<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d - 101)
Information To Be Included In Statements Filed Pursuant To
Rule 13d-1(a) And Amendments Thereto Filed Pursuant To Rule 13d-2(a)
(Amendment No. 1)(1)
THE PEREGRINE REAL ESTATE TRUST
(Name of Issuer)
COMMON SHARES OF BENEFICIAL INTEREST
(Title of Class of Securities)
713662013
(CUSIP Number)
James Evert
Assistant General Counsel
The Prudential Insurance Company of America
Four Embarcadero Center, Suite 2700
San Francisco, California 94111
November 18, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 12 Pages)
- ----------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
<PAGE>
CUSIP NO. 713662013 13D Page 1 of 2 Pages
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW JERSEY
7 SOLE VOTING POWER
5,388,614
NUMBER OF SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING PERSON WITH 0
9 SOLE DISPOSITIVE POWER
5,388,614
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
5,388,614
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.9%
14 TYPE OF REPORTING PERSON*
BD, IC, IA
- ----------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP NO. 713662013 13D Page 2 of 2 Pages
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
GATEWAY RECOVERY TRUST
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
3,744,652
NUMBER OF SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING PERSON WITH 0
9 SOLE DISPOSITIVE POWER
3,744,652
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
3,744,652
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
14 TYPE OF REPORTING PERSON*
PN
- ----------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
ITEM 1. SECURITY AND ISSUER.
The equity securities to which this Statement on Schedule 13D relates
are the Common Shares of Beneficial Interest (the "Common Shares") of The
Peregrine Real Estate Trust, a California real estate investment trust, d.b.a.
WinShip Properties (the "Issuer"), with its principal executive offices located
at 1300 Ethan Way, Suite 200, Sacramento, California 95825.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is filed on behalf of
(1) The Prudential Insurance Company of America, a New Jersey
corporation ("Prudential").
(2) The Gateway Recovery Trust, a Delaware Business Trust
("Gateway").
Prudential is a New Jersey corporation. Prudential is an insurance
company. The address of Prudential is Prudential Plaza, 751 Broad Street,
Newark, New Jersey 07102-3777.
Gateway is a Delaware business trust which owns debt and equity
securities. Prudential is the asset manager and principal beneficiary of
Gateway. The address of Gateway is Four Gateway Center, 9th Floor, Newark, New
Jersey 07102.
(a)-(c) & (f)
(i) The executive officers of Prudential are listed below. The
principal business address for each executive officer is Prudential Plaza, 751
Broad Street, Newark, New Jersey 07102-3777. Each executive officer is a citizen
of the United States of America unless otherwise specified below:
EXECUTIVE OFFICERS
Arthur F. Ryan Chairman of the Board, Chief
Executive Officer and
President
E. Michael Caulfield Executive Vice President,
Planning & Risk Management
Michele S. Darling Executive Vice President,
Human Resources
Robert C. Golden Executive Vice President,
Operations & Systems
Mark B. Grier Executive Vice President,
Corporate Governance
Jean D. Hamilton Executive Vice President,
Institutional
Rodger A. Lawson Executive Vice President,
Prudential International Investments
Kiyofumi Sakaguchi President, Prudential International Insurance
<PAGE>
John V. Scicutella Chief Executive Officer,
Prudential Individual Insurance & Investments
John R. Strangfeld Chief Executive Officer,
Prudential Global Private Asset Management
Schedule I attached hereto and incorporated herein sets forth with
respect to each director of Prudential his or her name, residence or business
address, citizenship, present principal occupation or employment and the name,
principal business and address of any corporation or other organization in which
such employment is conducted.
Prudential is the asset manager of Gateway and, as such, has discretion
to make substantially all decisions with respect to the debt and equity
securities owned by Gateway. In addition, Prudential is the principal
beneficiary of Gateway. Prudential's executive officers and directors are as set
forth elsewhere herein. The sole trustee of Gateway is Chase Manhattan Bank
Delaware. The address of Chase Manhattan Bank Delaware is 1201 Market Street,
Wilmington, Delaware 19801.
(d)-(e)
During the last five years, neither Prudential, Gateway nor, to the
best of their knowledge, any of their respective executive officers, trustees or
directors (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); or (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Common Shares were acquired pursuant to a letter agreement dated
November 2, 1998 wherein the holders of all of the Issuer's preferred shares of
beneficial interest (the "Preferred Shares") agreed to exchange each Preferred
Share for 1.0541145 Common Shares. Such transaction effectively accelerated the
mandatory conversion of the Preferred Shares which was anticipated to occur in
April 1999. There was no other consideration involved in the acquisition of the
Common Shares.
ITEM 4. PURPOSE OF TRANSACTION.
On November 2, 1998, certain entities related to The TCW Group, Inc.
(the "TCW Related Entities"), certain entities of which Oaktree Capital
Management, LLC is the general partner (the "Oaktree Entities"), and Gateway and
Prudential (collectively, the "Prudential Entities") entered into a letter
agreement with the Issuer pursuant to which the TCW Related Entities, the
Oaktree Entities and the Prudential Entities agreed to an accelerated conversion
of the Preferred Shares into Common Shares. The exchange was consummated on
November 18, 1998. As a result of the transaction, all of the issued and
outstanding Preferred Shares were converted into Common Shares at a ratio of
1.0541145 Common Shares for each outstanding Preferred Share.
The Issuer has indicated that it is evaluating the possibility of a
plan of reorganization that would change the form of entity of the Issuer and
its state of organization and reduce the number of shareholders of the Issuer.
At such time as the Issuer proposes such a reorganization, the Prudential
Entities will also evaluate such a reorganization and may, depending upon the
terms of such a transaction, vote their Common Shares to approve such a
transaction.
The Prudential Entities intend to review on a continuing basis their
respective investments in the Common Shares and may, subject to the
continuing evaluation of the factors discussed herein, acquire from time to
time additional Common Shares in the open market or in privately negotiated
transactions. Depending on the factors discussed herein, the Prudential
Entities may, from time to time, retain or sell all or a portion of its
holdings of the Common Shares in the open market or in privately negotiated
transactions and such open market and privately negotiated purchases or sales
may be made at any time without further prior notice. Any actions that the
Prudential
<PAGE>
Entities might undertake with respect to the Common Shares will be dependent
upon their review of numerous factors, including, among other things, the
availability of Common Shares for purchase and the price levels of such
Common Shares, general market and economic conditions as well as those in the
areas in which the Issuer's properties are located, ongoing evaluation of the
Issuer's business, financial condition, properties, operations and prospects,
the relative attractiveness of alternative business and investment
opportunities, the actions of the management and the Board of Trustees of the
Issuer, and other future developments.
The Prudential Entities plan to continue to review various alternatives
available to enhance the value of the Issuer and its assets and engage in
discussions with other creditors and shareholders of the Issuer regarding such
alternatives. Such review and discussions may result in a decision by the
Prudential Entities to pursue in cooperation with the Issuer and/or other
creditors and shareholders of the Issuer one or more restructuring options.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Prudential directly holds 1,643,962 shares of the Issuer's Common
Shares in a separate account and may be deemed to beneficially own an additional
3,744,652 shares of the Issuer's Common Shares owned by Gateway, for a total of
5,388,614 Common Shares or approximately 23.9% of the Issuer's outstanding
Common Shares.
Gateway beneficially owns 3,744,652 of the Issuer's Common Shares or
approximately 16.6% of the Issuer's outstanding Common Shares.
(b) Prudential has the sole power to vote and dispose, or direct the
disposition, of 5,388,614 of the Issuer's Common Shares, including the sole
power to direct the voting and disposition of Gateway's Common Shares in its
capacity as asset manager and principal beneficiary of Gateway.
(c) On November 2, 1998, the TCW Related Entities, the Oaktree Entities
and the Prudential Entities entered into a letter agreement with the Issuer in
which the TCW Related Entities, the Oaktree Entities and the Prudential Entities
agreed to exchange each of their Preferred Shares for 1.0541145 Common Shares.
As a result, on November 18, 1998, Prudential received 1,435,353 Common Shares
in exchange for 1,361,667 Preferred Shares, and Gateway received 3,270,723
Common Shares in exchange for 3,102,816 Preferred Shares.
Except as discussed above, neither Prudential, Gateway nor, to the best
of their knowledge, any of their respective officers, trustees or directors have
effected any other transactions involving the Issuer's Common Shares during the
last 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
On May 30, 1997, the TCW Related Entities and Prudential entered into
an agreement pursuant to which the TCW Related Entities agreed that at such time
as Prudential identified an individual to serve as a trustee on the Board of
Trustees of the Issuer, the TCW Related Entities would (i) use commercially
reasonable efforts to cause a Trustee of the Issuer nominated by TCW Related
Entities to resign and (ii) vote all of the shares of common stock held by the
TCW Related Entities, or cause the Board of Trustees of the Issuer to take all
necessary action, to elect the individual identified by Prudential to the Board
of Trustees of the Issuer. Although not parties to the letter agreement, the
Oaktree Entities subsequently indicated that they intended to vote their Common
Shares in favor of the trustee nominated by Prudential.
At a meeting of the Board of Trustees on October 7, 1997, Michael
Joseph was elected to the Board of Trustees as the designee of Prudential.
<PAGE>
On November 2, 1998, the Prudential Entities, the TCW Related Entities
and the Oaktree Entities entered into a letter agreement with the Issuer in
which the Prudential Entities, the TCW Related Entities and the Oaktree Entities
agreed to exchange their Preferred Shares for Common Shares. The exchange of the
Preferred Shares for Common Shares was effected to accelerate the mandatory
conversion of such Preferred Shares anticipated to occur in April 1999. As a
result of the exchange transaction, on November 18, 1998, all of the issued and
outstanding Preferred Shares were converted into Common Shares at a ratio of
1.0541145 Common Shares for each outstanding Preferred Share.
Prudential directly holds 1,643,962 of the Common Shares in a separate
account. Prudential receives a fee with respect to the Common Shares held in the
separate account. Gateway holds an additional 3,744,652 Common Shares.
Prudential is the asset manager and principal beneficiary of Gateway and, in its
capacity as asset manager, has the sole power to direct the voting and
disposition of the Common Shares held by Gateway. Prudential, as asset manager
of Gateway, receives a fee for managing the assets of Gateway. An additional 495
Common Shares are held by Prudential Securities, Inc., a Delaware corporation
and subsidiary of Prudential. Prudential also receives a fee with respect to the
Common Shares held in the separate account.
The filing of this statement should not be construed as an admission
that Prudential is, for the purposes of Sections 13 or 16 of the Securities
Exchange Act of 1934, the beneficial owner of the shares held by any entity
other than Prudential or shares held by Prudential in a separate account.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT 1 Joint Filing Agreement.
EXHIBIT 2 Letter Agreement among the TCW related entities, the Oaktree
Entities, the Prudential Entities and the Issuer dated
November 2, 1998.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certify that the information set forth herein, complete and correct.
Dated as of the 25th day of November 1998.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /S/ PAUL MEIRING
----------------------------
Paul Meiring
Vice President
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company
Of America, its Asset Manager
By: /S/ PAUL MEIRING
----------------------------
Paul Meiring
Vice President
<PAGE>
SCHEDULE I
DIRECTORS OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
DIRECTORS
Each director is a citizen of the United States of America unless otherwise
specified below:
<TABLE>
<CAPTION>
Principal Occupation
Name Title Address
- ---------------------------- --------------------------------------- --------------------------------------
<S> <S> <S>
Franklin E. Agnew Business Consultant One Mellon Bank Center
Suite 2120
Pittsburgh, PA 15219
Frederic E. Becker President Wilentz Goldman & Spitzer
90 Woodbridge Center Drive
Suite 900
Woodbridge, NJ 07095
Gilbert F. Casellas Partner McConnell Valdes LLP
1717 Pennsylvania Avenue NW, Suite 625
Washington, D.C. 20006
James G. Cullen President and CEO Bell Telecom Atlantic Corp.
1310 North Court House Road,
11th Floor
Arlington, VA 22201
Carolyne K. Davis Independent Health Care Advisor, Ernst & Young
Scholar in Residence 1225 Connecticut Avenue, NW
Cornell University Washington, DC 20036
Roger A. Enrico Chairman and CEO PepsiCo
14841 North Dallas Parkway
Dallas, TX 75240
Allan D. Gilmour Retired Vice Chairman, The Prudential Insurance
Ford Motor Company Company of America
751 Broad Street
Newark, NJ 07012-3777
William H. Gray III President and CEO United Negro College Fund,
Inc.
8260 Willow Oaks Corp. Drive
P.O. Box 10444
Fairfax, VA 22031-4511
Jon F. Hanson Chairman Hampshire Management Company
235 Moore Street,
Suite 200
Hackensack, NJ 07601
Glen H. Hiner Chairman and CEO Owens-Corning Corporation
One Owns Corning Parkway
Toledo, OH 45659
</TABLE>
<PAGE>
<TABLE>
<S> <S> <S>
Constance J. Horner Guest Scholar The Brookings Institution
1775 Massachusetts
Avenue, NW
Washington, DC 20036-2188
Gaynor N. Kelley Retired Chairman Perkins Elmer Corporation
and CEO 751 Broad Street, 23rd Floor
Newark, NJ 07102
Burton G. Malkiel Professor of Economics Princeton University
Dept. of Economics
110 Fisher Hall
Prospect Avenue
Princeton, NJ 08544-1021
Arthur E. Ryan Chairman, CEO The Prudential Insurance
and President Company of America
751 Broad Street
Newark, NJ 07102
Ida S. Schmertz Principal Investment Strategies
International
751 Broad Street, 23rd Floor
Newark, NJ 07102
Charles R. Sitter Retired President Exxon Corporation
225 East John W.
Carpenter Freeway
Irving, TX 75602
Donald L. Staheli Retired Chairman and CEO Continental Grain Company
277 Park Avenue
New York, NY 10172
Richard M. Thomas Retired Chairman and CEO The Toronto-Dominion Bank
(Canadian Citizen) P.O. Box 1
Toronto-Dominion Centre
Toronto, Ontario
Canada M5K 1A2
James A. Unruh Retired Chairman and CEO Unisys Corporation
Township Line and Union
Meeting Roads
P.O. Box 500
Blue Bell, PA 19424-0001
P. Roy Vagelos, M.D. Retired Chairman and CEO Merck & Co., Inc.
One Crossroads Drive
Building A, 3rd Floor
Bedminster, NJ 07921
Stanley C. Van Ness, Partner Herbert, Van Ness, Cayci & Goodell
Esq. 22 Chambers Street
Princeton, NJ 08542
</TABLE>
<PAGE>
<TABLE>
<S> <S> <S>
Paul A. Volcker Director and Consultant to various Wolfensohn & Co., Inc.
companies 599 Lexington Avenue
Former Chairman New York, NY 10022
Joseph H. Williams Director The Williams Companies, Inc.
One Williams Center
Tulsa, OK 74172
</TABLE>
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
Each of the undersigned acknowledges and agrees that the foregoing
statement on Schedule 13D is filed on behalf of the undersigned and that all
subsequent amendments to this statement on Schedule 13D shall be filed on
behalf of the undersigned without the necessity of filing additional joint
acquisition statements. Each of the undersigned acknowledges that it shall be
responsible for the timely filing of such amendments, and for the
completeness and accuracy of the information concerning it contained therein,
but shall not be responsible for the completeness and accuracy of the
information concerning the other, except to the extent that he or it knows or
has reason to believe that such information is inaccurate.
Dated as of this 25th day of November, 1998.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /S/ PAUL MEIRING
------------------------------
Paul Meiring
Vice President
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company
Of America, its Asset Manager
By: /S/ PAUL MEIRING
------------------------------
Paul Meiring
Vice President
<PAGE>
THE PEREGRINE REAL ESTATE TRUST
1300 ETHAN WAY, SUITE 200
SACRAMENTO, CALIFORNIA 95825
November 2, 1998
To each of the parties listed
on the signature pages hereto
Gentlemen:
This letter agreement (the "Letter Agreement") is entered into by and
among The Peregrine Real Estate Trust, a California real estate investment trust
(the "Company"); The Prudential Insurance Company of America and Gateway
Recovery Trust (collectively, the "Prudential Entities"); TCW Special Credits
Fund IV, TCW Special Credit Plus Fund, TCW Special Credits Trust IV, TCW Special
Credits Trust IVA and TCW Special Credits, as investment manager of the
Weyerhaeuser Company Master Retirement Trust Separate Account (collectively,
"TCW"); OCM Real Estate Opportunities Fund A, L.P., OCM Real Estate
Opportunities Fund B, L.P., and Oaktree Capital Management, LLC as investment
manager of Weyerhaeuser Company Master Retirement Trust and Real Estate
Opportunities Separate Account (collectively, "Oaktree"). The Prudential
Entities, TCW and Oaktree are collectively referred to herein as the "Preferred
Stockholders".
The Company and Preferred Stockholders hereby agree, subject to the
terms and conditions set forth in this Letter Agreement as follows:
DEFINITIONS
"Common Stock" shall mean Common Shares of beneficial interest of the
Company authorized and issued pursuant to the Declaration of Trust.
"Declaration of Trust" shall mean the Restated Declaration of Trust of
the Company dated as of October 7, 1994.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Preferred Stock" shall mean Preferred Shares of beneficial interest
of the Company issued pursuant to the Declaration of Trust and that certain
Redeemable Convertible Preferred Stock Purchase Agreement dated as of October 1,
1994 by and among the Company and Pacific Mutual Life Insurance Company, The
Prudential Insurance Company of America, Pruco Life Insurance Company, ORIX USA
Corporation, Weyerhauser Company Master
<PAGE>
Retirement Trust, TCW Special Credits Fund IV, TCW Special Credits Plus Fund,
TCW Special Credits Trust IV, and TCW Special Credits Trust IVA.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities" shall mean the Preferred Stock and Common Stock
(including Conversion Shares (as defined herein)).
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1 EXCHANGE OF PREFERRED STOCK FOR COMMON STOCK
1.1 EXCHANGE. Subject to the terms and conditions set forth herein,
each of the Preferred Stockholders hereby agrees to exchange each share of
Preferred Stock held by such Preferred Stockholder for a number of shares of
Common Stock to be issued by the Company pursuant to the following conversion
ratio (the "Conversion Shares"): (a) the sum of (i) the number of shares of
Preferred Stock that would have been issued and outstanding on October 10, 1998
if the Preferred Stock issued and outstanding as of the Closing Date (as defined
herein) had remained outstanding until and as of such date (it being agreed that
such number of shares of Preferred Stock is 16,764,135) plus (ii) the quotient
of (A) the amount of cash dividends that would have accrued on the Preferred
Stock between the date of this Agreement and April 10, 1999 (it being agreed
that such amount is $1,814,364) divided by (B) the conversion price set forth in
the Declaration of Trust (it being agreed that such amount is $2.00), divided by
(b) the number of shares of Preferred Stock issued and outstanding as of the
Closing Date (as defined herein). Subject to the terms and conditions set forth
herein, the Company hereby agrees to issue the Conversion Shares upon receipt of
share certificates representing all of the issued and outstanding shares of
Preferred Stock from the Preferred Stockholders.
1.2 THE CLOSING. At the closing of the transactions described herein
(the "Closing"), (a) each of the Preferred Stockholders will deliver to the
Company the certificates evidencing the shares of Preferred Stock held by such
holder together with duly executed blank stock powers, (b) the Company will
accept and cancel such certificates representing shares of Preferred Stock and
(c) the Company will deliver to Preferred Stockholders certificates for the
Conversion Shares, registered in the denominations and names specified by each
Preferred Stockholder. The Closing shall be held at the offices of Milbank,
Tweed, Hadley & McCloy, 601 S. Figueroa St., thirtieth floor, Los Angeles,
California 90017, on the third business day following satisfaction of the
conditions set forth herein or at such other time and place as all parties to
this Letter Agreement may mutually agree (the "Closing Date").
Section 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants and covenants to each
Preferred Stockholder as follows:
2.1 ORGANIZATION; POWER AND AUTHORITY. The Company is a real estate
investment trust duly organized, validly existing and in good standing under the
laws of the State
-2-
<PAGE>
of California. The Company has all requisite power and authority to transact
its business as now transacted and proposed to be transacted, to execute and
deliver this Agreement, to issue and exchange the Conversion Shares for the
Preferred Shares and to perform the provisions of this Letter Agreement.
2.2 AUTHORIZATION, ETC. The execution, delivery and performance of
this Letter Agreement and the other documents contemplated herein to which the
Company is a party, the issuance and exchange of Conversion Shares for the
Preferred Stock, and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company, and this Letter Agreement has been executed and delivered by the
Company, and this Letter Agreement constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
2.3 CAPITAL STOCK. The total number of shares of capital stock which
the Company has authority to issue is 75,000,000 shares, consisting of
50,000,000 shares of Common Stock and 25,000,000 shares of Preferred Stock. As
of October 1, 1998, the total number of outstanding shares of Common Stock was
4,881,122, the total number of outstanding shares of Preferred Stock was
16,764,135 and there were options and warrants to purchase an aggregate of
119,998 shares of Common Stock outstanding and options to purchase 1,450,000
shares of Common Stock had been granted subject to shareholder approval.
2.4 ISSUANCE OF THE CONVERSION SHARES. Upon issuance, the Conversion
Shares will be duly authorized, validly issued, outstanding, fully paid and
non-assessable. The delivery to each Preferred Stockholder of a certificate or
certificates representing the Conversion Shares at the Closing will transfer to
such Preferred Stockholder good and valid title to the Conversion Shares which
it is entitled to receive hereunder, free and clear of all liens and
encumbrances.
2.5 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS OF THE COMPANY, ETC.
Except as described in Schedule 2.5 hereto, none of the execution and delivery
of this Letter Agreement, or the issuance and exchange of the Conversion Shares
for Preferred Stock or the consummation of the transactions contemplated herein
or compliance with the terms and provisions hereof will conflict with or result
in a breach of, or require any consent under, the Restated Declaration of Trust
or Bylaws of the Company, any applicable law or regulation (other than filings
which will be made by the Company as required by applicable state securities
laws), or any order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which the Company is a
party or by which it is bound or to which it is subject, or constitute a default
under any such agreement or instrument, or result in the creation or imposition
of any lien upon any of the revenues or assets of the Company pursuant to the
terms of any such agreement or instrument.
2.6 GOVERNMENTAL CONSENTS. Other than filings required by applicable
state securities laws which shall be made by the Company, neither the nature of
the Company or of any of its respective businesses or properties, nor any
relationship between the Company and any other person, nor any circumstance in
connection with the offer, issue or exchange of the Securities is such as to
require consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the Company as a
condition to the execution, delivery or performance of this Letter Agreement.
-3-
<PAGE>
2.7 LEGAL PROCEEDINGS. There are no legal actions or proceedings
pending, or to the knowledge of the Company, threatened against, relating to or
affecting the Company which request or threaten to request the issuance of a
court order restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated in this Letter
Agreement (or any similar transaction).
Section 3 REPRESENTATIONS AND WARRANTIES OF THE PREFERRED
STOCKHOLDERS.
Each of the Preferred Stockholders, severally and not jointly,
represents, warrants and covenants to the Company and each other Preferred
Stockholder as follows:
3.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION, ETC. Such
Preferred Stockholder has all requisite power and authority to execute and
deliver this Letter Agreement and to perform its obligations pursuant to the
provisions of this Letter Agreement. The execution, delivery and performance of
this Letter Agreement, and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of such
Preferred Stockholder. This Letter Agreement has been executed and delivered by
a duly authorized representative of such Preferred Stockholder and constitutes a
legal, valid and binding obligation of such Preferred Stockholder enforceable
against such holder in accordance with its terms.
3.2 OWNERSHIP OF SHARES. Such Preferred Stockholder represents that
such Preferred Stockholder is the sole legal owner of the number of shares of
Preferred Stock set forth opposite such holder's name on Schedule 3.2. Such
Preferred Stockholder holds such shares of Preferred Stock of the Company free
and clear of any liens, claims, interests, charges and encumbrances. Such
Preferred Stockholder represents that it has not previously entered into any
agreement (other than this Agreement) to sell, assign, convey, transfer or
otherwise dispose of, in whole or in part, the shares of Preferred Stock to be
exchanged by such Preferred Stockholder pursuant to the terms hereof. Upon
exchange of the Preferred Stock for the Conversion Shares at the Closing, such
Preferred Stockholder will transfer to the Company, good and valid title to the
Preferred Stock held by such holder, free and clear of all liens, claims,
interests, charges and encumbrances.
3.3 ACQUISITION FOR EACH OF THE PREFERRED STOCKHOLDERS' OWN ACCOUNT;
RESTRICTIONS ON TRANSFER; ACCREDITED INVESTORS. Such Preferred Stockholder
represents and warrants to the Company that it is acquiring and will acquire the
Conversion Shares for its own account (or a separate account managed by it),
with no present intention of distributing or reselling its Conversion Shares or
any part thereof in violation of the Securities Act, and that such Preferred
Stockholder is prepared to bear the economic risk of retaining its Conversion
Shares for an indefinite period of time, all without prejudice; provided that
the disposition of its property shall in all times be and remain with in its
control. Such Preferred Stockholder represents and warrants that it is an
"accredited investor," as such term is defined in Rule 501(a)(3) of Regulation D
promulgated under the Securities Act. Such Preferred Stockholder further
covenants that it will not make any sale, transfer or other disposition of the
Securities of the Company in violation of the Securities Act, the Exchange Act
or the rules of the SEC promulgated thereunder.
-4-
<PAGE>
3.4 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS OF EACH OF PREFERRED
STOCKHOLDERS, ETC. Except as described in Schedule 3.4 hereto, none of the
execution and delivery of this Letter Agreement, or the issue and exchange of
the Conversion Shares for Preferred Stock or the consummation of the
transactions contemplated herein or compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require any consent
under, organic foundation documents or bylaws of such Preferred Stockholder any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which such Preferred Stockholder is a party or by which it is bound or to which
it is subject, or constitute a default under any such agreement or instrument,
or result in the creation or imposition of any lien upon any of the revenues or
assets of such Preferred Stockholder pursuant to the terms of any such agreement
or instrument.
3.5 GOVERNMENTAL CONSENTS. Neither the nature of such Preferred
Stockholder or of any of its respective businesses or properties, nor any
relationship between such Preferred Stockholder and any other person, nor any
circumstance in connection with the offer, issue or exchange of the Securities
is such as to require consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority on the part of
such Preferred Stockholder as a condition to the execution, delivery or
performance of this Letter Agreement.
Section 4 COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with the Preferred
Stockholders that all times from and after the date hereof until the Closing
and, with respect to any covenant to be performed in whole or in part after the
Closing, to the period specified therein or if no period is specified,
indefinitely:
4.1 FAIRNESS OPINION. The Company shall use commercially reasonable
efforts to obtain an independent "fairness" opinion from a recognized investment
banking firm addressed to the trustees of the Company, together with a letter
permitting the Company to deliver the fairness opinion to each of the Preferred
Stockholders, and confirming that the transactions contemplated hereby are fair,
from a financial point of view, to the Company and the shareholders of the
Company other than the Preferred Stockholders.
4.2 CONSENTS. The Company shall use commercially reasonable efforts
to obtain the consents described in Schedule 2.5.
4.3 FULFILLMENT OF CONDITIONS. The Company will take all
commercially reasonable steps to satisfy conditions and obligations of the
Company under this Letter Agreement and will not take or fail to take any action
that could reasonably be expected to result in non-fulfillment of any such
condition or obligation under this Letter Agreement.
Section 5 CONDITIONS TO CLOSING.
(a) The obligations of each Preferred Stockholder hereunder are
subject to the satisfaction prior to the issuance of the Conversion Shares of
the following conditions:
(i) the Company shall have delivered to Preferred
Stockholders a certificate, dated as of the Closing Date, of the Secretary or an
Assistant Secretary of the
-5-
<PAGE>
Company, (A) attaching a true and complete copy of the resolutions of the Board
of Trustees of the Company, and of all documents evidencing other necessary
corporate or shareholder action taken by the Company in connection with the
matters contemplated by this Agreement, (B) attaching a true and complete copy
of the Restated Declaration of Trust, (C) setting forth the incumbency of the
officer or officers of the Company who sign this Letter Agreement, the other
Documents, and each certificate for the Conversion Shares, including therein a
signature specimen of such officer or officers, and (D) attaching a certificate
of good standing (including tax status, if applicable) of the California
Secretary of State;
(ii) the Company shall have received a "fairness" opinion, in
form and substance satisfactory to each of the Preferred Stockholders, from Duff
& Phelps, LLC (or other recognized investment banking firm) addressed to the
trustees of the Company, together with a letter permitting the Company to
deliver the fairness opinion to each of the Preferred Stockholders, and
confirming that the transactions contemplated hereby are fair, from a financial
point of view, to the Company and the shareholders of the Company other than the
Preferred Stockholders.
(iii) all representations and warranties of the Company
contained in Section 2 shall be true in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date (other than representations and
warranties that are dated as of a specified date earlier than the Closing Date,
which shall be certified to be true, correct and complete as of such earlier
date) the Company shall have performed all agreements on its part required to be
performed under this Letter Agreement on or prior to the Closing Date and
Preferred Stockholders shall have received a certificate signed by the chief
executive officer of the Company dated as of the Closing Date, certifying as to
the effect specified in this paragraph;
(iv) the Company shall have delivered to the Preferred
Stockholders such other documents, agreements, instruments, certificates and
evidence relating to the matters contemplated by this Letter Agreement as
Preferred Stockholders or its counsel shall reasonably require;
(v) since December 31, 1997, there shall have been no
material adverse change or development in the business, financial condition,
operating results, assets, operations, business prospects, cash flow, net worth
or any franchiser, customer, tenant, supplier or employee relationship of the
Company (each a "Material Adverse Effect");
(vi) the Company shall have delivered certificates
representing Conversion Shares to each of Preferred Shareholders;
(vii) all of the outstanding shares of Preferred Stock shall
have been tendered to the Company by Preferred Stockholders;
(viii) the Company shall have obtained the consents described in
Schedule 2.5 and each of the Preferred Stockholders shall have obtained the
consents discussed in Section 3.4;
-6-
<PAGE>
(ix) there shall not be any pending or threatened action or
proceeding (a) challenging this Agreement or the transactions contemplated
hereby or seeking monetary damages in connection therewith or (b) which, in the
reasonable judgement of any Preferred Stockholder, could be reasonably expected
to have a Material Adverse Effect on the Company; and
(x) the Company and each of the Preferred Stockholders shall
have executed and delivered an amendment to that certain Registration Rights
Agreement, dated as of October 1, 1994, by and among the Company and each of the
Preferred Stockholders (the "Registration Agreement") to clarify that (i)
Conversion Shares to be received by the Preferred Stockholders pursuant to the
transactions contemplated herein shall be subject to the registration rights
described in the Registration Agreement; and (ii) any and all securities that
the Preferred Stockholders may receive in exchange for or in respect of
Conversion Shares or thereafter shall be subject to the registration rights
described in the Registration Agreement; and
(xi) the Preferred Stockholders shall have received the
opinion of Milbank, Tweed, Hadley & McCloy, counsel for the Company, in form and
substance reasonably acceptable to the Preferred Stockholders.
(b) The obligations of the Company hereunder are subject to the
satisfaction prior to the issuance of the Common Stock of the following
conditions:
(i) all representations and warranties of each of the
Preferred Stockholders contained in Section 3 shall be true in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date; each
of the Preferred Stockholders shall have performed all agreements on its part
required to be performed under this Agreement or any other Document on or prior
to the Closing Date; and the Company shall have received a certificate signed by
an officer, or other comparable representative, of each of the Preferred
Stockholders dated as of the Closing Date, certifying as to the effect specified
in this paragraph;
(ii) each of the Preferred Stockholders shall have delivered
to the Company original certificates representing all shares of Preferred Stock
that it owns beneficially and stock powers duly executed or endorsed in blank;
(iii) the Company shall have received a "fairness" opinion in
form and substance satisfactory to the trustees of the Company and the Preferred
Stockholders, from Duff & Phelps, LLC (or other recognized investment banking
firm) addressed to the trustees of the Company and confirming that the
transactions contemplated hereby are fair, from a financial point of view, to
the Company and the shareholders of the Company other than the Preferred
Stockholders and the Company shall have received a letter from Duff & Phelps,
LLC permitting the Company to deliver such fairness opinion to each of the
Preferred Stockholders;
(iv) the Company shall have obtained the consents described in
Section 2.4 and each of the Preferred Stockholders shall have obtained the
consents discussed in Section 3.4; and
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<PAGE>
(v) there shall not be pending or threatened any action or
proceeding challenging this Agreement or the transactions contemplated hereby or
seeking monetary damages in connection therewith.
Section 6 NOTICES
6.1 NOTICES.
(a) All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid:
(i) if to the Company, at
The Peregrine Real Estate Trust
1300 Ethan Way, Suite 200
Sacramento, California 95825
Attention: Mr. Roger Snell
with copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street
Los Angeles, California 90017
Attention: Eric H. Schunk, Esq.
(ii) if to TCW, at:
TCW Special Credits
c/o Oaktree Capital Management, LLC
333 South Grand Avenue, 28th Floor
Los Angeles, California 90071
Attention: Mr. D. Richard Masson
(iii) if to Prudential, at:
Prudential Insurance Company of America
Prudential Capital Group
4 Gateway Center 7th Floor
100 Mulberry Street
Newark, New Jersey 07102
Attention: Mr. Paul L. Meiring
(iv) if to Oaktree, at:
Oaktree Capital Management, LLC
333 South Grand Avenue, 28th Floor
Los Angeles, California 90071
Attention: Mr. D. Richard Masson
or at such other address as each such party may have furnished in writing to
each other party to this Letter Agreement and all other holders of Shares at the
time outstanding.
-8-
<PAGE>
(b) Any notice shall be deemed to have been duly given when delivered
by hand, if personally delivered, and if sent by mail, two business days after
being deposited in the mail, postage prepaid.
6.2 SURVIVAL. All warranties, representations and covenants made by
the parties herein or in any certificate or other instrument delivered by them
or on their behalf under this Letter Agreement shall survive for a period of one
year after the issuance of the Conversion Shares and the exchange of the
Preferred Stock, EXCEPT FOR the representations and warranties contained in
Sections 2.2, 2.3 and 3.2 which shall survive the issuance of the Conversion
Shares and the exchange of the Preferred Stock until expiration of the
applicable statutes of limitations. All statements in any such certificate or
other instrument so delivered shall constitute representations and warranties by
the Company hereunder.
6.3 INDEMNIFICATION. The Company shall indemnify each of the
Preferred Stockholders in respect of, and hold each of them harmless from and
against, any and all losses suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
any breach of representation or warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Company contained in this
Letter Agreement.
6.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Letter Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the Preferred Stockholders, whether so
expressed or not. The Company may not assign its rights, nor to delegate its
duties, under this Letter Agreement.
6.5 AMENDMENT AND WAIVER, ETC. This Agreement may be amended, and
the observance of any term of this Letter Agreement may be waived, but only with
the written consent of each of the Preferred Stockholders. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the Company and each of the Preferred Stockholders. No failure or
delay on the part of the Preferred Stockholders in exercising any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
No waiver of any of the provisions of this Letter Agreement shall be deemed to
be a waiver of any other provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.
6.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of which together shall
constitute one and the same instrument.
6.7 SEVERABILITY. In the event that any one or more of the
provisions contained in this Letter Agreement, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
-9-
<PAGE>
6.8 SPECIFIC PERFORMANCE. The Company acknowledges that the
Preferred Stockholders have no adequate remedy at law for breaches by the
Company of its obligations hereunder, and accordingly the Company irrevocably
agrees that the Preferred Stockholders shall be entitled to the remedy of
specific performance and waives any right the Company may have to object to such
remedy.
6.9 EXPENSES. The Company will pay all costs and reasonable expenses
(including reasonable legal fees of one counsel to the Preferred Stockholders)
incurred by Preferred Stockholders including (a) costs and expenses relating to
the negotiation, execution and delivery of this Letter Agreement and any other
agreement, instrument, document, or certificate necessary to consummate the
transactions contemplated by this Letter Agreement and the issuance of
Conversion Shares, (b) transfer taxes, (c) costs and expenses relating to
printing the instruments evidencing the Conversion Shares, (d) costs and
expenses relating to any amendments, waivers or consents under this Letter
Agreement and (e) costs and expenses incident to the enforcement by Preferred
Stockholders of, or the protection or preservation of any right or remedy of any
Preferred Stockholder under, this Letter Agreement.
6.10 ENTIRE AGREEMENT. This Agreement, together with all Exhibits and
Schedules hereto, constitutes the entire agreement among the Company and
Preferred Stockholders pertaining to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties.
6.11 CHOICE OF LAW. This Letter Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
giving effect to its principles of conflict of laws.
6.12 TERMINATION. This Letter Agreement shall terminate (a) at any
time prior to the Closing by mutual written agreement of the parties hereto or
(b) on or after December 31, 1998 by any of the Company or the Preferred
Stockholders if the Closing shall not have occurred on or prior to such date and
such failure to consummate is not caused by a breach by the terminating party.
If this Letter Agreement is validly terminated pursuant to clause (a) of the
first sentence of this Section 6.12, this Letter Agreement will forthwith become
null and void, and there will be no liability or obligation on the part of any
party hereto, except for the obligation of the Company to pay expenses pursuant
to Section 6.9. Upon termination of this Agreement pursuant to clause (b) of the
first sentence of this Section 6.12, the breaching party, if any, whose breach
has caused such termination will remain liable to the non-breaching party for
any breach of this Letter Agreement existing at the time of such termination,
and the non-breaching party may use such remedies, including damages and fees of
attorneys, against such breaching party with respect to such breach as are
provided for in this Letter Agreement or are otherwise available in law or
equity.
6.13 SHAREHOLDER LIABILITY. Each of the parties hereto agrees
that the shareholders of the Company are not personally liable for any written
contracts or agreements entered into by the Company and shall not be personally
liable for any obligation of the Company under this Agreement.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please so indicate by having an authorized representative sign this
Letter Agreement in the appropriate space provided below and return to us this
Letter Agreement on or prior to November 15, 1998, whereupon this Letter
Agreement and your acceptance shall represent a binding agreement between you
and the Company with respect to the matters set forth herein.
THE PEREGRINE REAL ESTATE TRUST
By: /s/ Roger Snell
----------------------------------------
Name: Roger Snell
Title: President
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Letter Agreement to
be duly executed and delivered as of the day and year first written above.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Gary D. Trabka
----------------------------------------
Name:
Title:
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company of
America, its Asset Manager
By: /s/ Gary D. Trabka
-----------------------------------
Name:
Title
TCW SPECIAL CREDITS FUND IV
By: TCW Special Credits,
Its: General Partner
By: TCW Asset Management Company,
Its: Managing General Partner
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Authorized Signatory
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<PAGE>
TCW SPECIAL CREDITS PLUS FUND
By: TCW Special Credits,
Its: General Partner
By: TCW Asset Management Company,
Its: Managing General Partner
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ BRUCE A. KARSH
Name: Bruce A. Karsh
Title: Authorized Signatory
TCW SPECIAL CREDITS TRUST IV
By: Trust Company of the West, Trustee
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Authorized Signatory
TCW SPECIAL CREDITS TRUST IVA
By: Trust Company of the West, Trustee
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Authorized Signatory
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<PAGE>
OCM REAL ESTATE OPPORTUNITIES FUND A, L.P.
By: Oaktree Capital Management, LLC
Its: General Partner
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: President
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Principal
OCM REAL ESTATE OPPORTUNITIES FUND B, L.P.
By: Oaktree Capital Management, LLC
Its: General Partner
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: President
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Principal
WEYERHAEUSER REAL ESTATE OPPORTUNITIES
SEPARATE ACCOUNT
By: Oaktree Capital Management, LLC
Its: Investment Manager
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: President
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Principal
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<PAGE>
WEYERHAEUSER COMPANY MASTER RETIREMENT
TRUST
By: TCW Special Credits,
Its: Investment Manager
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Bruce A. Karsh
-----------------------------------
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Richard Masson
-----------------------------------
Name: Richard Masson
Title: Authorized Signatory
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<PAGE>
SCHEDULE 2.5
CONSENTS
1. Prior written consent and waiver from Fleet Capital Corporation pursuant to
Section 10.1.12 of the Loan and Security Agreement, dated as of December 4,
1997, between the Peregrine Real Estate Trust and Fleet Capital
Corporation.
2. Prior written consent and waiver from Holiday Inns Franchising, Inc. and
Holiday Hospitality Franchising, Inc. relating to the Holiday
Inn-Registered Trademark- Change of Ownership License Agreement dated
July 20, 1993 relating to location number 1608, the Holiday Inn-Registered
Trademark- Hotel License Renewal Agreement dated January 23, 1998 relating
to location number 4203 and the Holiday Inn-Registered Trademark- Hotel
License Renewal Agreement dated December 18, 1997 relating to location
number 5053.
3. Prior written consent and waiver from the Noteholders and The Prudential
Insurance Company of America as Agent for Noteholders relating to the
Second Amended and Restated Note Agreement.
<PAGE>
SCHEDULE 3.2
<TABLE>
<CAPTION>
BENEFICIAL OWNER NOMINEE NAME PREFERRED
---------------- ------------ ---------
SHARES
------
<S> <C> <C>
GATEWAY RECOVERY TRUST GATEWAY RECOVERY TRUST 3,102,816
THE PRUDENTIAL INSURANCE THE PRUDENTIAL INSURANCE 1,361,667
COMPANY OF AMERICA COMPANY OF AMERICA
WEYERHAEUSER COMPANY MASTER SALKELD & CO. 644,894
RETIREMENT TRUST
TCW SPECIAL CREDITS FUND IV SALKELD & CO. 2,077,992
TCW SPECIAL CREDITS PLUS FUND SALKELD & CO. 2,221,304
TCW SPECIAL CREDITS TRUST IV SALKELD & CO. 1,791,375
TCW SPECIAL CREDITS TRUST IVA SALKELD & CO. 429,931
WEYERHAEUSER REAL ESTATE HARE & CO. 513,416
OPPORTUNITIES
OCM REAL ESTATE OPPORTUNITIES HARE & CO. 1,694,273
FUND A, L.P.
OCM REAL ESTATE OPPORTUNITIES HARE & CO. 2,926,467
FUND B, L.P.
TOTAL PREFERRED SHARES: 16,764,135
</TABLE>
<PAGE>
SCHEDULE 3.4
CONSENTS
NONE
