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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MAY 14, 1996
SECURITY CAPITAL INDUSTRIAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-12846 74-2604728
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
14100 EAST 35TH PLACE, AURORA, COLORADO 80011
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
(303) 375-9292
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On May 14, 1996, Security Capital Industrial Trust, a Maryland real estate
investment trust, announced the pricing of an offering of its unsecured senior
debt securities (the "Notes"). Copies of the announcement and the underwriting
agreement relating to the Notes are filed as exhibits hereto and are hereby
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DOCUMENT DESCRIPTION PAGE NO.
------- -------------------- ----------
<C> <S> <C>
1.1 Underwriting Agreement dated May 14, 1996 between J.P.
Morgan Securities Inc. and Security Capital Industrial
Trust.
99.1 Press Release dated May 14, 1996 by Security Capital
Industrial Trust.
</TABLE>
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Security Capital Industrial Trust
Dated: May 16, 1996
/s/ Jeffrey A. Klopf
By __________________________________
Jeffrey A. Klopf
Secretary
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$200,000,000
SECURITY CAPITAL INDUSTRIAL TRUST
UNDERWRITING AGREEMENT
May 14, 1996
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May 14, 1996
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
Security Capital Industrial Trust, a Maryland real estate investment trust
("SCI"), proposes to issue and sell to you (a) $50,000,000 principal amount of
its 7.25% Notes due 2002 (the "2002 Notes"), (b) $100,000,000 principal amount
of its 7.95% Notes due 2008 (the "2008 Notes") and (c) $50,000,000 principal
amount of its 8.65% Notes due 2016 (the "2016 Notes" and, together with the 2002
Notes and 2008 Notes, the "Securities"), to be issued pursuant to the provisions
of an Indenture dated as of March 1, 1995 (the "Indenture") between SCI and
State Street Bank and Trust Company, as Trustee (the "Trustee").
SCI has prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File Number 33-
99548) on Form S-3, including a form of prospectus, relating to certain debt and
equity securities (the "Shelf Securities") to be issued from time to time by
SCI. SCI proposes to file with the Commission pursuant to Rule 424 under the
Securities Act a prospectus supplement specifically relating to the Securities.
The registration statement as amended to the date of this Agreement is
hereinafter referred to as the "Registration Statement" and the related
prospectus covering the Shelf Securities in the form first used to confirm sales
of the Securities is hereinafter re-
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ferred to as the "Basic Prospectus". The Basic Prospectus as supplemented by the
prospectus supplement specifically relating to the Securities in the form first
used to confirm sales of the Securities is hereinafter referred to as the
"Prospectus". Any reference in this Agreement to the Registration Statement, the
Basic Prospectus, any preliminary form of Prospectus (a "preliminary
prospectus") previously filed with the Commission pursuant to Rule 424 or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act which
were filed under the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Exchange Act")
on or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
I.
SCI represents and warrants to you that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of SCI,
threatened by the Commission.
(b)(i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not, as of the effective date of such amendment or as of the
date of such supplement, as the case may be, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will
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comply in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not, as of the date
of such amendment or supplement, as the case may be, and at the Closing Date,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph 1(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to you furnished to SCI in writing by you expressly for use therein or
(B) to that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Trustee.
(c) The documents incorporated by reference in the Prospectus, when they
were filed with the Commission, complied in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the Commission
will comply in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as applicable, and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) SCI has been duly organized, is validly existing as a real estate
investment trust of unlimited duration in good standing under the laws of the
State of Maryland, has the trust power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the
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extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on SCI and its Subsidiaries, taken as a whole.
(e) Each subsidiary of SCI (within the meaning of the Securities Act) is
listed in Annex A hereto (the "subsidiaries") and has been duly incorporated or
organized, as the case may be, is validly existing as a corporation, trust or
partnership in good standing under the laws of the jurisdiction of its
organization, has the power (corporate or other) and authority to own its
property and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on SCI
and its Subsidiaries, taken as a whole.
(f) Each joint venture of SCI is listed in Annex B hereto (the "Joint
Ventures" and, together with the subsidiaries, the "Subsidiaries") and has been
duly organized, is validly existing as a joint venture in good standing under
the laws of the jurisdiction of its organization, has the power (corporate or
other) and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on SCI and its Subsidiaries, taken as a whole.
(g) SCI has an authorized capitalization as set forth in the Prospectus,
and all of the issued shares of capital stock of SCI have been duly and validly
authorized and issued, are fully paid and, except as described in the
Prospectus, non-assessable; and all of the issued shares of capital stock or
other equity interest of each Subsidiary of SCI have been duly and validly
authorized and issued, are fully paid and, with respect to subsidiaries that are
corporations, non-assessable and (except for directors' qualifying shares and
except as set forth in the Prospectus) are owned directly or indirectly by
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SCI, free and clear of all liens, encumbrances, equities or claims.
(h) The financial statements, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of SCI and its consolidated
subsidiaries as of the dates indicated and the results of their operations and
the changes in their consolidated cash flows for the period specified; said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein; and the pro forma
financial information, and the related notes thereto, included or incorporated
by reference in the Registration Statement and the Prospectus has been prepared
in accordance with the applicable requirements of the Securities Act and the
Exchange Act.
(i) This Agreement has been duly authorized, executed and delivered by SCI.
(j) The Indenture has been duly authorized, executed and delivered and duly
qualified under the Trust Indenture Act and is a valid and binding agreement of
SCI, enforceable in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability; and the Indenture and the Securities conform in all material
respects to the descriptions thereof in the Prospectus.
(k) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by you in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture, and will be valid and binding
obligations of SCI, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
avail-
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ability of equitable remedies may be limited by equitable principles of general
applicability.
(l) The execution and delivery by SCI of, and the performance by SCI of its
obligations under, this Agreement, the Indenture and the Securities will not
contravene any provision of applicable law or the declaration of trust or by-
laws of SCI or any agreement or other instrument binding upon SCI or any of its
Subsidiaries that is material to SCI and its Subsidiaries, taken as a whole, or
any judgment, order or decree of any governmental body, agency or court having
jurisdiction over SCI or any Subsidiary, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is required
for the performance by SCI of its obligations under this Agreement, the
Indenture or the Securities, except such as have been obtained under the
Securities Act and the Trust Indenture Act and such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities or such consents, approvals, authorizations, orders
or qualifications, the failure of which to obtain would not have a material
adverse effect on SCI and its Subsidiaries taken as a whole or on the
consummation of the transactions contemplated by this Agreement or the Indenture
or on the validity and enforceability of the Securities and the Indenture.
(m) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of SCI and its
Subsidiaries, taken as a whole, from that set forth in the Prospectus, except as
set forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither SCI nor any of its Subsidiaries has
entered into any transaction or agreement (whether or not in the ordinary course
of business) material to SCI and its Subsidiaries taken as a whole.
(n) There are no legal or governmental proceedings pending or, to the
knowledge of SCI, threatened to which SCI or any of its Subsidiaries is a party
or to which any of the properties of SCI or any of its Subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not
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so described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement or the documents incorporated
by reference therein that are not described or filed as required.
(o) Each preliminary prospectus, if any, filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the rules and regulations
of the Commission thereunder.
(p) SCI is not an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended.
(q) SCI and its Subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, (iii) are
in compliance with all terms and conditions of any such permit, license or
approval and (iv) have no knowledge of the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or waste materials
(collectively, "Hazardous Materials") on any of the properties owned by them, or
of any unlawful spills, releases, discharges or disposal of such Hazardous
Materials that have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties, except
where such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals or unlawful presence of
Hazardous Materials or occurrence would not, singly or in the aggregate, have a
material adverse effect on SCI and its Subsidiaries, taken as a whole.
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(r) Neither SCI nor any of its Subsidiaries is, or with the giving of
notice or lapse of time or both would be, in violation of or in default under,
its declaration of trust or by-laws or joint venture agreement or other
governing instruments or any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which SCI or any of its Subsidiaries is a
party or by which it or any of them or any of their respective properties is
bound, except for violations and defaults which individually and in the
aggregate are not material to SCI and its Subsidiaries taken as a whole.
(s) SCI and its Subsidiaries taken as a whole carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their business and the value of their properties.
(t) SCI and each of its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus and such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by SCI and its
Subsidiaries; and all real property and buildings held under lease by SCI and
its Subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by SCI and its
Subsidiaries.
(u) With respect to all tax periods regarding which the Internal Revenue
Service is or will be entitled to assert any claim, SCI has met the requirements
for qualification as a real estate investment trust pursuant to Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), and SCI's present and contemplated organization, ownership,
method of operation, assets and income continue to meet such requirements; SCI
Limited Partnership-I, SCI Limited Partnership-II, SCI Limited Partnership-III
and SCI Limited Partnership-IV are properly treated (x) as partnerships for
federal income tax purposes and (y) not as "publicly traded partnerships".
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(v) Arthur Andersen LLP, who have certified certain financial statements
of SCI and its subsidiaries are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
(w) The REIT management agreement (the "REIT Management Agreement")
described in the Prospectus as amended or supplemented has been duly authorized,
executed and delivered by SCI and Security Capital Industrial Incorporated (the
"REIT Manager") and constitutes a legal, valid and binding agreement enforceable
in accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability; and
the execution and delivery of such agreement and the performance thereof by SCI
and the REIT Manager are within the power and authority of SCI and the REIT
Manger, do not violate any provision of or constitute a default under any
agreement or instrument to which SCI or the REIT Manager is a party or by which
SCI or the REIT Manager is bound, and do not require the consent, approval,
authorization or order of any court or governmental agency or body.
(x) Each of the partnership agreements (the "Partnership Agreements") of
SCI Limited Partnership-I, SCI Limited Partnership-II, SCI Limited Partnership-
III and SCI Limited Partnership-IV described in SCI's 1995 Annual Report on Form
10-K incorporated by reference in the Prospectus has been duly authorized,
executed and delivered by SCI or a wholly owned subsidiary thereof and
constitutes a legal, valid and binding agreement enforceable in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability; and the execution and delivery of each such
agreement and the performance thereof by SCI or such subsidiary are within the
power and authority of SCI or such subsidiary, did not and do not violate any
provision of or constitute a default under any agreement or instrument to which
SCI or such subsidiary is a party or by which SCI or such subsidiary is bound,
and do not require
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the consent, approval, authorization or order of any court or governmental
agency or body.
(y) The mortgages and deeds of trust encumbering the properties and assets
described in the Prospectus are not convertible and neither SCI, the REIT
Manager or any of their respective subsidiaries holds a participation interest
therein and such mortgages and deeds of trust are not cross-defaulted or cross-
collateralized to any property not owned by SCI or any of its Subsidiaries.
(z) SCI has complied with all provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida).
II.
SCI hereby agrees to sell to you, and you, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree to purchase from SCI (a) $50,000,000 principal amount
of the 2002 Notes at 99.288% of their principal amount -- the purchase price --
plus accrued interest from May 17, 1996 to the date of payment and delivery, (b)
$100,000,000 principal amount of the 2008 Notes at 99.083% of their principal
amount -- the purchase price -- plus accrued interest from May 17, 1996 to the
date of payment and delivery and (c) $50,000,000 principal amount of the 2016
Notes at 98.835% of their principal amount -- the purchase price -- plus accrued
interest from May 17, 1996 to the date of payment and delivery.
III.
SCI is advised by you that you propose to make a public offering of the
Securities as soon after this Agreement has become effective as in your judgment
is advisable. SCI is further advised by you that (a) the 2002 Notes are to be
offered to the public initially at 99.888% of their principal amount -- the
public offering price -- plus accrued interest and to certain dealers selected
by you at a price that represents a concession not in excess of .35% of their
principal amount under the public offering price, and that you may allow, and
such dealers may reallow, a concession, not in excess of .25%
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of their principal amount, to you or to certain other dealers, (b) the 2008
Notes are to be offered to the public initially at 99.833% of their principal
amount -- the public offering price -- plus accrued interest and to certain
dealers selected by you at a price that represents a concession not in excess of
.45% of their principal amount under the public offering price, and that you may
allow, and such dealers may reallow, a concession, not in excess of .25% of
their principal amount, to you or to certain other dealers and (c) the 2016
Notes are to be offered to the public initially at 99.710% of their principal
amount -- the public offering price -- plus accrued interest and to certain
dealers selected by you at a price that represents a concession not in excess of
.50% of their principal amount under the public offering price, and that you may
allow, and such dealers may reallow, a concession, not in excess of .25% of
their principal amount, to you or to certain other dealers.
IV.
Payment for the Securities shall be made by certified or official bank
check or checks payable to the order of, or by wire transfer to, SCI of same day
funds at the office of Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue,
New York, New York , at 10:00 A.M., local time, on May 17, 1996, or at such
other time on the same or such other date, not later than May 22, 1996, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the Closing Date.
Payment for the Securities shall be made against delivery to you of the
Securities registered in such names and in such denominations as you shall
request in writing not later than two full business days prior to the date of
delivery, with any transfer taxes payable in connection with the transfer of the
Securities to you duly paid.
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V.
Your obligations hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review or a possible change that does not indicate the direction
of the possible change, in the rating accorded any of SCI's securities
by any nationally recognized statistical rating organization, as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations, of
SCI and its subsidiaries, taken as a whole, from that set forth in the
Registration Statement, that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the
Prospectus.
(b) You shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer and Secretary of SCI, to the
effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of SCI contained in this Agreement are true and
correct as of the Closing Date and that SCI has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
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(c) You shall have received on the Closing Date an opinion of Mayer, Brown
& Platt, counsel for SCI, dated the Closing Date, to the effect that
(i) SCI has been duly organized, is validly existing as a real estate
investment trust in good standing under the laws of the State of Maryland,
has the trust power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on SCI and its
Subsidiaries, taken as a whole;
(ii) each of the subsidiaries of SCI has been duly organized, is
validly existing as a corporation, partnership or trust, as the case may
be, in good standing under the laws of the jurisdiction of its
organization, has the power and authority (corporate or other) to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on SCI and its Subsidiaries, taken as a whole;
(iii) SCI has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of SCI have been
duly and validly authorized and issued and are fully paid and, except as
described in the Prospectus, non-assessable; and all of the issued shares
of capital stock or other equity interest of each subsidiary of SCI have
been duly and validly authorized and issued, are fully paid and, with
respect to subsidiaries that are corporations, non-assessable, and (except
for directors' qualifying shares and except as otherwise set forth in the
Prospectus) are owned
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directly or indirectly by SCI, free and clear of all perfected liens,
encumbrances, equities or claims;
(iv) this Agreement has been duly authorized, executed and delivered
by SCI;
(v) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by SCI and is a
valid and binding agreement of SCI, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(vi) the Securities have been duly authorized, executed and delivered
by SCI and, when authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by you in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of SCI, enforceable in accordance
with their terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(vii) neither SCI nor any of its Subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its declaration of trust, by-laws or joint venture agreement or
other governing instruments or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
SCI or any of its Subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate are not material to SCI
and its Subsidiaries taken as a whole; the issue and sale of the Securities
and the performance by SCI of its obligations under the Securities, the
Indenture and this Agreement and the consummation of the transactions
herein and therein
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contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument known to such counsel to which SCI or any of its Subsidiaries is
a party or by which SCI or any of its Subsidiaries is bound or to which any
of the property or assets of SCI or any of its Subsidiaries is subject, nor
will any such action result in any violation of the provisions of the
declaration of trust or the by-laws of SCI or any applicable law or statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over SCI, its Subsidiaries or any of their
respective properties, the violation of which would have a material adverse
effect on SCI and its Subsidiaries taken as a whole or on the consummation
of the transactions contemplated by this Agreement or the Indenture or on
the validity and enforceability of the Securities and the Indenture;
(viii) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation of
the other transactions contemplated by this Agreement or the Indenture,
except such consents, approvals, authorizations, registrations or
qualifications as have been obtained under the Securities Act and the Trust
Indenture Act and as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
you or consents, approvals, authorizations, registrations or qualifications
the failure of which to obtain would not have a material adverse effect on
SCI and its Subsidiaries taken as a whole or on the consummation of the
transactions contemplated by this Agreement or the Indenture or on the
validity and enforceability of the Securities and the Indenture;
(ix) the statements (1) in the Basic Prospectus under the captions
"Federal Income Tax Considerations" and "Description of Debt Securities",
(2) in the Prospectus Supplement under the caption "Description of Notes"
and (3) in the Registration Statement under Item 15, in each case insofar
as
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such statements constitute summaries of the legal matters, documents and
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings in all
material respects and are true and correct in all material respects;
(x) other than as set forth or contemplated in the Prospectus, to
such counsel's knowledge, there are no legal or governmental proceedings
pending or threatened to which SCI or any of its Subsidiaries is or may be
a party or to which any property of SCI or its Subsidiaries is or may be
the subject which, if determined adversely to SCI or such Subsidiaries,
could individually or in the aggregate reasonably be expected to have a
material adverse effect on SCI and its Subsidiaries taken as a whole; and
such counsel does not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus
which are not filed or incorporated by reference or described as required;
(xi) SCI is not an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended;
(xii) The REIT Manager has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to
conduct its business as described in the Prospectus;
(xiii) The REIT Management Agreement has been duly authorized,
executed and delivered by the parties thereto and constitutes a legal,
valid and binding agreement enforceable in accordance with its terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability; and the execution
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<PAGE>
and delivery of such agreement and the performance thereof by SCI and the
REIT Manager are within the power and authority of SCI and the REIT Manger,
do not violate any provision of or constitute a default under any material
agreement or instrument known to such counsel to which SCI or the REIT
Manager is a party or by which SCI or the REIT Manager is bound, and do not
require the consent, approval, authorization or order of any court or
governmental agency or body;
(xiv) SCI has qualified to be taxed as a real estate investment trust
pursuant to the Internal Revenue Code, for its taxable years ended December
31, 1993, 1994 and 1995, and SCI's present and contemplated organization,
ownership, method of operation, assets and income are such that SCI is in a
position under present law to so qualify for the fiscal year ending
December 31, 1996 and in the future; SCI Limited Partnership-I, SCI Limited
Partnership-II, SCI Limited Partnership-III and SCI Limited Partnership-IV
are properly treated (x) as partnerships for federal income tax purposes
and (y) not as "publicly traded partnerships";
(xv) The investments of SCI described in the Prospectus are permitted
investments under the declaration of trust of SCI;
(xvi) the Registration Statement is effective under the Securities Act
and, to the best of such counsel's knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the Securities Act or proceeding therefor initiated or threatened by
the Commission; and
(xvii) such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
included or incorporated by reference therein as to which such counsel need
not express any opinion) comply as to form in all material respects with
the Securities Act and the rules and regulations of the Commission
thereunder, (2) is of the opinion that each document incorporated by
reference in the Registration Statement and Prospectus (except for
financial statements
17
<PAGE>
and schedules as to which such counsel need not express any opinion)
complies as to form in all material respects with the Securities Act and
the Exchange Act and the rules and regulations of the Commission
thereunder, (3) believes that (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the Form T-1
heretofore referred to) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (4) believes that (except for
financial statements and schedules as to which such counsel need not
express any belief) the Prospectus as of its date and as of the Closing
Date does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering such opinion, Mayer, Brown & Platt may rely as to matters
governed by the laws of states other than Illinois, New York or Federal
laws on local counsel in such jurisdictions, provided that in each case
Mayer, Brown & Platt shall state that they believe that they and you are
reasonably justified in relying on such other counsel. In rendering the
opinions contained in paragraphs (ix) (insofar as said opinion refers to
information in the Prospectus under the caption "Federal Income Tax
Considerations") and (xiv), such opinions may be based upon (a) the
Internal Revenue Code, as amended, and the rules and regulations
promulgated thereunder and the interpretations of the Internal Revenue Code
and such regulations by the courts and the Internal Revenue Service, all as
they are in effect and exist at the time of this opinion, (b) Maryland and
Delaware law existing and applicable to SCI and its Subsidiaries, (c) facts
and other matters set forth in the Prospectus, (d) the provisions of the
declaration of trust of SCI, the agreements relating to the properties
owned by SCI and the REIT Management Agreement, and (e) certain statements
and
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<PAGE>
representations as to factual matters made by SCI to Mayer, Brown & Platt
as set forth in an attachment thereto.
(d) You shall have received on the Closing Date an opinion of Jeffrey A.
Klopf, Senior Vice President and Secretary of SCI, to the effect that
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the best of his
knowledge, threatened to which SCI or any of its Subsidiaries is or may be
a party or to which any property of SCI or its Subsidiaries is or may be
the subject which, if determined adversely to SCI or such Subsidiaries,
could individually or in the aggregate reasonably be expected to have a
material adverse effect on SCI and its Subsidiaries taken as a whole; he
does not know of any amendment to the Registration Statement required to be
filed; and there are no contracts or other documents of a character re-
quired to be filed as an exhibit to the Registration Statement or the
documents incorporated by reference therein or required to be described in
the Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required; and
(ii) Each of the Joint Ventures has been duly organized is validly
existing as a joint venture in good standing under the laws of the
jurisdiction of its organization, has the power (corporate or other) and
authority to own its property and to conduct its business as described in
the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on SCI and its Subsidiaries, taken as a
whole; SCI owns the outstanding joint venture interests of each Joint
Venture in the percentage amounts specified in Annex B hereto, directly or
indirectly, free and clear of all perfected liens, encumbrances, equities
or claims, except with respect to the terms of the
19
<PAGE>
provisions of the respective joint venture agreements;
(e) You shall have received on the Closing Date an opinion of Skadden,
Arps, Slate, Meagher & Flom, your special counsel, dated the Closing Date,
covering the matters referred to in subparagraphs (v), (vi), (xvi) and (xvii) of
paragraph (c) above.
With respect to subparagraph (xvii) of paragraph (c), Mayer, Brown &
Platt and Skadden, Arps, Slate, Meagher & Flom may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification except as specified.
(f) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Arthur Andersen LLP, independent
public accountants for SCI, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
or incorporated by reference in the Registration Statement and the Prospectus.
VI.
In further consideration of your agreements herein contained, SCI covenants
as follows:
(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits and documents incorporated by
reference therein and any amendments thereto) and, during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as you
may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
20
<PAGE>
supplement and not to file any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first date of the public offering
of the Securities as in the opinion of your counsel the Prospectus is
required by law to be delivered in connection with sales by you or a
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the opinion of your
counsel, it is necessary to amend or supplement the Prospectus to comply
with law, forthwith to prepare, file with the Commission and furnish, at
its own expense, to you and to the dealers (whose names and addresses you
will furnish to SCI) to which Securities may have been sold by you, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To file the Prospectus in a form approved by you pursuant to Rule
424 under the Securities Act not later than the Commission's close of
business on the second Business Day following the date hereof.
(e) To file promptly all reports and any definitive proxy or
information statements required to be filed by SCI with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities, and during such same period, to advise
you promptly, and to confirm such advice in writing, (i) when any amendment
to the Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for any additional
information with respect thereto or with respect to any documents filed
under the Exchange Act, (iii) of the issuance by the Commission of any stop
order sus-
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<PAGE>
pending the effectiveness of the Registration Statement or the initiation
or threatening of any proceeding for that purpose, and (iv) of the receipt
by SCI of any notification with respect to any suspension of the
qualification of the Securities for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and to
use its best efforts to prevent the issuance of any such stop order or
notification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(f) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to pay all expenses (including reasonable fees and
disbursements of counsel) in connection with such qualification and in
connection with the determination of the eligibility of the Securities for
investment under the laws of such jurisdictions as you may designate.
(g) To make generally available to SCI's security holders and to you
as soon as practicable an earning statement that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(h) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell contract to sell or
otherwise dispose of any debt securities of SCI or warrants to purchase
debt securities of SCI substantially similar to the Securities (other than
(i) the Securities and (ii) commercial paper issued in the ordinary course
of business), without your prior written consent.
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<PAGE>
(i) To pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of the
Securities, including any transfer taxes payable in connection with the
transfer of the Securities to you, (iii) the fees and disbursements of
SCI's counsel and accountants, (iv) the qualification of the Securities
under state securities or Blue Sky laws in accordance with the provisions
of paragraph (f), including filing fees and the fees and disbursements of
your counsel in connection therewith and in connection with the preparation
of any Blue Sky Memoranda, (v) the printing and delivery to you, in
quantities as hereinabove stated, copies of the Registration Statement and
all amendments thereto, of each preliminary prospectus and the Prospectus
and any amendments or supplements thereto, and documents incorporated by
reference and all amendments thereto, and (vi) the printing and delivery to
you of copies of any Blue Sky Memoranda.
VII.
SCI agrees to indemnify and hold harmless you and each person, if any, who
controls you within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by you or any such controlling person in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if SCI shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to
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<PAGE>
you furnished to SCI by you in writing expressly for use therein; provided, that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to your benefit (or to the benefit of any person controlling you) from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus (as amended or supplemented if SCI shall have
furnished any amendments or supplements thereto) and, if required by law, a copy
of the Prospectus (as so amended or supplemented) shall not have been furnished
to such person at or prior to the written confirmation of the sale of such
Securities to such person.
You agree to indemnify and hold harmless SCI, its Trustees, its officers
who sign the Registration Statement and each person, if any, who controls SCI
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from SCI to you,
but only with reference to information relating to you furnished to SCI in
writing by you expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying
24
<PAGE>
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in respect
of the legal expenses of any indemnified party in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
J.P. Morgan Securities Inc., in the case of parties indemnified pursuant to the
second preceding paragraph, and by SCI, in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first or second paragraph of
this Article VII is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
25
<PAGE>
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by SCI on the one hand and you on the other hand from
the offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of SCI on the one hand and of you on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by SCI on the one hand and you on
the other hand in connection with the offering of the Securities shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by SCI and the total
underwriting discounts and commissions received by you, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Securities. The relative fault of SCI on the one hand and
of you on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by SCI, or by you and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
SCI and you agree that it would not be just or equitable if contribution
pursuant to this Article VII were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this
26
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Article VII, you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages that you have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Article VII are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Article VII and
the representations and warranties of SCI contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of you or any
person controlling you or by or on behalf of SCI, its officers or trustees or
any person controlling SCI and (iii) acceptance of and payment for any of the
Securities.
VIII.
This Agreement shall be subject to termination by notice given by you to
SCI, if (a) after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, the New York Stock Exchange, (ii) trading
of any securities of SCI shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Securities on
27
<PAGE>
the terms and in the manner contemplated in the Prospectus.
IX.
This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
If this Agreement shall be terminated by you because of any failure or
refusal on the part of SCI to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason SCI shall be unable to
perform its obligations under this Agreement, SCI will reimburse you for all
out-of-pocket expenses (including the fees and disbursements of your counsel)
reasonably incurred by you in connection with this Agreement or the offering
contemplated hereunder.
X.
This Agreement shall inure to the benefit of and be binding upon SCI, you,
any controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Securities from you shall be deemed
to be a successor by reason merely of such purchase.
XI.
Under the terms of SCI's declaration of trust, all persons dealing with SCI
shall look solely to SCI's property for satisfaction of claims of any nature,
and no trustee, officer, agent or shareholder of SCI shall be held to any person
liable in tort, contract or otherwise as the result of the execution and
delivery of this Agreement by SCI.
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XII.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to you shall be given to J.P. Morgan
Securities Inc. at 60 Wall Street, New York, New York 10260 (facsimile number:
(212) 648-5705); Attention: Syndicate Department. Notices to SCI shall be given
to it c/o SC Group Incorporated Administrative Center, at 7777 Market Center
Avenue, El Paso, Texas 79912 (facsimile number: (505) 988-8920); Attention:
Jeffrey A. Klopf, Senior Vice President.
This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
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<PAGE>
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
Very truly yours,
SECURITY CAPITAL INDUSTRIAL TRUST
By \s\ Jeffrey A. Klopf
-------------------------
Name: Jeffrey A. Klopf
Title: Senior Vice President and Secretary
Accepted, May 14, 1996
J.P. MORGAN SECURITIES INC.
By \s\ Keysha Bailey
----------------------
Name: Keysha Bailey
Title: Vice President
<PAGE>
Annex A
Name of Subsidiary
- ------------------
SCI Limited Partnership - I
SCI Limited Partnership - II
SCI Limited Partnership - III
SCI Limited Partnership - IV
SCI-Alabama (1) Incorporated
SCI-Alabama (2) Incorporated
Security Capital Alabama Industrial Trust
SCI-North Carolina (1) Incorporated
SCI-North Carolina (2) Incorporated
SCI-North Carolina Limited Partnership
SCI Houston Holdings, Inc.
SCI IV, Inc.
<PAGE>
Annex B
Percentage Interest
Name of Joint Venture Owned by SCI
- --------------------- -------------------
1440 Goodyear Partners 73%
Red Mountain Joint Venture 70%
<PAGE>
Press Release
- -For Immediate Release-
SECURITY CAPITAL INDUSTRIAL TRUST
Announces
Pricing of a $200 Million Long-Term Senior Debt Offering
May 14, 1996 - Security Capital Industrial Trust (SCI) (New York Stock
Exchange Symbol: SCN) announced today that it has priced a $200 million long-
term, fully amortizing senior debt offering, consisting of $50 million of 8.65%
notes due 2016, $100 million of 7.95% notes due 2008 and $50 million of 7.25%
notes due 2002. This financing is consistent with SCI's stated strategy of
having a fixed-rate, long-term, fully amortizing debt structure.
The securities have an effective average interest cost of 8.41%, including
all costs associated with the offering. The securities have a weighted average
life to maturity of 10.8 years and a final maturity extending to 2016. The
offering is being sole managed by J.P. Morgan Securities, Inc. Copies of the
prospectus may be obtained from J.P. Morgan Securities Inc., 60 Wall Street, New
York, N. Y. 10260. The shelf registration statement under which these securities
are offered has previously been declared effective by the Securities and
Exchange Commission.
SCI is the largest publicly held owner and operator of industrial
properties in the United States. SCI's primary objective is to achieve long-
term, sustainable growth in per share cash flow. SCI expects to achieve this
objective through the SCI National Operating System tm, which is committed to
creating shareholder value by providing exceptional customer service. SCI's
investment strategy is to acquire generic distribution facilities and develop
full-service, master-planned distribution parks in metropolitan areas that
demonstrate strong demographic growth and excellent industrial real estate
fundamentals. At March 31, 1996, SCI had distribution properties operating or
under development in 35 target markets, totaling 74.8 million square feet.
FOR MORE INFORMATION CONTACT: K. Scott Canon
(800) 820-0181
or
Gerard de Gunzburg
(212) 838-9292
