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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 24, 1997
WESTERN INVESTMENT REAL ESTATE TRUST
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(Exact name of registrant as specified in its charter)
CALIFORNIA 0-2809 94-6100058
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
3450 California Street, San Francisco, CA 94118
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number
including area code: (415) 929-0211
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ITEM 5. OTHER EVENTS.
On September 25, 1997, Western Investment Real Estate Trust (the
"Company") will complete its offering of $75,000,000 of senior notes consisting
of $25,000,000 of 7.10% Senior Notes due 2006 (the "2006 Notes"), $25,000,000 of
7.20% Senior Notes due 2008 (the "2008 Notes") and $25,000,000 of 7.30% Senior
Notes due 2010 (the "2010 Notes," together with the 2006 and 2008 Notes, the
"Senior Notes"). The offering of the Senior Notes is made pursuant to a
Prospectus Supplement dated September 22, 1997 relating to the Prospectus dated
August 1, 1997 filed with the Company's shelf registration statement on Form S-3
(File No. 333-32721).
Interest on the Senior Notes is payable semi-annually in arrears on
each March 15 and September 15, commencing March 15, 1998. The Senior Notes are
redeemable at any time in whole or in part, at the option of the Company,
subject to certain "make-whole" requirements. The Senior Notes are senior
unsecured obligations of the Company and will rank equally with all unsecured
and unsubordinated indebtedness of the Company. The Senior Notes are not
subject to any mandatory sinking fund.
The net proceeds to the Company from the sale of the Senior Notes,
after anticipated issuance costs, are estimated to be approximately $74.2
million. The Company will use the proceeds from sale of the Senior Notes to
repay approximately $60.5 million of its 8% Convertible Debentures due 2008, and
for general corporate purposes which may include repayment of amounts drawn on
the Company's bank line of credit, improvement, expansion or redevelopment of
its properties, acquisition of additional properties and for working capital.
The following table sets forth the estimated expenses in connection
with the offering of the Senior Notes:
Printing and Engraving Costs ...................................$ 31,000
Accounting Fees and Expenses ................................... 65,000
Legal Fees and Expenses......................................... 75,000
Trustee and Registrar Fees ..................................... 6,000
SEC Filing Fee.................................................. 45,000
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Total $222,000
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENT OF BUSINESS ACQUIRED:
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Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION:
Not applicable.
(c) EXHIBITS:
1.1 Underwriting Agreement for the Senior Notes.
4.5 Supplemental Indenture for 2006 Notes.
4.6 Supplemental Indenture for 2008 Notes.
4.7 Supplemental Indenture for 2010 Notes.
5.1 Opinion of Steinhart and Falconer LLP regarding legality of the
Senior Notes.
8.1 Opinion of Steinhart and Falconer LLP regarding certain tax
considerations.
25.1 Statement of Eligibility and Qualification of Trustee for the
Notes on Form T-1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 24, 1997
WESTERN INVESTMENT REAL ESTATE TRUST
/s/ Dennis D. Ryan
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By: Dennis D. Ryan
Title: Chief Financial Officer
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Exhibit 1.1
$25,000,000 of 7.10% Senior Notes due September 15, 2006
$25,000,000 of 7.20% Senior Notes due September 15, 2008
$25,000,000 of 7.30% Senior Notes due September 15, 2010
UNDERWRITING AGREEMENT
September 22, 1997
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
Western Investment Real Estate Trust, a business trust organized under
the laws of the State of California (the "Company), confirms its agreement
with PaineWebber Incorporated, as underwriter (the "Underwriter"), as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell to
you the principal amount of its debt securities identified on Schedule A
hereto (the "Securities") to be issued under an Indenture, dated September 1,
1997, as supplemented by Supplemental Indenture No. 1, Supplemental Indenture
No. 2 and Supplemental Indenture No. 3 (as supplemented, the "Indenture"),
between the Company and the Bank of New York, as trustee (the "Trustee").
2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to and agrees with you that:
(i) A registration statement on Form S-3 (File No. 333-32721) with
respect to the Securities being offered by the Company, including a
prospectus, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act") and the
rules and regulations (the "1933 Act Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has
been field with the Commission and has been declared effective. Such
registration statement and prospectus may have been amended or supplemented
prior to the date of this Underwriting Agreement; any such amendment or
supplement was so prepared and filed, and any such amendment filed after the
effective date of such registration statement has been declared effective.
No stop order suspending the effectiveness of the registration statement has
been issued and no proceeding for that purpose has been instituted or
threatened by the Commission. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the offering, sale and plan of
distribution of the Securities being offered by the Company and additional
information concerning the Company and its business has been or will be so
prepared and will be filed pursuant to Rule 424(b) of the 1933 Act Rules and
Regulations on or before the second business
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day after the date hereof (or such earlier time as may be required by the
1933 Act Rules and Regulations). Copies of such registration statement and
prospectus, any such amendments or supplements and all documents incorporated
by reference therein that were filed with the Commission on or prior to the
date of this Underwriting Agreement have been delivered or made available to
you and your counsel. Such registration statement, as it may have heretofore
been amended, is referred to herein as the "Registration Statement," and the
final form of prospectus included in the Registration Statement, as
supplemented by the Prospectus Supplement, is referred to herein as the
"Prospectus." Any reference herein to the Registration Statement, the
Prospectus, any preliminary prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated by
reference therein, and any reference herein to the terms "amend, "amendment"
or "supplement" with respect to the Registration Statement, Prospectus or any
preliminary prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Underwriting
Agreement, all references to the Registration Statement, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval System (EDGAR), and such copy shall be
identical to any Prospectus delivered to you for use in connection with the
offering of the Securities by the Company.
(ii) Each part of the Registration Statement (excluding any
prospectus supplement with respect to an offering of securities other than
the offering of the Securities contemplated hereby), when such part became
or becomes effective, and the Prospectus and any amendment or supplement to
such Registration Statement or such Prospectus, on the date of filing thereof
with the Commission and at the Closing Date (as hereinafter defined)
conformed or will conform in all material respects with the requirements of
the Act and the 1933 Act Rules and Regulations; the Indenture, on the date of
filing hereof with the Commission and at the Closing Date (as hereinafter
defined) conformed or will conform in all material respects with the
requirements of the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission thereunder (the "TIA"), each part of the
Registration Statement (excluding any prospectus supplement with respect to
an offering of securities other than the offering of the Securities
contemplated hereby), when such part became or becomes effective did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at
the Closing Date did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to (i) that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification under the TIA (the "Form T-1") and (ii)
statements in, or omissions from, any such document in reliance upon, and in
conformity with, written information concerning the Underwriter that was
furnished to the Company by the Underwriter specifically for use in the
preparation thereof.
(iii) The documents incorporated by reference in the
Registration Statements, the Prospectus and any amendment or supplement to
such Registration Statement or such Prospectus, when they became or become
effective under the Act or were or are filed with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, conformed or will conform in all material respects with the
requirements of the Act, the
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1933 Act Rules and Regulations, the Exchange Act and the rules and
regulations of the Commission thereunder (the "Exchange Act Rules and
Regulations"), as applicable.
(iv) The consolidated financial statements of the Company, together
with the related schedule, and notes thereto, set forth or included or
incorporated by reference in the Registration Statement and Prospectus fairly
present, in all material respects, the financial condition of the Company and
its consolidated subsidiaries as of the dates indicated and the results of
operations, changes in financial position, stockholder' equity and cash flows
for the periods therein specified, in conformity with generally accepted
accounting principles ("GAAP") consistently applied throughout the periods
involved (except as otherwise stated therein and except for changes in GAAP).
In addition, any pro forma financial statements of the Company, and the
related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly, in all material
respects, the information provided therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments made therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(v) KPMG Peat Marwick LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the periods covered
by their reports, were independent public accountants as required by the Act
and the 1933 Act Rules and Regulations.
(vi) The only subsidiaries (as defined in the 1933 Act Rules and
Regulations) of the Company are the subsidiaries listed on Schedule B hereto
(the "Subsidiaries"). The Company and each of its Subsidiaries has been duly
incorporated or formed, as the case may be, and is an existing corporation,
general or limited partnership or other business entity, as the case may be,
in good standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. The Company and each of its Subsidiaries has
full power and authority (corporate and other) to conduct its business as
described in the Registration Statement and Prospectus, and is duly qualified
or registered to do business in each jurisdiction in which it owns or leases
real property or in which the conduct of its business requires such
qualification or registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, would not have a
material adverse affect on the business, properties, financial position or
results of operations of the Company and its Subsidiaries taken as a whole;
and, other than the Subsidiaries, the Company owns no stock or other
beneficial interest in any corporation, partnership, joint venture or other
business entity which is a controlling interest in such entity or which
interests are, individually or collectively, material to the Company and its
Subsidiaries on a consolidated basis.
(vii) All of the issued and outstanding capital stock or
ownership interest of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, is wholly owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(viii) The Company's authorized, issued and outstanding debt and
shareholders' equity as set forth under the caption "Capitalization" in the
Prospects Supplement was and will be correct as of the dates of such
information. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
nonassessable by the Company and conform to the description thereof in the
Prospectus.
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(ix) The Securities will be, as of the Closing Date, duly authorized
by the Company for issuance and sale pursuant to this Underwriting Agreement
and the Indenture, and when duly authenticated and delivered by the Trustee
in accordance with the terms of the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee), and
delivered to, and paid for by, the Underwriter pursuant to this Underwriting
Agreement, will be valid and legally binding obligations of the Company
entitled to the benefit of the Indenture and will be enforceable against the
Company in accordance with their terms, subject to (a) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, (b) general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or law), and (c)
the discretion of the court before which any proceeding therefor may be
brought (clauses (a), (b) and (c) are collectively referred to as the
"Enforceability Limitations"); the Indenture has been duly qualified under
the TIA and prior to the issuance of the Securities will be duly authorized,
executed and delivered by the Company, and assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the Enforceability Limitations; the
Securities and the Indenture will conform in all material respects to the
statements relating thereto contained in the Prospectus; and the Securities
are, in all material respects, in the form contemplated by the Indenture.
(x) Except as contemplated in the Prospectus, subsequent to the
later of (a) the respective dates as of which information is given in the
Registration Statement and the Prospectus, or (b) the date as of which
information is incorporated therein, the Company and its Subsidiaries have
not incurred any liabilities or obligations, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that are
material to the Company and its Subsidiaries on a consolidated basis, there
has not been any material change in the capital stock or structure,
short-term debt or long-term debt of the Company or any material adverse
change in the capital stock or structure, short-term debt or long-term debt
of the Subsidiaries, or any material adverse change or any development that
is reasonably likely to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or results of
operations of the Company and its Subsidiaries on a consolidated basis and,
except for regular distributions with respect to the Company's common shares
of beneficial interest, no par value (the "Common Stock"), in amounts per
share that are consistent with past practice or the Company's declaration of
trust or by-laws, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(xi) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened any action, suit or proceeding to
which the Company or any of its Subsidiaries is a party, or that any of its
properties or other assets is the subject of, before or by any court or
governmental agency or body, that is reasonably likely to result in any
material adverse change in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
Subsidiaries on a consolidated basis.
(xii) During the period of at least the last 36 calendar months
prior to the date of this Underwriting Agreement, the Company has timely
filed with the Commission all documents and other material required to be
filed pursuant to Sections 13, 14 and 15(d) under the Exchange Act.
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(xiii) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statement or to any
of the documents incorporated by reference therein by the Act or the Exchange
Act or by the rules and regulations of the Commissions thereunder that have
not been so filed.
(xiv) This Underwriting Agreement and the Indenture have been
duly authorized, executed and delivered by the Company.
(xv) The execution of this Underwriting Agreement and the Indenture
and the consummation of the transactions contemplated herein and therein will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any agreement or instrument to which the
Company or its Subsidiaries is a party or by which they are bound or to which
any of the property or other assets of the Company or its Subsidiaries are
subject, except where such default(s) would not have a material adverse
effect or the Company and its Subsidiaries on a consolidated basis, (ii) the
declaration of trust, by-laws, certificate of general or limited partnership,
partnership agreement or other organizational document, as applicable, of the
Company or its Subsidiaries, or (iii) any statute, order, rule or regulation
of any court of governmental agency or body having jurisdiction over the
Company or its Subsidiaries or any of their properties or other assets; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Underwriting Agreement and the Indenture in
connection with the issuance or sale of the Securities being offered by the
Company, except such as may be required under the Act, the TIA and applicable
state securities laws (if any); and the Company has full power and authority
to authorize, issue and sell the Securities to be offered by it as
contemplated by this Underwriting Agreement and the Indenture.
(xvi) The Company and its Subsidiaries are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or the evidence of indebtedness, lease,
contract or other agreement or instrument to which they are a party or by
which they or any of their properties or other assets are bound, the
violation of which would individually or in the aggregate have a material
adverse effect on the Company and its Subsidiaries on a consolidated basis,
and no other party under any such agreement or instrument to which the
Company or its Subsidiaries are a party is, to the knowledge of the Company,
in default thereunder where such default would have a material adverse effect
on the Company and its Subsidiaries on a consolidated basis; and the Company
and its Subsidiaries are not in violation of their respective articles of
incorporation, by-laws, certificates of general or limited partnership,
partnership agreements, or other organizational documents, as the case may be.
(xvii) The Company and each of its Subsidiaries have good and
marketable title to all properties and assets described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Prospectus or where such exceptions
do not have a material adverse effect on the Company and its Subsidiaries
taken as a whole, and the Company and its Subsidiaries have valid, subsisting
and enforceable leases for the properties described in the Prospectus as
leased by the Company and its Subsidiaries with such exceptions, individually
and in the aggregate, as do not interfere with the use made and proposed to
be made of such properties by the Company and its Subsidiaries and would not
have a material adverse effect on the Company and its Subsidiaries taken as a
whole; except as set forth in Schedule C, no tenant under any of the leases
pursuant to which the Company or its Subsidiaries lease their
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properties has an option or right of first refusal to purchase the premises
demised under such lease; the use and occupancy of each of the properties of
the Company and its Subsidiaries complies with all applicable codes and
zoning laws and regulations with such exceptions, individually and in the
aggregate, as would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole; the Company and its Subsidiaries have no
knowledge of any pending or threatened condemnation or zoning change that
will affect the size of, use of, improvement of, construction on, or access
to any of the properties of the Company and its Subsidiaries with such
exceptions, individually and in the aggregate, as would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole; and the
Company and its Subsidiaries have no knowledge of any pending or threatened
proceeding or action that will affect the size of, use of, improvements on,
construction on, or access to any of the properties of the Company or its
Subsidiaries with such exceptions, individually and in the aggregate, as
would not have a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(xviii)The Company or its Subsidiaries have acquired title insurance
with respect to each of the properties described in the Prospectus as being
owned by the Company or its Subsidiaries, except, in each case, where the
failure to maintain such title insurance is not reasonably likely to have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
Subsidiaries taken as a whole.
(xix) Except as described, or incorporated by reference, in the
Registration Statement and the Prospectus (i) there does not exist on any of
the properties described in the Prospectus any hazardous substances,
hazardous materials, toxic substances or waste materials (collectively,
Hazardous Materials") in unlawful quantities which, individually and in the
aggregate, are reasonably likely to have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its Subsidiaries taken as a whole, (ii)
there has not occurred on or, to the Company's knowledge, off such properties
any unlawful spills, releases, discharges or disposal of Hazardous Materials,
which presence or occurrence is reasonably likely to have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries taken as a
whole, and (iii) the Company and its Subsidiaries have not failed to comply
with all applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any Hazardous
Materials, except for such failures which are not reasonably likely to have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
Subsidiaries taken as a whole.
(xx) Property and casualty insurance in favor of each of the Company
and its Subsidiaries is maintained with respect to each of the properties
owned by each of them in an amount and on such items as is reasonable and
customary for businesses of this type.
(xxi) No holder of outstanding shares of capital stock of the Company
has any rights to the registration of shares of capital stock of the Company
which would or could require such securities to be included in the
Registration Statement.
(xxii) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
or incorporated
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therein, (i) there has not been any material adverse change in the business,
results of operations, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, and (ii) neither the Company
nor any of its Subsidiaries has sustained any material loss or interference
with its assets, businesses or properties (whether owned or leased) from
fire, explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree that materially and adversely affects
the business, prospects, condition (financial or other), net worth or results
of operations of the Company and its Subsidiaries taken as a whole.
(xxiii)The Company has filed all federal, state, local and foreign
income tax returns which have been required to be filed and has paid all
taxes indicated by said returns and all assessments received by it to the
extent that such taxes have become due and payable, and which are not being
contested by the Company in good faith.
(xxiv) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by
the Company of this Underwriting Agreement and the Indenture and the
consummation of the transactions contemplated herein and thereon has been or
will be obtained or made and is or at the Closing Date will be in full force
and effect.
(xxv) The Company and its Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary to
the conduct of their businesses and are in compliance with the terms and
conditions of such licenses, certificates and permits; and to the best of the
Company's knowledge, the Company and its Subsidiaries have not infringed on
any patents, patent rights, trade names, trademarks or copyrights, which
infringement is reasonably likely to have a material adverse affect upon the
business, prospects, condition (financial or over), net worth or results of
operations of the Company and its Subsidiaries taken as a whole.
(xxvi) To Company's knowledge, the Company and its Subsidiaries are
conducting their respective businesses in compliance with all applicable
laws, orders, rules and regulations of the jurisdictions in which they are
conducting business including, without limitation, the Americans with
Disabilities Act of 1990 and all applicable local, state and federal
employment, truth-in-advertising, franchising and immigration laws and
regulations, except where the failure to be so in compliance would not have a
material adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company
and its Subsidiaries taken as a whole.
(xxvii)To the Company's knowledge, no transaction has occurred between
or among the Company and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required by the Act or the
1933 Act Rules and Regulations to be described in and is not described or
incorporated by reference in the Registration Statement and the Prospectus.
(xxviii)The Company satisfies all conditions and requirements for
filing the Registration Statement on Form S-3 under the Act.
(xxix) Other than in connection with this Underwriting Agreement, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or which is reasonably expected to cause or result in, or which
has constituted or
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which is reasonably expected to constitute, the stabilization or manipulation
of the price of the Securities.
(xxx) For all applicable tax years as to which the Company's tax
returns are subject to audit and the Company is subject to assessment for
taxes reportable therein, the Company has continuously been organized and
operating in conformity with the requirements for qualification as the real
estate investment trust under the Internal Revenue Code of 1986, as amended
(the "Code"). The Company's present operations are consistent with the
current requirements for taxation as a real estate investment trust under the
Code. The Company has no intention of changing its operations or engaging in
activities which would adversely affect its ability to qualify as a real
estate investment trust.
(xxx) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
On the basis of the representations, warranties and agreements contained
herein, but subject to the terms and conditions set forth herein, the Company
agrees to issue and sell the Securities to the Underwriter as hereinafter
provided, and the Underwriter agrees to purchase from the Company the
Securities at the purchase price set forth on Schedule A hereto plus accrued
interest, if any, from the date specified on Schedule A hereto to the date of
payment and delivery.
The Company understands that the Underwriter intends (i) to make a public
offering of the Securities, and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
Payment for the Securities shall be made to the Company or to its order
in immediately available funds in the amount, on the date and at the place
set forth on Schedule hereto (or at such other time and place on the same
date or such other date, not later than the third Business Day thereafter, as
the Underwriter and the Company may agree in writing). Such payment will be
made upon delivery to the Underwriter of the Securities registered in such
names and in such denominations as the Underwriter shall request nor less
than two full Business Days prior to the date of delivery, with transfer
taxes, if any, payable in connection with transfer to the Underwriter duly
paid by the Company. As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City or San Francisco, California. The time and date of such payment
and delivery with respect to the Securities are referred to herein as the
"Closing Date." The Securities will be delivered through the book entry
facilities of The Depository Trust Company ("DTC") and will be made available
for inspection by the Underwriter by 1:00 P.M. New York City time on the
Business Day prior to the Closing Date at such place in New York City as the
Underwriter, DTC and the Company shall agree.
4. COVENANTS. The Company covenants and agrees with the Underwriter
that:
(i) The Company will cause the Prospectus Supplement to be filed as
required by Section 2(a)(i) hereof (but only if you or your counsel have
not reasonably objected thereto by notice to the Company after having been
furnished a copy a reasonable time prior to filing) and will notify you
promptly of such filing.
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During the period in which a prospectus relating to the Securities is
required to be delivered under the Act, the Company will (i) notify you
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information, (ii) prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration
Statement or Prospectus that, in your opinion, may be necessary or
advisable in connection with your distribution of the Securities, and
(iii) file no amendment or supplement to the Registration Statement or
Prospectus (other than any document required to be filed under the
Exchange Act that upon filing is deemed to be incorporated by reference
therein) to which you or your counsel shall reasonably object by notice to
the Company after having been furnished a copy a reasonable time prior to
the filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification or registration of the Securities
for offering or sale in any jurisdiction, or of the initiation or threat of
any proceeding for any such purpose; and it will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(iii) The Company will comply with all requirements imposed upon
it by the Act, the 1933 Act Rules and Regulations, the Exchange Act, the
Exchange Act Rules and Regulations and the TIA, as from time to time in
force, so far as necessary to permit the continuance of sales of, or
dealings in, the Securities as contemplated by the provisions hereof and
the Prospectus. If, during such period, any event occurs as a result of
which, in the opinion of your counsel, the Registration Statement contains
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus
to comply with the Act, the Company will promptly notify you and will amend
or supplement the Registration Statement or Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance.
(iv) The Company will furnish to you copies of the Registration
Statement, the Prospectus (including all documents incorporated by
reference therein), each preliminary prospectus and all amendments and
supplements to the Registration Statement and Prospectus that are filed
with the Commission during the period in which a prospectus relating to the
Securities is required to be delivered under the Act (including all
documents filed with the Commission during such period that are deemed to
be incorporated by reference therein), in each case as soon as available
and in such quantities as you may from time to time reasonably request.
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(v) During the period of five years commencing on the date upon which
the Prospectus Supplement is filed pursuant to Rule 424(b) under the Act,
the Company will furnish you with copies of filings of the Company under
the Act and Exchange Act and with all other financial statements and
reports it distributes generally to the holders of any class of its capital
stock.
(vi) The Company will make generally available to its security holders
as soon as practicable and in the manner contemplated by Rule 158 of the
1933 Act Rules and Regulations, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning
after the date upon which the Prospectus Supplement is filed pursuant to
Rule 424(b) under the Act that shall satisfy the provisions of Section
11(a) of the Act and Rule 158 of the 1933 Act Rules and Regulations and
will advise you in writing when such statement has been made available.
(vii) Whether or not the transactions contemplated by this
Underwriting Agreement are consummated or this Underwriting Agreement is
terminated, the Company will pay, or reimburse if paid by you, all costs
and expenses incident to the performance of the obligations of the Company
under this Underwriting Agreement, including, but not limited to, costs and
expenses of or relating to (A) the preparation, printing and filing of the
Registration Statement and exhibits thereto, the Prospectus, each
preliminary prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (B) the word processing and reproduction of
this Underwriting Agreement and the Indenture, (C) the costs incurred by
the Company in furnishing (including costs of shipping, mailing and
courier) such copies of the Registration Statement, the Prospectus, each
preliminary prospectus and all amendments and supplements thereto, as may
be requested for use in connection with the offering and sale of the
Securities by you or by dealers to whom Securities may be sold, (D) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of such jurisdictions designated by you,
including the reasonable fees, disbursements and other charges of your
counsel in connection therewith, and the preparation of a blue sky
memoranda, if any, (E) the fees charged by Moody's Investors Service, Inc.
("Moody's") and Standard at Poor's Rating Services ("S&P" and, together
with Moody's, the "Rating Agencies") for the rating of the Securities at
the request of the Company, (F) the fees and costs of counsel to the
Company, (G) the fees and costs of the transfer agent for the Securities,
(H) the costs and expenses of the Trustee under the Indenture, and I) KPMG
Peat Marwick LLP or any other accountants engaged by the Company in
connection with the offering of the Securities.
(viii) If this Underwriting Agreement shall be terminated pursuant
to any of the provisions hereof or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse you
for all out-of-pocket expenses (including the reasonable fees,
disbursements and other charges of your counsel) incurred by you in
connection herewith.
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(ix) Other than in connection with this Underwriting Agreement, the
Company shall not at any time, directly or indirectly, take any action
designed to, or which might reasonably be expected to cause or result in,
or which has constituted or which might reasonably be expected to
constitute, the stabilization of the price of the Securities.
(x) The Company will take all reasonable action necessary to enable
the Rating Agencies to provide their respective credit ratings of the
Securities.
(xi) The Company will execute the supplemental indentures designating
the Securities as the debt securities to be offered and their terms and
provisions in accordance with the provisions of the Indenture.
(xii) The Company will apply the net proceeds to the Company from
the sale of the Securities by the Company as set forth under the caption
"Use of Proceeds" in the Prospects Supplement.
(xiii) The Company will continue to elect to qualify as a "real
estate investment trust" under the Code, and will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust."
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. Your obligation to purchase
and pay for the Securities as provided herein shall be subject to the
accuracy, as of the date hereof and the Closing Date (as if made at the
Closing Date), of the representations and warranties of the Company herein,
to the performance by the Company of its obligations hereunder and to the
following additional conditions:
(a) The Prospectus shall have been filed by the Company as required
by Section 2(a)(i) hereof; and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to your knowledge or the knowledge of
the Company, threatened by the Commission, nor, to your knowledge or the
knowledge of the Company, has any state securities authority suspended the
qualification or registration of the Securities for offering or sale in any
jurisdiction, and any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of you and your counsel.
(b) You shall not have advised the Company that the Registration
Statement, or any amendment thereto, contains an untrue statement of fact
that in the reasonable opinion of you or your counsel is material or omits to
state a fact that in the opinion of you or your counsel is material and is
required to be stated therein or is necessary to make the statements therein
not misleading, or that the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in the opinion of you and
your counsel is material or is necessary, in the light of the circumstances
under which they were made, to make the statements therein not misleading and
which statement has not been or is not being corrected to your satisfaction.
(c) Subsequent to the execution and delivery of this Underwriting
Agreement and prior to the Closing Date, there shall not have occurred any
downgrading in the rating accorded the Securities or any other debt
securities of the Company by any Rating Agency nor shall
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any notice have been given to the Company of (i) any intended or potential
downgrading by any Rating Agency in such securities, or (ii) any review or
possible change by any Rating Agency that does not indicate a stable,
positive or improving rating accorded such securities.
(d) Except as contemplated in the Prospectus Supplement, subsequent
to the respective dates as of which information is included or incorporated
in the Registration Statement, the Prospectus, the Prospectus Supplement and
each preliminary prospectus, there shall not have been any change on a
consolidated basis, in the equity capitalization, short-term debt or
long-term debt of the Company, or any adverse change, or any development
involving a prospective adverse change, in the condition (financial or
other), business, prospects, net worth or results of operations of the
Company and its Subsidiaries taken as a whole or any adverse change in the
rating assigned to any securities of the Company, that, in your judgment,
makes it impractical or inadvisable to offer or deliver the Securities on the
terms and in the manner contemplated in the Prospectus.
(e) You shall have received the opinion of Steinhart & Falconer LLP,
counsel for the Company, dated the Closing Date, in form and substance
reasonably satisfactory to your counsel to the effect that:
(i) The Company has been duly organized, is validly
existing as a business trust and is in good standing under the laws of
its jurisdiction of formation, has full power and authority to conduct
its business as described in the Registration Statement and
Prospectus, and is duly qualified or registered to do business in each
jurisdiction in which the conduct of its business or its ownership or
leasing of its properties requires such qualification or registration,
except where the failure to be so qualified or registered, considering
all such cases in the aggregate, is not reasonably likely to have a
material adverse effect on the business, properties, financial
position or results of operations of the Company and its Subsidiaries
taken as a whole;
(ii) The Company has the authorized, issued and outstanding,
Common Stock as set forth under the caption "Capitalization" in the
Prospectus Supplement and in its Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997; and to the knowledge of such counsel,
none of them was issued in violation of any preemptive or other
similar right arising under contract. The issuance of the Securities
has been duly authorized by the Company and, when duly authenticated
and delivered by the Trustee in accordance with the terms of the
Indenture (assuming the due authorization, execution and delivery of
the Indenture by the Trustee), and delivered to, and paid for by, the
Underwriter in accordance with the terms of this Underwriting
Agreement, such Securities will constitute valid and legally binding
obligations of the Company entitled to the benefits provided for in
the Indenture and will be enforceable against the Company in
accordance with their terms, subject to the Enforceability
Limitations. To the knowledge of such counsel, no holder of any
security of the Company has the right to have any security owned by
such holder included for registration in the Registration Statement or
to demand registration of any security owned by such holder during the
180 days after the date of this Agreement.
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(iii) The Registration Statement has become effective under
the Act, the Indenture has been qualified under the TIA, the
Prospectus Supplement has been filed as required by Section 2(a)(i)
hereof and, to the best knowledge of such counsel, after due inquiry,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission;
(iv) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects with the
requirements of the Act and the 1933 Act Rules and Regulations, and
nothing has come to the attention of such counsel which would lead
such counsel to believe that either (A) any part of the Registration
Statement (excluding any Prospectus Supplement with respect to an
offering of securities other than the offering contemplated hereby),
when such part became effective or was filed under the Act or the
Exchange Act, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission or at the Closing Date, included an
untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (C) to
the knowledge of such counsel, the documents incorporated by reference
in the Registration Statement or Prospectus or any amendment or
supplement thereto, when they became effective under the Act or were
filed with the Commission under the Act or the Exchange Act, as the
case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder (it being
understood that such counsel need express no opinion as to the
financial statements or other financial data included in any documents
mentioned in this clause), and the Indenture, on the date of filing
thereof with the Commission and at the Closing Date, conformed or will
conform in all material respects with the requirements of the TIA;
(v) This Underwriting Agreement has been duly authorized,
executed and delivered by the Company; the execution, delivery and
performance of this Underwriting Agreement and the consummation of the
transactions contemplated herein will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, the declaration of trust of the Company or any statute
applicable to the Company;
(vi) The Indenture has been duly and validly authorized,
executed and delivered by the Company and assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid
and legally binding agreement of the Company, enforceable against the
Company in accordance
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with its terms, subject to the Enforceability Limitations; the
execution, delivery and performance of the Indenture and the
consummation of the transactions contemplated therein will not
result in a breach or violation of any of the terms and provisions
of, or constitute a default under, the declaration of trust of the
Company or any statute applicable to the Company; and the Indenture
has been duly qualified under the TIA;
(vii) The Indenture and the Securities conform in all
material respects to the descriptions thereof in the Registration
Statement and the Prospectus under the captions "Description of the
Notes" and "Description of Debt Securities;"
(viii) For all applicable tax years as to which the Company's
tax returns are subject to audit and the Company is subject to
assessment for taxes reportable therein, the Company has continuously
been organized and operated in conformity with the requirements for
qualification as a "real estate investment trust" under the Code. The
Company's contemplated method of operation will permit it to continue
to meet the requirements for taxation as a "real estate investment
trust" under the Code;
(ix) The Company satisfies all conditions and requirements
for the use of a Registration Statement on Form S-3 under the Act;
(x) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(xi) Each of the Subsidiaries has been duly incorporated or
formed, as the case may be, and is validly existing as a corporation,
general or limited partnership or other legal entity, as the case may
be, and in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, has full power
(corporate or other) and authority to conduct its business as
described in the Registration Statement and Prospectus, and is duly
qualified or registered to do business in each jurisdiction in which
the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, is not
reasonably likely to have a material adverse effect on the business,
financial position or results of operations of the Company and its
Subsidiaries taken as a whole;
(xii) The statements in the Registration Statement and
Prospectus describing statutes, legal and governmental proceedings,
contracts and other documents, insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, are accurate and fairly present, in all material respects,
the information required to be shown; and such counsel does not know
of any statutes or legal or governmental proceedings required to be
described in the Prospectus that are not described as required, or of
any contracts or documents of a character required to be described in
the
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Registration Statement or Prospectus (or required to be filed under
the Exchange Act if upon such filing they would be incorporated by
reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required;
(xiii) The execution, delivery and performance of this
Underwriting Agreement and the Indenture and the consummation of the
transactions contemplated herein and therein will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (A) to the knowledge of such counsel, any
material fact, any statute, indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or
the evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company or its Subsidiaries are a party or by
which they are bound or to which any of the property or other assets
of the Company or its Subsidiaries is subject, (B) the declaration of
trust, articles of incorporation, by-laws, certificate of general or
limited partnership, partnership agreement or other organizational
document of the Company or any of its Subsidiaries, as applicable, or
(C) any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
its Subsidiaries or any of their properties or other assets; and no
consent, approval, authorization, notice to, order of, or filing with,
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Securities by the Company,
except such as have been obtained under the Act or the TIA, as may be
required under the Securities or Blue Sky laws of the various states
(as to which counsel expresses no opinion) or the absence of which
would not have a material adverse effect upon the business prospects,
condition (financial or other), net worth or results of operations of
the Company and its Subsidiaries taken as a whole;
(xiv) To the knowledge of such counsel, neither the Company
nor any of its Subsidiaries is in violation of any term or provision
of their respective declaration of trust, articles of incorporation,
by-laws, certificate of general or limited partnership, partnership
agreement or other organizational document, as applicable or in
violation of or default under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract, permit,
judgment, decree, order, statute, rule or regulation, except where
such default would not have a material adverse effect on the Company
and its Subsidiaries on a consolidated basis; and
(xv) To the knowledge of such counsel, there is no litigation
or governmental or other proceeding or investigation, before any court
or before or by any public body or board pending or, threatened
against, or involving the assets, properties or businesses of, the
Company or any of its Subsidiaries, involving the Company's or any of
its Subsidiaries' officers or directors or to which any of the
Company's or any of its Subsidiaries' properties or other
15
<PAGE>
assets is subject which would have a material adverse effect upon the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole.
(f) You shall have received from O'Melveny & Myers LLP, your counsel,
such opinion or opinions, dated as of the Closing Date, with respect to the
organization of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
reasonably may request, and such counsel shall have received such papers
and information as they request to enable them to pass upon such matters.
(g) At the time of execution of this Agreement and at the Closing
Date, you shall have received a letter, dated the date of delivery thereof,
from KPMG Peat Marwick LLP, the independent public accountants of the
Company in the form previously agreed to by you.
(h) You shall have received from the Company a certificate, signed by
the Chief Executive Officer and by the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that, to the
best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this
Underwriting Agreement are true and correct, as if made at and as of
the Closing Date, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened by the Commission and, if
applicable, no state securities authority has suspended the
qualification or registration of the Securities for offering or sale
in any jurisdiction;
(iii) Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment
or supplement to the Registration Statement or Prospectus that has not
been so set forth, and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed; and
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) there has not
been and no development has occurred which could reasonably be
expected to result in, a material adverse change in the general
affairs, business, business prospects, properties, management,
condition (financial or overwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, in each case
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other than as set forth in or contemplated by the Registration
Statement and the Prospectus, and (B) neither the Company nor any of
its Subsidiaries has sustained any material loss or interference with
its business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action order
or decree, which is not set forth in the Registration Statement and
the Prospectus.
Such certificate shall address such other matters as you may reasonably
request.
(i) All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel. The Company
will furnish you with such conformed copies of such opinions, certificates,
letters and other documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless you and your
directors, officers, employees, agents and representatives and each person,
if any, who controls you within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection
with and any and all amounts paid in settlement of, any action, suit or
proceeding between any of the identified parties and any indemnifying parties
or between any indemnified party and any third party or otherwise, or any
claim asserted), as and when incurred to which you or any such person, may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, clauses, liabilities, expenses or damages arise out of or are based
on (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or in any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, or in any application or other document
executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order
to qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission, (ii) the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to
make the statements in it not misleading, or (iii) any act or failure to act
or any alleged act or failure to act by you in connection with, or relating
in any manner to, the Securities or the offering contemplated hereby, and
which is included as part of, or referred to in, any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause
(i) or (ii) above (provided that the Company shall not be liable under this
clause (iii) to the extent it is finally determined by the Commission or a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by you through your gross negligence or willful
misconduct); provided that, the Company will not be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Securities in the public offering to any person and is based on an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to you furnished in
writing to the Company by you expressly for inclusion in the Registration
Statement or the Prospectus. You confirm to the Company, and the Company
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acknowledges that only the following information appearing in the Prospectus
with respect to the public offering of the Securities has been finished to
the Company by you for use in the Prospectus: (i) the stabilization legend on
the inside front cover page of the Prospectus Supplement; and (ii) the
information relating to you in the third paragraph under the caption
"Underwriting" in the Prospectus Supplement. This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
(b) You will indemnify and hold harmless the Company, its directors,
officers, employees, agents and representatives, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to you, but only insofar as losses claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity
with information relating to you furnished in writing to the Company by you
expressly for use in the Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that you might otherwise have.
Notwithstanding any other provision of this Section 6(b), in no case shall
you be liable or responsible for any amount in excess of the underwriting
discounts and commissions received by you.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against
an indemnifying party under this Section 6, notify such indemnifying party of
the commencement of such action, enclosing a copy of all papers served, but
the omission to so notify such indemnifying party will not relieve it from
any liability that it may have to any indemnified party under the foregoing
provisions of this Section 6 unless, and only to the extent such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent at
it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless (i) the
employment of counsel by he indemnified party has been authorized in writing
by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the indemnified
party between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party, or (iv) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one additional firm
admitted to
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practice in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed
by the indemnifying party promptly as they are incurred. An indemnifying
party will not be liable for any settlement of any action or claim effected
without its written consent (which consent will not be unreasonably
withheld); provided, however, no indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlements
compromise or consent includes an unconditional full release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding. Notwithstanding any other provision of this
Section 6(c), if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (x) such settlement is
entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (y) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement
being entered into, and (z) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of
such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but
for any reason is held to be unavailable from the Company or you, the Company
and you will contribute to the total losses, clam, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than you who may be
liable for contribution) to which the Company and you may be subject in such
proportion as shall be appropriate to reflect the relative benefits received
by the Company on the one hand and you on the other. The relative benefits
received by the Company on the one hand and you on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discount and commissions received by you, in each case as set
forth in the table on the cover page of the Prospects Supplement if, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company on the one hand and you on the other with respect to the statements
or omissions which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or you, the intent of the
parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and you agree
that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), you shall not be required to contribute any
19
<PAGE>
amount in excess of the underwriting discounts and commissions received by
you and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(d), any person who controls a party to this
Underwriting Agreement within the meaning of the Act will have the same
rights to contribution as that party, and each officer and director of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any other party
or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 6(d).
Except for a settlement entered into pursuant to the last sentence of Section
6(c) hereof, no party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not
be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of you, (ii) acceptance of the Securities
and payment therefor, or (iii) any termination of this Underwriting Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company contained herein or
in certificates delivered pursuant hereto, and your agreements, contained in
Section 6 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you or any
controlling persons or the Company or any of its officers, directors or
controlling persons, and shall survive delivery of and payment for the
Securities hereunder.
8. TERMINATION. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to
terminate this Underwriting Agreement if (i) the Company shall have failed,
refused or been unable, at or prior to the Closing Date, to perform any
agreement on its part to be performed hereunder, (ii) any other condition of
your obligations hereunder is not fulfilled when due, (iii) trading on the
Amex shall have been wholly suspended, (iv) minimum or maximum prices for
trading shall have been fixed for the Common Stock, or maximum ranges for
prices for the Common Stock shall have been required on the Amex by the Amex
or by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by federal or
New York authorities, or (vi) an outbreak of major hostilities in which the
United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or
occurrence of a similar character shall have occurred since the execution of
this Underwriting Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Securities. Any such termination shall be without liability of any party to
any other party with respect to Securities not purchased by reason of such
termination except that the provisions of Sections 4(a)(vii) and 6 hereof
shall at all times be effective. If you elect to terminate this Underwriting
Agreement as provided in this Section, the Company shall be notified promptly
by you by telephone, telex or telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be in
writing and if sent to you shall be mailed, delivered telexed or telecopied
and confirmed to the Underwriter at 1285
20
<PAGE>
Avenue of the Americas, New York, New York 10019, Attention: Corporate
Finance Department (with copy to Peter T. Healy, Esq., c/o O'Melveny & Myers
LLP, 275 Battery Street, 26th floor, San Francisco, California 94111), or if
sent to the Company shall be mailed, delivered, telexed or telecopied and
confirmed to the Company at 3450 California Street, San Francisco, California
94118, Attention: Mr. Dennis Ryan, with a copy to David J. Romanski, Esq.,
c/o Steinhart & Falconer LLP, 333 Market Street, 32nd floor, San Francisco,
California 94105. Either party to this Underwriting Agreement may change
such address for notices by sending to the other party to this Underwriting
Agreement written notice of a new address for such purpose.
10. PARTIES. This Agreement shall inure to the benefit of, and be
binding upon the Company and the Underwriter and their respective successors
and the controlling persons, officers, directors, employees and
representatives referred to in Section 6 hereof, and no other person will
have any right or obligation hereunder.
11. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with, the laws of the State of New York.
12. LIMITATION OF LIABILITY. Any liability of the Company under this
Agreement shall be solely the liability of the Company, and no officers or
trustee of the Company shall have any personal liability hereunder.
21
<PAGE>
If the foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company and the Underwriter.
Very truly yours,
Western Investment Real Estate Trust
By: /s/ Dennis D. Ryan
-----------------------------------------------
Name: Dennis D. Ryan
------------------------------------------
Title: Chief Financial Officer
-----------------------------------------
By: /s/ William A. Talmage
-----------------------------------------------
Name: William A. Talmage
------------------------------------------
Title: President
-----------------------------------------
ACCEPTED as of the date first above written
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
By: /s/ Frederick T. Caven, Jr.
-------------------------------------------
Name: Frederick T. Caven, Jr.
Title: Managing Director
22
<PAGE>
SCHEDULE A
Underwriter: PaineWebber Incorporated
Title of Securities: 7.10% Senior Notes due September 15, 2006
7.20% Senior Notes due September 15, 2008
7.30% Senior Notes due September 15, 2010
Aggregate principal amount: $25,000,000 of each class, for an aggregate total
of $75,000,000
Price to Public: 99.859% - 2006 Notes
99.764% - 2008 Notes
99.781% - 2010 Notes
Underwriting Discount: 0.60% - 2006 Notes
0.60% - 2008 Notes
0.60% - 2010 Notes
Purchase Price to be paid
to Company: $74,401,000
Closing Date and Time of
Delivery: September 25, 1997, 10:00 a.m. (New York City time)
Closing Location: O'Melveny & Myers LLP
275 Battery Street, 26th Floor
San Francisco, California 94111
<PAGE>
SCHEDULE B
SUBSIDIARIES
WIRET Asset Management Services
<PAGE>
SCHEDULE C
Tenants with Options or Rights of First Refusal
<PAGE>
SCHEDULE D
<TABLE>
Principal Amount
of Notes
Underwriter To Be Purchased
- ----------- ---------------
<S> <C>
PaineWebber Incorporated $ 75,000,000
</TABLE>
<PAGE>
Exhibit 4.5
WESTERN INVESTMENT REAL ESTATE TRUST
ISSUER
to
THE BANK OF NEW YORK
TRUSTEE
-----------------------------
Supplemental Indenture No. 1
Dated as of September 1, 1997
-----------------------------
$25,000,000
7.10% Senior Notes due 2006
<PAGE>
SUPPLEMENTAL INDENTURE NO. 1, dated as of September 1, 1997 (the
"Supplemental Indenture"), between WESTERN INVESTMENT REAL ESTATE TRUST, a
real estate investment trust organized and existing under the laws of the
State of California (herein called the "Company"), and THE BANK OF NEW YORK,
a banking corporation duly organized and existing under the laws of the State
of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture
dated as of September 1, 1997 (the "Senior Indenture"), a form of which has
been filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, as Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (Registration No. 333-32721), providing for the
issuance from time to time of Senior Debt Securities of the Company (the
"Securities").
Section 301 of the Senior Indenture provides for various matters
with respect to any series of Securities issued under the Senior Indenture to
be established in an indenture supplemental to the Senior Indenture.
Section 901(7) of the Senior Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Senior Indenture
to establish the form or terms of Securities of any series as provided by
Sections 201 and 301 of the Senior Indenture.
The Board of Trustees of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Securities provided for herein by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as follows:
ARTICLE ONE
RELATION TO SENIOR INDENTURE; DEFINITIONS
-----------------------------------------
SECTION 1.1. RELATION TO SENIOR INDENTURE. This Supplemental
Indenture constitutes an integral part of the Senior Indenture.
SECTION 1.2. DEFINITIONS. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
<PAGE>
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Senior Indenture; and
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Supplemental Indenture.
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary, or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Debt
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred
on the date of the related acquisition of assets from any Person or the date
the acquired Person becomes a Subsidiary.
"Business Day" means any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which banking institutions in the
City of New York or in the City of Saint Louis, Missouri are authorized or
required by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period
means Earnings from Operations of the Company and its Subsidiaries plus
amounts which have been deducted, and minus amounts which have been added,
for the following (without duplication): (a) interest on Debt of the Company
and its Subsidiaries, (b) provision for taxes of the Company and its
Subsidiaries based on income, (c) amortization of debt discount, (d) provisions
for gains and losses on properties and property depreciation and amortization,
(e) the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for such period, and
(f) amortization of deferred charges.
"Corporate Trust Office" means the office of the Trustee at which,
at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286 and, for purposes of the
Place of Payment provisions of Sections 305 and 1002 of the Senior Indenture,
is located at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"Debt" of the Company or any Subsidiary means any indebtedness of
the Company or any Subsidiary, whether or not contingent, in respect of
(i) borrowed money or evidenced by bonds, notes, debentures or similar
instruments, (ii) indebtedness for borrowed money secured by any mortgage,
lien, charge, pledge, or security interest of any kind existing
-2-
<PAGE>
on property owned by the Company or any Subsidiary (each securing such debt,
an "Encumbrance"), (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's Consolidated Balance Sheet as a capitalized lease in accordance
with GAAP, to the extent, in the case of items of indebtedness under (i)
through (iii) above, that any such items (other than letters of credit) would
appear as a liability on the Company's Consolidated Balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise
included, any obligations by the Company 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 the Company or any Subsidiary) (it being understood that Debt shall be
deemed to be incurred by the Company or any Subsidiary whenever the Company
or such Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof).
"Debt Service Charge" for any period means the maximum amount which
is payable during such period for interest on, and amortization during such
period of any original issue discount of, Debt of the Company and its
Subsidiaries and the amount of dividends which are payable during such period
in respect of any Disqualified Stock.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise
(i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise (other than Capital Stock which is redeemable solely
in exchange for common stock), (ii) is convertible into or exchangeable or
exercisable for Debt or Disqualified Stock, or (iii) is redeemable at the
option of the holder thereof, in whole or in part (other than Capital Stock
which is redeemable solely in exchange for common stock), in each case on or
prior to the Stated Maturity of the Notes.
"Earnings from Operations" for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, and
net property valuation losses, as reflected in the financial statements of
the Company and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Encumbrance" has the meaning specified in the definition of "Debt"
set forth in this Section 1.2.
"Financial Statements" has the meaning specified in Section 1009 of
the Senior Indenture.
-3-
<PAGE>
"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any Notes, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of each such
dollar if such redemption or accelerated payment had not been made,
determined by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment
had not been made to the date of redemption or accelerated payment, over (ii)
the aggregate principal amount of the Notes being redeemed or paid. For
purposes of the Indenture, all references to any "premium" on the Notes shall
be deemed to refer to any Make-Whole Amount, unless the context otherwise
requires.
"Notes" has the meaning specified in Section 2.1 hereof.
"Redemption Price" has the meaning specified in Section 2.5 hereof.
"Reinvestment Rate' means 0.25% (one quarter of one percent) plus
the arithmetic mean of the yields under the heading "Week Ending" published
in the most recent Statistical Release under the caption "Treasury Constant
Maturities" for the maturity (rounded to the nearest month) corresponding to
the remaining life to maturity, as of the payment date of the principal being
redeemed or paid. If no maturity exactly corresponds to such maturity,
yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of such relevant periods to
the nearest month. For the purposes of calculating the Reinvestment Rate,
the most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which reports yields on
actively traded United States government securities adjusted to constant
maturities, or, if such statistical release is not published at the time of
any determination hereunder, then such other reasonably comparable index
which shall be designated by the Company.
"Subsidiary" means (i) any corporation or other entity the majority
of the shares of the non-voting capital stock or other equivalent ownership
interests of which (except trustees' qualifying shares) are at the time
directly or indirectly owned by the Company, and the majority of the shares
of the voting capital stock or other equivalent ownership interests of which
(except trustees' qualifying shares) are at the time directly or indirectly
owned by the Company or any
-4-
<PAGE>
other Subsidiary, and (ii) any other entity (other than the Company) that
accounts of which are consolidated with the accounts of the Company or any
Subsidiary.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its
Subsidiaries determined in accordance with GAAP, but excluding intangibles.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP, but excluding
intangibles.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the
Company and its Subsidiaries on such date, before depreciation and
amortization determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any Encumbrance
upon any of the properties of the Company or any Subsidiary.
ARTICLE TWO
THE SERIES OF NOTES
-------------------
SECTION 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the "7.10% Senior Notes due 2006" (the "Notes").
SECTION 2.2. LIMITATIONS ON AGGREGATE PRINCIPAL AMOUNT. The
aggregate principal amount of the Notes shall be limited to $25,000,000, and,
except as provided in this Section and in Section 306 of the Senior
Indenture, the Company shall not execute and the Trustee shall not
authenticate or deliver Notes in excess of such aggregate principal amount.
Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture, or in the Notes, is intended to or shall limit
execution by the Company or authentication or delivery by the Trustee of the
Notes under the circumstances contemplated in Sections 303, 304, 306 and 906 of
the Senior Indenture.
SECTION 2.3. INTEREST AND INTEREST RATES; MATURITY DATE OF NOTES.
The Notes will bear interest at a rate of 7.10% per annum from September 25,
1997 or from the immediately preceding Interest Payment Date to which
interest has been paid or duly provided for, payable semi-annually in arrears
on March 15 and September 15 of each year, commencing March 15, 1998 (each,
an "Interest Payment Date"), to the Person in whose name such Note is
registered at the close of business on March 1 or September 1 (whether or not
a Business Day),
-5-
<PAGE>
as the case may be, next preceding such Interest Payment Date (each, a
"Regular Record Date"). Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The interest so payable on any Note
which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Person in whose name such
Note as registered on the relevant Regular Record Date, and such defaulted
interest shall instead be payable to the Person in whose name such Note is
registered on the Special Record Date or other specified date determined in
accordance with the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not
a Business Day, the required payment shall be made on the next Business Day
as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
The Notes will mature on September 15, 2006.
SECTION 2.4. LIMITATIONS ON INCURRENCE OF DEBT.
(a) The Company will not, and will not permit any Subsidiary
to, incur any Debt if, immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Debt of the Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum of (without duplication) (i) the Total Assets of
the Company and its Subsidiaries as of the end of the calendar quarter
covered in the Company's Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, as the case may be, most recently filed with the Commission (or,
if such filing is not permitted under the Exchange Act, with the Trustee)
prior to the incurrence of such additional Debt, and (ii) the purchase price
of any real estate assets or mortgages receivable acquired since the end of
the most recent calendar quarter, and (iii) the amount of any securities
offering proceeds received (to the extent such proceeds were not used to
acquire real estate assets or mortgages receivable or used to reduce Debt),
by the Company or any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the incurrence of such
additional Debt.
(b) In addition to the limitation set forth in subsection (a)
of this Section 2.4, the Company will not, and will not permit any Subsidiary
to, incur any Debt if the ratio of Consolidated Income Available for Debt
Service to the Debt Service Charge for the four consecutive fiscal quarters
most recently ended prior to the date on which such additional Debt is to be
incurred shall have been less than 1.5:1 on a PRO FORMA basis after giving
effect thereto and to the application of the proceeds therefrom, and
calculated on the assumption that (i) such Debt and any other Debt incurred
by the Company and its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds therefrom, including to refinance
other Debt, had occurred at the beginning of such period; (ii) the repayment
or retirement of any other Debt by the Company and its Subsidiaries since the
first day of such four-quarter period had been repaid or retired at the
beginning of such period (except that, in making such computation,
-6-
<PAGE>
the amount of Debt under any revolving credit facility shall be computed
based upon the average daily balance of such Debt during such period); (iii)
in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such Period with the
appropriate adjustments with respect to such acquisition being included in
such PRO FORMA calculation; and (iv) in the case of any acquisition or
disposition by the Company or its Subsidiaries of any asset or group of
assets since the first day of such four-quarter period, whether by merger,
stock purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Debt had occurred as of the first day
of such period with the appropriate adjustments with respect to such
acquisition or disposition being included in such PRO FORMA calculation.
(c) In addition to the limitations set forth in subsections
(a) and (b) of this Section 2.4, the Company will not, and will not permit
any Subsidiary to, incur any Debt secured by any Encumbrance upon any of the
property of the Company or any Subsidiary if, immediately after giving effect
to the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the
Company and its Subsidiaries on a consolidated basis which is secured by any
Encumbrance on property of the Company or any Subsidiary is greater than 40%
of the sum of (without duplication) (i) the Total Assets of the Company and
its Subsidiaries as of the end of the calendar quarter covered in the
Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the
case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to the
incurrence of such additional Debt and (ii) the purchase price of any real
estate assets or mortgages receivable acquired since the end of the most
recent calendar quarter, and (iii) the amount of any securities offering
proceeds received (to the extent that such proceeds were not used to acquire
real estate assets or mortgages receivable or used to reduce Debt), by the
Company or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Debt.
(d) The Company and its Subsidiaries must at all times own
Total Unencumbered Assets greater than 150% of the aggregate outstanding
principal amount of the Unsecured Debt of the Company and its Subsidiaries on
a consolidated basis.
(e) For purposes of this Section 2.4, Debt shall be deemed to
be "incurred" by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof.
(f) The covenants set forth in subsections (a), (b) and (c) of
this Section 2.4 shall not restrict the Company from refinancing existing
Debt, provided that the outstanding principal amount of such Debt is not
increased.
-7-
<PAGE>
SECTION 2.5. REDEMPTION.
(a) The Notes shall be redeemable before their Stated Maturity
in accordance with this Section 2.5 and otherwise in accordance with the
provisions of Article Eleven of the Senior Indenture. In the event of any
conflict between this Section 2.5 (including the definitions of terms used
herein) and Article Eleven of the Senior Indenture (including the definitions
of terms used therein), this Section 2.5 shall control.
(b) The Notes may be redeemed at any time at the option and in
the sole discretion of the Company in whole or from time to time in part, at a
redemption price (the "Redemption Price") equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
Redemption Date, and (ii) the Make-Whole Amount, if any, with respect to such
Notes.
SECTION 2.6. PLACES OF PAYMENT. The Places of Payment where the
Notes may be presented or surrendered for payment, where the Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to and upon the Company in respect of the Notes and the Senior Indenture
may be served shall be in (i) the Borough of Manhattan, The City of New York,
New York, and the office or agency for such purpose shall initially be 101
Barclay Street, Floor 21 West, New York, New York 10286.
SECTION 2.7. METHOD OF PAYMENT. Payment of the principal of and
interest on the Notes will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(which shall initially be an office or agency of the Trustee), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company, payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located inside the United States.
SECTION 2.8. CURRENCY. Principal and interest on the Notes shall be
payable in Dollars.
SECTION 2.9. REGISTERED SECURITIES: GLOBAL FORM. The Notes shall
be issuable and transferable in fully registered form as Registered
Securities, without coupons. The Notes shall be issued in the form of one or
more permanent global Securities. The depositary for the Notes shall be DTC.
The Notes shall not be issuable in definitive form except as provided in
Section 305 of the Senior Indenture.
SECTION 2.10. FORM OF NOTES. The Notes shall be substantially in the
form attached as Exhibit A hereto.
-8-
<PAGE>
SECTION 2.11. REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent for the Notes.
SECTION 2.12. DEFEASANCE. The provisions of Section 1402 and 1403
of the Senior Indenture, together with the other provisions of Article
Fourteen of the Senior Indenture, shall be applicable to the Notes. The
provisions of Section 1403 of the Senior Indenture shall apply to the
covenants set forth in Section 2.4 of this Supplemental Indenture and to
those covenants specified in Section 1403 of the Senior Indenture.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. RATIFICATION OF SENIOR INDENTURE. Except as expressly
modified or amended hereby, the Senior Indenture continues in full force and
effect and is in all respects confirmed and preserved.
SECTION 3.2. GOVERNING LAW. This Supplemental Indenture and each
Note shall be governed by the construed in accordance with the laws of the
State of New York. This Supplemental Indenture is subject to the provisions
of the Trust Indenture Act of 1939, as amended and shall, to the extent
applicable, be governed by such provisions.
SECTION 3.3. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
WESTERN INVESTMENT REAL ESTATE TRUST
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
------------------------------------------
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
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<PAGE>
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
-10-
<PAGE>
Exhibit A to
Supplemental Indenture No. 1
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
SUCH SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR
ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR
A NOMINEE OF SUCH SUCCESSOR.
[If this Security is an Original Issue Discount Security, insert -- FOR
PURPOSES OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS__ % OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS ____, 19__ [AND] THE YIELD TO MATURITY IS__%.
[THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE
TO THE SHORT ACCRUAL PERIOD OF _____, 19__ TO _______ , 19__ , IS __% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]
WESTERN INVESTMENT REAL ESTATE TRUST
7.10% Senior Note Due 2006
Registered No. 001 PRINCIPAL AMOUNT
CUSIP No. 958468 AC 4 --$25,000,000--
WESTERN INVESTMENT REAL ESTATE TRUST, a California real estate investment
trust (herein referred to as the "Company" which term includes any successor
corporation under the Indenture referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, upon presentation, the
principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS on September 15, 2006
(the "Stated Maturity Date") and to pay interest thereon from September 25,
1997 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on March 15 and September 15 in each
year (each, an "Interest Payment Date"), commencing March 15, 1998, at the
rate of
-11-
<PAGE>
7.10% per annum, until the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date
at the office or agency of the Company maintained for such purpose; PROVIDED,
HOWEVER, that such interest may be paid, at the Company's option, by mailing
a check to such Holder at its registered address or by transfer of funds to
an account maintained by such Holder within the United States. Any such
interest not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date, and may be paid to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the
Indenture. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The principal of this Security payable on the Stated Maturity Date or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption
Date is not an Interest Payment Date, interest on this Security payable on
the Redemption Date will be paid against presentation of this Security at the
office or agency of the Company maintained for that purpose in San Francisco,
California in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
Stated Maturity Date or Redemption Date, as the case may be, will include
interest accrued from and including the next preceding Interest Payment Date
in respect of which interest has been paid or duly provided for (or from and
including September 25, 1997, if no interest has been paid on this Security)
to but excluding such Interest Payment Date or the Stated Maturity Date or
Redemption Date, as the case may be. If any Interest Payment Date or the
Stated Maturity Date or Redemption Date falls on a day that is not a Business
Day, as defined below, principal, premium or Make-Whole Amount, if any,
and/or interest payable with respect to such Interest Payment Date or Stated
Maturity Date or Redemption Date, as the case may be, will be paid on the
next succeeding Business Day with the same force and effect as if it were
paid on the date such payment was due, and no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date or
Stated Maturity Date or Redemption Date, as the case may be. "Business Day"
means any day, other than a Saturday or Sunday, on which banks in the City of
New York, New York are not required or authorized by law or executive order
to close.
All payments of principal, premium or Make-Whole Amount, if any, and interest in
respect of this Security will be made by the Company in immediately available
funds.
-12-
<PAGE>
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signatories, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its facsimile corporate seal.
Dated: WESTERN INVESTMENT REAL ESTATE TRUST
--------------
By:
---------------------------------
O.A. Talmage
Chief Executive Officer
By:
--------------------------------
Dennis D. Ryan
Chief Financial Officer
Attest:
- --------------------------------
Barbara J. Donham
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK
By:
----------------------------------
[name]
[title]
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<PAGE>
[Reverse of Security]
WESTERN INVESTMENT REAL ESTATE TRUST
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1997, as supplemented by
Supplemental Indenture No. 1, dated as of September 1, 1997 (as so
supplemented, herein called the "Indenture") between the Company and The Bank
of New York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture with respect to the series of which
this Security is a part), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), and the aggregate principal amount of the
Securities to be issued under such series is limited to $25,000,000 (except
for Securities authenticated and delivered upon transfer of, or in exchange
for, or in lieu of other Securities). All terms used in this Security which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Securities are subject to redemption at any time at the option and in the
sole discretion of the Company in whole or from time to time in part, at a
redemption price equal to the sum of (i) the principal amount of the Notes
being redeemed plus accrued interest thereon to the Redemption Date and (ii)
the Make-Whole Amount, if any, with respect to such Notes; PROVIDED, HOWEVER,
that installments of interest on this Security whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of this Security,
or one or more Predecessor Securities, of record at the close of business on
the relevant Record Dates referred to on the face hereof, all as provided in
the Indenture.
Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the Redemption Date, all as provided in
the Indenture.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of
-14-
<PAGE>
the Securities under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority of the aggregate
principal amount of all Securities issued under the Indenture at the time
Outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Securities, on behalf of the Holders of all such
Securities, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount, in certain
instances, of the Outstanding Securities of any series to waive, on behalf of
all of the Holders of Securities of such series, certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium or
Make-Whole Amount, if any) and interest on this Security at the times, places
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Security is registrable in the Security
Register of the Company upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium or Make-Whole Amount, if any) and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Security is exchangeable for a like aggregate principal
amount of Securities of different authorized denominations but otherwise having
the same terms and conditions, as requested by the Holder hereof surrendering
the same.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith,
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security
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<PAGE>
is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium or
Make-Whole Amount, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any past,
present or future stockholder, employee, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely in such State.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of
such Securities. No representation is made as to the correctness or accuracy
of such CUSIP numbers as printed on the Securities, and reliance may be
placed only on the other identification numbers printed hereon.
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE -------------------------
- ------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address Including
Zip Code of Assignee)
- ------------------------------------------------------------------------------
the within Security of Western Investment Real Estate Trust and hereby does
irrevocably constitute and appoint _______________________ Attorney to transfer
said security on the books of the within-named Company with full power of
substitution in the premises.
Dated:
-------------------- ----------------------------------
----------------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the [Registrar] in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular,
without alteration or enlargement of any change whatever.
17
<PAGE>
EXHIBIT 4.6
WESTERN INVESTMENT REAL ESTATE TRUST
ISSUER
to
THE BANK OF NEW YORK
TRUSTEE
-----------------------------
Supplemental Indenture No. 2
Dated as of September 1, 1997
-----------------------------
$25,000,000
7.20% Senior Notes due 2008
<PAGE>
SUPPLEMENTAL INDENTURE No. 2, dated as of September 1, 1997 (the
"Supplemental Indenture"), between WESTERN INVESTMENT REAL ESTATE TRUST, a real
estate investment trust organized and existing under the laws of the State of
California (herein called the "Company"), and THE BANK OF NEW YORK, a banking
corporation duly organized and existing under the laws of the State of New York,
as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture dated
as of September 1, 1997 (the "Senior Indenture"), a form of which has been filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, as Exhibit 4.1 to the Company's Registration Statement on Form S-3
(Registration No. 333-32721), providing for the issuance from time to time of
Senior Debt Securities of the Company (the "Securities").
Section 301 of the Senior Indenture provides for various matters with
respect to any series of Securities issued under the Senior Indenture to be
established in an indenture supplemental to the Senior Indenture.
Section 901(7) of the Senior Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Senior Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 and 301 of the Senior Indenture.
The Board of Trustees of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Securities provided for herein by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities or of any series thereof, as follows:
ARTICLE ONE
RELATION TO SENIOR INDENTURE; DEFINITIONS
SECTION 1.1. RELATION TO SENIOR INDENTURE. This Supplemental
Indenture constitutes an integral part of the Senior Indenture.
SECTION 1.2. DEFINITIONS. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
<PAGE>
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Senior Indenture; and
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Supplemental Indenture.
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary, or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Saint Louis, Missouri are authorized or required by
law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (a) interest on Debt of the Company and its
Subsidiaries, (b) provision for taxes of the Company and its Subsidiaries based
on income, (c) amortization of debt discount, (d) provisions for gains and
losses on properties and property depreciation and amortization, (e) the effect
of any noncash charge resulting from a change in accounting principles in
determining Earnings from Operations for such period, and (f) amortization of
deferred charges.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 101 Barclay Street,
Floor 21 West, New York, New York 10286 and, for purposes of the Place of
Payment provisions of Sections 305 and 1002 of the Senior Indenture, is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) borrowed
money or evidenced by bonds, notes, debentures or similar instruments,
(ii) indebtedness for borrowed money secured by any mortgage, lien, charge,
pledge, or security interest of any kind existing
-2-
<PAGE>
on property owned by the Company or any Subsidiary (each securing such debt,
an "Encumbrance"), (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's Consolidated Balance Sheet as a capitalized lease in accordance
with GAAP, to the extent, in the case of items of indebtedness under (i)
through (iii) above, that any such items (other than letters of credit) would
appear as a liability on the Company's Consolidated Balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise
included, any obligations by the Company 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 the Company or any Subsidiary) (it being understood that Debt shall be
deemed to be incurred by the Company or any Subsidiary whenever the Company
or such Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof).
"Debt Service Charge" for any period means the maximum amount which is
payable during such period for interest on, and amortization during such period
of any original issue discount of, Debt of the Company and its Subsidiaries and
the amount of dividends which are payable during such period in respect of any
Disqualified Stock.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock, or (iii) is redeemable at the option of the holder thereof,
in whole or in part (other than Capital Stock which is redeemable solely in
exchange for common stock), in each case on or prior to the Stated Maturity of
the Notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items, and net property
valuation losses, as reflected in the financial statements of the Company and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" has the meaning specified in the definition of "Debt"
set forth in this Section 1.2.
"Financial Statements" has the meaning specified in Section 1009 of
the Senior Indenture.
-3-
<PAGE>
"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any Notes, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of each such
dollar if such redemption or accelerated payment had not been made,
determined by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment
had not been made to the date of redemption or accelerated payment, over (ii)
the aggregate principal amount of the Notes being redeemed or paid. For
purposes of the Indenture, all references to any "premium" on the Notes shall
be deemed to refer to any Make-Whole Amount, unless the context otherwise
requires.
"Notes" has the meaning specified in Section 2.1 hereof.
"Redemption Price" has the meaning specified in Section 2.5 hereof.
"Reinvestment Rate' means 0.25% (one quarter of one percent) plus the
arithmetic mean of the yields under the heading "Week Ending" published in the
most recent Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity, as of the payment date of the principal being redeemed or
paid. If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the Reinvestment
Rate shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which reports yields on actively
traded United States government securities adjusted to constant maturities, or,
if such statistical release is not published at the time of any determination
hereunder, then such other reasonably comparable index which shall be designated
by the Company.
"Subsidiary" means (i) any corporation or other entity the majority of
the shares of the non-voting capital stock or other equivalent ownership
interests of which (except trustees' qualifying shares) are at the time directly
or indirectly owned by the Company, and the majority of the shares of the voting
capital stock or other equivalent ownership interests of which (except trustees'
qualifying shares) are at the time directly or indirectly owned by the Company
or any
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<PAGE>
other Subsidiary, and (ii) any other entity (other than the Company) that
accounts of which are consolidated with the accounts of the Company or any
Subsidiary.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP, but excluding intangibles.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP, but excluding
intangibles.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any Encumbrance
upon any of the properties of the Company or any Subsidiary.
ARTICLE TWO
THE SERIES OF NOTES
SECTION 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the "7.20% Senior Notes due 2008" (the "Notes").
SECTION 2.2. LIMITATIONS ON AGGREGATE PRINCIPAL AMOUNT. The
aggregate principal amount of the Notes shall be limited to $25,000,000, and,
except as provided in this Section and in Section 306 of the Senior Indenture,
the Company shall not execute and the Trustee shall not authenticate or deliver
Notes in excess of such aggregate principal amount.
Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture, or in the Notes, is intended to or shall limit execution
by the Company or authentication or delivery by the Trustee of the Notes under
the circumstances contemplated in Sections 303, 304, 306 and 906 of the Senior
Indenture.
SECTION 2.3. INTEREST AND INTEREST RATES; MATURITY DATE OF NOTES.
The Notes will bear interest at a rate of 7.20% per annum from September 25,
1997 or from the immediately preceding Interest Payment Date to which interest
has been paid or duly provided for, payable semi-annually in arrears on March 15
and September 15 of each year, commencing March 15, 1998 (each, an "Interest
Payment Date"), to the Person in whose name such Note is registered at the close
of business on March 1 or September 1 (whether or not a Business Day),
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<PAGE>
as the case may be, next preceding such Interest Payment Date (each, a
"Regular Record Date"). Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The interest so payable on any Note
which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Person in whose name such
Note as registered on the relevant Regular Record Date, and such defaulted
interest shall instead be payable to the Person in whose name such Note is
registered on the Special Record Date or other specified date determined in
accordance with the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
The Notes will mature on September 15, 2008.
SECTION 2.4. LIMITATIONS ON INCURRENCE OF DEBT.
(a) The Company will not, and will not permit any Subsidiary to,
incur any Debt if, immediately after giving effect to the incurrence of such
additional Debt and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis determined in accordance with GAAP is greater than 60% of
the sum of (without duplication) (i) the Total Assets of the Company and its
Subsidiaries as of the end of the calendar quarter covered in the Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the incurrence of such
additional Debt, and (ii) the purchase price of any real estate assets or
mortgages receivable acquired since the end of the most recent calendar quarter,
and (iii) the amount of any securities offering proceeds received (to the extent
such proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Company or any Subsidiary since the
end of such calendar quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt.
(b) In addition to the limitation set forth in subsection (a) of
this Section 2.4, the Company will not, and will not permit any Subsidiary to,
incur any Debt if the ratio of Consolidated Income Available for Debt Service to
the Debt Service Charge for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred shall
have been less than 1.5:1 on a PRO FORMA basis after giving effect thereto and
to the application of the proceeds therefrom, and calculated on the assumption
that (i) such Debt and any other Debt incurred by the Company and its
Subsidiaries since the first day of such four-quarter period and the application
of the proceeds therefrom, including to refinance other Debt, had occurred at
the beginning of such period; (ii) the repayment or retirement of any other Debt
by the Company and its Subsidiaries since the first day of such four-quarter
period had been repaid or retired at the beginning of such period (except that,
in making such computation,
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<PAGE>
the amount of Debt under any revolving credit facility shall be computed
based upon the average daily balance of such Debt during such period); (iii)
in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such Period with the
appropriate adjustments with respect to such acquisition being included in
such PRO FORMA calculation; and (iv) in the case of any acquisition or
disposition by the Company or its Subsidiaries of any asset or group of
assets since the first day of such four-quarter period, whether by merger,
stock purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Debt had occurred as of the first day
of such period with the appropriate adjustments with respect to such
acquisition or disposition being included in such PRO FORMA calculation.
(c) In addition to the limitations set forth in subsections (a)
and (b) of this Section 2.4, the Company will not, and will not permit any
Subsidiary to, incur any Debt secured by any Encumbrance upon any of the
property of the Company or any Subsidiary if, immediately after giving effect to
the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the Company
and its Subsidiaries on a consolidated basis which is secured by any Encumbrance
on property of the Company or any Subsidiary is greater than 40% of the sum of
(without duplication) (i) the Total Assets of the Company and its Subsidiaries
as of the end of the calendar quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional Debt
and (ii) the purchase price of any real estate assets or mortgages receivable
acquired since the end of the most recent calendar quarter, and (iii) the amount
of any securities offering proceeds received (to the extent that such proceeds
were not used to acquire real estate assets or mortgages receivable or used to
reduce Debt), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Debt.
(d) The Company and its Subsidiaries must at all times own Total
Unencumbered Assets greater than 150% of the aggregate outstanding principal
amount of the Unsecured Debt of the Company and its Subsidiaries on a
consolidated basis.
(e) For purposes of this Section 2.4, Debt shall be deemed to be
"incurred" by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof.
(f) The covenants set forth in subsections (a), (b) and (c) of
this Section 2.4 shall not restrict the Company from refinancing existing Debt,
provided that the outstanding principal amount of such Debt is not increased.
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<PAGE>
SECTION 2.5. REDEMPTION.
(a) The Notes shall be redeemable before their Stated Maturity
in accordance with this Section 2.5 and otherwise in accordance with the
provisions of Article Eleven of the Senior Indenture. In the event of any
conflict between this Section 2.5 (including the definitions of terms used
herein) and Article Eleven of the Senior Indenture (including the definitions of
terms used therein), this Section 2.5 shall control.
(b) The Notes may be redeemed at any time at the option and in
the sole discretion of the Company in whole or from time to time in part, at a
redemption price (the "Redemption Price") equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
Redemption Date, and (ii) the Make-Whole Amount, if any, with respect to such
Notes.
SECTION 2.6. PLACES OF PAYMENT. The Places of Payment where the
Notes may be presented or surrendered for payment, where the Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to and upon the Company in respect of the Notes and the Senior Indenture
may be served shall be in (i) the Borough of Manhattan, The City of New York,
New York, and the office or agency for such purpose shall initially be 101
Barclay Street, Floor 21 West, New York, New York 10286.
SECTION 2.7. METHOD OF PAYMENT. Payment of the principal of and
interest on the Notes will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(which shall initially be an office or agency of the Trustee), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company, payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located inside the United States.
SECTION 2.8. CURRENCY. Principal and interest on the Notes shall be
payable in Dollars.
SECTION 2.9. REGISTERED SECURITIES: GLOBAL FORM. The Notes shall be
issuable and transferable in fully registered form as Registered Securities,
without coupons. The Notes shall be issued in the form of one or more permanent
global Securities. The depositary for the Notes shall be DTC. The Notes shall
not be issuable in definitive form except as provided in Section 305 of the
Senior Indenture.
SECTION 2.10. FORM OF NOTES. The Notes shall be substantially in the
form attached as Exhibit A hereto.
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<PAGE>
SECTION 2.11. REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent for the Notes.
SECTION 2.12. DEFEASANCE. The provisions of Section 1402 and 1403
of the Senior Indenture, together with the other provisions of Article
Fourteen of the Senior Indenture, shall be applicable to the Notes. The
provisions of Section 1403 of the Senior Indenture shall apply to the
covenants set forth in Section 2.4 of this Supplemental Indenture and to
those covenants specified in Section 1403 of the Senior Indenture.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. RATIFICATION OF SENIOR INDENTURE. Except as expressly
modified or amended hereby, the Senior Indenture continues in full force and
effect and is in all respects confirmed and preserved.
SECTION 3.2. GOVERNING LAW. This Supplemental Indenture and each
Note shall be governed by the construed in accordance with the laws of the
State of New York. This Supplemental Indenture is subject to the provisions
of the Trust Indenture Act of 1939, as amended and shall, to the extent
applicable, be governed by such provisions.
SECTION 3.3. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
WESTERN INVESTMENT REAL ESTATE TRUST
By:
---------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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<PAGE>
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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<PAGE>
Exhibit A to
Supplemental Indenture No. 2
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
SUCH SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR
ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR
A NOMINEE OF SUCH SUCCESSOR.
[If this Security is an Original Issue Discount Security, insert -- FOR
PURPOSES OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS__ % OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS ____, 19__ [AND] THE YIELD TO MATURITY IS__%.
[THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE
TO THE SHORT ACCRUAL PERIOD OF _____, 19__ TO _______ , 19__ , IS __% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]
WESTERN INVESTMENT REAL ESTATE TRUST
7.20% Senior Note Due 2008
Registered No. 001 PRINCIPAL AMOUNT
CUSIP No. 958468 AD 2 --$25,000,000--
WESTERN INVESTMENT REAL ESTATE TRUST, a California real estate investment
trust (herein referred to as the "Company" which term includes any successor
corporation under the Indenture referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, upon presentation, the
principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS on September 15, 2008
(the "Stated Maturity Date") and to pay interest thereon from September 25,
1997 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on March 15 and September 15 in each
year (each, an "Interest Payment Date"), commencing March 15, 1998, at the
rate of
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<PAGE>
7.20% per annum, until the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date
at the office or agency of the Company maintained for such purpose; PROVIDED,
HOWEVER, that such interest may be paid, at the Company's option, by mailing
a check to such Holder at its registered address or by transfer of funds to
an account maintained by such Holder within the United States. Any such
interest not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date, and may be paid to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the
Indenture. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The principal of this Security payable on the Stated Maturity Date or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption
Date is not an Interest Payment Date, interest on this Security payable on
the Redemption Date will be paid against presentation of this Security at the
office or agency of the Company maintained for that purpose in San Francisco,
California in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
Stated Maturity Date or Redemption Date, as the case may be, will include
interest accrued from and including the next preceding Interest Payment Date
in respect of which interest has been paid or duly provided for (or from and
including September 25, 1997, if no interest has been paid on this Security)
to but excluding such Interest Payment Date or the Stated Maturity Date or
Redemption Date, as the case may be. If any Interest Payment Date or the
Stated Maturity Date or Redemption Date falls on a day that is not a Business
Day, as defined below, principal, premium or Make-Whole Amount, if any,
and/or interest payable with respect to such Interest Payment Date or Stated
Maturity Date or Redemption Date, as the case may be, will be paid on the
next succeeding Business Day with the same force and effect as if it were
paid on the date such payment was due, and no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date or
Stated Maturity Date or Redemption Date, as the case may be. "Business Day"
means any day, other than a Saturday or Sunday, on which banks in the City of
New York, New York are not required or authorized by law or executive order
to close.
All payments of principal, premium or Make-Whole Amount, if any, and interest
in respect of this Security will be made by the Company in immediately
available funds.
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<PAGE>
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this
Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its facsimile corporate seal.
Dated:______________ WESTERN INVESTMENT REAL ESTATE TRUST
By:_________________________________
O.A. Talmage
Chief Executive Officer
By:_________________________________
Dennis D. Ryan
Chief Financial Officer
Attest:
___________________________
Barbara J. Donham
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Dated:______________ THE BANK OF NEW YORK
By:_________________________________
[name]
[title]
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<PAGE>
[Reverse of Security]
WESTERN INVESTMENT REAL ESTATE TRUST
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1997, as supplemented by
Supplemental Indenture No. 2, dated as of September 1, 1997 (as so
supplemented, herein called the "Indenture") between the Company and The Bank
of New York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture with respect to the series of which
this Security is a part), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), and the aggregate principal amount of the
Securities to be issued under such series is limited to $25,000,000 (except
for Securities authenticated and delivered upon transfer of, or in exchange
for, or in lieu of other Securities). All terms used in this Security which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Securities are subject to redemption at any time at the option and in the
sole discretion of the Company in whole or from time to time in part, at a
redemption price equal to the sum of (i) the principal amount of the Notes
being redeemed plus accrued interest thereon to the Redemption Date and (ii)
the Make-Whole Amount, if any, with respect to such Notes; PROVIDED, HOWEVER,
that installments of interest on this Security whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of this Security,
or one or more Predecessor Securities, of record at the close of business on
the relevant Record Dates referred to on the face hereof, all as provided in
the Indenture.
Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the Redemption Date, all as provided
in the Indenture.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of
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<PAGE>
the Securities under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority of the aggregate
principal amount of all Securities issued under the Indenture at the time
Outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Securities, on behalf of the Holders of all such
Securities, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount, in certain
instances, of the Outstanding Securities of any series to waive, on behalf of
all of the Holders of Securities of such series, certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium or
Make-Whole Amount, if any) and interest on this Security at the times, places
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Security is registrable in the
Security Register of the Company upon surrender of this Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium or Make-Whole Amount, if any) and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or by his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Security is exchangeable for a like aggregate
principal amount of Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith,
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security
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<PAGE>
is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium or
Make-Whole Amount, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any past,
present or future stockholder, employee, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely in such State.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of
such Securities. No representation is made as to the correctness or accuracy
of such CUSIP numbers as printed on the Securities, and reliance may be
placed only on the other identification numbers printed hereon.
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE ____________________________
______________________________________________________________________________
(Please Print or Typewrite Name and Address Including
Zip Code of Assignee)
______________________________________________________________________________
the within Security of Western Investment Real Estate Trust and hereby does
irrevocably constitute and appoint _______________________ Attorney to transfer
said security on the books of the within-named Company with full power of
substitution in the premises.
Dated:___________________ ______________________________
______________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
[Registrar] in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular,
without alteration or enlargement of any change whatever.
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<PAGE>
EXHIBIT 4.7
WESTERN INVESTMENT REAL ESTATE TRUST
ISSUER
to
THE BANK OF NEW YORK
TRUSTEE
-------------------------------
Supplemental Indenture No. 3
Dated as of September 1, 1997
-------------------------------
$25,000,000
7.30% Senior Notes due 2010
<PAGE>
SUPPLEMENTAL INDENTURE No. 3, dated as of September 1, 1997 (the
"Supplemental Indenture"), between WESTERN INVESTMENT REAL ESTATE TRUST, a real
estate investment trust organized and existing under the laws of the State of
California (herein called the "Company"), and THE BANK OF NEW YORK, a banking
corporation duly organized and existing under the laws of the State of New York,
as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture dated
as of September 1, 1997 (the "Senior Indenture"), a form of which has been filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, as Exhibit 4.1 to the Company's Registration Statement on Form S-3
(Registration No. 333-32721), providing for the issuance from time to time of
Senior Debt Securities of the Company (the "Securities").
Section 301 of the Senior Indenture provides for various matters with
respect to any series of Securities issued under the Senior Indenture to be
established in an indenture supplemental to the Senior Indenture.
Section 901(7) of the Senior Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Senior Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 and 301 of the Senior Indenture.
The Board of Trustees of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Securities provided for herein by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities or of any series thereof, as follows:
ARTICLE ONE
RELATION TO SENIOR INDENTURE; DEFINITIONS
SECTION 1.1. RELATION TO SENIOR INDENTURE. This Supplemental
Indenture constitutes an integral part of the Senior Indenture.
SECTION 1.2. DEFINITIONS. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
<PAGE>
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Senior Indenture; and
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Supplemental Indenture.
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary, or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Saint Louis, Missouri are authorized or required by
law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (a) interest on Debt of the Company and its
Subsidiaries, (b) provision for taxes of the Company and its Subsidiaries based
on income, (c) amortization of debt discount, (d) provisions for gains and
losses on properties and property depreciation and amortization, (e) the effect
of any noncash charge resulting from a change in accounting principles in
determining Earnings from Operations for such period, and (f) amortization of
deferred charges.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 101 Barclay Street,
Floor 21 West, New York, New York 10286 and, for purposes of the Place of
Payment provisions of Sections 305 and 1002 of the Senior Indenture, is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) borrowed
money or evidenced by bonds, notes, debentures or similar instruments,
(ii) indebtedness for borrowed money secured by any mortgage, lien, charge,
pledge, or security interest of any kind existing
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on property owned by the Company or any Subsidiary (each securing such debt,
an "Encumbrance"), (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's Consolidated Balance Sheet as a capitalized lease in accordance
with GAAP, to the extent, in the case of items of indebtedness under (i)
through (iii) above, that any such items (other than letters of credit) would
appear as a liability on the Company's Consolidated Balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise
included, any obligations by the Company 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 the Company or any Subsidiary) (it being understood that Debt shall be
deemed to be incurred by the Company or any Subsidiary whenever the Company
or such Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof).
"Debt Service Charge" for any period means the maximum amount which is
payable during such period for interest on, and amortization during such period
of any original issue discount of, Debt of the Company and its Subsidiaries and
the amount of dividends which are payable during such period in respect of any
Disqualified Stock.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock, or (iii) is redeemable at the option of the holder thereof,
in whole or in part (other than Capital Stock which is redeemable solely in
exchange for common stock), in each case on or prior to the Stated Maturity of
the Notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items, and net property
valuation losses, as reflected in the financial statements of the Company and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" has the meaning specified in the definition of "Debt"
set forth in this Section 1.2.
"Financial Statements" has the meaning specified in Section 1009 of
the Senior Indenture.
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"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any Notes, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of each such
dollar if such redemption or accelerated payment had not been made,
determined by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment
had not been made to the date of redemption or accelerated payment, over (ii)
the aggregate principal amount of the Notes being redeemed or paid. For
purposes of the Indenture, all references to any "premium" on the Notes shall
be deemed to refer to any Make-Whole Amount, unless the context otherwise
requires.
"Notes" has the meaning specified in Section 2.1 hereof.
"Redemption Price" has the meaning specified in Section 2.5 hereof.
"Reinvestment Rate' means 0.25% (one quarter of one percent) plus the
arithmetic mean of the yields under the heading "Week Ending" published in the
most recent Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity, as of the payment date of the principal being redeemed or
paid. If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the Reinvestment
Rate shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which reports yields on actively
traded United States government securities adjusted to constant maturities, or,
if such statistical release is not published at the time of any determination
hereunder, then such other reasonably comparable index which shall be designated
by the Company.
"Subsidiary" means (i) any corporation or other entity the majority of
the shares of the non-voting capital stock or other equivalent ownership
interests of which (except trustees' qualifying shares) are at the time directly
or indirectly owned by the Company, and the majority of the shares of the voting
capital stock or other equivalent ownership interests of which (except trustees'
qualifying shares) are at the time directly or indirectly owned by the Company
or any
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other Subsidiary, and (ii) any other entity (other than the Company) that
accounts of which are consolidated with the accounts of the Company or any
Subsidiary.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP, but excluding intangibles.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP, but excluding
intangibles.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any Encumbrance
upon any of the properties of the Company or any Subsidiary.
ARTICLE TWO
THE SERIES OF NOTES
SECTION 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the "7.30% Senior Notes due 2010" (the "Notes").
SECTION 2.2. LIMITATIONS ON AGGREGATE PRINCIPAL AMOUNT. The
aggregate principal amount of the Notes shall be limited to $25,000,000, and,
except as provided in this Section and in Section 306 of the Senior Indenture,
the Company shall not execute and the Trustee shall not authenticate or deliver
Notes in excess of such aggregate principal amount.
Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture, or in the Notes, is intended to or shall limit execution
by the Company or authentication or delivery by the Trustee of the Notes under
the circumstances contemplated in Sections 303, 304, 306 and 906 of the Senior
Indenture.
SECTION 2.3. INTEREST AND INTEREST RATES; MATURITY DATE OF NOTES.
The Notes will bear interest at a rate of 7.30% per annum from September 25,
1997 or from the immediately preceding Interest Payment Date to which interest
has been paid or duly provided for, payable semi-annually in arrears on March 15
and September 15 of each year, commencing March 15, 1998 (each, an "Interest
Payment Date"), to the Person in whose name such Note is registered at the close
of business on March 1 or September 1 (whether or not a Business Day),
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as the case may be, next preceding such Interest Payment Date (each, a
"Regular Record Date"). Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The interest so payable on any Note
which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Person in whose name such
Note as registered on the relevant Regular Record Date, and such defaulted
interest shall instead be payable to the Person in whose name such Note is
registered on the Special Record Date or other specified date determined in
accordance with the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
The Notes will mature on September 15, 2010.
SECTION 2.4. LIMITATIONS ON INCURRENCE OF DEBT.
(a) The Company will not, and will not permit any Subsidiary to,
incur any Debt if, immediately after giving effect to the incurrence of such
additional Debt and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis determined in accordance with GAAP is greater than 60% of
the sum of (without duplication) (i) the Total Assets of the Company and its
Subsidiaries as of the end of the calendar quarter covered in the Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the incurrence of such
additional Debt, and (ii) the purchase price of any real estate assets or
mortgages receivable acquired since the end of the most recent calendar quarter,
and (iii) the amount of any securities offering proceeds received (to the extent
such proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Company or any Subsidiary since the
end of such calendar quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt.
(b) In addition to the limitation set forth in subsection (a) of
this Section 2.4, the Company will not, and will not permit any Subsidiary to,
incur any Debt if the ratio of Consolidated Income Available for Debt Service to
the Debt Service Charge for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred shall
have been less than 1.5:1 on a PRO FORMA basis after giving effect thereto and
to the application of the proceeds therefrom, and calculated on the assumption
that (i) such Debt and any other Debt incurred by the Company and its
Subsidiaries since the first day of such four-quarter period and the application
of the proceeds therefrom, including to refinance other Debt, had occurred at
the beginning of such period; (ii) the repayment or retirement of any other Debt
by the Company and its Subsidiaries since the first day of such four-quarter
period had been repaid or retired at the beginning of such period (except that,
in making such computation,
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the amount of Debt under any revolving credit facility shall be computed
based upon the average daily balance of such Debt during such period); (iii)
in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such Period with the
appropriate adjustments with respect to such acquisition being included in
such PRO FORMA calculation; and (iv) in the case of any acquisition or
disposition by the Company or its Subsidiaries of any asset or group of
assets since the first day of such four-quarter period, whether by merger,
stock purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Debt had occurred as of the first day
of such period with the appropriate adjustments with respect to such
acquisition or disposition being included in such PRO FORMA calculation.
(c) In addition to the limitations set forth in subsections (a)
and (b) of this Section 2.4, the Company will not, and will not permit any
Subsidiary to, incur any Debt secured by any Encumbrance upon any of the
property of the Company or any Subsidiary if, immediately after giving effect to
the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the Company
and its Subsidiaries on a consolidated basis which is secured by any Encumbrance
on property of the Company or any Subsidiary is greater than 40% of the sum of
(without duplication) (i) the Total Assets of the Company and its Subsidiaries
as of the end of the calendar quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional Debt
and (ii) the purchase price of any real estate assets or mortgages receivable
acquired since the end of the most recent calendar quarter, and (iii) the amount
of any securities offering proceeds received (to the extent that such proceeds
were not used to acquire real estate assets or mortgages receivable or used to
reduce Debt), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Debt.
(d) The Company and its Subsidiaries must at all times own Total
Unencumbered Assets greater than 150% of the aggregate outstanding principal
amount of the Unsecured Debt of the Company and its Subsidiaries on a
consolidated basis.
(e) For purposes of this Section 2.4, Debt shall be deemed to be
"incurred" by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof.
(f) The covenants set forth in subsections (a), (b) and (c) of
this Section 2.4 shall not restrict the Company from refinancing existing Debt,
provided that the outstanding principal amount of such Debt is not increased.
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SECTION 2.5. REDEMPTION.
(a) The Notes shall be redeemable before their Stated Maturity
in accordance with this Section 2.5 and otherwise in accordance with the
provisions of Article Eleven of the Senior Indenture. In the event of any
conflict between this Section 2.5 (including the definitions of terms used
herein) and Article Eleven of the Senior Indenture (including the definitions of
terms used therein), this Section 2.5 shall control.
(b) The Notes may be redeemed at any time at the option and in
the sole discretion of the Company in whole or from time to time in part, at a
redemption price (the "Redemption Price") equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
Redemption Date, and (ii) the Make-Whole Amount, if any, with respect to such
Notes.
SECTION 2.6. PLACES OF PAYMENT. The Places of Payment where the
Notes may be presented or surrendered for payment, where the Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to and upon the Company in respect of the Notes and the Senior Indenture
may be served shall be in (i) the Borough of Manhattan, The City of New York,
New York, and the office or agency for such purpose shall initially be 101
Barclay Street, Floor 21 West, New York, New York 10286.
SECTION 2.7. METHOD OF PAYMENT. Payment of the principal of and
interest on the Notes will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(which shall initially be an office or agency of the Trustee), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Company, payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located inside the United States.
SECTION 2.8. CURRENCY. Principal and interest on the Notes shall be
payable in Dollars.
SECTION 2.9. REGISTERED SECURITIES: GLOBAL FORM. The Notes shall be
issuable and transferable in fully registered form as Registered Securities,
without coupons. The Notes shall be issued in the form of one or more permanent
global Securities. The depositary for the Notes shall be DTC. The Notes shall
not be issuable in definitive form except as provided in Section 305 of the
Senior Indenture.
SECTION 2.10. FORM OF NOTES. The Notes shall be substantially in the
form attached as Exhibit A hereto.
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<PAGE>
SECTION 2.11. REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent for the Notes.
SECTION 2.12. DEFEASANCE. The provisions of Section 1402 and 1403 of
the Senior Indenture, together with the other provisions of Article Fourteen of
the Senior Indenture, shall be applicable to the Notes. The provisions of
Section 1403 of the Senior Indenture shall apply to the covenants set forth in
Section 2.4 of this Supplemental Indenture and to those covenants specified in
Section 1403 of the Senior Indenture.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. RATIFICATION OF SENIOR INDENTURE. Except as expressly
modified or amended hereby, the Senior Indenture continues in full force and
effect and is in all respects confirmed and preserved.
SECTION 3.2. GOVERNING LAW. This Supplemental Indenture and each
Note shall be governed by the construed in accordance with the laws of the State
of New York. This Supplemental Indenture is subject to the provisions of the
Trust Indenture Act of 1939, as amended and shall, to the extent applicable, be
governed by such provisions.
SECTION 3.3. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
WESTERN INVESTMENT REAL ESTATE TRUST
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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THE BANK OF NEW YORK,
as Trustee
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
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Exhibit A to
Supplemental Indenture No. 3
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.
[If this Security is an Original Issue Discount Security, insert -- FOR PURPOSES
OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS__ % OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS ____, 19__ [AND] THE YIELD TO MATURITY IS__%. [THE METHOD USED TO
DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF _____, 19__ TO _______ , 19__ , IS __% OF THE PRINCIPAL AMOUNT OF
THIS SECURITY.]
WESTERN INVESTMENT REAL ESTATE TRUST
7.30% Senior Note Due 2010
Registered No. 001 PRINCIPAL AMOUNT
CUSIP No. 958468 AE 0 --$25,000,000--
WESTERN INVESTMENT REAL ESTATE TRUST, a California real estate investment trust
(herein referred to as the "Company" which term includes any successor
corporation under the Indenture referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, upon presentation, the
principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS on September 15, 2010
(the "Stated Maturity Date") and to pay interest thereon from September 25, 1997
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on March 15 and September 15 in each year
(each, an "Interest Payment Date"), commencing March 15, 1998, at the rate of
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7.30% per annum, until the principal hereof is paid or duly provided for. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Holder in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the March 1 or September 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date at the office or agency of the Company
maintained for such purpose; PROVIDED, HOWEVER, that such interest may be paid,
at the Company's option, by mailing a check to such Holder at its registered
address or by transfer of funds to an account maintained by such Holder within
the United States. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Holder in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The principal of this Security payable on the Stated Maturity Date or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption Date
is not an Interest Payment Date, interest on this Security payable on the
Redemption Date will be paid against presentation of this Security at the office
or agency of the Company maintained for that purpose in San Francisco,
California in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the Stated
Maturity Date or Redemption Date, as the case may be, will include interest
accrued from and including the next preceding Interest Payment Date in respect
of which interest has been paid or duly provided for (or from and including
September 25, 1997, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the Stated Maturity Date or Redemption
Date, as the case may be. If any Interest Payment Date or the Stated Maturity
Date or Redemption Date falls on a day that is not a Business Day, as defined
below, principal, premium or Make-Whole Amount, if any, and/or interest payable
with respect to such Interest Payment Date or Stated Maturity Date or Redemption
Date, as the case may be, will be paid on the next succeeding Business Day with
the same force and effect as if it were paid on the date such payment was due,
and no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date or Stated Maturity Date or Redemption Date, as
the case may be. "Business Day" means any day, other than a Saturday or Sunday,
on which banks in the City of New York, New York are not required or authorized
by law or executive order to close.
All payments of principal, premium or Make-Whole Amount, if any, and interest in
respect of this Security will be made by the Company in immediately available
funds.
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<PAGE>
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signatories, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its facsimile corporate seal.
Dated:______________ WESTERN INVESTMENT REAL ESTATE TRUST
By:_________________________________
O.A. Talmage
Chief Executive Officer
By:_________________________________
Dennis D. Ryan
Chief Financial Officer
Attest:
___________________________
Barbara J. Donham
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Dated:______________ THE BANK OF NEW YORK
By:_________________________________
[name]
[title]
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[Reverse of Security]
WESTERN INVESTMENT REAL ESTATE TRUST
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1997, as supplemented by
Supplemental Indenture No. 3, dated as of September 1, 1997 (as so
supplemented, herein called the "Indenture") between the Company and The Bank
of New York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture with respect to the series of which
this Security is a part), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), and the aggregate principal amount of the
Securities to be issued under such series is limited to $25,000,000 (except
for Securities authenticated and delivered upon transfer of, or in exchange
for, or in lieu of other Securities). All terms used in this Security which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Securities are subject to redemption at any time at the option and in the
sole discretion of the Company in whole or from time to time in part, at a
redemption price equal to the sum of (i) the principal amount of the Notes
being redeemed plus accrued interest thereon to the Redemption Date and (ii)
the Make-Whole Amount, if any, with respect to such Notes; PROVIDED, HOWEVER,
that installments of interest on this Security whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of this Security,
or one or more Predecessor Securities, of record at the close of business on
the relevant Record Dates referred to on the face hereof, all as provided in
the Indenture.
Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the Redemption Date, all as provided in
the Indenture.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of
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<PAGE>
the Securities under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority of the aggregate
principal amount of all Securities issued under the Indenture at the time
Outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Securities, on behalf of the Holders of all such
Securities, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount, in certain
instances, of the Outstanding Securities of any series to waive, on behalf of
all of the Holders of Securities of such series, certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium or Make-Whole Amount, if
any) and interest on this Security at the times, places and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Security is registrable in the Security
Register of the Company upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium or Make-Whole Amount, if any) and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Security is exchangeable for a like aggregate principal
amount of Securities of different authorized denominations but otherwise having
the same terms and conditions, as requested by the Holder hereof surrendering
the same.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith,
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security
-15-
<PAGE>
is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium or
Make-Whole Amount, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any past, present or
future stockholder, employee, officer or director, as such, of the Company or of
any successor, either directly or through the Company or any successor, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely in such State.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused "CUSIP" numbers to be printed
on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
-16-
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE ____________________
______________________________________________________________________________
(Please Print or Typewrite Name and Address Including
Zip Code of Assignee)
______________________________________________________________________________
the within Security of Western Investment Real Estate Trust and hereby does
irrevocably constitute and appoint _______________________ Attorney to transfer
said security on the books of the within-named Company with full power of
substitution in the premises.
Dated:___________________ ______________________________
______________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the [Registrar] in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular,
without alteration or enlargement of any change whatever.
-17-
<PAGE>
Exhibit 5.1
September 24, 1997
Western Investment Real Estate Trust
3450 California Street
San Francisco, California 94118
Re: Western Investment Real Estate Trust
Registration Statement on Form S-3
(FILE NO. 333-32721)
Gentlemen:
We are acting as counsel to Western Investment Real Estate Trust, a
California real estate investment trust (the "Trust"), in connection with the
registration under the Securities Act of 1933, as amended, of $25,000,000 of
Senior Notes due 2006, $25,000,000 of Senior Notes due 2008 and $25,000,000 of
Senior Notes due 2010 (the "Notes"), to be offered by PaineWebber Incorporated
(the "Underwriter") pursuant to that certain Underwriting Agreement to be
entered into between the Trust and PaineWebber Incorporated (the "Underwriting
Agreement"). In this regard, we have participated in the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") including the
Prospectus therein and the Prospectus Supplement (the "Prospectus Supplement")
which the Trust proposes to file with the Securities and Exchange Commission
(the "SEC").
We have reviewed the Amended and Restated Declaration of Trust (as
certified by the Secretary of the Trust), and the Trust proceedings with respect
to the registration, sale and issuance of the Notes as described in the minutes
of the Trust (as certified by the Secretary of the Trust). Based on this
review, we are of the opinion that the Notes have been duly authorized and, when
issued to and paid for by the Underwriter in the manner described in the
Registration Statement, will be legally issued, fully paid and nonassessable,
and will be binding obligations of the Trust.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus and Prospectus
Supplement included therein.
Very truly yours,
STEINHART & FALCONER LLP
/s/ Steinhart & Falconer LLP
<PAGE>
Exhibit 8.1
September 24, 1997
Western Investment Real
Estate Trust
3450 California Street
San Francisco, CA 94118
RE: Western Investment Real Estate Trust --
REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We are acting as counsel to Western Investment Real Estate Trust, a
California real estate investment trust (the "Trust"), in connection with the
registration under the Securities Act of 1933, as amended, of $ 75,000,000 of
senior notes ( the "Securities"). In this regard, we have participated in
the preparation of the Registration Statement on Form S-3 (the "Registration
Statement") including the Prospectus Supplement therein (the "Prospectus
Supplement"), which the Trust proposes to file with the Securities and
Exchange Commission (the "SEC").
We have reviewed the following documents for purposes of this opinion:
(i) The 1996 Annual Report of the Trust filed with the SEC;
(ii) The Form 10-K for the fiscal year ended December 31, 1996, filed
by the Trust with the SEC;
(iii) The Form 10-Q for the quarter ended March 31, 1997 filed by the
Trust with the SEC;
(iv) The Form 10-Q for the quarter ended June 30, 1997 filed by the
Trust with the SEC;
(v) The pro forma REIT tax qualification test package prepared by
the Trust for the quarter ending March 31, 1997;
<PAGE>
Western Investment Real
Estate Trust
September 23, 1997
Page 2
(vi) The pro forma REIT tax qualification test package prepared by
the Trust for the quarter ending June 30, 1997;
(vii) The pro forma REIT tax qualification test package prepared by
the Trust for the year ending December 31, 1996; and
(viii) The Certificate of the Chief Financial Officer of the Trust
dated September 19, 1997.
The documents listed in items (i) through (vii) referred to above are
hereinafter referred to as the "Reports." The certificate listed in item (viii)
is hereinafter referred to as the "Certificate."
We have relied on the correctness and accuracy of all facts set forth
in the Certificate and Reports.
Based on this review, and in reliance on the Reports and
Certificate, we are of the opinion that, for the calendar year 1996, the
Trust met the requirements of the Internal Revenue Code of 1986, as amended,
for qualification as a real estate investment trust, that the Trust currently
meets such requirements, and that the Trust's contemplated method of
operation as described in the Prospectus Supplement will enable the Trust to
comply with such requirements in the future.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus Supplement
included therein.
Very truly yours,
STEINHART & FALCONER LLP
/s/ Steinhart & Falconer LLP
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------
WESTERN INVESTMENT REAL ESTATE TRUST
(Exact name of obligor as specified in its charter)
An unincorporated Business Asscociation 94-6100058
in State of California
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3450 California Street
San Francisco, California 94118
(Address of principal executive offices) (Zip code)
-------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 28th day of August, 1997.
THE BANK OF NEW YORK
By: /s/VIVIAN GEORGES
-------------------------
Name: VIVIAN GEORGES
Title: Assistant Vice President
-4-
<PAGE>
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
-----------
Total assets ......................... $54,746,131
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
-5-
<PAGE>
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
-----------
Total liabilities .................... 50,560,708
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 19,449)
Cumulative foreign currency transla-
tion adjustments .................. ( 13,034)
------------
Total equity capital ................ 4,185,423
------------
Total liabilities and equity
capital ........................... $54,746,131
------------
------------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
//
Alan R. Griffith //
J. Carter Bacot //
Thomas A. Renyi // Directors
//
- --------------------------------------------------------------------------------
