect your investment in the notes.
With certain minor exceptions, our Declaration of Trust does not require us to
invest our assets in any particular manner. The Board of Trustees, in their
discretion, may change the mix of our investment portfolio at any time or make
new types of investments, so as long as the investments are not prohibited by
the Declaration of Trust or by any indentures, loan documents or other
agreements applicable to us. In addition, the Declaration of Trust does not
limit the amount of money we can borrow or the types of debt securities we can
issue, including additional notes or debt securities which are senior to the
notes.
FORWARD LOOKING STATEMENTS DISCLOSURE
This prospectus contains forward looking statements which can be identified by
the use of terminology such as "may," "will," expect," "anticipate," "estimate,"
"continue," or other similar words. Although we believe that our expectations
reflected in the forward-looking statements are based on reasonable assumptions,
these expectations may not prove to be correct. Important factors that could
cause our actual results to differ materially from the expectations reflected in
these forward-looking statements include those set forth in the "Risk Factors"
section of this prospectus, as well as general economic, business and market
conditions, changes in Federal and local laws and regulations and increased
competitive pressures.
USE OF PROCEEDS
We will use the net proceeds from the sale of these notes primarily to retire
maturing notes, including the notes offered hereby. At December 31, 2000, $4.6
million and $8.0 million principal amount of notes were scheduled to mature in
fiscal 2001 and fiscal 2002. The interest rates on outstanding notes scheduled
to mature during this period vary from 5% to 15% per annum. Any proceeds not
used to pay maturing notes will be used for other general corporate purposes.
This offering is not contingent on the sale of any minimum amount of notes.
PLAN OF DISTRIBUTION
The notes will not be distributed through underwriters, brokers or dealers and
will be sold only by us acting through one or more of our duly authorized
officers. Such officers are salaried employees of the Saul Company, the parent
of the Advisor, and do not receive any compensation in connection with their
participation in the offering and sale of the notes in the form of commissions
or other remuneration based either directly or indirectly on sales of the notes.
Although we do not pay the officers who participate in the offering and sale of
the notes, we do pay the Advisor a fee of 1% of the principal amount of the
notes as they are issued to offset its costs of administering the note program.
Notes will be available for sale only at our office in Bethesda, Maryland. See
"How to Purchase Notes."
The offering of the notes by this prospectus will terminate when all of the
notes have been sold. See "Description of Notes -- General." We may also
terminate the offering of the notes at any time without notice.
HOW TO PURCHASE NOTES
You may purchase notes in person at our sales office located at 7200 Wisconsin
Avenue, Suite 903, Bethesda, Maryland 20814, or by mail by completing the
applicable Note Order Form, which may be found at the end of this prospectus,
and mailing the form and a check payable to the Trust in the enclosed envelope.
In either case, the note, in registered form, will be mailed directly to you by
U.S. Bank Trust National Association, the Indenture Trustee for the notes. For
further information on how to purchase notes, please telephone (301) 986-6207.
DESCRIPTION OF NOTES
The notes will be issued under an Indenture dated as of September 1, 1992, as
supplemented by the First Supplemental Indenture dated as of January 16, 1997,
as further supplemented by the Second Supplemental Indenture dated January 13,
1999 between the Trust and U.S. Bank Trust National Association, referred to in
this prospectus as the "Indenture Trustee". Included below is a summary of the
material terms of the notes and the material provisions of the indenture. The
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by express reference to, the
cited sections and articles of, and definitions contained in, the indenture as
supplemented, a copy of which has been filed with the Commission as Exhibit
4(a), (b) and (l) to the registration statement of which this prospectus forms a
part, and which is available as described under "Available Information."
General
The notes are limited to the aggregate principal amount of $70,704,000 offered
hereby (Section 3.0 1). The Trust from time to time may enter into one or more
supplemental indentures providing for the issuance of additional notes without
the consent of the holders of outstanding notes (Section 9.01).
The notes will be issued in denominations of $5,000 or any amount in excess
thereof which is an integral multiple of $1,000. They will be issued in
registered form only, without coupons, to mature one to ten years from the date
of issue, as selected by the investor. The notes will be unsecured general
obligations of the Trust and will be identical except for interest rate, issue
date and maturity date (Section 3.02). Except as described below under
"Redemption of Certain Notes," the notes will not contain any provisions for
conversion, redemption, amortization, sinking fund or retirement prior to
maturity.
The notes are not guaranteed or insured and are not secured by any mortgage,
pledge or lien. The notes will rank on a parity in right of payment with all
unsecured debt of the Real Estate Trust. At September 30, 2000, the Real Estate
Trust's unsecured debt, consisting of notes and accounts payable and accrued
expenses, totaled $81.8 million.
Each note will bear interest from the date of issue to the date of maturity at
the annual rate stated on the face thereof. Such interest will be payable
semiannually, six months from the date of issue and each six months thereafter,
and at maturity, to the persons in whose names the notes are registered at the
close of business on the 20th day preceding such interest payment dates.
Interest rates applicable to notes will be subject to change by the Trust from
time to time, but no such change will affect any notes issued prior to the
effective date of such change (Section 3.01). Based on the amount of a proposed
investment in notes or the aggregate principal amount of the Trust's outstanding
unsecured notes held by a prospective investor, the Trust may offer to pay
interest on a note of any maturity at an annual rate of up to 2% in excess of
the interest rate shown on the cover page of this prospectus for a note of such
maturity.
At maturity of any note, principal will be payable upon surrender of such note
without endorsement at U.S. Bank Trust National Association, 100 Wall Street
Suite 1600, New York, New York 10005. Interest payments will be made by the
Trust by check mailed to the person entitled thereto (Sections 3.01 and 10.02).
Notes must be presented at the above office of the Indenture Trustee for
registration of transfer or exchange and for payment at maturity. No service
charge will be imposed for any transfer or exchange of notes, but the Trust may
require payment to cover taxes or other governmental charges that may be
assessed in connection with any such transfer or exchange (Section 3.05).
The indenture does not impose any restrictions on the Trust's ability to pay
dividends or other distributions to its shareholders, to incur debt or to issue
additional securities.
There is no established trading market for the notes, and the Trust does not
anticipate that an active trading market will be established.
Redemption of Notes
The Trust may, at its sole election, redeem any of the notes having a stated
maturity of more than one year from date of issue on any interest payment date
with respect to such note on or after the first anniversary of the date of issue
of such note at a redemption price, exclusive of the installment of interest due
on the redemption date, payment of which shall have been made or duly provided
for to the registered holder on the relevant record date, equal to the principal
amount of the note so redeemed. (Section 11.01). Notes called for redemption
will not bear interest after the redemption date. (Section 11.07).
If fewer than all of the notes having a stated maturity of more than one year
and the same interest payment date as the redemption date are to be redeemed,
the particular notes to be redeemed will be selected by such method as the Trust
shall deem appropriate and may include redemption of notes with higher interest
rates first. (Section 11.04).
Events of Default and Notice Thereof
The indenture provides that an "Event of Default" with respect to the notes will
result upon the occurrence of any of the following:
o default in the payment of any interest upon any note when it becomes due and
payable, and continuance of such default for a period of 30 days;
o default in the payment of the principal of and premium, if any, on any note
at its maturity;
o default in the performance, or breach, of any covenant or warranty of the
Trust in the indenture, other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in the indenture specifically dealt
with, and continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Trust by the
Indenture Trustee or to the Trust and the Indenture Trustee by the holders of
at least 10% in principal amount of the notes outstanding, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the indenture;
o certain events of bankruptcy or insolvency affecting the Trust; or
o B. F. Saul Advisory Company ceases to be the investment advisor to the Trust
without being immediately replaced by another entity the majority voting
interest of which is owned by the Saul Company or B. Francis Saul II (Section
5.01).
Within 90 days after the occurrence of a default, the Indenture Trustee is
required to give the noteholders notice of all defaults known to it; provided
that, except in the case of a default in the payment of principal of, and
premium if any, or interest on, any of the notes, the Indenture Trustee will be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the noteholders (Section 6.02).
If an Event of Default occurs and is continuing, the Indenture Trustee or the
holders of not less than 25% in principal amount of the notes outstanding may
declare the principal of all the notes to be due and payable immediately, by a
notice in writing to the Trust, and to the Indenture Trustee if given by
noteholders, and upon any such declaration such principal will become
immediately due and payable (Section 5.02). At any time after such a declaration
of acceleration has been made and 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 the notes outstanding, by written notice to the Trust and
the Indenture Trustee, may rescind and annul such declaration and its
consequences if
(1) the Trust has paid or deposited with the Indenture Trustee a sum sufficient
to pay:
o all overdue installments of interest on all notes;
o the principal of and premium, if any, on any notes which have become due
otherwise than by such declaration of acceleration and interest thereon at
the rate borne by the notes;
o to the extent that payment of such interest is lawful, interest upon overdue
installments of interest at the rate borne by the notes; and
o all sums paid or advanced by the Indenture Trustee under the indenture and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal of notes
which have become due solely by such acceleration, have been cured or have been
waived as provided in the indenture (Section 5.02).
The indenture provides that if (1) default is made in the payment of any
interest on any note when such interest becomes due and payable and such default
continues for a period of 30 days, or (2) default is made in the payment of the
principal of or premium, if any, on any note at the maturity thereof, the Trust
will, upon demand of the Indenture Trustee, pay to it, for the benefit of the
holders of such notes, the whole amount then due and payable on such notes for
principal and premium, if any, and interest, with interest upon the overdue
principal and premium, if any and, to the extent that payment of such interest
is legally enforceable, upon overdue installments of interest, at the rate borne
by the notes. (Section 5.03).
In the case of an Event of Default which is not cured or waived, the Indenture
Trustee will be required to exercise such of its rights and powers under the
indenture, and to use the degree of care and skill in their exercise, that a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs, but it otherwise need only perform such duties as are specifically
set forth in the indenture (Section 6.01). Subject to such provisions, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the indenture at the request of any of the noteholders unless they
offer to the Indenture Trustee reasonable security or indemnity (Section 6.03).
Modification of Indenture
The indenture, the rights and obligations of the Trust and the rights of the
noteholders may be modified by the Trust and the Indenture Trustee without the
consent of the noteholders:
o to evidence the succession of a corporation or other entity to the Trust, and
the assumption by any such successor of the covenants of the Trust in the
indenture and the notes;
o to add to the covenants of the Trust, for the benefit of the noteholders, or
to surrender any right or power conferred in the indenture upon the Trust;
o to cure any ambiguity, to correct or supplement any provision of the
indenture which may be defective or inconsistent with any other provisions,
or to make any other provisions with respect to matters or questions arising
under the indenture which are not inconsistent with the indenture, provided
such action does not adversely affect the interests of the noteholders;
o to create, from time to time, notes in addition to the notes initially
issuable under the indenture and any supplemental indenture thereto, which
subsequently created notes are identical to the notes initially issuable
under the indenture and any supplemental indenture thereto, except for
interest rate, issue date and maturity date; or
o to modify, amend or supplement the indenture to effect the qualification of
the indenture under the Trust Indenture Act of 1939 and to add to the
indenture specified provisions permitted by such Act (Section 9.01).
With certain exceptions, the indenture, the rights and obligations of the Trust
and the rights of the noteholders may be modified in any manner by the Trust
with the consent of the holders of not less than 66-2/3% in aggregate principal
amount of the outstanding notes; but no such modification may be made without
the consent of each noteholder affected thereby which would (1) change the
maturity of the principal of, or any installment of interest on, any note or
reduce the principal amount thereof or the interest thereon, or impair the right
of such noteholder to institute suit for the enforcement of any such payment on
or after the maturity thereof, or (2) reduce the percentage in principal amount
of the outstanding notes, the consent of whose holders is required for any
modification of the indenture, or the consent of whose holders is required for
any waiver of compliance with certain provisions of the indenture or certain
defaults thereunder and the consequences thereof provided for in the indenture
(Section 9.02).
Compliance Reports
The Trust and each other obligor on the notes, if any, must deliver annually to
the Indenture Trustee, within 120 days after the end of each fiscal year, an
officers' certificate stating whether the Trust is in default in the performance
and observance of any of the conditions or covenants of the indenture, and if
the Trust is in default, specifying all such defaults and the nature and status
thereof (Section 10.06).
Reports to Noteholders
The Trust will furnish to the holders of notes such summaries of all quarterly
and annual reports which it files with the Commission as may be required by the
rules and regulations of the Commission to be furnished to holders of any notes
(Section 7.04).
<PAGE>
EXPERTS
The Trust's Consolidated Financial Statements and related schedules included in
this prospectus and elsewhere in this registration statement as of September 30,
1999 and 1998 and for each of the three years in the period ended September 30,
1999, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
LEGAL MATTERS
The legality of the securities offered by this prospectus has been passed upon
for the Trust by the firm of Shaw Pittman, Washington, D.C., a partnership
including professional corporations. George M. Rogers, Jr., currently a senior
counsel of that firm and who was a member of that firm until January, 1999, is a
trustee of the Trust and a director of B. F. Saul Company and of Chevy Chase
Bank.
AVAILABLE INFORMATION
The Trust has filed with the Securities and Exchange Commission a Registration
Statement on Form S-1 pursuant to the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, covering the notes being
offered hereby. This prospectus does not contain all the information set forth
in the registration statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission, and to which reference is
hereby made. Statements made in this prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the registration statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
The Trust is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Commission. Information as of particular dates
concerning the Trust's Trustees, officers and principal holders of securities
and any material interest of such persons in transactions with the Trust is set
forth in annual reports on Form 10-K filed with the Commission. Such reports and
other information filed by the Trust is set forth in annual reports on Form 10-K
with the Commission. Such reports and other information filed by the Trust with
the Commission may be inspected and copied at the public reference facilities of
the Commission, located at 450 Fifth Street, N.W., Washington, D.C. 20549; Seven
World Trade Center, 13th Floor, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of this material may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, certain
of these materials are publicly available through the Commission's web site
located at http://www.sec.gov.
<PAGE>
NOTE ORDER FORM
B.F. SAUL REAL ESTATE INVESTMENT TRUST
7200 Wisconsin Avenue, Suite 903
Bethesda, Maryland 20814
PLEASE ISSUE A NOTE EXACTLY AS INDICATED BELOW AT THE INTEREST RATE SHOWN
ON YOUR CURRENT PROSPECTUS OR SUPPLEMENT THERETO. MY CHECK FOR 100% OF THE
PRINCIPAL AMOUNT IS ENCLOSED. I UNDERSTAND THAT MY NOTE WILL BE ISSUED AS OF THE
DATE THIS ORDER IS RECEIVED (IF RECEIVED BY NOON) AND THAT YOUR OFFER MAY BE
WITHDRAWN WITHOUT NOTICE.
Owner's Name:
-----------------------------------------------------------------
Address:
-----------------------------------------------------------------
-----------------------------------------------------------------
Taxpayer Identification
(Social Security) Number:
-----------------------------------------------------
Principal Amount of Note Maturity from date of issue
(Minimum $5,000): (circle one): 1 2 3 4 5 6 7 8 9 10 year(s)
--------
If the maturity date falls on a Saturday, Sunday, or holiday, it will be changed
to the nearest business day. This change will not alter the interest rate.
Under penalties of perjury, I certify (1) that the number shown on this form is
my correct taxpayer identification number, and (2) that I am not subject to
backup withholding because (a) I have not been notified that I am subject to
backup withholding as a result of a failure to report all interest or dividends,
or (b) the Internal Revenue Service has notified me that I am no longer subject
to backup withholding; or all of the account owners are neither citizens nor
residents of the United States and therefore exempt from withholding.
Note: Strike out the language certifying that you are not subject to backup
withholding due to notified payee underreporting if the Internal Revenue Service
has notified you that you are subject to backup withholding and you have not
received notice from the Internal Revenue Service advising that backup
withholding has terminated.
-------------- -------------------------------------------------
Date Signature
For office use only:
-------------------- -------------------------------------------------
Date rec'd Print Name
---------
-------------------------------------------------
Issue date Address (if different from above)
---------
-------------------------------------------------
Interest rate City, State & Zip Code
------
-------------------------------------------------
(Area Code) Telephone Number
<PAGE>
B.F. SAUL REAL ESTATE INVESTMENT TRUST
7200 Wisconsin Avenue, Suite 903
Bethesda, Maryland 20814
Gentlemen:
I (We) hold a Note,
number
------------------------------
For the principal amount of $
------------------------------
which matures on
------------------------------
CHECK ONE OF THE FOLLOWING BOXES:
1. I (We) wish to receive a check for the principal amount -
if so, please send note to U.S. Bank Trust National
Association
2. I (We) wish to reinvest the principal amount in a new Note as follows:
Principal Amount of Note Maturity from date of issue
(Minimum $5,000): (circle one): 1 2 3 4 5 6 7 8 9 10 year(s)
--------
The principal amount of the new note may be either increased or decreased in
increments of $1,000. In no can case the new principal be less than $5,000. If
increased, please send a check payable to B.F. Saul Real Estate Investment Trust
for the amount of the increase.
PLEASE ENCLOSE THE MATURING NOTE AND RETURN TO US
IF THE NEW NOTE TO BE ISSUED IS TO BE REGISTERED IN A NAME
OTHER THAN THAT OF THE PRESENT HOLDER(S), OR IF ANY OTHER
ALTERATIONS IN THE FORM OF THE
REGISTRATION ARE REQUIRED, PLEASE PRINT OR TYPE IN THE NEW
INFORMATION BELOW.
Name of Owner(s)
--------------------------------------------
Print Name
--------------------------------------------
Print Name
Address:
--------------------------------------------
No. Street Apt.
--------------------------------------------
City State Zip Code
Telephone Number
--------------------------------------------
Area Code
Federal Identification or
Social Security
--------------------------------------------
----------------------------------- ---------------
Signature Date
<PAGE>
ACKNOWLEDGEMENT
B.F. SAUL REAL ESTATE INVESTMENT TRUST
7200 Wisconsin Avenue, Suite 903
Bethesda, MD 20814
Gentlemen:
I understand and acknowledge that (1) the Note I am purchasing is not a
savings account or a deposit and (2) the Note is not insured or guaranteed any
federal government agency, including the Federal Deposit Insurance Corporation,
or by any state governmental agency.
-------------------- --------------------------------------
Date Signature
--------------------------------------
Print Name
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Declaration of Trust (Article III) provides that no Trustee or officer of
the Trust shall be liable for any action or failure to act except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties, and, except as stated, Trustees and officers are entitled to be
reimbursed and indemnified for all loss, expenses, and outlays which they may
suffer because they are Trustees or officers of the Trust.
<PAGE>
ITEM 16.
(a) EXHIBITS.
EXHIBITS DESCRIPTION
---------- ------------------------------------------------------------------
3. (a) Amended and Restated Declaration of Trust filed with the
Maryland State Department of Assessments and Taxation on June 22,
1990 as filed as Exhibit 3(a) to Registration Statement No.
33-34930 is hereby incorporated by reference.
(b) Amendment to Amended and Restated Declaration of Trust reflected
in Secretary Certificate filed with the Maryland State Department
of Assessments and Taxation on June 26, 1990 as filed as Exhibit
3(b) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(c) Amended and Restated By-Laws of the Trust dated as of
February 28, 1991 as filed as Exhibit T3B to the Trust's Form
T-3 Application for Qualification of Indentures under the Trust
Indenture Act of 1939 (File No. 22-20838) is hereby incorporated
by reference.
4. (a) Indenture dated as of March 25, 1998 between the Trust and
Norwest Bank Minnesota, National Association, as Trustee, with
respect to the Trust's 9 3/4% Series B Senior Secured Notes due
2008, as filed as Exhibit 4(a) to Registration Statement
333-49937 is hereby incorporated by reference.
(b) Indenture with respect to the Trust's Senior Notes Due from One
Year to Ten Years from Date of Issue as filed as Exhibit 4(a) to
Registration No. 33-19909 is hereby incorporated by reference.
(c) First Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit T-3C to the Trust's Form T-3 Application for
Qualification of Indentures under the Trust Indenture Act of 1939
(File No. 22-20838) is hereby incorporated by reference.
(d) Indenture with respect to the Trust's Senior Notes due from One
Year to Ten Years from Date of Issue as filed as Exhibit 4(a) to
Registration Statement No. 33-9336 is hereby incorporated by
reference.
(e) Fourth Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-95506 is hereby
incorporated by reference.
(f) Third Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-91126 is hereby
incorporated by reference.
(g) Second Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-80831 is hereby
incorporated by reference.
(h) Supplemental Indenture with respect to the Trust's Senior Notes
due from One Year to Ten Years from Date of Issue as filed as
Exhibit 4(a) to Registration Statement No. 2-68652 is hereby
incorporated by reference.
(i) Indenture with respect to the Trust's Senior Notes due from One
Year to Five Years from Date of Issue as filed as Exhibit T-3C to
the Trust's Form T-3 Application for Qualification of Indentures
under the Trust Indenture Act of 1939 (file No. 22-10206) is
hereby incorporated by reference
(j) Indenture dated as of September 1, 1992 with respect to the
Trust's Notes due from One to Ten Years form Date of Issue filed
as Exhibit 4(a) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(k) First Supplemental Indenture dated as of January 16, 1997 with
respect to the Trust's Notes due from One to Ten years from Date
of Issue filed as Exhibit 4(b) to Registration Statement No.
33-34930 is hereby incorporated by reference.
(l) Second Supplemental Indenture dated as of January 13, 1999 with
respect to the Trust's Notes due from One to Ten Years from Date
of Issuance as filed as Exhibit 4(l) to Registration Statement
No. 333-70753 is hereby incorporated by reference.
**5. Opinion of Shaw Pittman with respect to legality of the Notes.
10. (a) Advisory Contract with B.F. Saul Advisory Company effective
October 1, 1982 filed as Exhibit 10(a) to Registration Statement
No. 2-80831 is hereby incorporated by reference.
(b) Commercial Property Leasing and Management Agreement effective
October 1, 1982 between the Trust and Franklin Property Company
as filed as Exhibit 10(b) to Registration Statement No. 2-80831
is hereby incorporated by reference.
(c) Tax Sharing Agreement dated June 28, 1990 among the Trust, Chevy
Chase Savings Bank F.S.B. and certain of their subsidiaries filed
as Exhibit 10(c) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(d) Agreement dated June 28, 1990 among the Trust, B.F. Saul Company,
Franklin Development Co., Inc., The Klingle Corporation and
Westminster Investing Corporation relating to the transfer of
certain shares of Chevy Chase Savings Bank, F.S.B. and certain
real property to the Trust in exchange for preferred shares of
beneficial interest of the Trust subsidiaries filed as Exhibit
10(d) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(e) Regulatory Capital Maintenance/Dividend Agreement dated May 17,
1988 among B.F. Saul Company, the Trust and the Federal Savings
and Loan Insurance Corporation as filed as Exhibit 10(e) to the
Trust's Annual Report on Form 10-K (File No. 1-7184) for the
fiscal year ended September 30, 1991 is hereby incorporated by
reference
(f) Written Agreement dated September 30, 1991 between the Office of
Thrift Supervision and Chevy Chase Savings Bank, F.S.B. filed as
Exhibit 10(f) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(g) Amendments to Commercial Property Leasing and Management
Agreement between the Trust and Franklin Property Company dated
as of December 31, 1992 (Amendment No. 5), July 1, 1989
(Amendment No. 4), October 1, 1986 (Amendment No. 3),
January 1, 1985 (Amendment No. 2) and July 1, 1984 (Amendment
No. 1) subsidiaries filed as Exhibit 10(o) to Registration
Statement No. 33-34930 is hereby incorporated by reference.
(h) Advisory Contract between B.F. Saul Advisory Company and Dearborn
Corporation dated as of December 31, 1992 filed as Exhibit 10(p)
to Registration Statement No. 33-34930 is hereby incorporated by
reference.
(k) Commercial Property Leasing and Management Agreement between
Dearborn Corporation and Franklin Property Company dated as of
December 31, 1992 filed as Exhibit 10(q) to Registration
Statement No. 33-34930 is hereby incorporated by reference.
(l) Registration Rights and Lock-Up Agreement dated August 26, 1993
by and among Saul Centers, Inc. and the Trust, Westminster
Investing Corporation, Van Ness Square Corporation, Dearborn
Corporation, Franklin Property Company and Avenel Executive Park
Phase II, Inc. as filed as Exhibit 10.6 to Registration Statement
No. 33-64562 is hereby incorporated by reference.
(m) Exclusivity and Right of First Refusal Agreement dated August 26,
1993 among Saul Centers, Inc., the Trust, B. F. Saul Company,
Westminster Investing Corporation, Franklin Property Company, Van
Ness Square Corporation, and Chevy Chase Savings Bank, F.S.B. as
filed as Exhibit 10.7 to Registration Statement No. 33-64562 is
hereby incorporated by reference.
(n) Fourth Amended and Restated Reimbursement Agreement dated as of
April 25, 2000 by and among Saul Centers, Inc., Saul Holdings
Limited Partnership, Saul Subsidiary I Limited Partnership, Saul
Subsidiary II Limited Partnership, Saul QRS, Inc., Franklin
Property Company, Westminster Investing Corporation, Van Ness
Square Corporation, Dearborn, L.L.C., Avenel Executive Park
Phase II, L.L.C., and the Trust.
(o) Amendment to Written Agreement dated October 29, 1993 between the
Office of Thrift Supervision and Chevy Chase Savings Bank, F.S.B.
filed as Exhibit 10(u) to Registration Statement No. 33-34930 is
hereby incorporated by reference.
(p) First Amended and Restated Reimbursement Agreement dated as of
August 1, 1994 by and among Saul Centers, Inc., Saul Holdings
Limited Partnership, Saul Subsidiary I Limited Partnership, Saul
Subsidiary II Limited Partnership, Avenel Executive Park
Phase II, Inc., Franklin Property Company, Westminster Investing
Corporation, Van Ness Square Corporation, Dearborn Corporation
and the Trust as filed as Exhibit 10(l) to the Trust's Annual
Report on Form 10-K (File No. 1-7184) for the fiscal year ended
September 30, 1995 is hereby incorporated by reference.
(q) Registration Rights Agreement dated as of March 25, 1998 among
the Trust, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
Smith Incorporated and Friedman, Billings, Ramsey & Co., Inc. as
filed as Exhibit 4(c) to Registration Statement No. 333-49937 is
hereby incorporated by reference.
(r) Bank Stock Registration Rights Agreement dated as of March 25,
1998 between the Trust and Norwest Bank Minnesota, National
Association, as Trustee, filed as Exhibit 4(d) to Registration
Statement No. 333-49937 is hereby incorporated by reference.
*12. Statement re: Computation of Ratio of Earnings to Fixed Charges.
*12.1 Statement re: Computation of Ratio of Consolidated Earnings to
Fixed Charges.
21. List of Subsidiaries of the Trust, filed as Exhibit 21 to the
Trust's 10-K (File No. 1-7184) for the fiscal year ended
September 30, 2000, is hereby incorporated by reference.
*23. (a) Consent of Arthur Andersen LLP.
** (b) Consent of Shaw Pittman.
**25. Statement of Eligibility on Form T-1 of U.S. Bank
Trust National Association.
-------------------
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
<PAGE>
Insofar as Indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provision, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Chevy Chase,
Maryland on this 9th day of January 2001.
B.F. SAUL REAL ESTATE INVESTMENT TRUST
By: B. FRANCIS SAUL II
----------------------------
B. Francis Saul II
Chairman of the Board
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
below on this 9th day of January 2001.
<PAGE>
Signature Capacity
--------------------------- --------------------------------------
B. Francis Saul II
--------------------------- Trustee, Chairman of the Board
B. Francis Saul II and Principal Executive Officer
Stephen R. Halpin, Jr.
--------------------------- Vice President and Chief
Stephen R. Halpin, Jr. Financial Officer (Principal
Financial Officer)
Ross E. Heasley
--------------------------- Vice President
Ross E. Heasley (Principal Accounting Officer)
Garland J. Bloom, Jr.*
--------------------------- Trustee
Garland J. Bloom, Jr.
Gilbert M. Grosvenor*
--------------------------- Trustee
Gilbert M. Grosvenor
B. Francis Saul III*
--------------------------- Trustee
B. Francis Saul III
John R. Whitmore*
--------------------------- Trustee
John R. Whitmore
*Signed by Ross E. Heasley as attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBITS DESCRIPTION
---------- ------------------------------------------------------------------
3. (a) Amended and Restated Declaration of Trust filed with the
Maryland State Department of Assessments and Taxation on June 22,
1990 as filed as Exhibit 3(a) to Registration Statement No.
33-34930 is hereby incorporated by reference.
(b) Amendment to Amended and Restated Declaration of Trust reflected
in Secretary Certificate filed with the Maryland State Department
of Assessments and Taxation on June 26, 1990 as filed as Exhibit
3(b) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(c) Amended and Restated By-Laws of the Trust dated as of
February 28, 1991 as filed as Exhibit T3B to the Trust's Form
T-3 Application for Qualification of Indentures under the Trust
Indenture Act of 1939 (File No. 22-20838) is hereby incorporated
by reference.
4. (a) Indenture dated as of March 25, 1998 between the Trust and
Norwest Bank Minnesota, National Association, as Trustee, with
respect to the Trust's 9 3/4% Series B Senior Secured Notes due
2008, as filed as Exhibit 4(a) to Registration Statement
333-49937 is hereby incorporated by reference.
(b) Indenture with respect to the Trust's Senior Notes Due from One
Year to Ten Years from Date of Issue as filed as Exhibit 4(a) to
Registration No. 33-19909 is hereby incorporated by reference.
(c) First Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit T-3C to the Trust's Form T-3 Application for
Qualification of Indentures under the Trust Indenture Act of 1939
(File No. 22-20838) is hereby incorporated by reference.
(d) Indenture with respect to the Trust's Senior Notes due from One
Year to Ten Years from Date of Issue as filed as Exhibit 4(a) to
Registration Statement No. 33-9336 is hereby incorporated by
reference.
(e) Fourth Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-95506 is hereby
incorporated by reference.
(f) Third Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-91126 is hereby
incorporated by reference.
(g) Second Supplemental Indenture with respect to the Trust's Senior
Notes due from One Year to Ten Years from Date of Issue as filed
as Exhibit 4(a) to Registration Statement No. 2-80831 is hereby
incorporated by reference.
(h) Supplemental Indenture with respect to the Trust's Senior Notes
due from One Year to Ten Years from Date of Issue as filed as
Exhibit 4(a) to Registration Statement No. 2-68652 is hereby
incorporated by reference.
(i) Indenture with respect to the Trust's Senior Notes due from One
Year to Five Years from Date of Issue as filed as Exhibit T-3C to
the Trust's Form T-3 Application for Qualification of Indentures
under the Trust Indenture Act of 1939 (file No. 22-10206) is
hereby incorporated by reference
(j) Indenture dated as of September 1, 1992 with respect to the
Trust's Notes due from One to Ten Years form Date of Issue filed
as Exhibit 4(a) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(k) First Supplemental Indenture dated as of January 16, 1997 with
respect to the Trust's Notes due from One to Ten years from Date
of Issue filed as Exhibit 4(b) to Registration Statement No.
33-34930 is hereby incorporated by reference.
(l) Second Supplemental Indenture dated as of January 13, 1999 with
respect to the Trust's Notes due from One to Ten Years from Date
of Issuance as filed as Exhibit 4(l) to Registration Statement
No. 333-70753 is hereby incorporated by reference.
**5. Opinion of Shaw Pittman with respect to legality of the Notes.
10. (a) Advisory Contract with B.F. Saul Advisory Company effective
October 1, 1982 filed as Exhibit 10(a) to Registration Statement
No. 2-80831 is hereby incorporated by reference.
(b) Commercial Property Leasing and Management Agreement effective
October 1, 1982 between the Trust and Franklin Property Company
as filed as Exhibit 10(b) to Registration Statement No. 2-80831
is hereby incorporated by reference.
(c) Tax Sharing Agreement dated June 28, 1990 among the Trust, Chevy
Chase Savings Bank F.S.B. and certain of their subsidiaries filed
as Exhibit 10(c) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(d) Agreement dated June 28, 1990 among the Trust, B.F. Saul Company,
Franklin Development Co., Inc., The Klingle Corporation and
Westminster Investing Corporation relating to the transfer of
certain shares of Chevy Chase Savings Bank, F.S.B. and certain
real property to the Trust in exchange for preferred shares of
beneficial interest of the Trust subsidiaries filed as Exhibit
10(d) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(e) Regulatory Capital Maintenance/Dividend Agreement dated May 17,
1988 among B.F. Saul Company, the Trust and the Federal Savings
and Loan Insurance Corporation as filed as Exhibit 10(e) to the
Trust's Annual Report on Form 10-K (File No. 1-7184) for the
fiscal year ended September 30, 1991 is hereby incorporated by
reference
(f) Written Agreement dated September 30, 1991 between the Office of
Thrift Supervision and Chevy Chase Savings Bank, F.S.B. filed as
Exhibit 10(f) to Registration Statement No. 33-34930 is hereby
incorporated by reference.
(g) Amendments to Commercial Property Leasing and Management
Agreement between the Trust and Franklin Property Company dated
as of December 31, 1992 (Amendment No. 5), July 1, 1989
(Amendment No. 4), October 1, 1986 (Amendment No. 3),
January 1, 1985 (Amendment No. 2) and July 1, 1984 (Amendment
No. 1) subsidiaries filed as Exhibit 10(o) to Registration
Statement No. 33-34930 is hereby incorporated by reference.
(h) Advisory Contract between B.F. Saul Advisory Company and Dearborn
Corporation dated as of December 31, 1992 filed as Exhibit 10(p)
to Registration Statement No. 33-34930 is hereby incorporated by
reference.
(k) Commercial Property Leasing and Management Agreement between
Dearborn Corporation and Franklin Property Company dated as of
December 31, 1992 filed as Exhibit 10(q) to Registration
Statement No. 33-34930 is hereby incorporated by reference.
(l) Registration Rights and Lock-Up Agreement dated August 26, 1993
by and among Saul Centers, Inc. and the Trust, Westminster
Investing Corporation, Van Ness Square Corporation, Dearborn
Corporation, Franklin Property Company and Avenel Executive Park
Phase II, Inc. as filed as Exhibit 10.6 to Registration Statement
No. 33-64562 is hereby incorporated by reference.
(m) Exclusivity and Right of First Refusal Agreement dated August 26,
1993 among Saul Centers, Inc., the Trust, B. F. Saul Company,
Westminster Investing Corporation, Franklin Property Company, Van
Ness Square Corporation, and Chevy Chase Savings Bank, F.S.B. as
filed as Exhibit 10.7 to Registration Statement No. 33-64562 is
hereby incorporated by reference.
(n) Fourth Amended and Restated Reimbursement Agreement dated as of
April 25, 2000 by and among Saul Centers, Inc., Saul Holdings
Limited Partnership, Saul Subsidiary I Limited Partnership, Saul
Subsidiary II Limited Partnership, Saul QRS, Inc., Franklin
Property Company, Westminster Investing Corporation, Van Ness
Square Corporation, Dearborn, L.L.C., Avenel Executive Park
Phase II, L.L.C., and the Trust.
(o) Amendment to Written Agreement dated October 29, 1993 between the
Office of Thrift Supervision and Chevy Chase Savings Bank, F.S.B.
filed as Exhibit 10(u) to Registration Statement No. 33-34930 is
hereby incorporated by reference.
(p) First Amended and Restated Reimbursement Agreement dated as of
August 1, 1994 by and among Saul Centers, Inc., Saul Holdings
Limited Partnership, Saul Subsidiary I Limited Partnership, Saul
Subsidiary II Limited Partnership, Avenel Executive Park
Phase II, Inc., Franklin Property Company, Westminster Investing
Corporation, Van Ness Square Corporation, Dearborn Corporation
and the Trust as filed as Exhibit 10(l) to the Trust's Annual
Report on Form 10-K (File No. 1-7184) for the fiscal year ended
September 30, 1995 is hereby incorporated by reference.
(q) Registration Rights Agreement dated as of March 25, 1998 among
the Trust, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
Smith Incorporated and Friedman, Billings, Ramsey & Co., Inc. as
filed as Exhibit 4(c) to Registration Statement No. 333-49937 is
hereby incorporated by reference.
(r) Bank Stock Registration Rights Agreement dated as of March 25,
1998 between the Trust and Norwest Bank Minnesota, National
Association, as Trustee, filed as Exhibit 4(d) to Registration
Statement No. 333-49937 is hereby incorporated by reference.
*12. Statement re: Computation of Ratio of Earnings to Fixed Charges.
*12.1 Statement re: Computation of Ratio of Consolidated Earnings to
Fixed Charges.
21. List of Subsidiaries of the Trust, filed as Exhibit 21 to the
Trust's 10-K (File No. 1-7184) for the fiscal year ended
September 30, 2000, is hereby incorporated by reference.
*23. (a) Consent of Arthur Andersen LLP.
** (b) Consent of Shaw Pittman.
**25. Statement of Eligibility on Form T-1 of U.S. Bank
Trust National Association.
-------------------
* Filed herewith.
** Previously filed.
