<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 27, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SECURITY CAPITAL PACIFIC TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MARYLAND 74-6056896
(STATE OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION
ORGANIZATION) NUMBER)
7777 MARKET CENTER AVENUE
EL PASO, TEXAS 79912
(915) 877-3900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
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JEFFREY A. KLOPF
SECRETARY
7777 MARKET CENTER AVENUE
EL PASO, TEXAS 79912
(915) 877-3900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
EDWARD J. SCHNEIDMAN
MAYER, BROWN & PLATT
190 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE OFFERING PRICE REGISTRATION
TO BE REGISTERED (1) REGISTERED PER UNIT (2) (2) FEE
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<S> <C> <C> <C> <C>
Debt Securities............................
Preferred Shares of Beneficial Interest, (3) (3) $300,000,000(3) $103,448.28
$1.00 par value...........................
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</TABLE>
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(1) Securities registered hereunder (the "Offered Securities") may be sold
separately, together or as units with other Offered Securities registered
hereunder. The Offered Securities registered hereunder also include such
indeterminate number of shares of Preferred Stock that may be issued upon
conversion of convertible debt securities.
(2) Estimated solely for purposes of determining the registration fee.
(3) Pursuant to Rule 457(o) under the Securities Act of 1933, as amended,
which permits the registration fee to be calculated on the basis of the
maximum offering price of all the securities listed, the table does not
specify by each class information as to the amount to be registered,
proposed maximum offering price per unit or proposed maximum aggregate
offering price.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 1996
PROSPECTUS
LOGO
$300,000,000 DEBT SECURITIES AND PREFERRED SHARES
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Security Capital Pacific Trust ("PTR") may from time to time offer in one or
more series its (i) unsecured senior debt securities (the "Debt Securities")
and (ii) Preferred Shares of Beneficial Interest, par value $1.00 per share
(the "Preferred Shares"). The Debt Securities and Preferred Shares (together,
the "Offered Securities") may be offered, separately or together, in separate
series, in amounts, at prices and on terms to be set forth in a supplement to
this Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, currency, form
(which may be registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, terms for redemption at the option of PTR or repayment at
the option of the Holder, terms for sinking fund payments, and any initial
public offering price; and (ii) in the case of Preferred Shares, the specific
title and stated value, any dividend, liquidation, redemption, voting and other
rights, and any initial public offering price. In addition, such specific terms
may include limitations on direct or beneficial ownership and restrictions on
transfer of the Offered Securities, in each case as may be appropriate to
preserve the status of PTR as a real estate investment trust ("REIT") for
federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered
Securities covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through agents designated
from time to time by PTR, or to or through underwriters or dealers. If any
agents or underwriters are involved in the sale of any of the Offered
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Offered Securities may be sold
without delivery of the applicable Prospectus Supplement describing the method
and terms of the offering of such series of Offered Securities.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
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THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>
AVAILABLE INFORMATION
PTR is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Room 1204, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, 13th
Floor, New York, New York 10048, and are also available on the Commission's
worldwide web site at http://www.sec.gov. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. PTR's
outstanding Common Shares of Beneficial Interest, par value $1.00 per share
("Common Shares"), Cumulative Convertible Series A Preferred Shares of
Beneficial Interest, $1.00 par value ("Series A Preferred Shares"), and Series
B Cumulative Redeemable Preferred Shares of Beneficial Interest, $1.00 par
value ("Series B Preferred Shares"), are listed on the New York Stock Exchange
(the "NYSE") under the symbols "PTR," "PTR-PRA" and "PTR-PRB," respectively,
and all such reports, proxy statements and other information filed by PTR with
the NYSE may be inspected at the NYSE's offices at 20 Broad Street, New York,
New York 10005.
This Prospectus constitutes part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement")
filed by PTR with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information, reference is hereby made to the Registration
Statement.
INCORPORATION BY REFERENCE
There are incorporated herein by reference the following documents filed by
PTR with the Commission (File No. 1-10272):
(a) PTR's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, as amended by Form 10-K/A No. 1;
(b) PTR's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, as amended by Form 10-Q/A No. 1, and June 30, 1996;
(c) PTR's Current Reports on Form 8-K filed February 6, 1996, February
15, 1996, May 22, 1996, August 1, 1996, August 6, 1996, and September 23,
1996; and
(d) The description of PTR's Series B Preferred Shares contained in PTR's
registration statement on Form 8-A filed with the Commission on May 16,
1995.
All documents subsequently filed by PTR pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of the offering of
the Offered Securities, shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any subsequently filed document which is also or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
PTR will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon the written or
oral request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests should be addressed to Secretary, Security Capital Pacific Trust,
7777 Market Center Avenue, El Paso, Texas 79912, telephone number: (915) 877-
3900.
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<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PTR's objective is to be the preeminent real estate operating company
focusing on multifamily property in its western United States target market.
PTR's REIT manager is Security Capital Pacific Incorporated (the "REIT
Manager" or "REIT Management"). PTR focuses on development, acquisition,
operation and long-term ownership of multifamily properties. Through its REIT
Management Agreement with the REIT Manager, PTR has access to the services
provided by the REIT Manager and its specialized service affiliates, which
provides PTR with access to the same resources as a fully integrated operating
company. PTR seeks to achieve long-term sustainable growth in cash flow by
maximizing operating performance through value-added operating systems and
concentrating its experienced team of professionals on developing and
acquiring industry-leading product in targeted submarkets exhibiting strong
job growth and favorable demographic trends. The REIT Manager provides PTR
with strategic and day-to-day management, including research, investment
analysis, development, acquisition, due diligence, asset management, capital
markets, legal and accounting services. PTR operates as a REIT.
PTR was formed in 1963 and is a real estate investment trust organized under
the laws of Maryland. Its principal executive offices are located at 7777
Market Center Avenue, El Paso, Texas 79912, and its telephone number is (915)
877-3900.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for the
development and acquisition of additional multifamily properties, as suitable
opportunities arise, for the repayment of certain outstanding indebtedness at
such time, for working capital purposes and, to a lesser extent, for capital
improvements to properties.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
For the purpose of computing these ratios, (a) "earnings" consist of
earnings from operations plus fixed charges other than capitalized interest
and (b) "fixed charges" consist of interest on borrowed funds (including
capitalized interest) and amortization of debt discount and expense.
<TABLE>
<CAPTION>
SIX
MONTHS
PERIOD ENDED DECEMBER ENDED
31, JUNE 30,
------------------------ ---------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges and
Preferred Share dividends.................. 1.5 2.9 3.4 1.6 1.9 1.9 1.8
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of
February 1, 1994, as supplemented by the First Supplemental Indenture, dated
as of February 2, 1994 (as so supplemented, the "Indenture"), between PTR and
State Street Bank and Trust Company (the "Trustee"). The Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part and is available for inspection at the corporate trust office of the
Trustee at 225 Franklin Street, Boston, Massachusetts 02110 or as described
above under "Available Information." The Indenture is subject to, and governed
by, the Trust Indenture Act of 1939, as amended (the "TIA"). The statements
made hereunder relating to the Indenture and the Debt Securities to be issued
thereunder are summaries of certain provisions thereof, do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture and such Debt Securities. All section
references appearing herein are to sections of the Indenture, and capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Indenture.
3
<PAGE>
GENERAL
The Debt Securities will be direct, unsecured obligations of PTR and will
rank equally with all other unsecured and unsubordinated indebtedness of PTR.
The Indenture provides that the Debt Securities may be issued without limit as
to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board of Trustees of PTR or as established in one or more
indentures supplemental to the Indenture. All Debt Securities of one series
need not be issued at the same time and, unless otherwise provided, a series
may be reopened, without the consent of the Holders of the Debt Securities of
such series, for issuances of additional Debt Securities of such series
(Section 301).
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect
to such series (Section 608). In the event that two or more persons are acting
as Trustee with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the Indenture separate and apart
from the trust administered by any other Trustee (Sections 101 and 609), and,
except as otherwise indicated herein, any action described herein to be taken
by the Trustee may be taken by each such Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the full principal amount thereof, the
portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or the method by which any such
portion shall be determined;
(4) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable and the
amount of principal payable thereon;
(5) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(6) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Dates for such
Interest Payment Dates, or the method by which such Dates shall be
determined, the Person to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a 360-
day year comprised of twelve 30-day months;
(7) the place or places where the principal of (and premium or Make-Whole
Amount (as defined), if any) and interest and Additional Amounts, if any,
on such Debt Securities will be payable, where such Debt Securities may be
surrendered for registration of transfer or exchange and where notices or
demands to or upon PTR in respect of such Debt Securities and the Indenture
may be served;
(8) the period or periods within which, the price or prices (including
the premium or Make-Whole Amount, if any) at which, the currency or
currencies in which, and the other terms and conditions upon which such
Debt Securities may be redeemed, as a whole or in part, at the option of
PTR, if PTR is to have such an option;
(9) the obligation, if any, of PTR to redeem, repay or purchase such Debt
Securities pursuant to any sinking fund or analogous provision or at the
option of a Holder thereof, and the period or periods within which, the
price or prices at which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
4
<PAGE>
(10) if other than United States dollars, the currency or currencies in
which such Debt Securities are denominated and payable, which may be a
foreign currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating thereto;
(11) whether the amount of payments of principal of (and premium or Make-
Whole Amount, if any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method (which
index, formula or method may, but need not be, based on a currency,
currencies, currency unit or units or composite currency or currencies) and
the manner in which such amounts shall be determined;
(12) whether the principal of (and premium or Make-Whole Amount, if any)
or interest or Additional Amounts, if any, on such Debt Securities are to
be payable, at the election of PTR or a Holder, in one or more currencies
other than that in which such Debt Securities are denominated or stated to
be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner
of, and identity of the exchange rate agent with responsibility for,
determining the exchange rate between the currency or currencies in which
such Debt Securities are denominated or stated to be payable and the
currency or currencies in which such Debt Securities are to be so payable;
(13) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or covenants set
forth in the Indenture;
(14) whether such Debt Securities will be issued in certificated or book-
entry form;
(15) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof if other than $5,000 and terms and conditions relating thereto;
(16) the applicability, if any, of the defeasance and covenant defeasance
provisions of Article Fourteen of the Indenture;
(17) if such Debt Securities are to be issued upon the exercise of debt
warrants, the time, manner and place for such Debt Securities to be
authenticated and delivered;
(18) whether and under what circumstances PTR will pay Additional Amounts
as contemplated in the Indenture on such Debt Securities in respect of any
tax, assessment or governmental charge and, if so, whether PTR will have
the option to redeem such Debt Securities in lieu of making such payment;
and
(19) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special United States federal income
tax, accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Under the Indenture, PTR will have the ability, in addition to the ability
to issue Debt Securities with terms different from those of Debt Securities
previously issued, without the consent of the Holders, to reopen a previous
issue of a series of Debt Securities and issue additional Debt Securities of
such series.
Except as set forth below under "Certain Covenants--Limitations on
Incurrence of Debt," the Indenture does not contain any other provisions that
would limit the ability of PTR to incur indebtedness or that would afford
Holders of Debt Securities protection in the event of a highly leveraged or
similar transaction involving PTR or in the event of a change of control of
PTR. However, PTR's Restated Declaration of Trust restricts beneficial
ownership of PTR's outstanding Common Shares by a single person, or persons
acting as a group, to 9.8% of such Common Shares, with certain exceptions
(including an exception for the ownership of up to 49% of such Common Shares
in the case of Security Capital Group Incorporated ("SCG")). Additionally, the
Articles Supplementary relating to the Series A Preferred Shares and the
Series B Preferred Shares restrict beneficial ownership of such Series A
Preferred Shares and Series B Preferred Shares, respectively, by a person, or
persons
5
<PAGE>
acting as a group, to 25% of such Series A Preferred Shares or Series B
Preferred Shares, as the case may be. Similarly, the Articles Supplementary
for each series of Preferred Shares will contain certain provisions
restricting the ownership and transfer of the Preferred Shares. See
"Description of Preferred Shares--Restrictions on Ownership." These
restrictions are designed to preserve PTR's status as a REIT and, therefore,
may act to prevent or hinder a change of control. Reference is made to the
applicable Prospectus Supplement for information with respect to any deletions
from, modifications of or additions to the Events of Default or covenants of
PTR that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples thereof. Unless otherwise
described in the applicable Prospectus Supplement, the Debt Securities of any
series issued in bearer form will be issuable in denominations of $5,000
(Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium or Make-Whole Amount, if any) and interest on any
series of Debt Securities will be payable at the corporate trust office of the
Trustee, initially located at 225 Franklin Street, Boston, Massachusetts
02110; provided that, at the option of PTR, payment of interest may be made by
check mailed to the address of the Person entitled thereto as it appears in
the Security Register or by wire transfer of funds to such Person to an
account maintained within the United States (Sections 301, 305, 306, 307 and
1002).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and either may be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to the Holder of such Debt Security
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, all as more completely described in the
Indenture (Section 307).
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount
and tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the Trustee referred to above. In
addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
registration of transfer thereof at the corporate trust office of the Trustee
referred to above. Every Debt Security surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer. No service charge will be made for any registration of
transfer or exchange of any Debt Securities, but PTR may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith (Section 305). If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the Trustee) initially designated
by PTR with respect to any series of Debt Securities, PTR may at any time
rescind the designation of any such transfer agent or approve a change in the
location at which any such transfer agent acts, except that PTR will be
required to maintain a transfer agent in each Place of Payment for such
series. PTR may at any time designate additional transfer agents with respect
to any series of Debt Securities (Section 1002).
Neither PTR nor the Trustee shall be required to (i) issue, register the
transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business
on the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed
in part; or (iii) issue, register the transfer of or exchange any Debt
Security which has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
6
<PAGE>
MERGER, CONSOLIDATION OR SALE
PTR may consolidate with, or sell, lease or convey all or substantially all
of its assets to, or merge with or into, any other entity, provided that (a)
either PTR shall be the continuing entity, or the successor entity (if other
than PTR) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets is a Person organized
and existing under the laws of the United States or any State thereof and
shall expressly assume payment of the principal of (and premium or Make-Whole
Amount, if any) and any interest (including Additional Amounts, if any) on all
of the Debt Securities and the due and punctual performance and observance of
all of the covenants and conditions contained in the Indenture; (b)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of PTR or any Subsidiary as a result
thereof as having been incurred by PTR or such Subsidiary at the time of such
transaction, no Event of Default under the Indenture, and no event which,
after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (c) an officer's
certificate and legal opinion covering such conditions shall be delivered to
the Trustee (Sections 801 and 803).
CERTAIN COVENANTS
Limitations on Incurrence of Debt. PTR will not, and will not permit any
Subsidiary to, incur any Debt (as defined below) 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
PTR and its Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles is greater than 60% of the sum of
(without duplication) (i) PTR's Total Assets (as defined below) as of the end
of the calendar quarter covered in PTR'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, and
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 PTR or any Subsidiary since the end of
such calendar quarter, including those proceeds obtained in connection with
the incurrence of such additional Debt (Section 1004).
In addition to the foregoing limitation on the incurrence of Debt, PTR will
not, and will not permit any Subsidiary to, incur any Debt secured by any
mortgage, lien, charge, pledge, encumbrance or security interest of any kind
upon any of the property of PTR 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
PTR and its Subsidiaries on a consolidated basis which is secured by any
mortgage, lien, charge, pledge, encumbrance or security interest on property
of PTR or any Subsidiary is greater than 40% of PTR's Total Assets (Section
1004).
In addition to the foregoing limitations on the incurrence of Debt, PTR will
not, and will not permit any Subsidiary to, incur any Debt if the ratio of
Consolidated Income Available for Debt Service (as defined below) to the
Annual Service Charge (as defined below) 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
PTR 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 PTR and its Subsidiaries since the first day of such
four-quarter period had been incurred, repaid or retired at the beginning of
such period (except that, in making such computation, 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
(as defined below) 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 PTR or its
Subsidiaries of any asset or group of assets since the first day of
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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 (Section 1004).
Existence. Except as permitted under "--Merger, Consolidation or Sale," PTR
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and franchises;
provided, however, that PTR shall not be required to preserve any right or
franchise if it determines that the preservation thereof is no longer
desirable in the conduct of its business and that the loss thereof is not
disadvantageous in any material respect to the Holders of the Debt Securities
(Section 1005).
Maintenance of Properties. PTR will cause all of its properties used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of PTR may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that PTR and its Subsidiaries shall not be prevented from selling or
otherwise disposing for value its properties in the ordinary course of
business (Section 1006).
Insurance. PTR will, and will cause each of its Subsidiaries to, keep all of
its insurable properties insured against loss or damage at least equal to
their then full insurable value with financially sound and reputable insurance
companies (Section 1007).
Payment of Taxes and Other Claims. PTR will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of PTR or any Subsidiary,
and (ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of PTR or any Subsidiary;
provided, however, that PTR shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings (Section 1008).
Provision of Financial Information. Whether or not PTR is subject to Section
13 or 15(d) of the Exchange Act, PTR will, to the extent permitted under the
Exchange Act, file with the Commission the annual reports, quarterly reports
and other documents which PTR would have been required to file with the
Commission pursuant to such Section 13 and 15(d) (the "Financial Statements")
if PTR were so subject, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which PTR would
have been required so to file such documents if PTR were so subject. PTR will
also in any event (x) within 15 days of each Required Filing Date (i) transmit
by mail to all Holders of Debt Securities, as their names and addresses appear
in the Security Register, without cost to such Holders, copies of the annual
reports and quarterly reports which PTR would have been required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act if PTR were
subject to such Sections and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which PTR would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if PTR were subject to such Sections and (y) if filing such
documents by PTR with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder (Section 1009).
As used herein,
"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.
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"Annual Service Charge" as of any date means the maximum amount which is
payable in any period for interest on, and original issue discount of, Debt of
PTR and its Subsidiaries and the amount of dividends which are payable in
respect of any Disqualified Stock.
"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 (as defined below) of PTR 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 PTR and its
Subsidiaries, (b) provision for taxes of PTR 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.
"Debt" of PTR or any Subsidiary means any indebtedness of PTR or any
Subsidiary, whether or not contingent, in respect of (i) borrowed money or
evidenced by bonds, notes, debentures or similar instruments, (ii)
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property owned by PTR or any Subsidiary, (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 PTR or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock or (v) any lease of property by PTR or any Subsidiary as
lessee which is reflected on PTR's Consolidated Balance Sheet as a capitalized
lease in accordance with generally accepted accounting principles 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 PTR's Consolidated Balance Sheet in accordance with generally accepted
accounting principles, and also includes, to the extent not otherwise
included, any obligation by PTR 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 PTR or
any Subsidiary) (it being understood that Debt shall be deemed to be incurred
by PTR or any Subsidiary whenever PTR or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"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,
(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, in each case on or prior to the Stated Maturity of the
series of Debt Securities.
"Earnings from Operations" for any period means net earnings excluding gains
and losses on sales of investments, net as reflected in the financial
statements of PTR and its Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles.
"Total Assets" as of any date means the sum of (i) PTR's Undepreciated Real
Estate Assets and (ii) all other assets of PTR determined in accordance with
generally accepted accounting principles (but excluding accounts receivable
and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of PTR and its
Subsidiaries on such date, before depreciation and amortization determined on
a consolidated basis in accordance with generally accepted accounting
principles.
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EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default
for 30 days in the payment of any installment of interest or Additional
Amounts payable on any Debt Security of such series; (b) default in the
payment of the principal of (or premium or Make-Whole Amount, if any, on) any
Debt Security of such series at its Maturity; (c) default in making any
sinking fund payment as required for any Debt Security of such series; (d)
default in the performance of any other covenant of PTR contained in the
Indenture (other than a covenant added to the Indenture solely for the benefit
of a series of Debt Securities issued thereunder other than such series),
continued for 60 days after written notice as provided in the Indenture; (e)
default in the payment of an aggregate principal amount exceeding $10,000,000
of any evidence of indebtedness of PTR or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the expiration of
any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged
or such acceleration is not rescinded or annulled; (f) the entry by a court of
competent jurisdiction of one or more judgments, orders or decrees against PTR
or any of its Subsidiaries in an aggregate amount (excluding amounts fully
covered by insurance) in excess of $10,000,000 and such judgments, orders or
decrees remain undischarged, unstayed and unsatisfied in an aggregate amount
(excluding amounts fully covered by insurance) in excess of $10,000,000 for a
period of 30 consecutive days; (g) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of
PTR or any Significant Subsidiary or for all or substantially all of either of
its property; and (h) any other Event of Default provided with respect to a
particular series of Debt Securities (Section 501). The term "Significant
Subsidiary" means each significant subsidiary (as defined in Regulation S-X
promulgated by the Commission) of PTR.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Debt Securities of that series may declare the principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities or Indexed Securities, such portion of the principal amount as may
be specified in the terms thereof) of, and the Make-Whole Amount, if any, on,
all of the Debt Securities of that series to be due and payable immediately by
written notice thereof to PTR (and to the Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then Outstanding
under the Indenture, as the case may be) has been made, but before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
Holders of not less than a majority in principal amount of Outstanding Debt
Securities of such series (or of all Debt Securities then Outstanding under
the Indenture, as the case may be) may rescind and annul such declaration and
its consequences if (a) PTR shall have deposited with the Trustee all required
payments of the principal of (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts, on the Debt Securities of such series
(or of all Debt Securities then outstanding under the Indenture, as the case
may be), plus certain fees, expenses, disbursements and advances of the
Trustee and (b) all Events of Default, other than the nonpayment of
accelerated principal (or specified portion thereof and the Make-Whole Amount,
if any) or interest, with respect to Debt Securities of such series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be) have
been cured or waived as provided in the Indenture (Section 502). The Indenture
also provides that the Holders of not less than a majority in principal amount
of the Outstanding Debt Securities of any series (or of all Debt Securities
then Outstanding under the Indenture, as the case may be) may waive any past
default with respect to such series and its consequences, except a default (x)
in the payment of the principal of (or premium or Make-Whole Amount, if any)
or interest or Additional Amounts payable on any Debt Security of such series
or (y) in respect of a covenant or provision contained in the Indenture that
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security affected thereby (Section 513).
The Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the Indenture; provided, however, that the
Trustee may withhold notice to the Holders of any series of Debt
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Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium or Make-Whole Amount, if any) or
interest or Additional Amounts payable on any Debt Security of such series or
in the payment of any sinking fund installment in respect of any Debt Security
of such series) if the Responsible Officers of the Trustee consider such
withholding to be in the interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an event of Default from the Holders of
not less than 25% in principal amount of the Outstanding Debt Securities of
such series, as well as an offer of reasonable indemnity (Section 507). This
provision will not prevent, however, any Holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium or Make-Whole Amount, if any), interest on, and Additional Amounts
payable with respect to, such Debt Securities at the respective due dates
thereof (Section 508).
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 602). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon
the Trustee. However, the Trustee may refuse to follow any direction which is
in conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, PTR must deliver to the
Trustee a certificate, signed by one of several specified officers, stating
whether or not such officer has knowledge of any default under the Indenture
and, if so, specifying each such default and the nature and status thereof
(Section 1010).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made with the consent
of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each such Debt Security affected thereby,
(a) change the Stated Maturity of the principal of (or premium or Make-Whole
Amount, if any), or any installment of principal of or interest or Additional
Amounts payable on, any such Debt Security; (b) reduce the principal amount
of, or the rate or amount of interest on, or any premium or Make-Whole Amount
payable on redemption of, or any Additional Amounts payable with respect to,
any such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security or Make-Whole Amount, if any, that would be due and payable
upon declaration of acceleration of the maturity thereof or would be provable
in bankruptcy, or adversely affect any right of repayment of the Holder of any
such Debt Security; (c) change the Place of Payment, or the coin or currency,
for payment of principal of (and premium or Make-Whole Amount, if any), or
interest on, or any Additional Amounts payable with respect to, any such Debt
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the above-
stated percentage of Outstanding Debt Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the
quorum or voting requirements set forth in the Indenture; or (f) modify any of
the foregoing provisions or any of the provisions relating to the waiver of
certain past defaults or certain covenants, except to increase the required
percentage to effect such action or to provide that certain other provisions
may not be modified or waived without the consent of the Holder of such Debt
Security (Section 902).
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The Holders of not less than a majority in principal amount of Outstanding
Debt Securities have the right to waive compliance by PTR with certain
covenants in the Indenture (Section 1012).
Modifications and amendments of the Indenture may be made by PTR and the
Trustee without the consent of any Holder of Debt Securities for any of the
following purposes: (i) to evidence the succession of another Person to PTR as
obligor under the Indenture; (ii) to add to the covenants of PTR for the
benefit of the Holders of all or any series of Debt Securities or to surrender
any right or power conferred upon PTR in the Indenture; (iii) to add Events of
Default for the benefit of the Holders of all or any series of Debt
Securities; (iv) to add or change any provisions of the Indenture to
facilitate the issuance of, or to liberalize certain terms of, Debt Securities
in bearer form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of the Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities Outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities of any series and any
related coupons; (viii) to provide for the acceptance of appointment by a
successor Trustee or facilitate the administration of the trusts under the
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or
inconsistency in the Indenture or to make any other changes, provided that in
each case, such action shall not adversely affect the interests of Holders of
Debt Securities of any series in any material respect; (x) to close the
Indenture with respect to the authentication and delivery of additional series
of Debt Securities or to qualify, or maintain qualification of, the Indenture
under the TIA; or (xi) to supplement any of the provisions of the Indenture to
the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall not adversely
affect the interests of the Holders of the Debt Securities of any series in
any material respect (Section 901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon declaration of acceleration of the maturity thereof, (ii) the principal
amount of a Debt Security denominated in a Foreign Currency that shall be
deemed outstanding shall be the United States dollar equivalent, determined on
the issue date for such Debt Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the United States dollar
equivalent on the issue date of such Debt Security of the amount determined as
provided in (i) above), (iii) the principal amount of an Indexed Security that
shall be deemed outstanding shall be the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Indexed Security pursuant to Section 301 of the Indenture, and (iv) Debt
Securities owned by PTR or any other obligor upon the Debt Securities or any
Affiliate of PTR or of such other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting may be called at any
time by the Trustee, and also, upon request, by PTR or the Holders of at least
10% in principal amount of the Outstanding Debt Securities of such series, in
any such case upon notice given as provided in the Indenture (Section 1502).
Except for any consent that must be given by the Holder of each Debt Security
affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding Debt Securities
of that series; provided, however, that, except as referred to above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Debt Securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present
by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of Debt
Securities of
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any series duly held in accordance with the Indenture will be binding on all
Holders of Debt Securities of that series. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be Persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders
of not less than a specified percentage in principal amount of the Outstanding
Debt Securities of a series, the Persons holding or representing such
specified percentage in principal amount of the Outstanding Debt Securities of
such series will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage in principal amount of all Outstanding
Debt Securities affected thereby, or of the Holders of such series and one or
more additional series: (i) there shall be no minimum quorum requirement for
such meeting and (ii) the principal amount of the Outstanding Debt Securities
of such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by the Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series of Debt
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of Holders in
person or by agent duly appointed in writing; and, except as otherwise
expressly provided in the Indenture, such action shall become effective when
such instrument or instruments are delivered to the Trustee. Proof of
execution of any instrument or of a writing appointing any such agent shall be
sufficient for any purpose of the Indenture and (subject to Article Six)
conclusive in favor of the Trustee and PTR, if made in the manner specified
above (Section 1507).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
PTR may discharge certain obligations to Holders of any series of Debt
Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due
and payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such Debt Securities are payable in an amount sufficient to pay the
entire indebtedness on such Debt Securities in respect of principal (and
premium or Make-Whole Amount, if any) and interest and Additional Amounts
payable to the date of such deposit (if such Debt Securities have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be
(Section 401).
The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, PTR may elect either (a) to defease and be discharged
from any and all obligations with respect to such Debt Securities (except for
the obligation to pay Additional Amounts, if any, upon the occurrence of
certain events of tax, assessment or governmental charge with respect to
payments on such Debt Securities and the obligations to register the transfer
or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402) or (b) to be released from its obligations with
respect to such Debt Securities under Sections 1004 to 1009, inclusive, of the
Indenture (being the restrictions described under "--Certain Covenants") and,
if provided pursuant to Section 301 of the Indenture, its obligations with
respect to any other covenant, and any omission to comply with such
obligations shall not constitute a default or an Event of Default with respect
to such Debt Securities ("covenant defeasance") (Section 1403), in either case
upon the irrevocable deposit by PTR with the Trustee, in trust, of an amount,
in such currency or currencies, currency unit or units or composite currency
or currencies in which such Debt Securities are payable at Stated Maturity, or
Government Obligations (as defined
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below), or both, applicable to such Debt Securities which through the
scheduled payment of principal and interest in accordance with their terms
will provide money in an amount sufficient to pay the principal of (and
premium or Make-Whole Amount, if any) and interest on such Debt Securities,
and any mandatory sinking fund or analogous payments thereon, on the scheduled
due dates therefor.
Such a trust may only be established if, among other things, PTR has
delivered to the Trustee an Opinion of Counsel (as specified in the Indenture)
to the effect that the Holders of such Debt Securities will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such Opinion of Counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable United States federal income tax law occurring after the
date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the Foreign Currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if after
PTR has deposited funds and/or Government Obligations to effect defeasance or
covenant defeasance with respect to Debt Securities of any series, (a) the
Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been,
and will be, fully discharged and satisfied through the payment of the
principal of (and premium or Make-Whole Amount, if any) and interest on such
Debt Security as they become due out of the proceeds yielded by converting the
amount so deposited in respect of such Debt Security into the currency,
currency unit or composite currency in which such Debt Security becomes
payable as a result of such election or such cessation of usage based on the
applicable market exchange rate (Section 1405). "Conversion Event" means the
cessation of use of (i) a currency, currency unit or composite currency (other
than the ECU or other currency unit) both by the government of the country
which issued such currency and for the settlement of transactions by a central
bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit or composite currency other than the
ECU for the purposes for which it was established. Unless otherwise provided
in the applicable Prospectus Supplement, all payments of principal of (and
premium or Make-Whole Amount, if any) and interest on any Debt Security that
is payable in a Foreign Currency that ceases to be used by its government of
issuance shall be made in United States dollars (Section 101).
In the event PTR effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default
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described in clause (d) under "--Events of Default, Notice and Waiver" with
respect to Sections 1004 to 1009, inclusive, of the Indenture (which Sections
would no longer be applicable to such Debt Securities) or described in clause
(g) under "--Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of
Default. However, PTR would remain liable to make payment of such amounts due
at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the applicable Prospectus Supplement relating to such series. Global
Securities, if any, are expected to be deposited with The Depository Trust
Company, as Depository. Global Securities may be issued in fully registered
form and may be issued in either temporary or permanent form. Unless and until
it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a
whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable
Prospectus Supplement, PTR anticipates that the following provisions will
apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and
transfer system the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by PTR if such Debt Securities are offered and sold directly by
PTR. Ownership of beneficial interests in a Global Security will be limited to
Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the applicable Depository or its nominee (with respect to
beneficial interests of Participants) and records of Participants (with
respect to beneficial interests of persons who hold through Participants). The
laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and laws
may impair the ability to own, pledge or transfer beneficial interest in a
Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below or in the applicable Prospectus
Supplement, owners of beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payments of principal of, any premium or Make-Whole Amount and any interest
on, or any Additional Amounts payable with respect to, individual Debt
Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the
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registered owner of the Global Security representing such Debt Securities.
None of PTR, the Trustee, any Paying Agent or the Security Registrar for such
Debt Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
PTR expects that the Depository for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium, Make-Whole Amount
or interest in respect of a permanent Global Security representing any of such
Debt Securities, immediately will credit Participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Depository or its nominee. PTR also expects that payments
by Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is
not appointed by PTR within 90 days, PTR will issue individual Debt Securities
of such series in exchange for the Global Security representing such series of
Debt Securities. In addition, PTR may, at any time and in its sole discretion,
subject to any limitations described in the applicable Prospectus Supplement
relating to such Debt Securities, determine not to have any Debt Securities of
such series represented by one or more Global Securities and, in such event,
will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by PTR, of $1,000 and integral
multiples thereof.
NO PERSONAL LIABILITY
No past, present or future trustee, officer, employee or shareholder, as
such, of PTR or any successor thereof shall have any liability for any
obligations of PTR under the Debt Securities or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Debt Securities by accepting such Debt Securities waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of Debt Securities (Section 111).
DESCRIPTION OF PREFERRED SHARES
GENERAL
Subject to limitations prescribed by Maryland law and the Restated
Declaration of Trust, the Board of Trustees is authorized to issue, from the
authorized but unissued capital shares of PTR, Preferred Shares in series and
to establish from time to time the number of Preferred Shares to be included
in such series and to fix the designation and any preferences and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the shares of each
series, and such other subjects or matters as may be fixed by resolution of
the Board of Trustees or duly authorized committee thereof. On September 16,
1996, PTR had 8,730,900 of its Series A Preferred Shares, issued and
outstanding and held of record by approximately 116 shareholders and 4,200,000
of its Series B Preferred Shares, issued and outstanding and held of record by
approximately 304 holders.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
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(2) The number of shares of such Preferred Shares offered, the
liquidation preference per share and the offering price of such Preferred
Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
cumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) Whether interests in such Preferred Shares will be represented by
Global Securities;
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of PTR;
(13) Any limitations on issuance of any series of preferred stock ranking
senior to or on a parity with such series of Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of PTR; and
(14) Any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the status of
PTR as a REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of PTR, rank (i) senior to all classes or series of
Common Shares, and to all equity securities ranking junior to such Preferred
Shares; (ii) on a parity with all equity securities issued by PTR the terms of
which specifically provide that such equity securities rank on a parity with
the Preferred Shares; and (iii) junior to all equity securities issued by PTR
the terms of which specifically provide that such equity securities rank
senior to the Preferred Shares.
DIVIDENDS
Holders of Preferred Shares of each series shall be entitled to receive,
when, as and if declared by the Board of Trustees of PTR, out of assets of PTR
legally available for payment, cash dividends at such rates and on such dates
as will be set forth in the applicable Prospectus Supplement. Each such
dividend shall be payable to holders of record as they appear on the share
transfer books of PTR on such record dates as shall be fixed by the Board of
Trustees of PTR.
Dividends on any series of the Preferred Shares may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees of PTR fails to
declare a dividend payable on a dividend payment date on any series of the
Preferred Shares for which dividends are noncumulative, then the holders of
such series of the Preferred Shares will have no right to receive a dividend
in respect of the dividend period ending on such dividend payment date, and
PTR will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Shares of any series are outstanding, no full dividends shall
be declared or paid or set apart for payment on the Preferred Shares of PTR of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Shares of such series for any period unless (i) if such series of
Preferred Shares has a cumulative
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dividend, full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment on the Preferred Shares of such series for all past
dividend periods and the then current dividend period or (ii) if such series
of Preferred Shares does not have a cumulative dividend, full dividends for
the then current dividend period have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for such payment on the Preferred Shares of such series. When dividends are
not paid in full (or a sum sufficient for such full payment is not so set
apart) upon the Preferred Shares of any series and the shares of any other
series of Preferred Shares ranking on a parity as to dividends with the
Preferred Shares of such series, all dividends declared upon Preferred Shares
of such series and any other series of Preferred Shares ranking on a parity as
to dividends with such Preferred Shares shall be declared pro rata so that the
amount of dividends declared per share on the Preferred Shares of such series
and such other series of Preferred Shares shall in all cases bear to each
other the same ratio that accrued dividends per share on the Preferred Shares
of such series (which shall not include any cumulation in respect of unpaid
dividends for prior dividend periods if such series of Preferred Shares does
not have a cumulative dividend) and such other series of Preferred Shares bear
to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Preferred Shares of
such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient of
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common Shares
or any other capital shares of PTR ranking junior to or on a parity with the
Preferred Shares of such series as to dividends or upon liquidation, nor shall
any Common Shares or any other capital shares of PTR ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such shares) by PTR (except by conversion into
or exchange for other capital shares of PTR ranking junior to the Preferred
Shares of such series as to dividends and upon liquidation).
Any dividend payment made on a series of Preferred Shares shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred Shares
will be subject to mandatory redemption or redemption at the option of PTR, as
a whole or in part, in each case upon the terms, at the times and at the
redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by PTR in each year commencing after a date to
be specified, at a redemption price per share to be specified, together with
an amount equal to all accrued and unpaid dividends thereon (which shall not,
if such series of Preferred Shares does not have a cumulative dividend,
include any cumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any
series of Preferred Shares shall have been or contemporaneously are
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declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend
period, no shares of any series of Preferred Shares shall be redeemed unless
all outstanding Preferred Shares of such series are simultaneously redeemed;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Shares of such series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series, and, unless (i) if such series of Preferred Shares has
a cumulative dividend, full cumulative dividends on all outstanding shares of
any series of Preferred Shares have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period and
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends on the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend
period, PTR shall not purchase or otherwise acquire directly or indirectly any
shares of Preferred Shares of such series (except by conversion into or
exchange for capital shares of PTR ranking junior to the Preferred Shares of
such series as to dividends and upon liquidation).
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by PTR and
such shares may be redeemed pro rata from the holders of record of such shares
in proportion to the number of such shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by lot in a manner
determined by PTR.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of PTR. Each notice shall state: (i) the redemption date; (ii) the number of
shares and series of the Preferred Shares to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date. If fewer than all the Preferred Shares of any series are to be redeemed,
the notice mailed to each such holder thereof shall also specify the number of
Preferred Shares to be redeemed from each such holder. If notice of redemption
of any Preferred Shares has been given and if the funds necessary for such
redemption have been set aside by PTR in trust for the benefit of the holders
of any Preferred Shares so called for redemption, then from and after the
redemption date dividends will cease to accrue on such Preferred Shares, and
all rights of the holders of such shares will terminate, except the right to
receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of PTR, then, before any distribution or payment shall be made to
the holders of any Common Shares or any other class or series of capital
shares of PTR ranking junior to the Preferred Shares in the distribution of
assets upon any liquidation, dissolution or winding up of PTR, the holders of
each series of Preferred Shares shall be entitled to receive out of assets of
PTR legally available for distribution to shareholders liquidating
distributions in the amount of the liquidation preference per share (set forth
in the applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any cumulation
in respect of unpaid dividends for prior dividend periods if such series of
Preferred Shares does not have a cumulative dividend). After payment of the
full amount of the liquidating distributions to which they are entitled, the
holders of Preferred Shares will have no right or claim to any of the
remaining assets of PTR. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available assets of
PTR are insufficient to pay the amount of the liquidating distributions on all
outstanding Preferred Shares and the corresponding amounts payable on all
shares of other classes or series of capital shares of PTR ranking on a parity
with the Preferred Shares in the distribution of assets, then the holders of
the Preferred Shares and all other such classes or series of capital shares
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shall share ratably in any such distribution of assets in proportion to the
full liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of PTR shall be distributed among the
holders of any other classes or series of capital shares ranking junior to the
Preferred Shares upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
PTR with or into any other corporation, or the sale, lease or conveyance of
all or substantially all of the property or business of PTR, shall not be
deemed to constitute a liquidation, dissolution or winding up of PTR.
VOTING RIGHTS
Holders of the Preferred Shares will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement. The following is a summary
of the voting rights applicable to the Series A Preferred Shares and Series B
Preferred Shares, which, unless provided otherwise in the applicable
Prospectus Supplement, will apply to each series of Preferred Shares.
If six quarterly dividends (whether or not consecutive) payable on the
Series A Preferred Shares, Series B Preferred Shares or any other Parity
Shares are in arrears, whether or not earned or declared, the number of
Trustees then constituting the Board of Trustees of PTR will be increased by
two, and the holders of Series A Preferred Shares and Series B Preferred
Shares, voting together as a class with the holders of any other series of
Parity Shares (any such other series, the "Voting Preferred Shares"), will
have the right to elect two additional trustees to serve on PTR's Board of
Trustees at any annual meeting of shareholders or a properly called special
meeting of the holders of Series A Preferred Shares, Series B Preferred Shares
and such Voting Preferred Shares and at each subsequent annual meeting of
shareholders until all such dividends and dividends for the current quarterly
period on the Series A Preferred Shares, Series B Preferred Shares and such
other Voting Preferred Shares have been paid or declared and set aside for
payment. Such voting rights will terminate when all such accrued and unpaid
dividends have been declared and paid or set aside for payment. The term of
office of all trustees so elected will terminate with the termination of such
voting rights. For so long as SCG and certain of its affiliates beneficially
own in excess of 10% of the outstanding Common Shares, in any such vote by
holders of Series A Preferred Shares and Series B Preferred Shares, SCG and
certain of its affiliates shall vote their Series A Preferred Shares and
Series B Preferred Shares, if any, in the same respective percentages as the
Series A Preferred Shares and Series B Preferred Shares and Voting Preferred
Shares that are not held by such persons.
The approval of two-thirds of the outstanding Series A Preferred Shares,
Series B Preferred Shares and all other series of Voting Preferred Shares
similarly affected, voting as a single class, is required in order to (i)
amend PTR's Declaration of Trust to affect materially and adversely the
rights, preferences or voting power of the holders of the Series A Preferred
Shares, Series B Preferred Shares or the Voting Preferred Shares, (ii) enter
into a share exchange that affects the Series A Preferred Shares or Series B
Preferred Shares, consolidate with or merge into another entity, or permit
another entity to consolidate with or merge into PTR, unless in each such case
each Series A Preferred Share or Series B Preferred Share, as the case may be,
remains outstanding without a material and adverse change to its terms and
rights or is converted into or exchanged for convertible preferred stock of
the surviving entity having preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption thereof identical to that of a Series A Preferred
Share or Series B Preferred Share, as the case may be (except for changes that
do not materially and adversely affect the holders of the Series A Preferred
Shares or Series B Preferred Shares), or (iii) authorize, reclassify, create,
or increase the authorized amount of any class of stock having rights senior
to the Series A Preferred Shares or Series B Preferred Shares with respect to
the payment of dividends or amounts upon liquidation, dissolution or winding
up. However, PTR may create additional classes of Parity Shares and Junior
Shares, increase the authorized number of Parity Shares and Junior Shares and
issue additional series of Parity Shares and Junior Shares without the consent
of any holder of Series A Preferred Shares or Series B Preferred Shares.
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Except as provided above and as required by law, the holders of Series A
Preferred Shares or Series B Preferred Shares are not entitled to vote on any
merger or consolidation involving PTR or a sale of all or substantially all of
the assets of PTR.
RESTRICTIONS ON OWNERSHIP
For PTR to qualify as a REIT under the Internal Revenue Code of 1986, as
amended (the "Code"), not more than 50% in value of its outstanding capital
shares may be owned by five or fewer individuals at any time during the last
half of a taxable year, and the capital stock must be beneficially owned by
100 or more persons during at least 335 days of PTR's taxable year of 12
months. Therefore, the Articles Supplementary for each series of Preferred
Shares will contain certain provisions restricting the ownership and transfer
of the Preferred Shares (the "Preferred Shares Ownership Limit Provision").
Except as otherwise described in the applicable Prospectus Supplement relating
thereto, the provisions of each Articles Supplementary relating to the
Preferred Shares Ownership Limit will provide (as in the case of the Series A
Preferred Shares and the Series B Preferred Shares) as summarized below.
The Preferred Shares Ownership Limit Provision will provide that, subject to
certain exceptions contained in such Articles Supplementary, no person, or
persons acting as a group, may beneficially own more than 25% of any series of
Preferred Shares outstanding at any time, except as a result of PTR's
redemption of Preferred Shares. Shares acquired in excess of the Preferred
Shares Ownership Limit Provision must be redeemed by PTR at a price equal to
the average daily per share closing sale price during the 30-day period ending
on the business day prior to the redemption date. Such redemption is not
applicable if a person's ownership exceeds the limitations due solely to PTR's
redemption of Preferred Shares; provided that thereafter any additional
Preferred Shares acquired by such person shall be Excess Shares. From and
after the date of notice of such redemption, the holder of the Preferred
Shares thus redeemed shall cease to be entitled to any distribution (other
than distributions declared prior to the date of notice of redemption), voting
rights and other benefits with respect to such shares except the right to
receive payment of the redemption price determined as described above. The
Preferred Shares Ownership Limit Provision may not be waived with respect to
certain affiliates of PTR.
All certificates representing shares of Preferred Shares will bear a legend
referring to the restrictions described above.
FEDERAL INCOME TAX CONSIDERATIONS
This section is a summary of certain federal income tax matters of general
application pertaining to REITs under the Code. The discussion is based on
current law and does not purport to deal with all aspects of federal income
taxation that may be relevant to investors subject to special treatment under
federal income tax laws, such as investors subject to the Employee Retirement
Income Security Act of 1974, as amended, other tax exempt investors, dealers
in securities or foreign persons. The provisions of the Code pertaining to
REITs are highly technical and complex and sometimes involve mixed questions
of fact and law. In addition, this section does not discuss foreign, state or
local taxation. PTR has not requested and will not request a ruling from the
Internal Revenue Service (the "Service") with respect to any of the federal
income tax issues discussed below. Prospective investors should consult, and
must depend on, their own tax advisors regarding the federal, state, local,
foreign and other tax consequences of holding and disposing of Preferred
Shares or Debt Securities.
TAXATION OF PTR
PTR believes that it has been organized and operated, and it intends to
continue to operate, in a manner qualifying it as a REIT under Sections 856
through 860 of the Code, but no assurance can be given that it will at all
times so qualify. PTR's ability to qualify as a REIT under the requirements of
the Code and the regulations promulgated thereunder is dependent upon actual
operating results.
To qualify as a REIT under the Code for a taxable year, PTR must meet
certain organizational and operational requirements, which generally require
it to be a passive investor in operating real estate and to avoid
21
<PAGE>
excessive concentration of ownership of its capital stock. First, its
principal activities must be real estate related. Generally, at least 75% of
the value of the total assets of PTR at the end of each calendar quarter must
consist of real estate assets, cash or governmental securities and for each
taxable year at least 75% of its gross income must be from real estate
sources, including rents from real property and interest on mortgage
obligations. PTR may not own more than 10% of the outstanding voting
securities of any corporation; shares of qualified REITs, qualified temporary
investments and shares of certain wholly owned subsidiaries are exempt from
this prohibition. PTR holds assets through certain wholly owned subsidiary
corporations that it believes qualify for the exemption. Additionally, gross
income from the sale or other disposition of stock and securities held for
less than one year, real property held for less than four years and property
in a prohibited transaction must constitute less than 30% of the gross income
for each taxable year of a REIT. For each taxable year, at least 75% of a
REIT's gross income must be derived from specified real estate sources and 95%
must be derived from such real estate sources plus certain other permitted
sources. Real estate income for purposes of these requirements includes gains
from the sale of real property not held primarily for sale to customers in the
ordinary course of business, dividends on REIT shares, interest on loans
secured by mortgages on real property, certain rents from real property and
income from foreclosure property. For rents to qualify, they may not be based
on the income or profits of any person, except that they may be based on a
percentage or percentages of gross income or receipts, and, subject to certain
limited exceptions, the REIT may not manage the property or furnish services
to tenants except through an independent contractor which is paid an arm's-
length fee and from which the REIT derives no income.
PTR must satisfy certain ownership restrictions that limit (i) concentration
of ownership of capital stock by a few individuals and (ii) ownership by PTR
of its tenants. The outstanding capital stock of PTR must be held by at least
100 shareholders. No more than 50% in value of the outstanding capital stock,
including in some circumstances capital stock into which outstanding
securities might be converted, may be owned actually or constructively by five
or fewer individuals or certain other entities at any time during the last
half of PTR's taxable year. Accordingly, PTR's Restated Declaration of Trust
restricts the transfer of Common Shares, Preferred Shares and any other
outstanding securities convertible into Common Shares when necessary to
maintain PTR's qualification as a REIT under the Code. However, because the
Code imposes broad attribution rules in determining constructive ownership, no
assurances can be given that the restrictions of PTR's Restated Declaration of
Trust will be effective in maintaining PTR's REIT status. See "Description of
Preferred Shares--Restrictions on Ownership." Because SCG is a corporation,
its ownership is attributed proportionally to all of its shareholders for
purposes of determining whether more than 50% in value of the outstanding
capital stock is owned by five or fewer individuals at any time during the
last half of PTR's taxable year.
So long as PTR qualifies for taxation as a REIT and distributes at least 95%
of its real estate investment trust taxable income (computed without regard to
net capital gains or the dividends-paid deduction) for its taxable year to its
shareholders annually, PTR itself will not be subject to federal income tax on
that portion of such income distributed to shareholders. PTR will be taxed at
regular corporate rates on all income not distributed to shareholders. PTR's
policy is to distribute at least 95% of its taxable income. REITs may also
incur taxes for certain other activities or to the extent distributions do not
satisfy certain other requirements.
Failure of PTR to qualify during any taxable year as a REIT could, unless
certain relief provisions were available, have a material adverse effect upon
its shareholders. If disqualified for taxation as a REIT for a taxable year,
PTR would also be disqualified for taxation as a REIT for the next four
taxable years, unless the failure was due to reasonable cause and not willful
neglect. PTR would be subject to federal income tax at corporate rates on all
of its taxable income and would not be able to deduct the dividends paid,
which could result in a discontinuation of or substantial reduction in
dividends to shareholders. Dividends would also be subject to the regular tax
rules applicable to dividends received by shareholders of corporations. Should
the failure to qualify be determined to have occurred retroactively in an
earlier tax year of PTR, the imposition of a substantial federal income tax
liability on PTR attributable to such nonqualifying tax years may adversely
affect PTR's ability to pay dividends. In the event that PTR fails to meet
certain income tests of the tax law, it may, generally, nonetheless retain its
qualification as a REIT if it pays a 100% tax on the amount by which it failed
to meet the income tests so long as its failure was due to reasonable cause
and not willful neglect. Any such taxes would adversely affect PTR's ability
to pay dividends or to pay interest on any Debt Securities.
22
<PAGE>
TAXATION OF THE SHAREHOLDERS OF PTR
As long as PTR qualifies as a REIT, distributions made to its shareholders
out of current or accumulated earnings and profits of PTR (which are not
designated as capital gain dividends) will generally be taxed to shareholders
as ordinary income either in the year of payment or, with respect to
distributions declared in the last quarter of any year and paid by January 31
of the following year, in the year of declaration and will not be eligible for
the dividends received deduction for corporations. PTR's earnings and profits
will first be allocated to any outstanding Preferred Shares. A distribution of
net capital gains by PTR will generally be treated as a long term capital gain
to shareholders to the extent properly designated by PTR as a capital gain
dividend and regardless of the length of time a shareholder has held his
shares of capital stock. Under Section 291 of the Code, however, corporate
shareholders may be required to treat up to 20% of any such capital gain as
ordinary income. Section 291 of the Code provides, in general, that if a
corporation sells or disposes of depreciable real property in a taxable
transaction, it must, to the extent of gain, include as ordinary income up to
20% of the depreciation previously taken on such property. Corporate
shareholders of a REIT are required to treat the portion of a capital gain
dividend attributable to the gain from the REIT's sale or exchange of
depreciable real property as subject to the 20% ordinary income rule. Capital
gains distributions are not eligible for the dividends-received deduction for
corporations. A dividend in excess of current or accumulated earnings and
profits will constitute a nontaxable return of capital, to the extent of the
shareholder's basis in his shares of capital stock, and is applied to reduce
the shareholder's basis in the shares of capital stock. To the extent such a
dividend is greater than such basis, it will be treated as capital gain to
those shareholders holding their shares of capital stock as capital assets.
PTR will notify shareholders as to the portions of each dividend which, in its
judgment, constitute ordinary income, capital gain dividends or return of
capital. Should PTR incur ordinary or capital losses, shareholders will not be
entitled to include such losses in their own income tax returns.
BACKUP WITHHOLDING
PTR will report to its U.S. shareholders and the Service the amount of
distributions paid during each calendar year, and the amount of tax withheld,
if any. Under the backup withholding rules, a shareholder may be subject to
backup withholding at applicable rates with respect to distributions paid
unless such shareholder (a) is a corporation or falls within certain other
exempt categories and, when required, demonstrates this fact, or (b) provides
a taxpayer identification number, certifies as to no loss of exemption from
backup withholding and otherwise complies with applicable requirements of the
backup withholding rules. A shareholder that does not provide PTR with his
correct taxpayer identification number may also be subject to penalties
imposed by the Service. Any amount paid as backup withholding will be
creditable against the shareholder's income tax liability. In addition, PTR
may be required to withhold a portion of capital gain distributions to any
shareholders who fail to certify their nonforeign status to PTR.
PLAN OF DISTRIBUTION
PTR may sell the Offered Securities to one or more underwriters or dealers
for public offering and sale by them or may sell the Offered Securities to
investors directly or through agents, which agents may be affiliated with PTR.
Direct sales to investors may be accomplished through subscription offerings
or concurrent rights offerings to PTR shareholders and direct placements to
third parties. Any such underwriter, dealer or agent involved in the offer and
sale of the Offered Securities will be named in the applicable Prospectus
Supplement.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
at prices related to the prevailing market prices at the time of sale or at
negotiated prices. PTR also may, from time to time, authorize underwriters
acting as PTR's agents to offer and sell the Offered Securities upon the terms
and conditions as set forth in the applicable Prospectus Supplement. In
connection with the sale of Offered Securities, underwriters may be deemed to
have received compensation from PTR in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
23
<PAGE>
Any underwriting compensation paid by PTR to underwriters or agents in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters, and any discounts and commissions received
by them and any profit realized by them on resale of the Offered Securities
may be deemed to be underwriting discounts and commissions, under the
Securities Act. Underwriters, dealers and agents may be entitled, under
agreements entered into with PTR, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act. Any such indemnification agreements will be described in the applicable
Prospectus Supplement.
If so indicated in the applicable Prospectus Supplement, PTR will authorize
dealers acting as PTR's agents to solicit offers by certain institutions to
purchase Offered Securities from PTR at the public offering price set forth in
such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated
in such Prospectus Supplement. Each Contract will be for an amount not less
than, and the aggregate principal amount of Offered Securities sold pursuant
to Contracts shall be not less nor more than, the respective amounts stated in
the applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of PTR. Contracts will not be subject to any conditions except (i)
the purchase by an institution of the Offered Securities covered by its
Contracts shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject,
and (ii) if the Offered Securities are being sold to underwriters, PTR shall
have sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for PTR and its subsidiaries in the
ordinary course of business.
EXPERTS
The financial statements of PTR as of December 31, 1995 and 1994, and for
each of the years in the three-year period ended December 31, 1995, and
related schedule, incorporated by reference herein; and the combined statement
of revenues and certain expenses of the Group A Properties, incorporated by
reference herein, have been incorporated by reference herein and in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
With respect to the unaudited interim financial information of PTR for the
periods ended March 31, 1996 and 1995 and June 30, 1996 and 1995, incorporated
by reference herein, the independent certified public accountants have
reported that they applied limited procedures in accordance with professional
standards for a review of such information. However, their separate reports
included in PTR's quarterly reports on Form 10-Q for the quarters ended March
31, 1996, as amended by Form 10-Q/A No. 1 and June 30, 1996, incorporated by
reference herein, states that they did not audit, and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. The accountants are not
subject to the liability provisions of Section 11 of the Securities Act for
their reports on the unaudited interim financial information because those
reports are not a "report" or a "part" of the registration statement prepared
or certified by the accountants within the meaning of Sections 7 and 11 of the
Securities Act.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for PTR by Mayer,
Brown & Platt, Chicago, Illinois.
24
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid in connection with the issuance and distribution of
the securities being registered are estimated as follows and will be borne by
the registrant:
<TABLE>
<S> <C>
SEC Registration Fee............................................ $103,448
Accounting fees and expenses.................................... 60,000
Legal fees and expenses......................................... 110,000
Blue sky fees and expenses (including legal fees)............... 30,000
Printing fees................................................... 75,000
Fees of Rating Agencies......................................... 180,000
Fees of Trustee (including counsel fees)........................ 20,000
Miscellaneous expenses.......................................... 21,552
--------
Total....................................................... $600,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 4, Section 12 of the registrant's Restated Declaration of Trust
provides as follows with respect to indemnification of Trustees:
"The Trust shall indemnify and hold harmless each Trustee from and
against all claims and liabilities, whether they proceed to judgment or are
settled, to which such Trustee may become subject by reason of his being or
having been a Trustee, or by reason of any action alleged to have been
taken or omitted by him as Trustee, and shall reimburse him for all legal
and other expenses reasonably incurred by him in connection with any such
claim or liability, including any claim or liability arising under the
provisions of federal or state securities laws; provided, however, that no
Trustee shall be indemnified or reimbursed under the foregoing provisions
in relation to any matter unless it shall have been adjudicated that his
action or omission did not constitute willful misfeasance, bad faith or
gross negligence in the conduct of his duties, or, unless, in the absence
of such an adjudication, the Trust shall have received a written opinion
from independent counsel, approved by the Trustees, to the effect that if
the matter of willful misfeasance, bad faith or gross negligence in the
conduct of duties had been adjudicated, it would have been adjudicated in
favor of such Trustee. The rights accruing to a Trustee under these
provisions shall not exclude any other right to which he may be lawfully
entitled, nor shall anything herein contained restrict the right of the
Trust to indemnify or reimburse such Trustee in any proper cause even
though not specifically provided for herein."
Article 8, Section 1 of the registrant's Restated Declaration of Trust
provides as follows with respect to the limitation of liability for Trustees
and officers and indemnification:
"The Trustee or officer of the Trust shall not be liable for monetary
damages to the Trust or its shareholders for any act or omission in the
performance of his duties unless:
(1) The Trustee or officer actually received an improper benefit in
money, property or services (in which case, such liability shall be for
the amount of the benefit in money, property or services actually
received);
(2) the Trust's Trustee's or officer's action or failure to act was
the result of active and deliberate dishonesty and was material to the
cause of action being adjudicated;
(3) the Trustee's or officer's action or failure to act constitutes
willful misconduct or deliberate recklessness; or
(4) such liability to the Trust is specifically imposed upon Trustees
or officers by statute."
II-1
<PAGE>
Article 8, Section 6 of the registrant's Restated Declaration of Trust
provides as follows with respect to the indemnification of Trustees and
officers:
"Notwithstanding any other provisions of this Restated Declaration of
Trust, the Trust, for the purpose of providing indemnification for its
Trustees and officers, shall have the authority, without specific
shareholder approval, to enter into insurance or other arrangements, with
persons or entities which are not regularly engaged in the business of
providing insurance coverage, to indemnify all Trustees and officers of the
Trust against any and all liabilities and expenses incurred by them by
reason of their being Trustees or officers of the Trust, whether or not the
Trust would otherwise have the power under this Restated Declaration of
Trust or under Maryland law to indemnify such persons against such
liability. Without limiting the power of the Trust to procure or maintain
any kind of insurance or other arrangement, the Trust may, for the benefit
of persons indemnified by it, (i) create a trust fund, (ii) establish any
form of self-insurance, (iii) secure its indemnity obligation by grant of
any security interest or other lien on the assets of the corporation, or
(iv) establish a letter of credit, guaranty or surety arrangement. Any such
insurance or other arrangement may be procured, maintained or established
within the Trust or with any insurer or other person deemed appropriate by
the Board of Trustees regardless of whether all or part of the shares or
other securities thereof are owned in whole or in part by the Trust. In the
absence of fraud, the judgment of the Board of Trustees as to the terms and
conditions of insurance or other arrangement and the identity of the
insurer or other person participating in any arrangement shall be
conclusive, and such insurance or other arrangement shall not be subject to
voidability, nor subject the Trustees approving such insurance or other
arrangement to liability, on any ground, regardless of whether Trustees
participating and approving such insurance or other arrangement shall be
beneficiaries thereof."
The registrant has entered into indemnity agreements with each of its
officers and Trustees which provide for reimbursement of all expenses and
liabilities of such officer or Trustee, arising out of any lawsuit or claim
against such officer or Trustee due to the fact that he was or is serving as
an officer or Trustee, except for such liabilities and expenses (a) the
payment of which is judicially determined to be unlawful, (b) relating to
claims under Section 16(b) of the Securities Exchange Act of 1934, or (c)
relating to judicially determined criminal violations.
ITEM 16. EXHIBITS.
A list of exhibits filed herewith is contained on the Exhibit Index which
immediately precedes such exhibits, and is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
II-2
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that: (a) For purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective; (b) for the purposes of determining any
liability under the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints C.
Ronald Blankenship, James W. Kluber, Jeffrey A. Klopf, Ariel Amir, Edward J.
Schneidman and Philip J. Niehoff, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of
substitution and resubstitution, for and in the name, place and stead of the
undersigned, in any and all capacities (unless revoked in writing), to sign
any and all amendments to this registration statement (including post-
effective amendments thereto, and other documents in connection therewith) and
any registration statement to register additional securities pursuant to Rule
462 under the Securities Act, and to file the same, with all exhibits thereto,
with the Securities and Exchange Commission, and hereby grants to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes, may lawfully do or cause
to be done by virtue hereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SANTA FE, STATE OF NEW MEXICO, ON THE 27TH DAY OF
SEPTEMBER, 1996.
SECURITY CAPITAL PACIFIC TRUST
/s/ C. Ronald Blankenship
By___________________________________
C. Ronald Blankenship
Chairman
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ C. Ronald Blankenship Chairman (Principal Executive September 27, 1996
____________________________________ Officer) and Trustee
C. Ronald Blankenship
/s/ James W. Kluber Vice President (Principal September 27, 1996
____________________________________ Financial and Accounting
James W. Kluber Officer)
/s/ James A. Cardwell Trustee September 27, 1996
____________________________________
James A. Cardwell
/s/ John T. Kelley III Trustee September 27, 1996
____________________________________
John T. Kelley III
/s/ Calvin K. Kessler Trustee September 27, 1996
____________________________________
Calvin K. Kessler
/s/ William G. Myers Trustee September 27, 1996
____________________________________
William G. Myers
/s/ James H. Polk III Trustee September 27, 1996
____________________________________
James H. Polk III
/s/ John C. Schweitzer Trustee September 27, 1996
____________________________________
John C. Schweitzer
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement for Debt Securities
(Incorporated by reference to Exhibit 1.1 to
Registration Statement No. 33-78402).
1.2 Form of Underwriting Agreement for Preferred Shares
(Incorporated by reference to Exhibit 1.2 to
Registration Statement No. 33-78402).
4.1 Amended and Restated Declaration of Trust dated June 18,
1991 (Incorporated by reference to Exhibit 4 to PTR's
Form 10-Q for the quarter ended June 30, 1991).
4.2 First Certificate of Amendment of Restate Declaration of
Trust of PTR (Incorporated by reference to Exhibit 4 to
PTR's Form 10-Q for the quarter ended June 30, 1992).
4.3 Second Certificate of Amendment of Restated Declaration
of Trust of PTR (Incorporated by reference to Exhibit
3.1 to PTR's Form 8-K dated November 22, 1993).
4.4 Articles Supplementary relating to PTR's Cumulative
Convertible Series A Preferred Shares of Beneficial
Interest (Incorporated by reference to Exhibit 3.1 to
PTR's Form 8-K dated November 22, 1993).
4.5 Articles Supplementary relating to PTR's Series B
Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest (Incorporated by reference to
Exhibit 99.3 to PTR's Form 8-K dated May 18, 1995).
4.6 First Articles of Amendment to Articles Supplementary
relating to PTR's Series B Cumulative Convertible
Redeemable Preferred Shares of Beneficial Interest
(Incorporated by reference to Exhibit 3.1 to PTR's Form
10-Q for the quarter ended September 30, 1995).
4.7 Bylaws of PTR (Incorporated by reference to Exhibit 4.1
to PTR's Form 8-K dated November 22, 1993).
4.8 Indenture, dated as of February 1, 1994, between PTR and
Morgan Guaranty Trust Company of New York, as Trustee,
relating to the Debt Securities (Incorporated by
reference to Exhibit 4.2 to PTR's Form 10-K for the year
ended December 31, 1993).
4.9 First Supplemental Indenture, dated as of February 2,
1994, among PTR, Morgan Guaranty Trust Company of New
York and State Street Bank and Trust Company, as
successor Trustee (Incorporated by reference to Exhibit
4.3 to PTR's Form 10-K for the year ended December 31,
1993).
4.10 6.875% Note due February 15, 2008 (Incorporated by
reference to Exhibit 4.4 to PTR's Form 10-K for the year
ended December 31, 1994).
4.11 7.5% Note due February 15, 2014 (Incorporated by
reference to Exhibit 4.5 to PTR's Form 10-K for the year
ended December 31, 1994).
4.12 7.15% Note due February 15, 2010 (Incorporated by
reference to Exhibit 4.14 to PTR's Form 10-K for the
year ended December 31, 1995).
4.13 7.90% Note due February 15, 2016 (Incorporated by
reference to Exhibit 4.15 to PTR's Form 10-K for the
year ended December 31, 1995).
4.14 7.550% Note due August 1, 2008...........................
4.15 7.625% Note due August 1, 2009...........................
4.16 7.650% Note due August 1, 2010...........................
4.17 8.100% Note due August 1, 2015...........................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
4.18 8.150% Note due August 1, 2016.........................
5 Opinion of Mayer, Brown & Platt as to the validity of
the Offered Securities and as to certain tax matters.
8 Opinion of Mayer, Brown & Platt as to certain tax
matters (included in the opinion filed as Exhibit 5 to
this Registration Statement).
10 Amended and Restated Credit Agreement, dated August 16,
1996..................................................
12 Statement re Computation of Ratios.....................
15 Letter from KPMG Peat Marwick LLP regarding unaudited
financial information.................................
23.1 Consent of Mayer, Brown & Platt (included in the
opinion filed as Exhibit 5 to this Registration
Statement).
23.2 Consent of KPMG Peat Marwick LLP.......................
24.1 Power of Attorney pursuant to which amendments to this
Registration Statement may be filed (included on page
II-4 of this Registration Statement).
25 Statement of Eligibility of Trustee on Form T-1........
</TABLE>
<PAGE>
EXHIBIT 4.14
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No.: 1 $20,000,000
CUSIP No.: 81414E AA 7
SECURITY CAPITAL PACIFIC TRUST
7.550% NOTE DUE 2008
SECURITY CAPITAL PACIFIC TRUST, a real estate investment trust
organized and existing under the laws of the State of Maryland (hereinafter
called the "Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of TWENTY
MILLION DOLLARS on August 1, 2008 and to pay interest on the outstanding
principal amount thereon from August 8, 1996, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1 in each year, commencing on February 1,
1997, at the rate of 7.550% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this 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 January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. 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
either be paid to the Person 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 more than 15 days and 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 may be
listed, and upon such notice as may be required
<PAGE>
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of, Make-Whole Amount, if any, on, and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
the City of Boston, Commonwealth of Massachusetts, or elsewhere as provided in
the Indenture, 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 payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) transfer to an account of
the Person entitled thereto located inside the United States.
Each Security of this series 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 February 1, 1994,
between the Company and Morgan Guaranty Trust Company of New York, as trustee,
as supplemented by a First Supplemental Indenture, dated as of February 2, 1994,
(as so supplemented, herein called the "Indenture") between the Company and
State Street Bank and Trust Company, as successor 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 series designated on the first page hereof, limited in
aggregate principal amount to $20,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
The following definitions apply with respect to any redemption of the
Securities of this series at the option of the Company:
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Security, 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
-2-
<PAGE>
(exclusive of interest accrued to the date of redemption or accelerated payment)
that would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual 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, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the 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 Federal Reserve
System and which establishes 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 under the Indenture, then such
other reasonably comparable index which shall be designated by the Company.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
-3-
<PAGE>
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
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 the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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, Make-Whole Amount, if any,
on, and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this
-4-
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any Place of Payment where the principal of, Make-Whole Amount, if any, on, 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 his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 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 under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or trustee, as such, of the Company
or of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Security
by the Holder thereof and as part of the consideration for the issue of the
Securities of this series.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-5-
<PAGE>
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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.
* * * *
-6-
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, 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 by the undersigned officer.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. Ronald Blankenship
---------------------------
C. Ronald Blankenship
Chairman
Attest:
By: /s/ Jeffrey A. Klopf
----------------------------
Jeffrey A. Klopf
Secretary
Dated: August 8, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
BY: /s/ Lena Altomare
---------------------------
Authorized Officer
-7-
<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 Security Capital Pacific 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:
------------ ------------------------------
------------------------------
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 or any change whatever.
-8-
<PAGE>
Exhibit 4.15
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No.: 1 $20,000,000
CUSIP No.: 81414E AB 5
SECURITY CAPITAL PACIFIC TRUST
7.625% NOTE DUE 2009
SECURITY CAPITAL PACIFIC TRUST, a real estate investment trust
organized and existing under the laws of the State of Maryland (hereinafter
called the "Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of TWENTY
MILLION DOLLARS on August 1, 2009 and to pay interest on the outstanding
principal amount thereon from August 8, 1996, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1 in each year, commencing on February 1,
1997, at the rate of 7.625% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this 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 January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. 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
either be paid to the Person 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 more than 15 days and 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 may be
listed, and upon such notice as may be required
<PAGE>
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of, Make-Whole Amount, if any, on, and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
the City of Boston, Commonwealth of Massachusetts, or elsewhere as provided in
the Indenture, 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 payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) transfer to an account of
the Person entitled thereto located inside the United States.
Each Security of this series 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 February 1, 1994,
between the Company and Morgan Guaranty Trust Company of New York, as trustee,
as supplemented by a First Supplemental Indenture, dated as of February 2, 1994,
(as so supplemented, herein called the "Indenture") between the Company and
State Street Bank and Trust Company, as successor 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 series designated on the first page hereof, limited in
aggregate principal amount to $20,000,000.
Securities of this series may be redeemed at any time at the option of
the Company, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
The following definitions apply with respect to any redemption of the
Securities of this series at the option of the Company:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Security, 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
<PAGE>
(exclusive of interest accrued to the date of redemption or accelerated payment)
that would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual 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, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the 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
Federal Reserve System and which establishes 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 under the
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain
conditions set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
<PAGE>
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
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 the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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, Make-Whole Amount, if
any, on, and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any Place of Payment where the principal of, Make-Whole Amount, if any, on, 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 his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 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 under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or trustee, as such, of the Company
or of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Security
by the Holder thereof and as part of the consideration for the issue of the
Securities of this series.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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.
* * * *
<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, 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 by the undersigned officer.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. Ronald Blankenship
-------------------------
C. Ronald Blankenship
Chairman
Attest:
By: /s/ Jeffrey A. Klopf
--------------------
Jeffrey A. Klopf
Secretary
Dated: August 8, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
BY: /s/ Lena Altomare
------------------
Authorized Officer
-7-
<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 Security Capital Pacific 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: . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
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 or any change whatever.
-8-
<PAGE>
Exhibit 4.16
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No.: 1 $20,000,000
CUSIP No.: 81414E AC 3
SECURITY CAPITAL PACIFIC TRUST
7.650% NOTE DUE 2010
SECURITY CAPITAL PACIFIC TRUST, a real estate investment trust organized
and existing under the laws of the State of Maryland (hereinafter called the
"Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of TWENTY
MILLION DOLLARS on August 1, 2010 and to pay interest on the outstanding
principal amount thereon from August 8, 1996, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1 in each year, commencing on February 1,
1997, at the rate of 7.650% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this 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 January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. 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
either be paid to the Person 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 more than 15 days and 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 may be
listed, and upon such notice as may be required
<PAGE>
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of, Make-Whole Amount, if any, on, and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
the City of Boston, Commonwealth of Massachusetts, or elsewhere as provided in
the Indenture, 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 payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) transfer to an account of
the Person entitled thereto located inside the United States.
Each Security of this series 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 February 1, 1994,
between the Company and Morgan Guaranty Trust Company of New York, as trustee,
as supplemented by a First Supplemental Indenture, dated as of February 2, 1994,
(as so supplemented, herein called the "Indenture") between the Company and
State Street Bank and Trust Company, as successor 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 series designated on the first page hereof, limited in
aggregate principal amount to $20,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
The following definitions apply with respect to any redemption of the
Securities of this series at the option of the Company:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Security, 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
-2-
<PAGE>
(exclusive of interest accrued to the date of redemption or accelerated payment)
that would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual 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, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the 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
Federal Reserve System and which establishes 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 under the
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
-3-
<PAGE>
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
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 the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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, Make-Whole Amount, if any,
on, and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this
-4-
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any Place of Payment where the principal of, Make-Whole Amount, if any, on, 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 his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 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 under or upon any obligation, covenant or agreement contained
in the Indenture or in this Security, or because of any indebtedness evidenced
thereby, shall be had against any promoter, as such, or against any past,
present or future shareholder, officer or trustee, as such, of the Company or of
any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Security
by the Holder thereof and as part of the consideration for the issue of the
Securities of this series.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-5-
<PAGE>
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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.
* * * *
-6-
<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, 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 by the undersigned officer.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. Ronald Blankenship
-------------------------------------
C. Ronald Blankenship
Chairman
Attest:
By: /s/ Jeffrey A. Klopf
--------------------------------------
Jeffrey A. Klopf
Secretary
Dated: August 8, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
BY: /s/ Lena Altomare
--------------------------------------
Authorized Officer
-7-
<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 Security Capital Pacific 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: . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
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 or any change whatever.
-8-
<PAGE>
Exhibit 4.17
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No.: 1 $20,000,000
CUSIP No.: 81414E AD 1
SECURITY CAPITAL PACIFIC TRUST
8.100% NOTE DUE 2015
SECURITY CAPITAL PACIFIC TRUST, a real estate investment trust organized
and existing under the laws of the State of Maryland (hereinafter called the
"Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of TWENTY
MILLION DOLLARS on August 1, 2015 and to pay interest on the outstanding
principal amount thereon from August 8, 1996, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1 in each year, commencing on February 1,
1997, at the rate of 8.100% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this 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 January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. 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
either be paid to the Person 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 more than 15 days and 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 may be
listed, and upon such notice as may be required
<PAGE>
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of, Make-Whole Amount, if any, on, and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
the City of Boston, Commonwealth of Massachusetts, or elsewhere as provided in
the Indenture, 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 payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) transfer to an account of
the Person entitled thereto located inside the United States.
Each Security of this series 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 February 1, 1994,
between the Company and Morgan Guaranty Trust Company of New York, as trustee,
as supplemented by a First Supplemental Indenture, dated as of February 2, 1994,
(as so supplemented, herein called the "Indenture") between the Company and
State Street Bank and Trust Company, as successor 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 series designated on the first page hereof, limited in
aggregate principal amount to $20,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
The following definitions apply with respect to any redemption of the
Securities of this series at the option of the Company:
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Security, 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
-2-
<PAGE>
(exclusive of interest accrued to the date of redemption or accelerated payment)
that would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual 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, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the 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
Federal Reserve System and which establishes 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 under the
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain
conditions set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
-3-
<PAGE>
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
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 the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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, Make-Whole Amount, if
any, on, and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this
-4-
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any Place of Payment where the principal of, Make-Whole Amount, if any, on, 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 his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 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 under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or trustee, as such, of the Company
or of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Security
by the Holder thereof and as part of the consideration for the issue of the
Securities of this series.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-5-
<PAGE>
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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.
* * * *
-6-
<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, 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 by the undersigned officer.
SECURITY CAPITAL PACIFIC TRUST
By:/s/ C. RONALD BLANKENSHIP
--------------------------------
C. Ronald Blankenship
Chairman
Attest:
By:/s/ JEFFREY A. KLOPF
--------------------------
Jeffrey A. Klopf
Secretary
Dated: August 8, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
BY:/s/ LENA ALTOMARE
--------------------------
Authorized Officer
-7-
<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 Security Capital Pacific 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: ........ ........................................
........................................
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 or any change whatever.
8
<PAGE>
Exhibit 4.18
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No.: 1 $20,000,000
CUSIP No.: 81414E AE 9
SECURITY CAPITAL PACIFIC TRUST
8.150% NOTE DUE 2016
SECURITY CAPITAL PACIFIC TRUST, a real estate investment trust
organized and existing under the laws of the State of Maryland (hereinafter
called the "Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of TWENTY
MILLION DOLLARS on August 1, 2016 and to pay interest on the outstanding
principal amount thereon from August 8, 1996, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1 in each year, commencing on February 1,
1997, at the rate of 8.150% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this 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 January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. 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
either be paid to the Person 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 more than 15 days and 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 may be
listed, and upon such notice as may be required
<PAGE>
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of, Make-Whole Amount, if any, on, and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
the City of Boston, Commonwealth of Massachusetts, or elsewhere as provided in
the Indenture, 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 payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) transfer to an account of
the Person entitled thereto located inside the United States.
Each Security of this series 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 February 1, 1994,
between the Company and Morgan Guaranty Trust Company of New York, as trustee,
as supplemented by a First Supplemental Indenture, dated as of February 2, 1994,
(as so supplemented, herein called the "Indenture") between the Company and
State Street Bank and Trust Company, as successor 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 series designated on the first page hereof, limited in
aggregate principal amount to $20,000,000.
Securities of this series may be redeemed at any time at the option of
the Company, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
The following definitions apply with respect to any redemption of the
Securities of this series at the option of the Company:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Security, 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
-2-
<PAGE>
(exclusive of interest accrued to the date of redemption or accelerated payment)
that would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual 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, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the 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
Federal Reserve System and which establishes 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 under the
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain
conditions set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
-3-
<PAGE>
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
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 the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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, Make-Whole Amount, if
any, on, and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this
-4-
<PAGE>
Security for registration of transfer at the office or agency of the Company in
any Place of Payment where the principal of, Make-Whole Amount, if any, on, 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 his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 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 under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or trustee, as such, of the Company
or of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Security
by the Holder thereof and as part of the consideration for the issue of the
Securities of this series.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-5-
<PAGE>
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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.
* * * *
-6-
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, 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 by the undersigned officer.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. RONALD BLANKENSHIP
---------------------------
C. Ronald Blankenship
Chairman
Attest:
By:/s/ JEFFREY A. KLOPF
------------------------
Jeffrey A. Klopf
Secretary
Dated: August 8, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
BY: /s/ LENA ALTOMARE
-----------------------
Authorized Officer
-7-
<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 Security Capital Pacific 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:
------------ ----------------------------
----------------------------
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 or any change whatever.
-8-
<PAGE>
EXHIBIT 5
[LETTERHEAD OF MAYER, BROWN & PLATT]
September 27, 1996
The Board of Trustees
Security Capital Pacific Trust
7777 Market Center Avenue
El Paso, Texas 79912
Gentlemen:
We have acted as special counsel to Security Capital Pacific Trust, a
Maryland real estate investment trust ("PTR"), in connection with the proposed
sale of the following securities (the "Securities") of PTR, as set forth in the
Form S-3 Registration Statement filed with the Securities and Exchange
Commission on the date hereof (the "Registration Statement"): (i) one or more
series of unsecured senior debt securities (the "Debt Securities") and (ii) one
or more series of preferred shares of beneficial interest, $1.00 par value per
share (the "Preferred Shares").
Each series of the Debt Securities will be issued under an Indenture dated
as of February 1, 1994, as supplemented by the First Supplemental Indenture
dated as of February 2, 1994 (the "Indenture"), between PTR and State Street
Bank and Trust Company, as successor Trustee. Each series of the Preferred
Shares will be issued under PTR's Restated Declaration of Trust, as amended and
supplemented (the "Declaration of Trust"), and Articles Supplementary to be
filed with the Maryland State Department of Assessments and Taxation (the
"Maryland SDAT"). Certain terms of the Securities to be issued by PTR from time
to time will be approved by the Board of Trustees of PTR or a committee thereof
as part of the trust action taken and to be taken in connection with the
authorization of the issuance of the Securities (the "Trust Proceedings").
As special counsel to PTR, we have examined originals or copies certified
or otherwise identified to our satisfaction of the Declaration of Trust, PTR's
Bylaws, resolutions of PTR's Board of Trustees and such PTR records,
certificates and other
<PAGE>
The Board of Trustees
Security Capital Pacific Trust
September 27, 1996
Page 2
documents and such questions of law as we considered necessary or appropriate
for the purpose of this opinion. As to certain facts material to our opinion, we
have relied, to the extent we deem such reliance proper, upon certificates of
public officials and officers of PTR. In rendering this opinion, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to authentic original documents of all
documents submitted to us as copies. We have also assumed that PTR has filed a
valid election to be taxed as a real estate investment trust in accordance with
the Internal Revenue Code of 1986, as amended (the "Code"), and has in its
operations to date satisfied all requirements for treatment as a real estate
investment trust under the Code.
Based upon and subject to the foregoing and to the assumptions, conditions
and limitations set forth herein, we are of the opinion that:
(1) upon the completion of the Trust Proceedings relating to a series of
the Debt Securities and the due execution, authentication, issuance and delivery
of the Debt Securities of such series, the Debt Securities of such series, when
sold in exchange for the consideration set forth in the Prospectus contained in
the Registration Statement and any Prospectus Supplement relating to such series
of the Debt Securities, will be duly authorized and will be binding obligations
of PTR enforceable in accordance with their terms and entitled to the benefits
of the Indenture, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
and subject to general principles of equity;
(2) upon the completion of the Trust Proceedings relating to a series of
the Preferred Shares, the execution, delivery and filing with, and recording by,
the Maryland SDAT of Articles Supplementary relating to such series of the
Preferred Shares, and the due execution, countersignature and delivery of the
Preferred Shares of such series, the Preferred Shares of such series, when sold
in exchange for the consideration set forth in the Prospectus and any Prospectus
Supplement relating to such series of the Preferred Shares, will be duly
authorized, legally issued, fully paid and, except as described below,
nonassessable; and
<PAGE>
The Board of Trustees
Security Capital Pacific Trust
September 27, 1996
Page 3
(3) if PTR is operated according to the policies and in the manner stated
in the Declaration of Trust, PTR will qualify as a real estate investment trust
under the Code and under present law the Federal income tax treatment of PTR and
its shareholders will be as set forth in the Prospectus under the caption
"Federal Income Tax Considerations."
Our opinion relating to the nonassessability of the Preferred Shares does
not pertain to the potential liability of shareholders of PTR for debts and
liabilities of PTR. Section 5-350 of the Maryland Courts and Judicial
Proceedings Code provides that "a shareholder . . . of a real estate investment
trust . . . is not personally liable for the obligations of the real estate
investment trust." The Declaration of Trust provides that no shareholder shall
be personally liable in connection with PTR's property or the affairs of PTR.
The Declaration of Trust further provides that PTR shall indemnify and hold
harmless shareholders against all claims and liabilities and related reasonable
expenses to which they become subject by virtue of their status as current or
former shareholders. In addition, we have been advised that PTR, as a matter of
practice, inserts a clause in its business, management and other contracts that
provides that shareholders shall not be personally liable thereunder.
Accordingly, no personal liability should attach to PTR's shareholders for
contract claims under any contract containing such a clause where adequate
notice is given. However, with respect to tort claims, contract claims where
shareholder liability is not so negated, claims for taxes and certain statutory
liability, the shareholders may, in some jurisdictions, including Texas, the
state in which PTR's principal executive office is located, be personally liable
for such claims and liabilities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
<PAGE>
EXHIBIT 10
AMENDED AND RESTATED CREDIT AGREEMENT
Dated
August 16, 1996
among
SECURITY CAPITAL PACIFIC TRUST
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent
WELLS FARGO REALTY ADVISORS FUNDING, INCORPORATED,
as Co-Agent
and
the Lenders
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. Definitions............................................................ 1
2. The Loans.............................................................. 15
2.1 Advances.......................................................... 15
2.2 Term Loan Conversion.............................................. 17
2.3 Payments.......................................................... 18
2.4 Pro Rata Treatment................................................ 20
2.5 Non-Receipt of Funds by the Agent................................. 20
2.6 Sharing of Payments, Etc.......................................... 20
2.7 Fees.............................................................. 21
3. Conditions............................................................. 22
3.1 All Loans......................................................... 22
3.2 First Loan........................................................ 22
3.3 Options Available................................................. 23
3.4 Designation and Conversion........................................ 23
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings....... 24
3.6 Funding Offices; Adjustments Automatic............................ 27
3.7 Funding Sources, Payment Obligations.............................. 27
3.8 Mitigation, Non-Discrimination.................................... 27
4. Representations and Warranties......................................... 28
4.1 Organization...................................................... 28
4.2 Financial Statements.............................................. 28
4.3 Enforceable Obligations; Authorization............................ 29
4.4 Other Debt........................................................ 29
4.5 Litigation........................................................ 29
4.6 Taxes............................................................. 29
4.7 Regulation U...................................................... 29
4.8 Subsidiaries...................................................... 30
4.9 Securities Act of 1933............................................ 30
4.10 No Contractual or Corporate Restrictions.......................... 30
4.11 Investment Company Act Not Applicable............................. 30
4.12 Public Utility Holding Company Act Not Applicable................. 30
4.13 ERISA Not Applicable.............................................. 30
5. Affirmative Covenants.................................................. 30
5.1 Taxes, Insurance, Existence, Regulations, Property, etc........... 30
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.2 Financial Statements and Information.............................. 31
5.3 Financial Tests................................................... 31
5.4 Inspection........................................................ 32
5.5 Further Assurances................................................ 32
5.7 Insurance......................................................... 32
5.8 Notice of Certain Matters......................................... 32
5.9 Use of Proceeds................................................... 32
5.10 Expenses of and Claims Against the Agent and the Lenders.......... 33
5.11 Legal Compliance; Indemnification................................. 33
5.12 Borrower's Performance............................................ 34
5.13 Professional Services............................................. 34
5.14 Capital Adequacy.................................................. 34
5.15 Property Pool..................................................... 35
6. Negative Covenants..................................................... 36
6.1 Indebtedness...................................................... 36
6.2 Mergers, Consolidations and Acquisitions of Assets................ 36
6.3 Redemption........................................................ 37
6.4 Nature of Business; Management.................................... 37
6.5 Transactions with Related Parties................................. 37
6.6 Loans and Investments............................................. 37
6.7 Limiting Agreements............................................... 39
6.8 Nature of Assets.................................................. 40
7. Events of Default and Remedies......................................... 40
7.1. Events of Default................................................. 40
7.2 Remedies Cumulative............................................... 42
8. The Agent.............................................................. 42
8.1 Appointment, Powers and Immunities................................ 42
8.2 Reliance.......................................................... 44
8.3 Defaults.......................................................... 44
8.4 Rights as a Lender................................................ 45
8.5 Indemnification................................................... 45
8.6 Non-Reliance on Agent and Other Lenders........................... 45
8.7 Failure to Act.................................................... 46
8.8 Resignation of Agent.............................................. 46
8.9 No Partnership.................................................... 47
</TABLE>
(ii)
<PAGE>
9. Renewal and Extension.................................................. 47
9.1 Procedure for Consideration of Renewal and Extension Requests.... 47
9.2 Conditions to Renewal and Extension.............................. 48
9.3 No Obligation to Renew and Extend................................ 48
10. Miscellaneous.......................................................... 49
10.1 No Waiver, Amendments............................................ 49
10.2 Notices.......................................................... 49
10.3 Venue............................................................ 49
10.4 Choice of Law.................................................... 50
10.5 Survival; Parties Bound; Successors and Assigns.................. 50
10.6 Counterparts..................................................... 52
10.7 Usury Not Intended; Refund of Any Excess Payments................ 52
10.8 Captions......................................................... 52
10.9 Severability..................................................... 52
10.10 Disclosures...................................................... 52
10.11 NO NOVATION...................................................... 53
10.12 LIMITATION OF LIABILITY.......................................... 53
10.13 ENTIRE AGREEMENT................................................. 53
EXHIBITS
- --------
A - Officer's Certificate
B - Request for Loan
C - Note
C-1 - Swing Loan Note
D - Legal Opinion
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made
and entered into as of August 16, 1996, by and among SECURITY CAPITAL PACIFIC
TRUST, a Maryland real estate investment trust (the "Borrower"), the financial
institutions (including TCB and Wells Fargo Realty Advisors Funding,
Incorporated, the "Lenders") which are now or may hereafter become signatories
hereto, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association
("TCB"), as administrative agent for Lenders (in such capacity, "Agent"), and
WELLS FARGO REALTY ADVISORS FUNDING, INCORPORATED, as co-agent for Lenders (in
such capacity, "Co-Agent").
W I T N E S E T H:
-----------------
WHEREAS, the Borrower, the Agent, the Co-Agent and certain Lenders
(the "Existing Lenders") entered into an Amended and Restated Credit Agreement
dated as of August 11, 1995 (the "Original Credit Agreement"); and
WHEREAS, the Borrower, the Agent, the Co-Agent, and the Lenders desire
to amend and restate the Original Credit Agreement upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE in consideration of the mutual covenants, agreements
and undertakings herein contained, the parties hereto agree as follows:
1. Definitions.
-----------
Unless a particular word or phrase is otherwise defined or the context
otherwise requires, capitalized words and phrases used in Credit Documents have
the meanings provided below.
Accounts, Equipment and Inventory shall have the respective meanings
assigned to them in the Texas Business and Commerce Code in force on the date
the document using such term was executed.
Adjusted Eurodollar Interbank Rate shall mean, with respect to each
Interest Period applicable to a Eurodollar Rate Borrowing, a rate per annum
equal to the quotient, expressed as a percentage, of (a) the Eurodollar
Interbank Rate with respect to such Interest Period divided by (b) 1.0000 minus
the Eurodollar Reserve Requirement in effect on each day during such Interest
Period.
Affiliate shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under
<PAGE>
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or otherwise.
Annual Audited Financial Statements shall mean the annual financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows, all setting forth in comparative form
the corresponding figures from the previous fiscal year, all prepared in
conformity with Generally Accepted Accounting Principles and accompanied by a
report and opinion of independent certified public accountants satisfactory to
the Agent, which shall state that such financial statements, in the opinion of
such accountants, present fairly the financial position of such Person as of the
date thereof and the results of its operations for the period covered thereby in
conformity with Generally Accepted Accounting Principles. Such statements shall
be accompanied by a certificate of such accountants that in making the
appropriate audit and/or investigation in connection with such report and
opinion, such accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description of the nature
and status thereof. The Annual Audited Financial Statements shall be prepared on
a consolidated basis in accordance with Generally Accepted Accounting
Principles.
Applicable Margin shall mean the following percentage which will be in
effect whenever and for so long as the Borrower has received the corresponding
S&P Rating or Moody's Rating, whichever is lower:
<TABLE>
<CAPTION>
S&P RATING/ APPPLICABLE MARGIN
----------- ------------------
MOODY'S RATING EURODOLLAR RATE BASE RATE
-------------- ------------------ ---------
BORROWING BORROWING
-------------- ---------
<S> <C> <C>
A/A2 or better 0.750% 0
A-/A3 0.875% 0
BBB+/Baa1 1.000% 0
BBB/Baa2 1.125% 0
BBB-/Baa3 1.250% 0
Worse than BBB-/Baa3 1.500% .25%;
</TABLE>
Base Rate shall mean for any day a rate per annum equal to the
Applicable Margin on that day plus the greater on a daily basis of (a) the Prime
Rate for that day, or (b) the Federal Funds Effective Rate for that day plus
one-half of one percent (1/2%).
-2-
<PAGE>
Base Rate Borrowing shall mean that portion of the principal balance
of the Loans at any time bearing interest at the Base Rate.
Borrower's REIT Manager shall mean Security Capital Pacific
Incorporated, manager to the Borrower, or any successor manager to the Borrower
permitted by this Agreement.
Business Day shall mean a day other than (a) a day when the main
office of the Agent is not open for business, or (b) a day that is a federal
banking holiday in the United States of America.
Ceiling Rate shall mean, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or Texas laws
permits the higher interest rate, stated as a rate per annum. On each day, if
any, that Chapter One establishes the Ceiling Rate, the Ceiling Rate shall be
the "indicated rate ceiling" (as defined in Chapter One) for that day. The Agent
may from time to time, as to current and future balances, implement any other
ceiling under Chapter One by notice to the Borrower, if and to the extent
permitted by Chapter One. Without notice to the Borrower or any other person or
entity, the Ceiling Rate shall automatically fluctuate upward and downward as
and in the amount by which such maximum nonusurious rate of interest permitted
by applicable law fluctuates.
Chapter One shall mean Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended.
Code shall mean the Internal Revenue Code of 1986, as amended, as now
or hereafter in effect, together with all regulations, rulings and
interpretations thereof or thereunder by the Internal Revenue Service.
Commitment shall mean the commitment of the Lenders to lend funds
under Section 2.1 of this Agreement, other than Swing Loans.
Construction Interest shall mean Borrower's interest expense for the
construction of projects, which is capitalized in accordance with Generally
Accepted Accounting Principles; provided, however, that notwithstanding
Generally Accepted Accounting Principles, interest applicable to each building
under construction shall be capitalized as to such building only until
substantial completion thereof and such building is ready for its intended use
and thereafter interest attributable thereto shall be expensed.
Conversion Date has the meaning given to it in Section 2.2 hereof.
-3-
<PAGE>
Coverage Ratio shall mean the ratio of (a) the Borrower's Funds From
Operations plus all of the Borrower's Interest Expense for the period used to
calculate Funds From Operations, to (b) dividends of any kind or character or
other proceeds paid or payable with respect to any Disqualified Stock plus all
of the Borrower's Interest Expense, in each case for the period used to
calculate the Funds From Operations.
Credit Documents shall mean this Agreement, the Notes, all
instruments, certificates and agreements now or hereafter executed or delivered
to the Agent or the Lenders pursuant to any of the foregoing, and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
Debt to Tangible Net Worth Ratio shall mean the ratio of Indebtedness
to Tangible Net Worth.
Debt to Total Asset Value Ratio shall mean the ratio (expressed as a
percentage) of Indebtedness to Total Asset Value.
Determination Date shall mean the date that is one (1) year prior to
the then existing Revolving Credit Termination Date.
Disqualified Stock shall mean any of the Borrower's capital stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable or exercisable) (a) matures or is subject to
mandatory redemption, pursuant to a sinking fund obligation or otherwise, (b) is
convertible into or exchangeable or exercisable for Indebtedness or Disqualified
Stock, (c) is redeemable at the option of the holder of such stock, or (d)
otherwise requires any payments by Borrower, in each case on or before the
Maturity Date.
Eligible Institution shall mean a commercial bank or a finance
company, insurance company or other financial institution which is regularly
engaged in making, purchasing or investing in loans, but shall not include any
Person which is an Affiliate of the Borrower or of the Borrower's REIT Manager.
Equity Percentage shall mean the following percentage for each
Unconsolidated Affiliate which will be in effect whenever and for so long as the
Unconsolidated Affiliate Ratio for that Unconsolidated Affiliate equals the
corresponding amount:
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<PAGE>
Unconsolidated Affiliate Ratio Equity Percentage
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1.5:1.0 or less 100%
Greater than 1.5:1.0 but less 50%
than or equal to 1.86:1.0
Greater than 1.86:1.0 0%
Eurodollar Business Day shall mean a Business Day on which
transactions in United States dollar deposits between banks may be carried on in
the London interbank dollar market.
Eurodollar Interbank Rate shall mean, for each Interest Period, the
rate of interest per annum, rounded, if necessary, to the next highest whole
multiple of one-sixteenth per cent (1/16%), quoted by Agent at or before 11:00
a.m., London time (or as soon thereafter as practicable), on the date two (2)
Eurodollar Business Days before the first day of such Interest Period, to be the
arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the London
interbank dollar market, for the offering to Agent by one or more prime banks
selected by Agent in its sole discretion, in the London interbank dollar market,
of deposits in United States dollars for delivery on the first day of such
Interest Period and having a maturity equal to the length of such Interest
Period and in an amount equal (or as nearly equal as may be) to the Eurodollar
Rate Borrowing to which such Interest Period relates. Each determination by
Agent of the Eurodollar Interbank Rate shall be prima facie evidence thereof.
Eurodollar Rate shall mean for any day a rate per annum equal to the
sum of the Applicable Margin for that day plus the Adjusted Eurodollar Interbank
Rate in effect on the first day of the Interest Period for the applicable
Eurodollar Rate Borrowing. Each Eurodollar Rate is subject to adjustments for
reserves, insurance assessments and other matters as provided for in Section 3.5
hereof.
Eurodollar Rate Borrowing shall mean that portion of the principal
balance of the Loans at any time bearing interest at a Eurodollar Rate.
Eurodollar Reserve Requirement shall mean, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth) which is in effect on such day for determining all reserve
requirements (including, without limitation, basic, supplemental, marginal and
emergency reserves) applicable to "Eurocurrency liabilities," as
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currently defined in Regulation D, all as specified by any Governmental
Authority, including but not limited to those imposed under Regulation D. Each
determination of the Eurodollar Reserve Requirement by Agent shall be prima
facie evidence thereof.
Event of Default shall mean any of the events specified as an event of
default in Section 7 of this Agreement, and Default shall mean any of such
events, whether or not any requirement for notice, grace or cure has been
satisfied.
Federal Funds Effective Rate shall to the extent necessary be
determined by the Agent separately for each day and shall for each such day be a
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for each such day (or if any such day is not
a Business Day, for the next immediately preceding Business Day) by the Federal
Reserve Bank of New York, or if the weighted average of such rates is not so
published for any such day which is a Business Day, the average of the
quotations for any such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent.
Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower's
Funds From Operations plus all of the Borrower's Interest Expense for the period
used to calculate Funds From Operations, less Unit Capital Expenditures, to (b)
dividends of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock, plus all of the principal payable and
principal paid on the Borrower's Indebtedness other than (i) in the case of the
Borrower, any scheduled principal payments on the Term Loans and (ii) any
regularly scheduled principal payments on any Indebtedness which pays such
Indebtedness in full, to the extent the amount of such final scheduled principal
payment is greater than the scheduled principal payment immediately preceding
such final scheduled principal payment, plus all of the Borrower's Interest
Expense, in each case for the period used to calculate the Funds From
Operations.
Funding Loss shall mean, with respect to (a) Borrower's payment or
prepayment of principal of a Eurodollar Rate Borrowing on a day other than the
last day of the applicable Interest Period; (b) Borrower's failure to borrow a
Eurodollar Rate Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate Borrowings) on
the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.5, in each case
whether voluntary or involuntary, any direct loss, expense, penalty, premium or
liability incurred by any Lender (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by a Lender to fund or maintain a Loan).
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Funds From Operations shall mean gross cash revenues (excluding
unforfeited security deposits) actually received by the Borrower, less all cash
disbursements characterized as expenses and all proper charges against income,
plus depreciation of Property and deferred taxes, reserves and other non-cash
charges, all determined in accordance with Generally Accepted Accounting
Principles; provided, that there shall not be included in such revenues (i) any
proceeds of any insurance policy other than rental or business interruption
insurance received by the Borrower, (ii) any gain which is classified as
"extraordinary" in accordance with Generally Accepted Accounting Principles, or
(iii) any capital gains. Funds From Operations will be calculated, on an
annualized basis, on the four (4) calendar quarters immediately preceding the
date of the calculation. Funds From Operations shall not be increased or
decreased by gains or losses from sales of Property. Funds From Operations shall
be calculated on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Generally Accepted Accounting Principles shall mean, as to a
particular Person, such accounting practice as, in the opinion of the
independent accountants of recognized national standing regularly retained by
such Person and acceptable to the Agent, conforms at the time to generally
accepted accounting principles, consistently applied. Generally Accepted
Accounting Principles means those principles and practices (a) which are
recognized as such by the Financial Accounting Standards Board, (b) which are
applied for all periods after the date hereof in a manner consistent with the
manner in which such principles and practices were applied to the most recent
audited financial statements of the relevant Person furnished to the Lenders or
where a change therein has been concurred in by such Person's independent
auditors, and (c) which are consistently applied for all periods after the date
hereof so as to reflect properly the financial condition, and results of
operations and changes in financial position, of such Person. If there is a
change in such accounting practice as to the Borrower that could affect the
Borrower's ability to comply with the terms of this Agreement, the parties
hereto agree to review and discuss such changes in accounting practice and the
terms of this Agreement for a period of no more than thirty (30) days with a
view to amending this Agreement so that the financial measures of the Borrower's
operating performance and financial condition are substantially the same after
such change as they were immediately before such change.
Governmental Authority shall mean any foreign governmental authority,
the United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over the Agent, any
Lender or the Borrower or their respective Property.
Historical Value shall mean the purchase price of Property (including
improvements) and ordinary related purchase transaction costs, plus the cost of
subsequent capital improvements made
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by the Borrower, less any provision for losses, all determined in accordance
with Generally Accepted Accounting Principles. If the Property is purchased as a
part of a group of properties, the Historical Value shall be calculated based
upon a reasonable allocation of the aggregate purchase price by the Borrower for
all purposes, and consistent with Generally Accepted Accounting Principles.
Indebtedness shall mean and include, without duplication (1) all
obligations for borrowed money, (2) all obligations evidenced by bonds,
debentures, notes or other similar agreements, (3) all obligations to pay the
deferred purchase price of Property or services, except trade accounts payable
arising in the ordinary course of business (unless included in (6) below), (4)
all guaranties, endorsements and other contingent obligations in respect of, or
any obligations to purchase or otherwise acquire, Indebtedness of others, (5)
all Indebtedness secured by any Lien existing on any interest of the Person with
respect to which Indebtedness is being determined in Property owned subject to
such Lien whether or not the Indebtedness secured thereby shall have been
assumed, and (6) accounts payable, dividends of any kind or character or other
proceeds payable with respect to any stock and accrued expenses which in the
aggregate are in excess of five percent (5%) of the undepreciated value of the
assets of the Borrower, in each case including Non-recourse Debt. Indebtedness
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Interest Expense shall mean all of a Person's paid, accrued or
capitalized interest expense on such Person's Indebtedness (whether direct,
indirect or contingent, and including, without limitation, interest on all
convertible debt), but excluding Construction Interest.
Interest Options shall mean the Base Rate and the Eurodollar Rate,
and "Interest Option" means either of them.
Interest Payment Dates shall mean the first (1st) day of each calendar
month and the Maturity Date, for both Base Rate Borrowings and Eurodollar Rate
Borrowings.
Interest Period shall mean, for each Eurodollar Rate Borrowing, a
period commencing on the date such Eurodollar Rate Borrowing was made and ending
on the numerically corresponding day which is, subject to availability, (a) one
(1), two (2), three (3) or six (6) months thereafter, or (b) seven (7), fourteen
(14) or twenty-one (21) days thereafter for no more than three (3) time periods
each calendar year in connection with payments of the Loans because of debt
and/or equity sales by the Borrower, changes in the Lender Commitments in
connection with an extension pursuant to Section 9.1 hereof or sales of major
assets by the Borrower; provided, (v) any Interest Period which would otherwise
end on a day which is not a Eurodollar Business
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Day shall be extended to the next succeeding Eurodollar Business Day, unless
such Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day; (w) any
Interest Period which begins on the last Eurodollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of the appropriate calendar month; (x) no Interest
Period shall ever extend beyond the Maturity Date; and (y) Interest Periods
shall be selected by Borrower in such a manner that the Interest Period with
respect to any portion of the Loans which shall become due shall not extend
beyond such due date.
Legal Requirement shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
Lender Commitment means, for any Lender, the amount set forth opposite
such Lender's name on its signature page of this Agreement, or as may hereafter
become a signatory hereto.
Lien shall mean any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions.
Loans shall mean the Loans described in Sections 2.1 and 2.2 hereof. Loan
shall mean any such Loan.
Majority Lenders shall mean the Lenders with an aggregate amount of at
least sixty-six and 67/100 percent (66.67%) of the amount of the Commitment then
outstanding.
Material Adverse Change shall mean a change which could reasonably be
expected to have a Material Adverse Effect.
Material Adverse Effect means a material adverse effect on (a) the
financial condition, or results of operations of Borrower and its Subsidiaries
taken as a whole, (b) the ability of Borrower to perform its obligations under
any Credit Document to which it is a party, (c) the validity or enforceability
of any of such Credit Documents, or (d) the rights and remedies of Lenders and
Agent under any of the Credit Documents.
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Maturity Date shall mean (a) the Revolving Credit Termination Date prior to
any conversion of the Loans to the Term Loans, and (b) the Termination Date as
to the Term Loans.
Moody's Rating shall mean the senior unsecured debt rating from time to
time received by the Borrower from Moody's Investor Service.
Net Operating Income shall mean, for any income producing operating
properties, the difference between (a) any cash rentals, proceeds and other
income received from such Property (but excluding security or other deposits,
late fees, early lease termination or other penalties, or other income of a non-
recurring nature) during the determination period, less (b) all cash costs and
expenses (excluding interest expense and any expenditures that are capitalized
in accordance with Generally Accepted Accounting Principles) incurred as a
result of, or in connection with, or properly allocated to, the operation or
leasing of such Property during the determination period. Net Operating Income
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Non-recourse Debt shall mean any Indebtedness the payment of which the
Borrower or any of its Subsidiaries is not obligated to make other than to the
extent of any security therefor.
Notes shall mean the promissory notes of the Borrower described in Section
2.1 hereof, including the Swing Loan Note, any and all renewals, extensions,
modifications, rearrangements and replacements thereof and any and all
substitutions therefor, and Note shall mean any one of them.
Obligations shall mean, as at any date of determination thereof, the sum of
(a) the aggregate amount of Loans outstanding hereunder plus (b) all other
liabilities, obligations and Indebtedness of any Parties under any Credit
Document.
Officer's Certificate shall mean a certificate in the form attached hereto
as Exhibit A.
Operating Sub-Pool Value means, with respect to properties in the
Operating Sub-Pool (as defined in Section 5.15 hereof), for the period being
measured, the lesser of (a) the aggregate Historical Value of such properties;
and (b) the sum of (i) the aggregate Net Operating Income of such properties
that during such measurement period have reached the beginning of the first full
calendar quarter after the Stabilization Date (the "Calculation Date") ((1)
beginning with the Calculation Date until the end of the third full calendar
quarter after the Stabilization Date, based on the annualized Net Operating
Income from the Calculation Date until the time of measurement, and (2) after
the third full calendar quarter after the Stabilization Date, based on the
immediately
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preceding twelve (12) calendar month period) divided by nine and one-fourth
percent (9.25%), plus (ii) the Historical Value of such properties that have not
reached the Calculation Date during the measurement period.
Organizational Documents shall mean, with respect to a corporation,
the certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Credit Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by the Lenders.
Opinion Letters shall mean the opinion letters of independent counsel for
the Borrower, each in Proper Form.
Parties shall mean all Persons other than the Agent, the Co-Agent or any
Lender executing any Credit Document.
Past Due Rate shall mean, on any day, a rate per annum equal to the Ceiling
Rate for that day, or only if applicable law imposes no maximum nonusurious rate
of interest for that day, then the Past Due Rate for that day shall be a rate
per annum equal to the Base Rate plus an additional three percent (3%) per
annum, but in any event not to exceed the Ceiling Rate.
Percentage shall mean the amount, expressed as a percentage, of each Lender
Commitment as compared to the Commitment, set forth opposite the Lender's name
on its signature page of this Agreement, or as may hereafter become signatory
hereto.
Permitted Encumbrances shall mean (a) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property,
provided that such items do not materially impair the use of such property for
the purposes intended and none of which is violated in any material respect by
existing or proposed structures or land use; (b) the following: (i) Liens for
taxes not yet due and payable, or being diligently contested in good faith, or
where no Material Adverse Effect could reasonably be expected to result from
such nonpayment or the imposition of such Lien; or (ii) materialmen's,
mechanic's, warehousemen's and other like Liens arising in the ordinary course
of business, securing payment of Indebtedness whose payment is not yet due, or
that are being contested in good faith by appropriate proceedings diligently
conducted, and for or against which the Borrower has established adequate
reserves in accordance with Generally Accepted Accounting Principles; (c) Liens
for taxes, assessments and
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governmental charges or assessments that are being contested in good faith by
appropriate proceedings diligently conducted, and for or against which the
Borrower has established adequate reserves in accordance with Generally Accepted
Accounting Principles; (d) Liens on real property which are insured around or
against by title insurance; (e) Liens securing assessments or charges payable to
a property owner association or similar entity which assessments are not yet due
and payable or are being diligently contested in good faith; and (f) Liens
securing this Agreement and Indebtedness hereunder.
Person shall mean any individual, corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Prime Rate shall mean, as of a particular date, the prime rate of interest
per annum most recently determined by the Agent and thereafter entered in the
minutes of the Agent's Loan and Discount Committee, automatically fluctuating
upward or downward with and at the time specified in each such determination
without notice to Borrower or any other Person; each change in the Prime Rate
shall be effective on the date such change is determined; which Prime Rate may
not necessarily represent the Agent's lowest or best rate actually charged to a
customer.
Proper Form shall mean in form and substance satisfactory to the Lenders.
Property shall mean any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Quarterly Unaudited Financial Statements shall mean the quarterly financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such quarter and an income statement
for such fiscal quarter, and for the fiscal year to date, a statement of cash
flows for such quarter and for the fiscal year to date, subject to normal year-
end adjustments, and a detailed listing of the Borrower's Property and the
Historical Value thereof, all setting forth in comparative form the
corresponding figures for the corresponding fiscal period of the preceding year
(or, in the case of the balance sheet, the end of the preceding fiscal year),
prepared in accordance with Generally Accepted Accounting Principles except that
the Quarterly Unaudited Financial Statements may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission, and certified as true and correct by a managing director or vice
president of Borrower's REIT Manager. The Quarterly Unaudited Financial
Statements shall be prepared on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
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Rate Designation Date shall mean 12:00 noon, Houston, Texas time, on the
date three (3) Eurodollar Business Days preceding the first day of any proposed
Interest Period.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member lenders of the Federal Reserve System.
Request for Loan shall mean a written request substantially in the form of
Exhibit B.
Revolving Credit Termination Date shall mean the earlier to occur of (a)
August 13, 1998 as the same may hereafter be accelerated pursuant to the
provisions of any of the Credit Documents, and (b) the Conversion Date.
S&P Rating shall mean the senior unsecured debt rating from time to time
received by the Borrower from Standard & Poor's Corporation.
Stabilization Date shall mean, with respect to a property, the earlier of
(a) twelve (12) months from the date of acquisition of an income producing
property by the Borrower or twelve (12) months after substantial completion of
construction or development of a new construction or development property, and
(b) the date on which the occupancy level is at least ninety percent (90%).
Stated Rate shall, on any day, mean whichever of the Base Rate or the
Eurodollar Rate has been designated and provided pursuant to this Agreement;
provided that, if on any day such rate shall exceed the Ceiling Rate for that
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balance of the Notes equals the total amount of interest
which would have accrued if there had been no Ceiling Rate. If the Notes mature
(or are prepaid) before such equality is achieved, then, in addition to the
unpaid principal and accrued interest then owing pursuant to the other
provisions of the Credit Documents, Borrower promises to pay on demand to the
order of the holders of the Notes interest in an amount equal to the excess (if
any) of (a) the lesser of (i) the total interest which would have accrued on the
Notes if the Stated Rate had been defined as equal to the Ceiling Rate from time
to time in effect and (ii) the total interest which would have accrued on the
Notes if the Stated Rate were not so prohibited from exceeding the Ceiling Rate,
over (b) the total interest actually accrued on the Notes to such maturity (or
prepayment) date.
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Subsidiary shall mean, as to a particular parent entity, any entity of
which more than fifty percent (50%) of the indicia of voting equity or ownership
rights (whether outstanding capital stock or otherwise) is at the time directly
or indirectly owned by, such parent entity, or by one or more of its other
Subsidiaries.
Swing Loan shall mean a Loan made pursuant to Section 2.1(c) hereof.
Swing Loan Note shall mean that certain promissory note dated of even date
herewith in the original principal amount of $75,000,000.00 executed by the
Borrower payable to the order of TCB.
Tangible Net Worth shall mean total assets (valued at cost without
deduction for depreciation, and including the book value of equity investments
in each Unconsolidated Affiliate multiplied by the Equity Percentage for that
Unconsolidated Affiliate), less (1) all intangibles and (2) all liabilities
(including contingent and indirect liabilities), all determined in accordance
with Generally Accepted Accounting Principles. The term "intangibles" shall
include, without limitation, (i) deferred charges, (ii) the amount of any write-
up in the book value of any assets contained in any balance sheet resulting from
revaluation thereof or any write-up in excess of the cost of such assets
acquired, and (iii) the aggregate of all amounts appearing on the assets side of
any such balance sheet for franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill, treasury stock,
experimental or organizational expenses and other like intangibles. The term
"liabilities" shall include, without limitation, (i) Indebtedness secured by
Liens on Property of the Person with respect to which Tangible Net Worth is
being computed whether or not such Person is liable for the payment thereof,
(ii) deferred liabilities, and (iii) obligations under leases which have been
capitalized. Tangible Net Worth shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
Taxes shall mean any tax, levy, impost, duty, charge or fee.
Term Loan has the meaning given it in Section 2.2 hereof.
Termination Date shall mean the date three (3) years after the Conversion
Date, as the same may hereafter be accelerated pursuant to the provisions of any
of the Credit Documents.
Total Asset Value shall mean the sum of (a) the Borrower's aggregate Net
Operating Income (based on the immediately preceding calendar quarter and
annualized, and adjusted to exclude the Net Operating Income from any properties
not owned for the full quarter and the properties described in (iii) below)
divided by eight and three-fourths percent (8.75%), plus (b)
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the total book value of (i) properties acquired during the immediately preceding
calendar quarter, (ii) land not yet being developed, and (iii) land (and any
improvements being constructed thereon) on which the construction of new income
producing improvements has been commenced and is continuing and for up to six
(6) months after completion of all improvements thereon, plus (c) the amount of
any cash and cash equivalents, excluding tenant security and other restricted
deposits, plus (d) the total book value of all of the Borrower's other assets
not described in (a), (b) or (c) above, excluding all intangibles and all equity
investments in Unconsolidated Affiliates, plus (e) the total book value of the
Borrower's equity investments in each Unconsolidated Affiliate multiplied by the
Equity Percentage for that Unconsolidated Affiliate. Total Asset Value shall be
calculated on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Unconsolidated Affiliate shall mean, in respect of any Person, any other
Person in whom such Person holds a voting equity or ownership interest and whose
financial results would not be consolidated under Generally Accepted Accounting
Principles with the financial results of such Person on the consolidated
financial statements of such Person.
Unconsolidated Affiliate Ratio shall mean, for each Unconsolidated
Affiliate, the ratio of the Indebtedness of the Unconsolidated Affiliate to the
Tangible Net Worth of the Unconsolidated Affiliate.
Unit Capital Expenditure shall mean, on an annual basis, an amount equal to
the product of (a) the number of apartment units contained in each completed,
operating Property owned by Borrower and any Subsidiary as of the last day of
each of the immediately preceding five (5) calendar quarters, divided by five
(5); and multiplied by (b) $200.00.
The following terms shall have the respective meanings ascribed to them in
the Uniform Commercial Code as enacted and in force in the State of Texas on the
date hereof:
accessions, continuation statement, fixtures, general intangibles,
proceeds, security interest and security agreement.
2. The Loans.
2.1 Advances. (a) Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Loans (other than Swing Loans) prior to the
Revolving Credit Termination Date to the Borrower not to exceed an amount (in
the aggregate, the "Commitment") at any one time outstanding equal to the
Lender's Lender Commitment. Each such request for a Loan by Borrower shall be
deemed a request for a Loan from each Lender equal to such
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Lender's Percentage of the aggregate amount so requested, and such aggregate
amount shall be in an amount at least equal to $1,000,000.00 and equal to a
multiple of $250,000.00, or the difference between the Commitment and the
aggregate principal balance of the Notes, whichever is less. Each repayment of
the Loans shall be deemed a repayment of each Lender's Loan equal to such
Lender's Percentage of the amount so repaid. The obligations of the Lenders
hereunder are several and not joint, and the preceding two sentences will give
rise to certain inappropriate results if special provisions are not made to
accommodate the failure of a Lender to fund a Loan as and when required by this
Agreement; therefore, notwithstanding anything herein to the contrary, (A) no
Lender shall be required to make Loans at any one time outstanding in excess of
such Lender's Percentage of the Commitment and (B) if a Lender fails to make a
Loan as and when required hereunder and Borrower subsequently makes a repayment
on the Loans, such repayment shall be split among the non-defaulting Lenders
ratably in accordance with their respective Percentages until each Lender has
its Percentage of all of the outstanding Loans, and the balance of such
repayment shall be divided among all of the Lenders in accordance with their
respective Percentages. Notwithstanding the foregoing, borrowings and payments
of Swing Loans shall be for TCB's own account. The Loans (other than Swing
Loans) shall be evidenced by the Notes substantially in the form of Exhibit C
attached hereto. The Borrower, the Agent and the Lenders agree that Chapter 15
of the Texas Credit Code shall not apply to this Agreement, the Notes or any
Loan.
(b) The Borrower shall give the Agent notice of each borrowing to be made
hereunder as provided in Section 3.1 hereof, and the Agent shall deliver same to
each Lender promptly thereafter. Not later than 11:00 a.m., Houston, Texas
time, on the date specified for each such borrowing hereunder other than Swing
Loans, each Lender shall make available the amount of the Loan, if any, to be
made by it on such date to the Agent at the Agent's principal office in Houston,
Texas, in immediately available funds, for the account of the Borrower. Such
amounts received by the Agent will be held in Agent's general ledger account.
The amounts so received by the Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrower by wiring or otherwise
transferring, in immediately available funds not later than 12:00 noon, Houston,
Texas time, such amount to an account designated by the Borrower and maintained
with Texas Commerce Bank National Association in El Paso, Texas or any other
account or accounts which the Borrower may from time to time designate to the
Agent by a written notice as the account or accounts to which borrowings
hereunder are to be wired or otherwise transferred. TCB shall make available
the amount of each Swing Loan by depositing the same in immediately available
funds, in the foregoing account by 2:00 p.m., Houston, Texas time, on the date
of the borrowing.
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(c) Subject to the terms and conditions hereof, if necessary to meet the
Borrower's funding deadlines, TCB agrees to make Swing Loans to the Borrower at
any time on or prior to the Revolving Credit Termination Date, not to exceed an
amount at any one time outstanding equal to the lesser of (i) $75,000,000.00, or
(ii) the difference between the Commitment and the unpaid principal balance of
all Loans. Swing Loans shall constitute "Loans" for all purposes hereunder.
Notwithstanding the foregoing, the aggregate amount of all Loans (including,
without limitation, all Swing Loans) shall not at any time exceed the
Commitment. Each request for a Swing Loan shall be in an amount at least equal
to $1,000,000.00 and equal to a multiple of $250,000.00. If necessary to meet
the Borrower's funding deadlines, the Agent may treat any Request for Loan as a
request for a Swing Loan from TCB and TCB may fund it as a Swing Loan. Within
two (2) Business Days after each Swing Loan is funded, TCB shall request that
each Lender, and each Lender shall, on the first Business Day after such request
is made, purchase a portion of any one or more Swing Loans in an amount equal to
that Lender's Percentage of such Swing Loans by funding under such Lender's
Note, such purchase to be made in accordance with the terms of Section 2.1(b) of
this Agreement just as if the Lender were funding directly to the Borrower under
its Note (such that all Lenders other than TCB shall fund only under their
respective Note and not under the Swing Loan Note). Unless the Agent knew or
should have known when TCB funded a Swing Loan that the Borrower had not
satisfied the conditions in this Agreement to obtain a Loan, each Lender's
obligation to purchase an interest in the Swing Loans shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender or any other Person may have against TCB or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default or
Event of Default or the termination of any Lender Commitment; (iii) any adverse
change in the condition (financial or otherwise) of the Borrower or any of its
Subsidiaries; (iv) any breach of this Agreement or any other Credit Documents by
the Borrower, any of its Subsidiaries, the Agent or any other Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. Any portion of a Swing Loan not so purchased and converted may
be treated by TCB as a Loan which was not funded by the non-purchasing Lenders
as contemplated in Section 2.1(a) of this Agreement, and as a funding by TCB
under the Commitment in excess of TCB's Percentage. Each Swing Loan, once so
sold, shall cease to be a Swing Loan for the purposes of this Agreement, but
shall be a Loan made under the Commitment and each Lender's Lender Commitment.
The Swing Loans shall be evidenced by the Swing Loan Note substantially in the
form of Exhibit C-1 attached hereto.
2.2 Term Loan Conversion.
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(a) Subject to the terms and conditions of this Agreement, if any
Extension Request (as defined in Section 9) shall be denied, the Borrower may
elect to convert the aggregate unpaid principal amount of the Loans (other than
the Swing Loans) outstanding on the date (if the conversion election is chosen,
the "Conversion Date") one (1) year prior to the then existing Revolving Credit
Termination Date into a term loan owing to each of the Lenders (each a "Term
Loan"), so long as (i) the Borrower has given the Agent at least fifteen (15)
days prior written notice of the Borrower's intention to so convert the Loans,
(ii) no amounts remain unpaid under the Swing Loan Note, and (iii) the
conditions to make a Loan set forth in Section 3 are satisfied as of the
Conversion Date. After the Conversion Date, the Borrower shall have no further
right to receive, and no Lender shall have the obligation to make, any advances
of Loans.
(b) The Borrower shall repay the principal balance of each Term Loan
in quarterly installments due on November 13 first following the Conversion
Date, and continuing on the thirteenth (13th) day of each subsequent February,
May, August and November until the Termination Date. The amount of each
quarterly principal installment shall be equal to the following amount during
the corresponding period:
PERIOD PAYMENT AMOUNT
------ --------------
During the first year after Quarterly amount necessary to amortize
the Conversion Date the unpaid principal balance of the
Term Loan on the Conversion Date over
a seven (7) year period
During the second year after Quarterly amount necessary to amortize
the Conversion Date the unpaid principal balance of the
Term Loan on the Conversion Date
over a five (5) year period
During the third year after Quarterly amount necessary to amortize
the Conversion Date the unpaid principal balance of the
Term Loan on the Conversion Date over
a three (3) year.
Accrued and unpaid interest on the unpaid principal balance of the Term Loans
shall continue to be due and payable on the Interest Payment Dates. The entire
unpaid principal balance, and all accrued and unpaid interest thereon, of the
Term Loans, together with all other amounts due under this Agreement, shall be
due and payable in full on the Termination Date.
2.3 Payments. (a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
hereunder, under the Notes and
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under the other Credit Documents shall be made in immediately available funds to
the Agent at its principal office in Houston, Texas (or in the case of a
successor Agent, at the principal office of such successor Agent in the United
States), not later than 12:00 noon Houston, Texas time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day).
(b) The Borrower may, at the time of making each payment hereunder, under
any Note or under any other Credit Document, specify to the Agent the Loans or
other amounts payable by the Borrower hereunder or thereunder to which such
payment is to be applied (and in the event that it fails so to specify, such
payment shall be applied to the Loans (first to the Swing Loans) or, if no Loans
are outstanding, to other amounts then due and payable, provided that if no
Loans or other amounts are then due and payable or an Event of Default has
occurred and is continuing, the Agent may apply such payment to the Obligations
in such order as it may elect in its sole discretion, but subject to the other
terms and conditions of this Agreement, including without limitation Section 2.4
hereof). Each payment received by the Agent hereunder, under any Note or under
any other Credit Document for the account of a Lender shall be paid promptly to
such Lender, in immediately available funds. If the Agent receives a payment for
the account of a Lender prior to 12:00 noon Houston, Texas time, such payment
must be delivered to the Lender on that same day and if it is not so delivered
due to the fault of the Agent, the Agent shall pay to the Lender entitled to the
payment the interest accrued on the amount of the payment pursuant to said
Lender's Note from the date the Agent receives the payment to the date the
Lender received the payment. The Agent may apply payments received from the
Borrower to pay any unpaid principal and interest on the Swing Loans before
making payment to each Lender of amounts due under the Notes other than the
Swing Loan Note.
(c) If the due date of any payment hereunder or under any Note falls on a
day which is not a Business Day or a Eurodollar Business Day, as the case may
be, the due date for such payments shall be extended to the next succeeding
Business Day or Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such extension;
provided, however, that with respect to Eurodollar Rate Borrowings if such
extension would cause the Eurodollar Business Day of payment to fall in another
calendar month, the payment shall be due on the Eurodollar Business Day next
preceding the due date of the payment.
(d) The Borrower shall give the Agent at least one (1) Business Day's prior
written notice of the Borrower's intent to make any payment of principal or
interest under the Credit Documents not scheduled to be paid under the Credit
Documents. Any such notification of payment shall be irrevocable after it is
made by the Borrower. Upon receipt by the Agent of such notification of
payment, it shall deliver same to the other Lenders.
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2.4 Pro Rata Treatment. Except to the extent otherwise provided herein: (a)
each borrowing from the Lenders under Section 2.1(a) hereof shall be made
ratably from the Lenders on the basis of their respective Percentages, each
payment of the Fee (hereinafter defined) shall be made for the account of the
Lenders, and shall be applied, pro rata, according to the Lenders' respective
Lender Commitment; and (b) each payment by the Borrower of principal or interest
on the Loans other than the Swing Loans, of any other sums advanced by the
Lenders pursuant to the Credit Documents, and of any other amount owed to the
Lenders other than the Fee, payments of Swing Loans, or any other sums
designated by this Agreement as being owed to a particular Lender, shall be made
to the Agent for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans (other than Swing Loans) held
by the Lenders. Payments of Swing Loans shall be for TCB's own account.
2.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan (or
purchase of a portion of a Swing Loan) to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, pay to the
Agent the amount made available by the Agent together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Past Due Rate for such period if the recipient returning a
Required Payment is the Borrower, or (b) the Federal Funds Effective Rate for
such period if the recipient returning a Required Payment is the Agent or a
Lender.
2.6 Sharing of Payments, Etc. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Borrower at any of its
offices, against any principal of or interest on any of such Lender's Loans to
the Borrower hereunder, or other Obligations of the Borrower hereunder, which is
not paid (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent thereof, provided
that such Lender's failure to give such notice shall not affect the validity
thereof. If a Lender shall obtain payment of any principal of or interest on any
Loan made by it under this Agreement (other than Swing Loans made by TCB), or
other Obligation then due to such Lender hereunder, through the exercise of any
right
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of set-off, banker's lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders portions of the Loans made or other
Obligations held (other than Swing Loans made by TCB), by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid principal and
interest on the Obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.
2.7 Fees. The Borrower shall pay to the Agent for the account of each
Lender fees (collectively, the "Fee") equal to (a) an amount payable as a
commitment fee by the Borrower to the Agent for the account of each Lender equal
to the portion of the daily unused amount of the Commitment (Swing Loans shall
be deemed to be a utilization of the Commitment solely for the purposes of this
Section 2.7(a)) listed below multiplied by the corresponding rate per annum
applicable to that portion:
Unused Commitment Rate
----------------- ----
Up to but not including $115,000,000 0.1250%
$115,000,000 up to and including
$230,000,000 0.1875%
Over $230,000,000 0.2500%
such commitment fee to be payable in arrears on or before the tenth (10th) day
of each April, July, October and January, (b) if the Revolving Credit
Termination Date is extended pursuant to Section 9 of this Agreement, an amount
payable as an extension fee by the Borrower to the Agent for the account of each
Lender that extends its Loans equal to 0.1500% of each Lender's Lender
Commitment at that time payable on the Determination Date, and (c) if the Loans
are converted to the Term Loans pursuant to Section 2.2 of this Agreement, an
amount payable as a conversion fee by the Borrower to the Agent for the account
of each Lender that converts its Loans equal to one-fourth of one percent (1/4%)
of the aggregate unpaid principal balance of each Loan on the date one (1) year
after the Conversion Date payable to each Lender on the date one (1) year after
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the Conversion Date, plus one-fourth of one percent (1/4%) of the aggregate
unpaid principal balance of each Loan on the date (2) years after the Conversion
Date payable to each Lender on the date two (2) years after the Conversion Date
if any portion of the Term Loan is unpaid on that date. The Fee shall not be
refundable (except as required by Section 3.1(c) of this Agreement). Any portion
of the Fee which is not paid by the Borrower when due shall bear interest at the
Past Due Rate from the date due until the date paid by the Borrower. The Fee
shall be calculated on the actual number of days elapsed in a year deemed to
consist of 360 days.
3. Conditions.
----------
3.1 All Loans. The obligation of any Lender to make any Loan is subject to
the accuracy of all representations and warranties of the Borrower on the date
of such Loan, to the performance by the Borrower of its obligations under the
Credit Documents and to the satisfaction of the following further conditions:
(a) the Agent shall have received the following, all of which shall be duly
executed and in Proper Form: (1) a Request for Loan (i) by 11:00 a.m., Houston,
Texas time, one (1) Business Day before the date (which shall also be a Business
Day) of the proposed Loan which is to be a Base Rate Borrowing (other than Swing
Loans), (ii) by 11:00 a.m., Houston, Texas time, on the same Business Day of any
proposed Swing Loan, provided that by 11:00 a.m., Houston, Texas time on the
date of the proposed Swing Loan, Borrower shall also have notified TCB by
telephone of its request for a Swing Loan, or (iii) by the Rate Designation Date
of the proposed Loan which is to be a Eurodollar Rate Borrowing; and (2) such
other documents as the Agent may reasonably require to satisfy itself or the
request of any Lender; (b) no Default or Event of Default shall have occurred
and be continuing; (c) the making of the Loan shall not be prohibited by any
Legal Requirement (in which event the applicable portion of the Fee will not be
charged to the Borrower); (d) the Borrower shall have paid all legal fees and
expenses of the type described in Section 5.10 hereof through the date of such
Loan; and (e) in the case of a Loan other than a Swing Loan, all Swing Loans
then outstanding shall have been paid or shall be paid with the proceeds of such
Loan.
3.2 First Loan. In addition to the matters described in Section 3.1
hereof, the obligation of the Lenders to make the first Loan under this
Agreement is subject to the receipt by the Lenders of each of the following, in
Proper Form: (a) the Notes, executed by the Borrower; (b) a certificate executed
by the Secretary of the Borrower dated as of the date hereof; (c) a certificate
from the Secretary of State or other appropriate public official of Maryland as
to the continued existence and good standing of the Borrower; (d) a certificate
from the appropriate public official of every state where the location of the
Borrower's Property requires it to be qualified to do business as to the due
qualification and good standing of the Borrower; (e) a legal opinion from
independent counsel for the Borrower as to the matters set forth on Exhibit D
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acceptable to the Lenders; (f) policies of insurance addressed to the Agent
reflecting the insurance required by Section 5.7 hereof; and (g) an Officer's
Certificate in the form of Exhibit A; and to the further condition that, at the
time of the initial Loan, all legal matters incident to the transactions herein
contemplated shall be satisfactory to Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P., counsel for the Agent.
3.3 Options Available. The outstanding principal balance of the Notes
shall bear interest at the Base Rate; provided, that (1) all past due amounts,
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balance of the Notes, other than the
Swing Loan Note, from time to time outstanding bear interest at a Eurodollar
Rate. The records of the Lenders with respect to Interest Options, Interest
Periods and the amounts of Loans to which they are applicable shall be prima
facie evidence thereof. Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this Agreement that a
Eurodollar Rate is to apply.
3.4 Designation and Conversion. Borrower shall have the right to designate
or convert its Interest Options in accordance with the provisions hereof.
Provided no Event of Default has occurred and is continuing and subject to the
provisions of Section 3.5, Borrower may elect to have a Eurodollar Rate apply or
continue to apply to all or any portion of the principal balance of the Notes,
other than the Swing Loan Note. Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding principal
balance of the Notes. The Interest Options shall be designated or converted in
the manner provided below:
(a) Borrower shall give Agent a Request for Loan. Each such written notice
shall specify the amount of Loan which is the subject of the designation, if
any; the amount of borrowings into which such borrowings are to be converted or
for which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period, if any, selected by Borrower.
The Request for Loan shall be irrevocable and shall be given to Agent no later
than the applicable Rate Designation Date. The Agent shall promptly deliver the
Request for Loan to the Lenders.
(b) No more than twelve (12) Eurodollar Rate Borrowings with twelve (12)
Interest Periods shall be in effect at any time.
(c) Each designation or conversion of a Eurodollar Rate Borrowing shall
occur on a Eurodollar Business Day.
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(d) Except as provided in Section 3.5 hereof, no Eurodollar Rate Borrowing
shall be converted on any day other than the last day of the applicable Interest
Period.
(e) Unless a Request for Loan to the contrary is received as provided in
this Agreement, each Eurodollar Rate Borrowing will convert to a Base Rate
Borrowing after the expiration of the Interest Period.
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings.
-----------------------------------------------------------
(a) Options Unlawful. If the adoption of any applicable Legal Requirement
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by the
Lenders with any request or directive (whether or not having the force of law)
of any central bank or other Governmental Authority shall at any time make it
unlawful or impossible for any Lender to permit the establishment of or to
maintain any Eurodollar Rate Borrowing, the commitment of the Lenders to
establish or maintain such Eurodollar Rate Borrowing shall forthwith be
suspended until such condition shall cease to exist and Borrower shall
forthwith, upon demand by Agent to Borrower, (1) convert the Eurodollar Rate
Borrowing with respect to which such demand was made to a Base Rate Borrowing;
(2) pay all accrued and unpaid interest to date on the amount so converted; and
(3) pay any amounts required to compensate the Lenders for any additional cost
or expense which the Lenders may incur as a result of such adoption of or change
in such Legal Requirement or in the interpretation or administration thereof and
any Funding Loss which the Lenders may incur as a result of such conversion. If,
when Agent so notifies Borrower, Borrower has given a Request for Loan
specifying a Eurodollar Rate Borrowing but the selected Interest Period has not
yet begun, such Request for Loan shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans specified in such Request for
Loan shall bear interest at the Base Rate until a different available Interest
Option shall be designated in accordance herewith.
(b) Increased Cost of Borrowings. If the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive of general applicability
(whether or not having the force of law) of any central bank or Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Notes being maintained on the basis of a Eurodollar Rate:
(1) subject any Lender (or make it apparent that any Lender is subject) to
any Taxes, or any deduction or withholding for any Taxes, on or from
any payment due under any Eurodollar Rate Borrowing or other amount
due
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hereunder, other than income and franchise taxes of the United States
and its political subdivisions; or
(2) change the basis of taxation of payments due from Borrower to any
Lender under any Eurodollar Rate Borrowing (otherwise than by a change
in the rate of taxation of the overall net income of a Lender); or
(3) impose, modify, increase or deem applicable any reserve requirement
(excluding that portion of any reserve requirement included in the
calculation of the applicable Eurodollar Rate), special deposit
requirement or similar requirement (including, but not limited to,
state law require ments and Regulation D) imposed, modified, increased
or deemed applicable by any Governmental Authority against assets held
by any Lender, or against deposits or accounts in or for the account
of any Lender, or against loans made by any Lender, or against any
other funds, obligations or other property owned or held by any
Lender; or
(4) impose on any Lender any other condition regarding any Eurodollar Rate
Borrowing;
and the result of any of the foregoing is to increase the cost to any
Lender of agreeing to make or of making, renewing or maintaining such
Eurodollar Rate Borrowing, or reduce the amount of principal or interest
received by any Lender, then, upon demand by Agent, Borrower shall pay to
such Lender, from time to time as specified by such Lender, additional
amounts which shall compensate such Lender for such increased cost or
reduced amount. Agent will promptly notify Borrower in writing of any event
which will entitle any Lender to additional amounts pursuant to this
paragraph. A Lender's determination of the amount of any such increased
cost, increased reserve requirement or reduced amount shall be prima facie
evidence thereof. Borrower shall have the right, if it receives from Agent
any notice referred to in this paragraph, upon three Business Days' notice
to Agent, either (i) to repay in full (but not in part) any borrowing with
respect to which such notice was given, together with any accrued interest
thereon, or (ii) to convert the Eurodollar Rate Borrowing which is the
subject of the notice to a Base Rate Borrowing; provided, that any such
repayment or conversion shall be accompanied by payment of (x) the amount
required to compensate a Lender for the increased cost or reduced amount
referred to in the preceding paragraph; (y) all accrued and unpaid interest
to date on the amount so repaid or converted, and
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(z) any Funding Loss which any Lender may incur as a result of such
repayment or conversion.
(c) Inadequacy of Pricing and Rate Determination. If for any reason with
respect to any Interest Period Agent shall have determined (which
determination shall be prima facie evidence thereof) that:
(1) Agent is unable through its customary general practices to determine
any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market generally,
Agent is not being offered deposits in United States dollars in such
market, for the applicable Interest Period and in an amount equal to
the amount of any applicable Eurodollar Rate Borrowing requested by
Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly reflect
the cost to the Lenders of making and maintaining such Eurodollar Rate
Borrowing hereunder for any proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any
Request for Loan previously given by Borrower designating the applicable
Eurodollar Rate Borrowing which has not commenced as of the date of such
notice from Agent shall be deemed for all purposes hereof to be of no force
and effect, as if never given, and (B) until Agent shall notify Borrower
that the circumstances giving rise to such notice from Agent no longer
exist, each Request for Loan requesting the applicable Eurodollar Rate
shall be deemed a request for a Base Rate Borrowing, and any applicable
Eurodollar Rate Borrowing then outstanding shall be converted, without any
notice to or from Borrower, upon the termination of the Interest Period
then in effect with respect to it, to a Base Rate Borrowing.
(d) Funding Losses. Borrower shall indemnify the Agent and each Lender
against and hold the Agent and each Lender harmless from any Funding Loss. This
agreement shall survive the payment of the Notes. A certificate as to any
additional amounts payable pursuant to this subsection and setting forth the
reasons for the Funding Loss submitted by Agent to Borrower shall be prima facie
evidence thereof.
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3.6 Funding Offices; Adjustments Automatic. Any Lender may, if it so
elects, fulfill its obligation as to any Eurodollar Rate Borrowing by causing a
branch or affiliate of such Lender to make such Loan and may transfer and carry
such Loan at, to, or for the account of, any branch office or affiliate of such
Lender; provided, that in such event for the purposes of this Agreement such
Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate. Without notice to
Borrower or any other person or entity, each rate required to be calculated or
determined under this Agreement shall automatically fluctuate upward and
downward in accordance with the provisions of this Agreement.
3.7 Funding Sources, Payment Obligations. Notwithstanding any provision of
this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of the Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded and
maintained each Eurodollar Rate Borrowing during each Interest Period through
the purchase of deposits having a maturity corresponding to such Interest Period
and bearing an interest rate equal to the Eurodollar Rate for such Interest
Period. Notwithstanding the foregoing, Funding Losses, increased costs and other
obligations relating to Eurodollar Rate Borrowings described in Section 3.5 of
this Agreement will only be paid by the Borrower as and when actually incurred
by the Lenders.
3.8 Mitigation, Non-Discrimination. (a) Each Lender will notify the
Borrower through the Agent of any event occurring after the date of this
Agreement which will require or enable such Lender to take the actions described
in Sections 3.5(a) or (b) of this Agreement as promptly as practicable after it
obtains knowledge thereof and determines to request such action, and (if so
requested by the Borrower through the Agent) will designate a different lending
office of such Lender for the applicable Eurodollar Rate Borrowing or will take
such other action as the Borrower reasonably requests if such designation or
action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need for, or reduce the amount of, such action and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender (provided that such Lender
will have no obligation to designate a different lending office which is located
in the United States of America).
(b) None of the Lenders shall be able to pass through to the Borrower
changes and costs under Section 3.5 of this Agreement on a discriminating basis,
such that such changes and costs are not also passed through by each Lender to
other customers of such Lender similarly situated where such customer is subject
to documents providing for such pass through.
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(c) If any Lender elects under Section 3.5 of this Agreement to
suspend or terminate the availability of Eurodollar Rate Borrowings for any
material period of time, and the event giving rise to such election is not
generally applicable to all of the Lenders, the Borrower may within sixty (60)
days after notification of such Lender's election, and so long as no Event of
Default is then in existence, either (i) demand that such Lender, and upon such
demand, such Lender shall promptly, assign its Lender Commitment to another
financial institution subject to and in accordance with the provisions of
Section 10.5 of this Agreement for a purchase price equal to the unpaid balance
of principal, accrued interest, the unpaid balance of the Fee and expenses owing
to such Lender pursuant to this Agreement, or (ii) pay such Lender the unpaid
balance of principal, accrued interest, the unpaid balance of the Fee and
expenses owing to such Lender pursuant to this Agreement, whereupon, such Lender
shall no longer be a party to this Agreement or have any rights or obligations
hereunder or under any other Credit Documents, and the Commitment shall
immediately and permanently be reduced by an amount equal to the Lender
Commitment of such Lender.
4. Representations and Warranties.
------------------------------
To induce the Lenders to enter into this Agreement and to make the Loans,
the Borrower represents and warrants to the Agent and the Lenders as follows:
4.1. Organization. The Borrower is duly organized, validly existing and in
good standing as a real estate investment trust under the laws of the state of
Maryland; has all power and authority to conduct its business as presently
conducted; and is duly qualified to do business and in good standing in every
state where the location of its Property requires it to be qualified to do
business, unless the failure to be so qualified could not reasonably be expected
to have a Material Adverse Effect.
4.2 Financial Statements. The financial statements delivered to the Agent
fairly present, in accordance with Generally Accepted Accounting Principles
(provided, however, that the Quarterly Unaudited Financial Statements are
subject to normal year-end adjustments and may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the
Borrower as at the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements. The Borrower
is not subject to any instrument or agreement which would materially prevent it
from conducting its business as it is now conducted or as it is contemplated to
be conducted.
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4.3 Enforceable Obligations; Authorization. The Credit Documents are
legal, valid and binding obligations of the Parties, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency
and other laws affecting creditors' rights generally and by general equitable
principles. The execution, delivery and performance of the Credit Documents have
all been duly authorized by all necessary action; are within the power and
authority of the Parties; do not and will not contravene or violate any Legal
Requirement or the Organizational Documents of the Parties; do not and will not
result in the breach of, or constitute a default under, any agreement or
instrument by which the Parties or any of their respective Property may be bound
or affected, except where such breach or default could not reasonably be
expected to have a Material Adverse Effect; and do not and will not result in
the creation of any Lien upon any Property of any of the Parties except as
expressly contemplated therein. All necessary permits, registrations and
consents for such making and performance have been obtained except where the
lack thereof could not reasonably be expected to have a Material Adverse Effect.
4.4 Other Debt. The Borrower is not in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security agreement
or lease to which it is a party which default could reasonably be expected to
have a Material Adverse Effect.
4.5 Litigation. There is no litigation or administrative proceeding
pending or, to the knowledge of the Borrower, threatened against, or any
outstanding judgment, order or decree affecting, the Borrower before or by any
Governmental Authority which is not adequately covered by insurance or which, if
determined adversely to the Borrower could reasonably be expected to have a
Material Adverse Effect. The Borrower is not in default with respect to any
judgment, order or decree of any Governmental Authority which default could
reasonably be expected to have a Material Adverse Effect.
4.6 Taxes. The Borrower has filed all tax returns required to have been
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained, those which are being contested in good faith and
those for which the Borrower's failure to file a return or pay could not
reasonably be expected to have a Material Adverse Effect.
4.7 Regulation U. None of the proceeds of any Loan will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
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4.8 Subsidiaries. The Borrower has no Subsidiaries which individually or
in the aggregate own more than twenty-five percent (25%) in value of the
Borrower's and the Subsidiaries' consolidated assets determined in accordance
with Generally Accepted Accounting Principles. Each of the Borrower's
Subsidiaries is a "qualified REIT subsidiary" under Section 856 of the Code.
4.9 Securities Act of 1933. Other than the Agent's efforts in syndicating
the Loans (for which the Agent is responsible) neither the Borrower nor any
agent acting for it has offered the Notes or any similar obligation of the
Borrower for sale to or solicited any offers to buy the Notes or any similar
obligation of the Borrower from any Person other than the Agent or any Lender,
and neither the Borrower nor any agent acting for it will take any action which
would subject the sale of the Note to the provisions of Section 5 of the
Securities Act of 1933, as amended.
4.10 No Contractual or Corporate Restrictions. The Borrower is not a party
to, or bound by, any contract, agreement or charter or other corporate
restriction materially and adversely affecting its business, Property, assets,
operations or condition, financial or otherwise.
4.11 Investment Company Act Not Applicable. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Public Utility Holding Company Act Not Applicable. The Borrower
is not a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company", or an affiliate of a "subsidiary company"
of a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
4.13 ERISA Not Applicable. The Borrower is not subject to any requirements
of the Employee Retirement Income Security Act of 1974 as amended from time to
time, or any rules, regulations, rulings or interpretations adopted by the
Internal Revenue Service or the Department of Labor thereunder.
5. Affirmative Covenants.
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The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will do, and if necessary cause to be
done, each and all of the following:
5.1 Taxes, Insurance, Existence, Regulations, Property, etc. At all times
(a) pay when due all taxes and governmental charges of every kind upon it or
against its income, profits or
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Property, unless and only to the extent that the same shall be contested in good
faith and reserves which are adequate under Generally Accepted Accounting
Principles have been established therefor, or unless such failure to pay could
not reasonably be expected to have a Material Adverse Effect; (b) do all things
necessary to preserve its existence, qualifications, rights and franchises in
all States where such qualification is necessary or desirable, except where
failure to obtain the same could not reasonably be expected to have a Material
Adverse Effect; (c) comply with all applicable Legal Requirements in respect of
the conduct of its business and the ownership of its Property except where
failure to so comply could not reasonably be expected to have a Material Adverse
Effect; and (d) cause its Property to be protected, maintained and kept in good
repair (reasonable wear and tear excepted) and make all replacements and
additions to its Property as may be reasonably necessary to conduct its
business.
5.2 Financial Statements and Information. Furnish to the Agent each of the
following: (a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, Annual Audited Financial Statements of
the Borrower (which shall include an unaudited statement of Funds From
Operations); (b) as soon as available and in any event within 45 days after the
end of each quarter (except the last quarter) of each fiscal year of the
Borrower, Quarterly Unaudited Financial Statements of the Borrower (which shall
include a statement of Funds From Operations); (c) concurrently with the
financial statements provided for in Subsections 5.2(a) and (b) hereof, an
Officer's Certificate, together with such schedules, computations and other
information (including, without limitation, if provided to Borrower information
as to Unconsolidated Affiliates of the Borrower), in reasonable detail, as may
be required by the Agent to demonstrate compliance with the covenants set forth
herein or reflecting any non-compliance therewith as of the applicable date, all
certified as true, correct and complete by a managing director, vice president
or controller of Borrower's REIT Manager; (d) promptly after the filing thereof,
all reports to or filings made by the Borrower or any of its Subsidiaries with
the Securities and Exchange Commission, including, without limitation,
registration statements and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents); (e) within two (2) Business Days after the receipt thereof, a copy
of the notification to the Borrower of the Borrower's S&P Rating or Moody's
Rating, or change therein, and (f) such other information relating to the
financial condition and affairs of the Borrower as from time to time may be
reasonably requested by any Lender. The Agent will send to each Lender the
information received by the Agent pursuant to this Section 5.2 promptly after
the receipt thereof by Agent.
5.3 Financial Tests. Have and maintain, on a consolidated basis in
accordance with Generally Accepted Accounting Principles: (a) a Debt to Tangible
Net Worth Ratio no greater than 1.0:1.0 at all times; (b) a Coverage Ratio of
not less than 2.0:1.0 at all times; (c) a Fixed Charge Coverage Ratio of not
less than 1.4:1.0 at all times; (d) a Tangible Net Worth of at least
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One Billion Dollars ($1,000,000,000.00) at all times; and (e) a Debt to Total
Asset Value Ratio no greater than (i) fifty-five percent (55%) during the first
year after the Conversion Date, if any, and (ii) fifty percent (50%) thereafter.
5.4 Inspection. In order to permit the Agent to ascertain compliance with
the Credit Documents, during normal business hours permit the Agent to inspect
its Property, to examine its files, books and records and make and take away
copies thereof, and to discuss its affairs with its officers and accountants,
all at such times and intervals and to such extent as a Lender may reasonably
desire.
5.5 Further Assurances. Promptly execute and deliver any and all other and
further instruments which may be requested by the Agent to cure any defect in
the execution and delivery of any Credit Document or more fully to describe
particular aspects of the Borrower's agreements set forth in the Credit
Documents or so intended to be.
5.6 Books and Records. Maintain books of record and account in accordance
with Generally Accepted Accounting Principles.
5.7 Insurance. Maintain insurance with such insurers, on such of its
properties, in such amounts and against such risks as is consistent with
insurance maintained by businesses of comparable type and size in the industry,
and furnish the Agent satisfactory evidence thereof promptly upon request.
5.8 Notice of Certain Matters. Notify the Agent promptly upon acquiring
knowledge of the occurrence of any of the following: the institution or
threatened institution of any lawsuit or administrative proceeding affecting the
Borrower in which the claim exceeds $250,000.00 and if determined adversely
could have a Material Adverse Effect; when the Borrower believes that there has
been a Material Adverse Change; or the occurrence of any Event of Default or any
Default. The Borrower will notify the Agent in writing at least thirty (30)
Business Days prior to the date that the Borrower changes its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records.
5.9 Use of Proceeds. The proceeds of the Loans will be used for general
business purposes including (without limitation) for acquisition of multi-family
real estate properties, for the development and enhancement of multi-family real
estate properties, for investment in convertible mortgages issued by Homestead
Village Properties Incorporated or for the costs of construction of multi-family
real estate projects owned or to be acquired by the Borrower.
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Notwithstanding the foregoing, none of the proceeds of the Loans will be used to
finance, fund or complete any hostile acquisition of any Person.
5.10 Expenses of and Claims Against the Agent and the Lenders. To the
extent not prohibited by applicable law, the Borrower will pay all reasonable
costs and expenses incurred to third parties and reimburse the Agent and each
Lender, as the case may be, for any and all reasonable expenditures of every
character incurred or expended from time to time, in connection with (a)
regardless of whether a Default or Event of Default shall have occurred, the
Agent's preparation, negotiation and completion of the Credit Documents, and (b)
during the continuance of an Event of Default, all costs and expenses relating
to the Agent's and such Lender's exercising any of its rights and remedies under
this or any other Credit Document, including, without limitation, attorneys'
fees, legal expenses, and court costs; provided, that no rights or option
granted by the Borrower to the Agent or any Lender or otherwise arising pursuant
to any provision of this or any other instrument shall be deemed to impose or
admit a duty on the Agent or any Lender to supervise, monitor or control any
aspect of the character or condition of any property or any operations conducted
in connection with it for the benefit of the Borrower or any other person or
entity other than the Agent or such Lender. Notwithstanding the foregoing, the
Borrower shall not be charged with any cost or expense incurred by the Agent or
any Lender relating to disputes or claims among or between the Agent, the
Lenders, or any of them unless during the continuance of an Event of Default and
related to details of enforcement of the Lenders' rights under the Credit
Documents.
5.11 Legal Compliance; Indemnification. The Borrower shall operate its
Property and businesses in full compliance with all Legal Requirements. It shall
not constitute an Event of Default if there is a failure to comply with any
Legal Requirement which failure could not reasonably be expected to have a
Material Adverse Effect. The Borrower shall indemnify the Agent and each Lender,
their directors, officers, employees and shareholders (the "Indemnified
Parties") for and defend and hold the Indemnified Parties harmless against any
and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without
limitation, interest, penalties, attorneys' fees, and amounts paid in
settlement) threatened or incurred by reason of, arising out of or in any way
related to any failure of the Borrower to so comply with the provisions of any
Legal Requirement, this Agreement or the other Credit Documents, and any and all
matters arising out of any act, omission, event or circumstance, regardless of
whether the act, omission, event or circumstance constituted a violation of any
such Legal Requirement, this Agreement or the other Credit Documents at the time
of its existence or occurrence. THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH
LENDER PURSUANT TO THIS SECTION REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS,
CIRCUMSTANCES OR
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CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART
BY THE AGENT'S OR SUCH LENDER'S NEGLIGENCE (SIMPLE, BUT NOT GROSS NEGLIGENCE).
The Borrower will comply with all Legal Requirements to maintain, and will at
all times qualify as and maintain, its status as a real estate investment trust
under Section 856(c)(1) of the Code.
5.12 Borrower's Performance. If the Borrower should fail to comply with
any of the agreements, covenants or obligations of the Borrower under this
Agreement or any other Credit Document, then the Agent (in the Borrower's name
or in Agent's name) may perform them or cause them to be performed for the
account of the Borrower and at the Borrower's sole expense, but shall not be
obligated to do so. Any and all expenses thus incurred or paid by the Agent and
by any Lender shall be the Borrower's demand obligations to the Agent or such
Lender and shall bear interest from the date of demand therefor until the date
that the Borrower repays it to the Agent or the applicable Lender at the Past
Due Rate. Upon making any such payment or incurring any such expense, the Agent
or the applicable Lender shall be fully subrogated to all of the rights of the
Person receiving such payment. Any amounts owing by the Borrower to the Agent or
any Lender pursuant to this provision or any other provision of this Agreement
shall automatically and without notice be secured by any collateral provided by
the Credit Documents. The amount and nature of any such expense and the time
when paid shall, absent manifest error, be fully established by the affidavit of
the Agent or the applicable Lender or any of the Agent's or the applicable
Lender's officers or agents.
5.13 Professional Services. Promptly upon the Agent's request to satisfy
itself or the request of any Lender, the Borrower, at the Borrower's sole cost
and expense, provided, however, that so long as no Event of Default has occurred
and is continuing, such items will not be at the Borrower's expense, shall: (a)
allow an inspection and/or appraisal of the Borrower's Property to be made by a
Person approved by the Agent in its sole discretion; and (b) if the Agent
believes that an Event of Default has occurred or is about to occur, cause to be
conducted or prepared any other written report, summary, opinion, inspection,
review, survey, audit or other professional service relating to the Borrower's
Property or any operations in connection with it (all as designated in the
Agent's request), including, without limitation, any accounting, auctioneering,
architectural, consulting, engineering, design, legal, management, pest control,
surveying, title abstracting or other technical, managerial or professional
service relating to such property or its operations.
5.14 Capital Adequacy. (a) If after the date of this Agreement, the Agent
or any Lender shall have determined that the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy of general
applicability, or any change therein, or any change in the
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interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or any Lender with any request or directive
regarding capital adequacy of general applicability (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Agent's or any Lender's capital as a consequence of its obligations hereunder to
a level below that which the Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent's or
such Lender's policies with respect to capital adequacy) by an amount deemed by
the Agent or such Lender to be material, then from time to time, the Borrower
shall pay to the Agent or such Lender such additional amount or amounts as will
compensate the Agent or such Lender for such reduction.
(b) A certificate of the Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate the Agent or such Lender
as specified in Section 5.14(a) hereof and making reference to the applicable
law, rule or regulation shall be delivered as soon as practicable to the
Borrower and shall be prima facie evidence thereof. The Borrower shall pay the
Agent or such Lender the amount shown as due on any such certificate within
fourteen (14) Business Days after the Agent or such Lender delivers such
certificate. In preparing such certificate, the Agent or such Lender may employ
such assumptions and allocations of costs and expenses as it shall in good faith
deem reasonable and may use any reasonable averaging and attribution method.
5.15 Property Pool. The Borrower will at all times own fee simple title to
real estate properties that are not mortgaged, pledged, hypothecated, or
encumbered in any manner other than Permitted Encumbrances (the "Pool") with an
aggregate Historical Value (plus all cash balances held by the Borrower if and
whenever the unpaid balance of the Loans is zero) of at least one hundred
seventy-five percent (175%) of the Borrower's unsecured Indebtedness outstanding
from time to time, with the following characteristics: (a) the Pool must include
income producing operating properties (the "Operating Sub-Pool") with an
aggregate Operating Sub-Pool Value of at least one hundred fifty percent (150%)
of the Borrower's unsecured Indebtedness outstanding from time to time, (b) each
individual property in the Operating Sub-Pool must have an occupancy level of at
least eighty percent (80%), where such occupancy level is the average of the
actual occupancy level for each of the immediately preceding three (3) months,
(c) any properties added to the Operating Sub-Pool after the date of this
Agreement must be multifamily properties, and (d) the Borrower must have
received from third party independent environmental consultants, written
assessments for each property in, or to be added to, the Operating Sub-Pool that
do not disclose any material environmental conditions or risks related to such
properties. If requested by the Agent and\or the Co-Agent, the Borrower will
provide to the Agent and the Co-Agent
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written assessments from third party independent environmental consultants for
all real estate properties acquired after the date of this Agreement. If the
Agent determines that there are material environmental conditions existing on or
risks to such properties, the properties will be excluded from the Pool.
6. Negative Covenants.
The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will not do any of the following:
6.1 Indebtedness. Create, incur, suffer or permit to exist, or assume or
guarantee, directly or indirectly, contingently or otherwise, or become or
remain liable with respect to any Indebtedness with a final maturity of five (5)
years or less (not including any renewal or extension options) in excess of
$400,000,000.00 in the aggregate, in all cases whether direct, indirect,
absolute, contingent or otherwise; except (a) Indebtedness incurred by Borrower
which has an S&P Rating of BBB- or better and a Moody's Rating of Baa3 or better
at the time of issuance, (b) Non-recourse Debt, (c) Indebtedness in the final
five (5) years or less of a full payment amortization schedule providing for
periodic payments over the remaining life where no more than fifty percent (50%)
of the original loan amount is amortized in said final five (5) year or less
period, (d) credit enhancement provided by or on behalf of the Borrower for tax
exempt bonds if said credit enhancement has an expiration date or a maturity
date of one (1) year or more, and (e) Indebtedness secured by multifamily real
estate properties and assumed by Borrower in connection with the purchase of
said properties by Borrower (but not incurred or assumed in anticipation of such
purchase) not to exceed $50,000,000.00 in the aggregate. For the purposes of the
foregoing calculation under (c) above, simultaneously issued tranches of
Indebtedness under the same indenture shall be combined and treated as a single
debt issuance.
6.2 Mergers, Consolidations and Acquisitions of Assets. In any single
transaction or series of related transactions, directly or indirectly: (a)
liquidate or dissolve; (b) other than a merger or consolidation in which the
Borrower is the surviving entity and the value of the assets of the other party
to such merger or consolidation is less than twenty percent (20%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such merger or consolidation, be
a party to any merger or consolidation; (c) other than an acquisition in which
the Borrower acquires all or substantially all of the assets of another Person
and the value of the assets acquired is less than twenty percent (20%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such acquisition, acquire all or
substantially all of the assets of any Person; or (d) except for periodic sales
not exceeding twenty-five percent
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(25%) of the Borrower's total assets on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) in any calendar year, or sales or
leases executed in the ordinary course of business, sell, convey or lease all or
any substantial part of its assets.
6.3 Redemption. At any time redeem, retire or otherwise acquire, directly
or indirectly, any shares of its capital stock if such action would cause the
Borrower to not be in compliance with this Agreement.
6.4 Nature of Business; Management. Change the nature of its business or
enter into any business which is substantially different from the business in
which it is presently engaged; amend the Borrower's agreements with Borrower's
REIT Manager if such amendments would materially increase amounts payable
thereunder to Borrower's REIT Manager or which would violate any provision of
the Credit Documents; or terminate or allow the termination (whether
voluntary or involuntary) of the Borrower's agreements with Borrower's REIT
Manager unless within thirty (30) days thereafter Borrower's REIT Manager is
replaced by an advisor or management team pursuant to an agreement which is in
compliance with the requirements of the North American Security Administrators
Association's Statement of Policy for Real Estate Investment Trusts and which is
otherwise satisfactory to the Agent and the Majority Lenders.
6.5 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director, or holder of more than five percent (5%)
(based on voting rights) of the issued and outstanding capital stock of the
Borrower (or any Affiliate of the Borrower), unless the same is upon terms
substantially similar to those obtainable from qualified wholly unrelated
sources, or complies with the requirements of the Statement of Policy for Real
Estate Investment Trusts promulgated by the North American Security
Administrators Association, as amended from time to time. Agent and each Lender
hereby consent to (a) the contribution to Homestead Village Properties
Incorporated of all of the Homestead Village assets owned by the Borrower in
exchange for common stock and warrants to be transferred to the Borrower's
shareholders promptly after receipt by the Borrower, and (b) the retention by
Borrower of mortgages convertible into common stock of Homestead Village
Properties Incorporated securing amounts funded by the Borrower (irrespective of
the face amount of the convertible mortgages) which do not exceed
$230,000,000.00, in each case to the extent not on terms substantially similar
to those obtainable from unrelated sources.
6.6 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or have any investment in, any Person, or
make any commitment to make any such extension of credit or investment, except
(a) travel advances in the ordinary course of business to officers, employees
and agents; (b) readily marketable securities issued or fully
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guaranteed by the United States of America (or investments or money market
accounts consisting of the same); (c) commercial paper rated "Prime 1" by
Moody's Investors Service, Inc. or A-1 by Standard and Poor's Corporation (or
investments or money market accounts consisting of the same); (d) certificates
of deposit or repurchase certificates issued by financial institutions
acceptable to the Agent (or investments or money market accounts consisting of
the same), all of the foregoing b, c and d not having a maturity of more than
one (1) year from the date of issuance thereof; (e) securities received in
settlement of liabilities created in the ordinary course of business, or
securities in Persons engaged primarily in the business of investment in and
operation of commercial real estate properties received in exchange for Property
sold to such Persons so long as the market value of such securities does not
exceed ten percent (10%) of the value of the assets of the Borrower on a
consolidated basis (in accordance with Generally Accepted Accounting Principles)
prior to such investment; (f) investments in Subsidiaries through which the
Borrower invests in real estate assets and acquisition and/or construction loans
encumbered by Property of or to be acquired by the Borrower; (g) the Borrower's
existing forty percent (40%) joint venture interest investment in KP/M PTA Joint
Venture I and investments in Unconsolidated Affiliates that are engaged
primarily in the business of investment in and operation of multifamily real
estate properties, so long as the aggregate amount of such investments described
in this (g) does not exceed fifteen percent (15%) of the value of the assets of
the Borrower on a consolidated basis (in accordance with Generally Accepted
Accounting Principles) after giving effect to such investments; (h) equity
investments or capital contributions in, and loans, advances, and extensions of
credit to, PTR Development Services, so long as (1) the equity investments or
capital contributions do not exceed $10,000,000.00, (2) the loans, advances and
extensions of credit are secured by valid and enforceable first priority liens
on real estate, (3) the Borrower shall at all times beneficially own at least
ninety percent (90%) of the economic interest in PTR Development Services, and
(4) the financial condition and results of operations of PTR Development
Services shall be consolidated with those of the Borrower for purposes of the
Borrower's financial statements; (i) loans, advances, and extensions of credit
to Persons (who are not Affiliates of the Borrower) secured by valid and
enforceable first priority liens on real estate for the purpose of acquiring and
developing multifamily properties for eventual ownership by, or to be acquired
by, the Borrower prior to, or within a reasonable period of time consistent with
a business purpose after, the completion of construction or development of such
multifamily property; (j) investments permitted under Section 6.2 of this
Agreement, and (k) loans, advances and extensions of credit to Homestead Village
Properties Incorporated secured by mortgages convertible into common stock
ownership of Homestead Village Properties Incorporated, so long as the aggregate
amount which is funded by the Borrower (irrespective of the face amount of the
convertible mortgages) does not exceed the lesser of $230,000,000.00 or 20% of
the value of the assets of the Borrower on a consolidated basis (in accordance
with Generally Accepted Accounting
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Principles). The Borrower will not mortgage, pledge, hypothecate or encumber in
any manner the loans, advances or extensions of credit made pursuant to Sections
6.6(h), (i) or (k).
6.7 Limiting Agreements. Without affecting the provisions of Section 5.15
of this Agreement, but cumulative of and in addition thereto:
(a) Except for the Indenture dated February 1, 1994 between the Borrower
and Morgan Guaranty Trust Company of New York, as Trustee, neither Borrower nor
any of its Subsidiaries has entered into, and after the date hereof, neither
Borrower nor any of its Subsidiaries shall enter into, any agreement, instrument
or transaction which has or may have the effect of prohibiting or limiting
Borrower's ability to pledge to Agent as security for the Loans assets now or
hereafter owned by Borrower up to the value described in this Section 6.7.
Borrower shall take, and shall cause its Subsidiaries to take, such actions as
are necessary (including, without limitation, otherwise limiting the amount of
secured indebtedness of the Borrower and its Subsidiaries) to preserve the right
and ability of Borrower to pledge assets up to the value described in this
Section 6.7 as security for the Loans without any such pledge after the date
hereof causing or permitting the acceleration (after the giving of notice or the
passage of time, or otherwise) of any other indebtedness of Borrower or any of
its Subsidiaries. For the purpose of this paragraph, the Historical Value of the
assets to be kept available by Borrower to be pledged as security for the Loans
shall be assets having an aggregate Historical Value of not less than one
hundred thirty-three percent (133%) of the Commitment; provided however that the
foregoing shall not be construed as a maximum amount of collateral which could
be required or accepted by the Lenders under any other agreement or in any
proceeding.
(b) Borrower shall, upon demand, provide to the Lenders such evidence as
the Lenders may reasonably require to evidence Borrower's compliance with this
covenant, which evidence shall include, without limitation (i) copies of any
agreements or instruments which would in any way restrict or limit Borrower's
ability to pledge assets as security for indebtedness, or which provide for the
occurrence of a default (after the giving of notice or the passage of time, or
otherwise) if assets are pledged in the future as security for indebtedness of
the Borrower or any of its Subsidiaries, (ii) a summary of the total debt of
Borrower and its Subsidiaries, and (iii) a summary of any of such debt which is
secured by any mortgage, pledge, lien, charge, encumbrance or other security
interest.
(c) Nothing in this covenant shall be construed as an obligation of
Borrower to, or request by the Lenders that Borrower, grant any mortgage, pledge
or security interest in any of its properties.
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6.8 Nature of Assets. (a) In its own name or the name of any of its
Subsidiaries, own or lease, directly or indirectly, land not improved for
multifamily use, other than land that is either under development or planned for
commencement of development within one (1) year from the date it was acquired,
with an aggregate Historical Value in excess of ten percent (10%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles), or (b) allow the Historical Value of
the income producing properties owned or leased, directly or indirectly, by the
Borrower and its Subsidiaries which are not multifamily properties and not
corporate affordable or extended stay lodging properties (such as Homestead
Village or the related convertible mortgages), to exceed five percent (5%) of
the value of the assets of the Borrower on a consolidated basis (in accordance
with Generally Accepted Accounting Principles).
7. Events of Default and Remedies.
7.1. Events of Default. If any of the following events shall occur,
then, as to the events described in Sections 7.1(b), (c), and (d), if the event
has not been waived, cured or remedied within twenty (20) days after the Agent
gives the Borrower notice of such event, at any time thereafter, and as to all
of the other events described herein, at any time, the Agent may do any or all
of the following: (1) without notice to the Borrower, declare the Notes to be,
and thereupon the Notes shall forthwith become, immediately due and payable,
together with all accrued interest thereon, without notice of any kind, notice
of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to the
Borrower, terminate the Commitment; (3) exercise, as may any other Lender, its
rights of offset against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is hereby granted by
the Borrower to the Agent and each Lender; and (4) exercise any and all other
rights pursuant to the Credit Documents:
(a) The Borrower shall fail to pay or prepay any principal of or interest
on the Notes or any fee or any other obligation hereunder within five (5) days
after it was due; or
(b) The Borrower shall (i) fail to pay when due, or within any applicable
period of grace, any principal of or interest on any other Indebtedness other
than Non-recourse Debt or Disqualified Stock in excess of $10,000,000.00 in
principal amount, or Non-recourse Debt in excess of $25,000,000.00 in principal
amount; or (ii) fail to comply with Section 1004 of the Indenture dated February
1, 1994 between the Borrower and Morgan
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Guaranty Trust Company of New York, as Trustee, as said Section 1004 may be
amended with the consent of the Majority Lenders; or
(c) Any written representation or warranty made in any Credit Document by
or on behalf of the Borrower, when taken as a whole shall prove to have been
incorrect, false or misleading in any material respect; or
(d) Default shall occur in the punctual and complete performance of any
covenant of the Borrower or any other Person other than the Agent or the Lenders
contained in any Credit Document not specifically set forth in this Section; or
(e) A final judgment or judgments in the aggregate for the payment of money
in excess of $5,000,000.00 shall be rendered against the Borrower and the same
shall remain undischarged for a period of thirty (30) days during which
execution shall not be effectively stayed; or
(f) Any court shall finally determine, that the Agent or any Lender does
not have a valid Lien as provided for herein on any security which may have been
provided to the Agent or any Lender by the Borrower under the Credit Documents,
or such other Person; or
(g) Any order shall be entered in any proceeding against the Borrower
decreeing the dissolution, liquidation or split-up thereof, and such order shall
remain in effect for more than thirty (30) days; or
(h) The Borrower shall make a general assignment for the benefit of
creditors or shall petition or apply to any tribunal for the appointment of a
trustee, custodian, receiver or liquidator of all or any substantial part of its
business, estate or assets or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in
effect; or
(i) Any such petition or application shall be filed or any such proceeding
shall be commenced against the Borrower and the Borrower by any act or omission
shall indicate approval thereof, consent thereto or acquiescence therein, or an
order shall be entered appointing a trustee, custodian, receiver or liquidator
of all or any substantial part of the assets of the Borrower or granting relief
to the Borrower or approving the petition
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in any such proceeding, and such order shall remain in effect for more than
ninety (90) days; or
(j) The Borrower shall fail generally to pay its debts as they become due
or suffer any writ of attachment or execution or any similar process to be
issued or levied against it or any substantial part of its Property which is not
released, stayed, bonded or vacated within thirty (30) days after its issue or
levy; or
(k) The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its Property, with intent to hinder, delay or
defraud its creditors or any of them, or made or suffered a transfer of any of
its Property which may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law; or shall have made any transfer of its Property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid.
7.2 Remedies Cumulative. No remedy, right or power conferred upon
the Agent or the Lenders is intended to be exclusive of any other remedy, right
or power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
8. The Agent.
8.1 Appointment, Powers and Immunities. (a) Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Credit Documents with such powers as are specifically delegated
to the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent (i) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents, and shall not by reason of this Agreement or any other
Credit Document be a trustee for any Lender; (ii) shall not be responsible to
any Lender for any recitals, statements, representations or warranties contained
in this Agreement or any other Credit Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this
Agreement or any other Credit Document or any other document referred to or
provided for herein or therein or any property covered thereby or for any
failure by any Party or any other Person to perform any of its obligations
hereunder or thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (iii) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or any other
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Credit Document except to the extent requested by the Majority Lenders; (iv)
SHALL NOT BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY
OTHER DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS
OWN NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to recognize any
agreement among or between the Borrower, the Agent, and any Lender other than
this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and provisions
thereof; (vi) shall not be charged with notice or knowledge of any fact or
information not herein set out or provided to the Agent in accordance with the
terms of this Agreement or any other Credit Document; (vii) shall not be
responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (viii) shall not be responsible for
the acts or edicts of any Governmental Authority. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
(b) Without the prior written consent of Agent and all of the Lenders,
Agent shall not (i) modify or amend in any respect whatsoever the interest rate
provisions of the Credit Documents, (ii) increase the Commitment above
$350,000,000.00, (iii) extend the Maturity Date other than in accordance with
the express provisions of the Credit Documents, (iv) extend or reduce the due
date for or the amount of the scheduled payments of principal or interest on the
Loans or the Fee, (v) amend the definition of Majority Lenders or any
requirement that certain actions be taken only with the consent of a certain
number of the Lenders, or (vi) amend Section 5.15 of this Agreement. From time
to time upon Agent's request, each Lender shall execute and deliver such
documents and instruments as may be reasonably necessary to enable Agent to
effectively administer and service the Loan in its capacity as lead lender and
servicer and in the manner contemplated by the provisions of this Agreement.
(c) All information provided to the Agent under or pursuant to the Credit
Documents, and all rights of the Agent to receive or request information, or to
inspect information or Property, shall be by the Agent on behalf of the Lenders.
If any Lender requests that it be able to receive or request such information,
or make such inspections, in its own right rather than through the Agent, the
Borrower will cooperate with the Agent and such Lender in order to obtain such
information or make such inspection as such Lender may reasonably require.
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(d) The Borrower shall be entitled to rely upon a written notice or a
written response from the Agent as being pursuant to concurrence or consent of
the Majority Lenders unless otherwise expressly stated in the Agent's notice or
response.
8.2 Reliance. The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telecopy, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall not be required in any way to determine the identity or authority of
any Person delivering or executing the same. As to any matters not expressly
provided for by this Agreement or any other Credit Document, the Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and thereunder in accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. If any order, writ, judgment or decree shall be made or entered by any
court affecting the rights, duties and obligations of the Agent under this
Agreement or any other Credit Document, then and in any of such events the Agent
is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant
Credit Document or otherwise; and if the Agent complies with any such order,
writ, judgment or decree, then it shall not be liable to any Lender or to any
other Person by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
8.3 Defaults. The Agent shall not be deemed to have constructive
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans) unless it has received notice from a Lender
or the Borrower specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default, or whenever the Agent has actual knowledge of the
occurrence of a Default, the Agent shall give prompt written notice thereof to
the Lenders (and shall give each Lender prompt notice of each such non-payment).
The Agent shall (subject to Section 8.7 hereof) take such action with respect to
such Default as shall be directed by the Majority Lenders and within its rights
under the Credit Documents and at law or in equity, provided that, unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
permitted hereby with respect to such Default as it shall deem advisable in the
best interests of the Lenders and within its rights under the Credit Documents
in order to preserve, protect or enhance the collectibility of the Loans, at law
or in equity. Provided, however, that if there is an occurrence of an Event of
Default, then in no event or under any circumstances shall any of the actions
described in Section 8.1(b)(i) through (vi) of
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this Agreement be taken, without in each instance the written consent of Agent
and all of the Lenders.
8.4 Rights as a Lender. With respect to the Commitment and the Loans
made, Agent, in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not acting in its agency capacity, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may (without having to account therefor to any
other Lender) as a Lender, and to the same extent as any other Lender, accept
deposits from, lend money to and generally engage in any kind of banking, trust,
letter of credit, agency or other business with the Borrower (and any of its
Affiliates) as if it were not acting as the Agent but solely as a Lender. The
Agent may accept fees and other consideration from the Borrower (in addition to
the fees heretofore agreed to between the Borrower and the Agent) for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
8.5 Indemnification. The Lenders agree to indemnify the Agent, its
officers, directors, agents and Affiliates, ratably in accordance with each
Lender's respective Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document or any other documents
contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby (including, without limitation, interest,
penalties, reasonable attorneys' fees and amounts paid in settlement in
accordance with the terms of this Section 8, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, INCLUDING BUT NOT
LIMITED TO THE NEGLIGENCE OF THE AGENT, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified, or from the Agent's default
in the express obligations of the Agent to the Lenders provided for in this
Agreement. The obligations of the Lenders under this Section 8.5 shall survive
the termination of this Agreement and the repayment of the Obligations.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has received current financial information with respect to the Borrower and that
it has, independently and without reliance on the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and decision to enter
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into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Credit Documents. The Agent shall not be required to keep itself informed
as to the performance or observance by any Party of this Agreement or any of the
other Credit Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of the Borrower or any Party
except as specifically required by the Credit Documents. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder or the other Credit Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
the Borrower or any other Party (or any of their affiliates) which may come into
the possession of the Agent. Each Lender assumes all risk of loss in connection
with its Percentage in the Loans to the full extent of its Percentage therein.
The Agent assumes all risk of loss in connection with its Percentage in the
Loans to the full extent of its Percentage therein.
8.7 Failure to Act. Except for action expressly required of the Agent, as
the case may be, hereunder, or under the other Credit Documents, the Agent shall
in all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction by the
Lenders of their indemnification obligations under Section 8.5 hereof against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
8.8 Resignation of Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, (i)
the Majority Lenders without the consent of the Borrower shall have the right to
appoint a successor Agent so long as such successor Agent is also a Lender at
the time of such appointment and (ii) the Majority Lenders shall have the right
to appoint a successor Agent that is not a Lender at the time of such
appointment so long as the Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, and with the consent of the Borrower which
shall not be unreasonably withheld, appoint a successor Agent. Any successor
Agent shall be a bank which has an office in the United States and a combined
capital and surplus of at least $250,000,000.00. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be
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discharged from its duties and obligations as Agent thereafter arising hereunder
and under any other Credit Documents, but shall not be discharged from any
liabilities for its actions as Agent prior to the date of discharge. Such
successor Agent shall promptly specify by notice to the Borrower its principal
office referred to in Section 2.1 and Section 2.3 hereof. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 8 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent.
8.9 No Partnership. Neither the execution and delivery of this Agreement
nor any of the other Credit Documents nor any interest the Lenders, the Agent or
any of them may now or hereafter have in all or any part of the Obligations
shall create or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the Agent. The
relationship between the Lenders, on the one hand, and the Agent, on the other,
is and shall be that of principals and agent only, and nothing in this Agreement
or any of the other Credit Documents shall be construed to constitute the Agent
as trustee or other fiduciary for any Lender or to impose on the Agent any duty,
responsibility or obligation other than those expressly provided for herein and
therein.
9. Renewal and Extension.
Neither the Agent nor any Lenders have any agreement or obligation to
extend or renew the Revolving Credit Termination Date. But in the event such an
extension is requested by the Borrower and any Lender decides to consider such
renewal and extension request, such request and consideration will be governed
by the following terms and conditions:
9.1 Procedure for Consideration of Renewal and Extension Requests.
(a) The Borrower may request the Agent and the Lenders to extend the
current Revolving Credit Termination Date by successive one (1) year intervals
by executing and delivering to the Agent a written request for extension (the
"Extension Request") at least seventy-five (75) days (but not more than ninety
(90) days) prior to the Determination Date. If all of the Lenders shall have
notified the Agent on or prior to the date which is forty-five (45) days prior
to the Determination Date that they accept such Extension Request, the Revolving
Credit Termination Date shall be extended for one (1) year. If any Lender shall
not have notified Agent on or prior to the date which is forty-five (45) days
prior to the Determination Date that it accepts such Extension Request, the
Revolving Credit Termination Date shall not be extended. The Agent shall
promptly notify the Borrower whether the Extension Request has been accepted or
rejected
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as well as which Lender or Lenders rejected the Borrower's Extension Request
(each such Lender a "Rejecting Lender").
(b) Notwithstanding the preceding subsection (a), within thirty (30) days
after notification from the Agent that the Extension Request has been rejected
(a "Notice of Rejection"), and provided that the aggregate amount of Lender
Commitments of the Rejecting Lenders does not exceed twenty percent (20%) of the
Commitment, the Borrower may either (i) demand that the Rejecting Lender, and
upon such demand the Rejecting Lender shall promptly, assign its Lender
Commitment to another financial institution subject to and in accordance with
the provisions of Section 10.5 of this Agreement for a purchase price equal to
the unpaid balance of principal, accrued interest, the unpaid balance of the Fee
and expenses owing to the Rejecting Lender pursuant to this Agreement, or (ii)
pay to the Rejecting Lender the unpaid balance of principal, accrued interest,
the unpaid balance of the Fee and expenses owing to the Rejecting Lender
pursuant to this Agreement, whereupon the Rejecting Lender shall no longer be a
party to this Agreement or have any rights or obligations hereunder or under any
other Credit Documents, and the Commitment shall immediately and permanently be
reduced by an amount equal to the Lender Commitment of the Rejecting Lender. If
all Rejecting Lenders have either assigned their Lender Commitments to other
financial institutions as contemplated by the preceding clause (i) or have been
paid the amounts specified in the preceding clause (ii), then the Borrower's
Extension Request which was initially rejected shall be deemed to have been
granted and accordingly the Revolving Credit Termination Date shall be extended
by one (1) year, otherwise the Revolving Credit Termination Date shall not be
extended. If the aggregate of Lender Commitments of the Rejecting Lenders
exceeds twenty percent (20%) of the Commitment, the Revolving Credit Termination
Date shall not be extended.
9.2 Conditions to Renewal and Extension. Any agreement of the Lenders to
extend the Revolving Credit Termination Date under Section 9.1 of this Agreement
shall be conditioned upon, among other things, the following terms and
conditions (which shall be in addition to those required by Sections 2.7, 3 and
9.1 of this Agreement):
(a) Execution by the Borrower of a renewal and extension agreement for
each Note in Proper Form.
(b) Such other documents, instruments and items as Agent or any Lender
shall require in its sole discretion.
9.3 No Obligation to Renew and Extend. Notwithstanding the procedures and
terms and conditions for any renewal and extension of the Revolving Credit
Termination Date, neither
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the Agent nor any Lender has any obligation, commitment or present intent to
extend the Revolving Credit Termination Date, and the Revolving Credit
Termination Date may not be extended except in accordance with a written
agreement signed by the Agent, the Lenders, the Borrower and any other Person to
be charged with compliance therewith.
10. Miscellaneous.
10.1 No Waiver, Amendments. No waiver of any Default shall be deemed
to be a waiver of any other Default. No failure to exercise or delay in
exercising any right or power under any Credit Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power preclude any further or other exercise thereof or the exercise of any
other right or power. Except as may be prohibited by Section 8.1 hereof, no
amendment, modification or waiver of any Credit Document shall be effective
unless the same is in writing and signed by the Borrower, the Agent and the
Majority Lenders. No notice to or demand on the Borrower or any other Person
shall entitle the Borrower or any other Person to any other or further notice or
demand in similar or other circumstances.
10.2 Notices. All notices under the Credit Documents shall be in
writing and either (i) delivered against receipt therefor, or (ii) mailed by
registered or certified mail, return receipt requested, in each case addressed
as set forth herein, or to such other address as a party may designate. Notices
shall be deemed to have been given (whether actually received or not) when
delivered (or, if mailed, on the next Business Day). Provided, however, that as
between the Agent and the Lenders and among the Lenders, notice may be given by
telecopy or facsimile effective upon the earlier of actual receipt or
confirmation of receipt by telephone.
10.3 Venue. HARRIS COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO
ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
UNLESS THE AGENT SHALL GIVE ITS PRIOR WRITTEN CONSENT TO A DIFFERENT VENUE. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING ARISING OUT OF ANY OF
THE CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW. THE
BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS
IN THE DISTRICT COURTS OF HARRIS COUNTY, TEXAS,
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OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS,
HOUSTON DIVISION, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THE BORROWER (A) AGREES TO DESIGNATE AND MAINTAIN AN AGENT
FOR SERVICE OF PROCESS IN THE STATE OF TEXAS IN CONNECTION WITH ANY SUCH SUIT,
ACTION OR PROCEEDING AND TO DELIVER TO THE AGENT EVIDENCE THEREOF AND (B)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY NOTICE GIVEN AS PROVIDED FOR IN
THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE
LENDERS TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER
IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE
LAW. THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST THE AGENT OR ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE
DISTRICT COURTS OF HARRIS COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION.
10.4 Choice of Law. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
DOCUMENTS HAVE BEEN NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF TEXAS AND
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS, INCLUDING ALL APPLICABLE FEDERAL LAW, FROM TIME TO TIME
IN FORCE IN THE STATE OF TEXAS.
10.5 Survival; Parties Bound; Successors and Assigns. (a) All
representations, warranties, covenants and agreements made by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
the Credit Documents, shall not be affected by any investigation made by any
Person, and shall bind the Borrower and its successors, trustees, receivers and
assigns and inure to the benefit of the successors and assigns of the Agent and
the Lenders; provided, however, that the Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of the
Agent and all of the Lenders, and any such assignment or transfer without such
consent shall be null and void.
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(b) Subject to Sections 10.5(d) and (e) of this Agreement, a Lender
may assign part of its Lender Commitment to an Eligible Institution so long as
such assignment shall (1) include the voting rights and all other rights and
obligations attributable thereto, and include a written assumption by the
assignee of the assigning Lender's obligations under the Credit Documents, (2)
require the written consent of the Borrower and the Agent, such consent not to
be unreasonably withheld, (3) be in a minimum amount of $15,000,000.00 if
assigned to a Person not already a Lender, (4) not reduce the Lender's Lender
Commitment to an amount less than $15,000,000.00, and (5) include payment to the
Agent by the Lender of a service fee for each assignment equal to $3,000.00.
(c) Subject to Section 10.5(d) and (e) of this Agreement, a Lender
may sell participating interests in any of its Loans to an Eligible Institution
so long as such participation shall (1) limit the voting rights of the
participant, if any, to the ability to vote for changes in the amount of the
Commitment, the interest rate on the Loans, and the Maturity Date, (2) if the
participant is not an Affiliate of the participating Lender, require the written
consent of the Borrower and the Agent, such consent not to be unreasonably
withheld and, if the participant is an Affiliate of the participating Lender,
require written notice to the Agent and the Borrower but not any consent of the
Agent, the Borrower or any other Lender, (3) be in a minimum principal amount of
at least $10,000,000.00 if participated to a Person not already a Lender, and
(4) not reduce the Lender's Lender Commitment which has not been participated to
less than $10,000,000.00. In connection with any sale of a participating
interest made in compliance with this Agreement, (i) the participating Lender
shall continue to be liable for its Lender Commitment and its other obligations
under the Credit Documents, (ii) the Agent, the Borrower and the other Lenders
shall continue to deal solely and directly with the participating Lender in
connection with such Lender's rights and obligations under the Credit Documents,
and (iii) the participant may not require the participating Lender to take or
refrain from taking any action under the Credit Documents that is in conflict
with the terms and provisions of the Credit Documents.
(d) A Lender may assign all or any part of its Loans or its Lender
Commitment to an Affiliate of the Lender with written consent of the Agent and
the Borrower, such consent not to be unreasonably withheld.
(e) Notwithstanding any provision hereof to the contrary, (i) any
Lender may assign and pledge all or any portion of its Lender Commitment and
Loans to a Federal Reserve Bank; provided, however, that any such assignment or
pledge shall not relieve such Lender from its obligations under the Credit
Documents; (ii) the Agent may not assign or participate $30,000,000.00 of its
Lender Commitment to any Person other than an Affiliate of the Agent without the
prior written consent of all of the Lenders and the Borrower; and (iii) TCB may
-51-
<PAGE>
assign, sell or participate all or any portion of the Swing Loan without the
consent of the Agent, the Borrower or any other Lender.
(f) The term of this Agreement shall be until the final maturity of
the Notes and the payment of all amounts due under the Credit Documents.
10.6 Counterparts. This Agreement may be executed in several identical
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
10.7 Usury Not Intended; Refund of Any Excess Payments. It is the intent
of the parties in the execution and performance of this Agreement to contract in
strict compliance with the usury laws of the State of Texas and the United
States of America from time to time in effect. In furtherance thereof, the
Agent, the Lenders and the Borrower stipulate and agree that none of the terms
and provisions contained in this Agreement or the other Credit Documents shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate in excess of the Ceiling Rate and
that for purposes hereof "interest" shall include the aggregate of all charges
which constitute interest under such laws that are contracted for, reserved,
taken, charged or received under this Agreement. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Ceiling Rate, the Borrower, the Agent and the Lenders shall, to the maximum
extent permitted under applicable law, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) "spread" the total amount of
interest throughout the entire contemplated term of the Loans. The provisions of
this paragraph shall control over all other provisions of the Credit Documents
which may be in apparent conflict herewith.
10.8 Captions. The headings and captions appearing in the Credit
Documents have been included solely for convenience and shall not be considered
in construing the Credit Documents.
10.9 Severability. If any provision of any Credit Documents shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
10.10 Disclosures. Every reference in the Credit Documents to disclosures
of the Borrower to the Agent and the Lenders in writing, to the extent that such
references refer to
-52-
<PAGE>
disclosures at or prior to the execution of this Agreement, shall be deemed
strictly to refer only to written disclosures delivered to the Agent and the
Lenders in an orderly manner concurrently with the execution hereof.
10.11 NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS SOLELY TO AMEND, RESTATE AND RESTRUCTURE THE TERMS
OF, AND THE OBLIGATIONS TO THE EXISTING LENDERS OWING UNDER AND IN CONNECTION
WITH, THE ORIGINAL CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS AGREEMENT
NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY
OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
ORIGINAL CREDIT AGREEMENT.
10.12 LIMITATION OF LIABILITY. NO OBLIGATION OR LIABILITY WHATSOEVER OF
THE BORROWER WHICH MAY ARISE AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION
OR LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER CREDIT DOCUMENT
SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF
BE HAD TO THE PRIVATE PROPERTY OF, ANY OF THE BORROWER'S TRUSTEES OR
SHAREHOLDERS REGARDLESS OF WHETHER SUCH OBLIGATION OR LIABILITY IS IN THE NATURE
OF CONTRACT, TORT OR OTHERWISE.
10.13 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
-53-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ James W. Kluber
----------------------------
Name: James W. Kluber
--------------------------
Title: Vice President
-------------------------
Address:
7777 Market Center Avenue
El Paso, Texas 79912
Attention: Secretary
<PAGE>
Lender Commitment: $55,000,000.00 TEXAS COMMERCE BANK
Percentage: 15.714285714% NATIONAL ASSOCIATION,
as Agent and as a Lender
By: /s/ Brian M. Kouns
-----------------------------
Name: Brian M. Kouns
---------------------------
Title: Vice President
--------------------------
Address:
712 Main Street
Houston, Texas 77002
Attention: Manager, Real Estate Group
Telecopy No.: 713-216-7713
Telephone No.: Brian Kouns
713-216-5133
-55-
<PAGE>
Lender Commitment: $55,000,000.00 WELLS FARGO REALTY ADVISORS
Percentage: 15.714285714% FUNDING, INCORPORATED, as
Co-Agent and as a Lender
By: /s/ Mary Ann Kelly
------------------------------
Name: Mary Ann Kelly
---------------------------
Title: Vice President
--------------------------
By: /s/ Patricia A. Forbes
-----------------------------
Name: Patricia A. Forbes
---------------------------
Title: Vice President
--------------------------
Address:
2859 Paces Ferry Road
Suite 1210
Atlanta, Georgia 30339
Attention: Bob Belson
Telecopy No: 770-435-2262
Telephone No. Bob Belson
770-435-3800
-56-
<PAGE>
Lender Commitment: $30,000,000.00 GUARANTY FEDERAL BANK, F.S.B.
Percentage: 8.571428571%
By: /s/ Phyllis Milstead
---------------------------------
Name: Phyllis Milstead
-------------------------------
Title: Vice President
------------------------------
Address:
301 Congress, Suite 1075
Austin, Texas 78701
Attention: Phyllis Milstead
Telecopy No.: 512-320-1041
Telephone No.: Phyllis Milstead
512-320-1007
-57-
<PAGE>
Lender Commitment: $20,000,000.00 NORWEST BANK NEW MEXICO,
Percentage: 5.714285714% NATIONAL ASSOCIATION
By: /s/ Dan Shannon
---------------------------------
Name: Dan Shannon
-------------------------------
Title: President and Managing Officer
------------------------------
Address:
1048 Paseo de Peralta
Santa Fe, New Mexico 87501
Attention: Dan Shannon
Telecopy No.: 505-983-6232
Telephone No.: Dan Shannon
505-984-8500
-58-
<PAGE>
Lender Commitment: $25,000,000.00 COMMERZBANK
Percentage: 7.142857143% AKTIENGESELLSCHAFT, LOS ANGELES
BRANCH
By: /s/ Christian Jagenberg
----------------------------
Name: Christian Jagenberg
--------------------------
Title: SVP and Manager
-------------------------
By: /s/ Steven F. Larsen
----------------------------
Name: Steven F. Larsen
--------------------------
Title: Vice President
-------------------------
Address:
660 S. Figueroa, Suite 1450
Los Angeles, California 90017
Attention: Steven F. Larsen
Telecopy No.: 213-623-0039
Telephone No.: Steven F. Larsen
213-623-8223
-59-
<PAGE>
Lender Commitment: $30,000,000.00 BANK OF AMERICA NATIONAL TRUST
Percentage: 8.571428571% AND SAVINGS ASSOCIATION
By: /s/ Kelly M. Allred
---------------------------
Name: Kelly M. Allred
-------------------------
Title: Vice President
------------------------
Address:
555 South Flower Street
6th Floor
Los Angeles, California 90071
Attention: Kelly M. Allred
Telecopy No.: 213-228-5389
Telephone No.: Kelly M. Allred
213-228-4027
-60-
<PAGE>
Lender Commitment: $30,000,000.00 FLEET NATIONAL BANK
Percentage: 8.571428571%
By: /s/ Mark E. Dalton
---------------------------
Name: Mark E. Dalton
-------------------------
Title: Vice President
------------------------
Address:
111 Westminster, Suite 800
Providence, Rhode Island 02903
Attention: Mark Dalton
Telecopy No: 401-278-5166
Telephone No. Mark Dalton
401-278-5605
-61-
<PAGE>
Lender Commitment: $20,000,000.00 THE NIPPON CREDIT BANK, LTD.
Percentage: 5.714285714%
By: /s/ Neil J. Crawford
-----------------------------
Name: Neil J. Crawford
---------------------------
Title: Vice President
--------------------------
Address:
245 Park Avenue
30th Floor
New York, New York 10167
Attention: Neil Crawford
Telecopy No: 212-490-3895
Telephone No. Neil Crawford
212-984-1319
-62-
<PAGE>
Lender Commitment: $22,500,000.00 BANK HAPOALIM, B.M.,
Percentage: 6.428571429% Los Angeles Branch
By: /s/ Kalman Schiff
-----------------------------
Name: Kalman Schiff
---------------------------
Title: First Vice President
--------------------------
By: /s/ Lori Lake
-----------------------------
Name: Lori Lake
---------------------------
Title: Assistant Vice President
--------------------------
Address:
6222 Wilshire Blvd.
Los Angeles, California 90048
Attention: Shohre Afshar or
Lori Lake
Telecopy No: 213-937-1439
Telephone No. Shohre Afshar or
Lori Lake
213-937-2322
-63-
<PAGE>
Lender Commitment: $25,000,000.00 CORESTATES BANK, N.A.
Percentage: 7.142857143%
By: /s/ R. Scott Relick
------------------------------
Name: R. Scott Relick
----------------------------
Title: Vice President
---------------------------
Address:
1339 Chestnut Street
Real Estate Department
Philadelphia, Pennsylvania 19107
Attention: R. Scott Relick
Telecopy No: 215-786-6381
Telephone No. R. Scott Relick
215-786-4224
-64-
<PAGE>
Lender Commitment: $20,000,000.00 BANK ONE, ARIZONA, NA
Percentage: 5.714285714%
By: /s/ Deborah L. Bliss
____________________________
Name: Deborah L. Bliss
__________________________
Title: Vice President
_________________________
Address:
Real Estate Banking Group
241 N. Central, 20th Floor
Phoenix, Arizona 85004
Attention: Deborah L. Bliss
Telecopy No: 602-221-1372
Telephone No. Deborah L. Bliss
602-221-2342
-65-
<PAGE>
Lender Commitment: $17,500,000.00 UNION BANK OF CALIFORNIA
Percentage: 5.000000000%
By: /s/ Annette Billingsley
_____________________________
Name: Annette Billingsley
___________________________
Title: Vice President
__________________________
By: /s/ Gary L. Roberts
_____________________________
Name: Gary L. Roberts
___________________________
Title: Vice President
__________________________
Address:
Capital Markets Division
350 California, 7th Floor
San Francisco, California 94104
Attention: Annette Billingsley
Telecopy No: 415-705-7367
Telephone No. Annette Billingsley
415-705-5075
-66-
<PAGE>
SECURITY CAPITAL PACIFIC TRUST EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SHARE DIVIDENDS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, December 31,
---------------- -------------------------------------------------------
1996 1995 1995 1994 1993 1992 (1) 1991 (1)
---- ---- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings from operations $47,382 $35,346 $ 81,696 $46,719 $23,191 $ 9,037 $2,078
Add:
Interest expense 13,777 11,129 19,584 19,442 3,923 3,214 3,952
------- ------- -------------------------------------------------------
Earnings as adjusted $61,159 $46,475 $101,280 $66,161 $27,114 $12,251 $6,030
======= ======= =======================================================
Combined Fixed Charges and Preferred Share Dividends:
Interest expense 13,777 $11,129 $ 19,584 $19,442 $ 3,923 $ 3,214 $3,952
Capitalized interest 7,509 4,675 11,741 6,029 2,818 989 157
------- ------- -------------------------------------------------------
Total fixed charges 21,286 15,804 31,325 25,471 6,741 4,203 4,109
Preferred share dividends 12,774 9,048 21,823 16,100 1,341 - -
------- ------- -------------------------------------------------------
Combined fixed charges and preferred share dividends $34,060 $24,852 $ 53,148 $41,571 $ 8,082 $ 4,203 $4,109
======= ======= =======================================================
Ratio of earnings to combined fixed charges
and preferred share dividends 1.8 1.9 1.9 1.6 3.4 2.9 1.5
======= ======= =======================================================
</TABLE>
(1) SECURITY CAPITAL PACIFIC TRUST had no preferred share dividend requirement
in any of the historical periods presented prior to 1993.
<PAGE>
Exhibit 15
Security Capital Pacific Trust
El Paso, Texas
Ladies and Gentlemen:
Re: Registration Statement on Form S-3 relating to registration of $300 million
debt securities and preferred shares
With respect to the subject registration statement, we acknowledge our awareness
of the incorporation therein of our AU 722 reports, dated April 23, 1996 and
August 12, 1996, related to our reviews of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered part of a registration statement prepared or certified by an
accountant within the meaning of sections 7 and 11 of the Act.
KPMG PEAT MARWICK LLP
Chicago, Illinois
September 27, 1996
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Trustees and Shareholders of
Security Capital Pacific Trust:
With respect to the accompanying registration statement on Form S-3 of Security
Capital Pacific Trust, we consent to:
(i) incorporation by reference of our report dated January 31, 1996, except
as to note 12, which is as of February 23, 1996, relating to the balance
sheets of Security Capital Pacific Trust as of December 31, 1995 and
1994, the related statements of earnings, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31,
1995, and the related schedule as of December 31, 1995, which report
appears in the December 31, 1995 annual report on Form 10-K of Security
Capital Pacific Trust, as amended by Form 10-K/A No. 1;
(ii) the incorporation by reference of our audit report dated July 11, 1996
relating to the combined statement of revenues and certain expenses for
certain multifamily properties for the year ended December 31, 1995,
which report appears in the current report on Form 8-K of Security
Capital Pacific Trust dated August 1, 1996; and
(iii) the reference to our firm under the heading "Experts" in the registration
statement.
KPMG PEAT MARWICK LLP
Chicago, Illinois
September 27, 1996
<PAGE>
EXHIBIT 25
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) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
_____________________
SECURITY CAPITAL PACIFIC TRUST
(Exact name of obligor as specified in its charter)
MARYLAND 74-6056896
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7777 Market Center Avenue
El Paso, Texas 79912
(Address of principal executive offices) (Zip Code)
____________________
DEBT SECURITIES
(Title of indenture securities)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington, D.C.,
Federal Deposit Insurance Corporation, Washington, D.C.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 6.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit 2
to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4
to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated herein
by reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility and Qualification
which relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information furnished
to it by the obligor and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Boston
and The Commonwealth of Massachusetts, on the 25TH DAY OF SEPTEMBER, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/(Gerald R. Wheeler)
------------------------------------
Gerald R. Wheeler
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Security
Capital Pacific Trust of its Debt Securities, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Gerald R. Wheeler
--------------------------------
Gerald R. Wheeler
Vice President
Dated: September 25, 1996
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1995, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................ 1,331,827
Interest-bearing balances......................................... 5,971,326
Securities.................................................................. 6,325,054
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary............................... 5,436,994
Loans and lease financing receivables:
Loans and leases, net of unearned income........ 4,308,339
Allowance for loan and lease losses............. 63,491
Loans and leases, net of unearned income and allowances........... 4,244,848
Assets held in trading accounts............................................. 1,042,846
Premises and fixed assets................................................... 374,362
Other real estate owned..................................................... 3,223
Investments in unconsolidated subsidiaries.................................. 31,624
Customers' liability to this bank on acceptances outstanding................ 57,472
Intangible assets........................................................... 68,384
Other assets................................................................ 670,058
----------
Total assets................................................................ 25,558,018
==========
LIABILITIES
Deposits:
In domestic offices............................................... 6,880,231
Noninterest-bearing........................ 4,728,115
Interest-bearing........................... 2,152,116
In foreign offices and Edge subsidiary............................ 9,607,427
Noninterest-bearing........................ 28,265
Interest-bearing........................... 9,579,162
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary............................... 5,913,969
Demand notes issued to the U.S. Treasury and Trading Liabilities............ 530,406
Other borrowed money........................................................ 493,191
Bank's liability on acceptances executed and outstanding.................... 57,387
Other liabilities........................................................... 620,287
----------
Total liabilities........................................................... 24,102,898
----------
EQUITY CAPITAL
Common stock................................................................ 29,176
Surplus..................................................................... 228,448
Undivided profits........................................................... 1,197,496
----------
Total equity capital........................................................ 1,455,120
----------
Total liabilities and equity capital........................................ 25,558,018
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, 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.
Rex S. Schuette
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.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
