-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ff4tUKfQ+bJNZY8UUaooI6DkPrW1byLKmXmXd5Dq5UoT++WRLd29+iRh7A/Z85hD jROKIL4Hmjn7AXH2vDbKYw== 0001047469-98-042237.txt : 19981126 0001047469-98-042237.hdr.sgml : 19981126 ACCESSION NUMBER: 0001047469-98-042237 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19981125 GROUP MEMBERS: GATEWAY RECOVERY TRUST GROUP MEMBERS: PRUDENTIAL INSURANCE CO OF AMERICA SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PEREGRINE REAL ESTATE TRUST CENTRAL INDEX KEY: 0000314485 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942255677 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-43455 FILM NUMBER: 98759646 BUSINESS ADDRESS: STREET 1: 1300 ETHAN WAY, STE 200 CITY: SACRAMENTO STATE: CA ZIP: 95825 BUSINESS PHONE: 9169298244 MAIL ADDRESS: STREET 1: 1300 EATHAN WAY SUITE 200 STREET 2: 705 UNIVERSITY AVE CITY: SACRAMENTO STATE: CA ZIP: 95825 FORMER COMPANY: FORMER CONFORMED NAME: COMMONWEALTH EQUITY TRUST DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL INSURANCE CO OF AMERICA CENTRAL INDEX KEY: 0000729057 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 221211670 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: PRUDENTIAL PLZ STREET 2: 751 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07102-3777 BUSINESS PHONE: 9738024284 MAIL ADDRESS: STREET 1: 751 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07102 SC 13D/A 1 SC 13D/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d - 101) Information To Be Included In Statements Filed Pursuant To Rule 13d-1(a) And Amendments Thereto Filed Pursuant To Rule 13d-2(a) (Amendment No. 1)(1) THE PEREGRINE REAL ESTATE TRUST (Name of Issuer) COMMON SHARES OF BENEFICIAL INTEREST (Title of Class of Securities) 713662013 (CUSIP Number) James Evert Assistant General Counsel The Prudential Insurance Company of America Four Embarcadero Center, Suite 2700 San Francisco, California 94111 November 18, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 12 Pages) - ---------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, SEE the NOTES). CUSIP NO. 713662013 13D Page 1 of 2 Pages 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) THE PRUDENTIAL INSURANCE COMPANY OF AMERICA 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* N/A 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEW JERSEY 7 SOLE VOTING POWER 5,388,614 NUMBER OF SHARES BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING PERSON WITH 0 9 SOLE DISPOSITIVE POWER 5,388,614 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,388,614 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.9% 14 TYPE OF REPORTING PERSON* BD, IC, IA - ---------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP NO. 713662013 13D Page 2 of 2 Pages 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) GATEWAY RECOVERY TRUST 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* N/A 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE 7 SOLE VOTING POWER 3,744,652 NUMBER OF SHARES BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING PERSON WITH 0 9 SOLE DISPOSITIVE POWER 3,744,652 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,744,652 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.6% 14 TYPE OF REPORTING PERSON* PN - ---------- *SEE INSTRUCTIONS BEFORE FILLING OUT ITEM 1. SECURITY AND ISSUER. The equity securities to which this Statement on Schedule 13D relates are the Common Shares of Beneficial Interest (the "Common Shares") of The Peregrine Real Estate Trust, a California real estate investment trust, d.b.a. WinShip Properties (the "Issuer"), with its principal executive offices located at 1300 Ethan Way, Suite 200, Sacramento, California 95825. ITEM 2. IDENTITY AND BACKGROUND. This Statement is filed on behalf of (1) The Prudential Insurance Company of America, a New Jersey corporation ("Prudential"). (2) The Gateway Recovery Trust, a Delaware Business Trust ("Gateway"). Prudential is a New Jersey corporation. Prudential is an insurance company. The address of Prudential is Prudential Plaza, 751 Broad Street, Newark, New Jersey 07102-3777. Gateway is a Delaware business trust which owns debt and equity securities. Prudential is the asset manager and principal beneficiary of Gateway. The address of Gateway is Four Gateway Center, 9th Floor, Newark, New Jersey 07102. (a)-(c) & (f) (i) The executive officers of Prudential are listed below. The principal business address for each executive officer is Prudential Plaza, 751 Broad Street, Newark, New Jersey 07102-3777. Each executive officer is a citizen of the United States of America unless otherwise specified below: EXECUTIVE OFFICERS Arthur F. Ryan Chairman of the Board, Chief Executive Officer and President E. Michael Caulfield Executive Vice President, Planning & Risk Management Michele S. Darling Executive Vice President, Human Resources Robert C. Golden Executive Vice President, Operations & Systems Mark B. Grier Executive Vice President, Corporate Governance Jean D. Hamilton Executive Vice President, Institutional Rodger A. Lawson Executive Vice President, Prudential International Investments Kiyofumi Sakaguchi President, Prudential International Insurance John V. Scicutella Chief Executive Officer, Prudential Individual Insurance & Investments John R. Strangfeld Chief Executive Officer, Prudential Global Private Asset Management Schedule I attached hereto and incorporated herein sets forth with respect to each director of Prudential his or her name, residence or business address, citizenship, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted. Prudential is the asset manager of Gateway and, as such, has discretion to make substantially all decisions with respect to the debt and equity securities owned by Gateway. In addition, Prudential is the principal beneficiary of Gateway. Prudential's executive officers and directors are as set forth elsewhere herein. The sole trustee of Gateway is Chase Manhattan Bank Delaware. The address of Chase Manhattan Bank Delaware is 1201 Market Street, Wilmington, Delaware 19801. (d)-(e) During the last five years, neither Prudential, Gateway nor, to the best of their knowledge, any of their respective executive officers, trustees or directors (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Common Shares were acquired pursuant to a letter agreement dated November 2, 1998 wherein the holders of all of the Issuer's preferred shares of beneficial interest (the "Preferred Shares") agreed to exchange each Preferred Share for 1.0541145 Common Shares. Such transaction effectively accelerated the mandatory conversion of the Preferred Shares which was anticipated to occur in April 1999. There was no other consideration involved in the acquisition of the Common Shares. ITEM 4. PURPOSE OF TRANSACTION. On November 2, 1998, certain entities related to The TCW Group, Inc. (the "TCW Related Entities"), certain entities of which Oaktree Capital Management, LLC is the general partner (the "Oaktree Entities"), and Gateway and Prudential (collectively, the "Prudential Entities") entered into a letter agreement with the Issuer pursuant to which the TCW Related Entities, the Oaktree Entities and the Prudential Entities agreed to an accelerated conversion of the Preferred Shares into Common Shares. The exchange was consummated on November 18, 1998. As a result of the transaction, all of the issued and outstanding Preferred Shares were converted into Common Shares at a ratio of 1.0541145 Common Shares for each outstanding Preferred Share. The Issuer has indicated that it is evaluating the possibility of a plan of reorganization that would change the form of entity of the Issuer and its state of organization and reduce the number of shareholders of the Issuer. At such time as the Issuer proposes such a reorganization, the Prudential Entities will also evaluate such a reorganization and may, depending upon the terms of such a transaction, vote their Common Shares to approve such a transaction. The Prudential Entities intend to review on a continuing basis their respective investments in the Common Shares and may, subject to the continuing evaluation of the factors discussed herein, acquire from time to time additional Common Shares in the open market or in privately negotiated transactions. Depending on the factors discussed herein, the Prudential Entities may, from time to time, retain or sell all or a portion of its holdings of the Common Shares in the open market or in privately negotiated transactions and such open market and privately negotiated purchases or sales may be made at any time without further prior notice. Any actions that the Prudential Entities might undertake with respect to the Common Shares will be dependent upon their review of numerous factors, including, among other things, the availability of Common Shares for purchase and the price levels of such Common Shares, general market and economic conditions as well as those in the areas in which the Issuer's properties are located, ongoing evaluation of the Issuer's business, financial condition, properties, operations and prospects, the relative attractiveness of alternative business and investment opportunities, the actions of the management and the Board of Trustees of the Issuer, and other future developments. The Prudential Entities plan to continue to review various alternatives available to enhance the value of the Issuer and its assets and engage in discussions with other creditors and shareholders of the Issuer regarding such alternatives. Such review and discussions may result in a decision by the Prudential Entities to pursue in cooperation with the Issuer and/or other creditors and shareholders of the Issuer one or more restructuring options. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) Prudential directly holds 1,643,962 shares of the Issuer's Common Shares in a separate account and may be deemed to beneficially own an additional 3,744,652 shares of the Issuer's Common Shares owned by Gateway, for a total of 5,388,614 Common Shares or approximately 23.9% of the Issuer's outstanding Common Shares. Gateway beneficially owns 3,744,652 of the Issuer's Common Shares or approximately 16.6% of the Issuer's outstanding Common Shares. (b) Prudential has the sole power to vote and dispose, or direct the disposition, of 5,388,614 of the Issuer's Common Shares, including the sole power to direct the voting and disposition of Gateway's Common Shares in its capacity as asset manager and principal beneficiary of Gateway. (c) On November 2, 1998, the TCW Related Entities, the Oaktree Entities and the Prudential Entities entered into a letter agreement with the Issuer in which the TCW Related Entities, the Oaktree Entities and the Prudential Entities agreed to exchange each of their Preferred Shares for 1.0541145 Common Shares. As a result, on November 18, 1998, Prudential received 1,435,353 Common Shares in exchange for 1,361,667 Preferred Shares, and Gateway received 3,270,723 Common Shares in exchange for 3,102,816 Preferred Shares. Except as discussed above, neither Prudential, Gateway nor, to the best of their knowledge, any of their respective officers, trustees or directors have effected any other transactions involving the Issuer's Common Shares during the last 60 days. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. On May 30, 1997, the TCW Related Entities and Prudential entered into an agreement pursuant to which the TCW Related Entities agreed that at such time as Prudential identified an individual to serve as a trustee on the Board of Trustees of the Issuer, the TCW Related Entities would (i) use commercially reasonable efforts to cause a Trustee of the Issuer nominated by TCW Related Entities to resign and (ii) vote all of the shares of common stock held by the TCW Related Entities, or cause the Board of Trustees of the Issuer to take all necessary action, to elect the individual identified by Prudential to the Board of Trustees of the Issuer. Although not parties to the letter agreement, the Oaktree Entities subsequently indicated that they intended to vote their Common Shares in favor of the trustee nominated by Prudential. At a meeting of the Board of Trustees on October 7, 1997, Michael Joseph was elected to the Board of Trustees as the designee of Prudential. On November 2, 1998, the Prudential Entities, the TCW Related Entities and the Oaktree Entities entered into a letter agreement with the Issuer in which the Prudential Entities, the TCW Related Entities and the Oaktree Entities agreed to exchange their Preferred Shares for Common Shares. The exchange of the Preferred Shares for Common Shares was effected to accelerate the mandatory conversion of such Preferred Shares anticipated to occur in April 1999. As a result of the exchange transaction, on November 18, 1998, all of the issued and outstanding Preferred Shares were converted into Common Shares at a ratio of 1.0541145 Common Shares for each outstanding Preferred Share. Prudential directly holds 1,643,962 of the Common Shares in a separate account. Prudential receives a fee with respect to the Common Shares held in the separate account. Gateway holds an additional 3,744,652 Common Shares. Prudential is the asset manager and principal beneficiary of Gateway and, in its capacity as asset manager, has the sole power to direct the voting and disposition of the Common Shares held by Gateway. Prudential, as asset manager of Gateway, receives a fee for managing the assets of Gateway. An additional 495 Common Shares are held by Prudential Securities, Inc., a Delaware corporation and subsidiary of Prudential. Prudential also receives a fee with respect to the Common Shares held in the separate account. The filing of this statement should not be construed as an admission that Prudential is, for the purposes of Sections 13 or 16 of the Securities Exchange Act of 1934, the beneficial owner of the shares held by any entity other than Prudential or shares held by Prudential in a separate account. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS EXHIBIT 1 Joint Filing Agreement. EXHIBIT 2 Letter Agreement among the TCW related entities, the Oaktree Entities, the Prudential Entities and the Issuer dated November 2, 1998. SIGNATURE After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth herein, complete and correct. Dated as of the 25th day of November 1998. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /S/ PAUL MEIRING ---------------------------- Paul Meiring Vice President GATEWAY RECOVERY TRUST By: The Prudential Insurance Company Of America, its Asset Manager By: /S/ PAUL MEIRING ---------------------------- Paul Meiring Vice President SCHEDULE I DIRECTORS OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA DIRECTORS Each director is a citizen of the United States of America unless otherwise specified below:
Principal Occupation Name Title Address - ---------------------------- --------------------------------------- -------------------------------------- Franklin E. Agnew Business Consultant One Mellon Bank Center Suite 2120 Pittsburgh, PA 15219 Frederic E. Becker President Wilentz Goldman & Spitzer 90 Woodbridge Center Drive Suite 900 Woodbridge, NJ 07095 Gilbert F. Casellas Partner McConnell Valdes LLP 1717 Pennsylvania Avenue NW, Suite 625 Washington, D.C. 20006 James G. Cullen President and CEO Bell Telecom Atlantic Corp. 1310 North Court House Road, 11th Floor Arlington, VA 22201 Carolyne K. Davis Independent Health Care Advisor, Ernst & Young Scholar in Residence 1225 Connecticut Avenue, NW Cornell University Washington, DC 20036 Roger A. Enrico Chairman and CEO PepsiCo 14841 North Dallas Parkway Dallas, TX 75240 Allan D. Gilmour Retired Vice Chairman, The Prudential Insurance Ford Motor Company Company of America 751 Broad Street Newark, NJ 07012-3777 William H. Gray III President and CEO United Negro College Fund, Inc. 8260 Willow Oaks Corp. Drive P.O. Box 10444 Fairfax, VA 22031-4511 Jon F. Hanson Chairman Hampshire Management Company 235 Moore Street, Suite 200 Hackensack, NJ 07601 Glen H. Hiner Chairman and CEO Owens-Corning Corporation One Owns Corning Parkway Toledo, OH 45659
Constance J. Horner Guest Scholar The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036-2188 Gaynor N. Kelley Retired Chairman Perkins Elmer Corporation and CEO 751 Broad Street, 23rd Floor Newark, NJ 07102 Burton G. Malkiel Professor of Economics Princeton University Dept. of Economics 110 Fisher Hall Prospect Avenue Princeton, NJ 08544-1021 Arthur E. Ryan Chairman, CEO The Prudential Insurance and President Company of America 751 Broad Street Newark, NJ 07102 Ida S. Schmertz Principal Investment Strategies International 751 Broad Street, 23rd Floor Newark, NJ 07102 Charles R. Sitter Retired President Exxon Corporation 225 East John W. Carpenter Freeway Irving, TX 75602 Donald L. Staheli Retired Chairman and CEO Continental Grain Company 277 Park Avenue New York, NY 10172 Richard M. Thomas Retired Chairman and CEO The Toronto-Dominion Bank (Canadian Citizen) P.O. Box 1 Toronto-Dominion Centre Toronto, Ontario Canada M5K 1A2 James A. Unruh Retired Chairman and CEO Unisys Corporation Township Line and Union Meeting Roads P.O. Box 500 Blue Bell, PA 19424-0001 P. Roy Vagelos, M.D. Retired Chairman and CEO Merck & Co., Inc. One Crossroads Drive Building A, 3rd Floor Bedminster, NJ 07921 Stanley C. Van Ness, Partner Herbert, Van Ness, Cayci & Goodell Esq. 22 Chambers Street Princeton, NJ 08542
Paul A. Volcker Director and Consultant to various Wolfensohn & Co., Inc. companies 599 Lexington Avenue Former Chairman New York, NY 10022 Joseph H. Williams Director The Williams Companies, Inc. One Williams Center Tulsa, OK 74172
EX-1 2 EXHIBIT 1 EXHIBIT 1 JOINT FILING AGREEMENT Each of the undersigned acknowledges and agrees that the foregoing statement on Schedule 13D is filed on behalf of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of the undersigned without the necessity of filing additional joint acquisition statements. Each of the undersigned acknowledges that it shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the other, except to the extent that he or it knows or has reason to believe that such information is inaccurate. Dated as of this 25th day of November, 1998. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /S/ PAUL MEIRING ------------------------------ Paul Meiring Vice President GATEWAY RECOVERY TRUST By: The Prudential Insurance Company Of America, its Asset Manager By: /S/ PAUL MEIRING ------------------------------ Paul Meiring Vice President EX-2 3 LETTER AGREEMENT THE PEREGRINE REAL ESTATE TRUST 1300 ETHAN WAY, SUITE 200 SACRAMENTO, CALIFORNIA 95825 November 2, 1998 To each of the parties listed on the signature pages hereto Gentlemen: This letter agreement (the "Letter Agreement") is entered into by and among The Peregrine Real Estate Trust, a California real estate investment trust (the "Company"); The Prudential Insurance Company of America and Gateway Recovery Trust (collectively, the "Prudential Entities"); TCW Special Credits Fund IV, TCW Special Credit Plus Fund, TCW Special Credits Trust IV, TCW Special Credits Trust IVA and TCW Special Credits, as investment manager of the Weyerhaeuser Company Master Retirement Trust Separate Account (collectively, "TCW"); OCM Real Estate Opportunities Fund A, L.P., OCM Real Estate Opportunities Fund B, L.P., and Oaktree Capital Management, LLC as investment manager of Weyerhaeuser Company Master Retirement Trust and Real Estate Opportunities Separate Account (collectively, "Oaktree"). The Prudential Entities, TCW and Oaktree are collectively referred to herein as the "Preferred Stockholders". The Company and Preferred Stockholders hereby agree, subject to the terms and conditions set forth in this Letter Agreement as follows: DEFINITIONS "Common Stock" shall mean Common Shares of beneficial interest of the Company authorized and issued pursuant to the Declaration of Trust. "Declaration of Trust" shall mean the Restated Declaration of Trust of the Company dated as of October 7, 1994. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Preferred Stock" shall mean Preferred Shares of beneficial interest of the Company issued pursuant to the Declaration of Trust and that certain Redeemable Convertible Preferred Stock Purchase Agreement dated as of October 1, 1994 by and among the Company and Pacific Mutual Life Insurance Company, The Prudential Insurance Company of America, Pruco Life Insurance Company, ORIX USA Corporation, Weyerhauser Company Master Retirement Trust, TCW Special Credits Fund IV, TCW Special Credits Plus Fund, TCW Special Credits Trust IV, and TCW Special Credits Trust IVA. "SEC" shall mean the United States Securities and Exchange Commission. "Securities" shall mean the Preferred Stock and Common Stock (including Conversion Shares (as defined herein)). "Securities Act" shall mean the Securities Act of 1933, as amended. Section 1 EXCHANGE OF PREFERRED STOCK FOR COMMON STOCK 1.1 EXCHANGE. Subject to the terms and conditions set forth herein, each of the Preferred Stockholders hereby agrees to exchange each share of Preferred Stock held by such Preferred Stockholder for a number of shares of Common Stock to be issued by the Company pursuant to the following conversion ratio (the "Conversion Shares"): (a) the sum of (i) the number of shares of Preferred Stock that would have been issued and outstanding on October 10, 1998 if the Preferred Stock issued and outstanding as of the Closing Date (as defined herein) had remained outstanding until and as of such date (it being agreed that such number of shares of Preferred Stock is 16,764,135) plus (ii) the quotient of (A) the amount of cash dividends that would have accrued on the Preferred Stock between the date of this Agreement and April 10, 1999 (it being agreed that such amount is $1,814,364) divided by (B) the conversion price set forth in the Declaration of Trust (it being agreed that such amount is $2.00), divided by (b) the number of shares of Preferred Stock issued and outstanding as of the Closing Date (as defined herein). Subject to the terms and conditions set forth herein, the Company hereby agrees to issue the Conversion Shares upon receipt of share certificates representing all of the issued and outstanding shares of Preferred Stock from the Preferred Stockholders. 1.2 THE CLOSING. At the closing of the transactions described herein (the "Closing"), (a) each of the Preferred Stockholders will deliver to the Company the certificates evidencing the shares of Preferred Stock held by such holder together with duly executed blank stock powers, (b) the Company will accept and cancel such certificates representing shares of Preferred Stock and (c) the Company will deliver to Preferred Stockholders certificates for the Conversion Shares, registered in the denominations and names specified by each Preferred Stockholder. The Closing shall be held at the offices of Milbank, Tweed, Hadley & McCloy, 601 S. Figueroa St., thirtieth floor, Los Angeles, California 90017, on the third business day following satisfaction of the conditions set forth herein or at such other time and place as all parties to this Letter Agreement may mutually agree (the "Closing Date"). Section 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents, warrants and covenants to each Preferred Stockholder as follows: 2.1 ORGANIZATION; POWER AND AUTHORITY. The Company is a real estate investment trust duly organized, validly existing and in good standing under the laws of the State -2- of California. The Company has all requisite power and authority to transact its business as now transacted and proposed to be transacted, to execute and deliver this Agreement, to issue and exchange the Conversion Shares for the Preferred Shares and to perform the provisions of this Letter Agreement. 2.2 AUTHORIZATION, ETC. The execution, delivery and performance of this Letter Agreement and the other documents contemplated herein to which the Company is a party, the issuance and exchange of Conversion Shares for the Preferred Stock, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company, and this Letter Agreement has been executed and delivered by the Company, and this Letter Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 2.3 CAPITAL STOCK. The total number of shares of capital stock which the Company has authority to issue is 75,000,000 shares, consisting of 50,000,000 shares of Common Stock and 25,000,000 shares of Preferred Stock. As of October 1, 1998, the total number of outstanding shares of Common Stock was 4,881,122, the total number of outstanding shares of Preferred Stock was 16,764,135 and there were options and warrants to purchase an aggregate of 119,998 shares of Common Stock outstanding and options to purchase 1,450,000 shares of Common Stock had been granted subject to shareholder approval. 2.4 ISSUANCE OF THE CONVERSION SHARES. Upon issuance, the Conversion Shares will be duly authorized, validly issued, outstanding, fully paid and non-assessable. The delivery to each Preferred Stockholder of a certificate or certificates representing the Conversion Shares at the Closing will transfer to such Preferred Stockholder good and valid title to the Conversion Shares which it is entitled to receive hereunder, free and clear of all liens and encumbrances. 2.5 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS OF THE COMPANY, ETC. Except as described in Schedule 2.5 hereto, none of the execution and delivery of this Letter Agreement, or the issuance and exchange of the Conversion Shares for Preferred Stock or the consummation of the transactions contemplated herein or compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent under, the Restated Declaration of Trust or Bylaws of the Company, any applicable law or regulation (other than filings which will be made by the Company as required by applicable state securities laws), or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which the Company is a party or by which it is bound or to which it is subject, or constitute a default under any such agreement or instrument, or result in the creation or imposition of any lien upon any of the revenues or assets of the Company pursuant to the terms of any such agreement or instrument. 2.6 GOVERNMENTAL CONSENTS. Other than filings required by applicable state securities laws which shall be made by the Company, neither the nature of the Company or of any of its respective businesses or properties, nor any relationship between the Company and any other person, nor any circumstance in connection with the offer, issue or exchange of the Securities is such as to require consent, approval or authorization of, or filing, registration or qualification with, any governmental authority on the part of the Company as a condition to the execution, delivery or performance of this Letter Agreement. -3- 2.7 LEGAL PROCEEDINGS. There are no legal actions or proceedings pending, or to the knowledge of the Company, threatened against, relating to or affecting the Company which request or threaten to request the issuance of a court order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated in this Letter Agreement (or any similar transaction). Section 3 REPRESENTATIONS AND WARRANTIES OF THE PREFERRED STOCKHOLDERS. Each of the Preferred Stockholders, severally and not jointly, represents, warrants and covenants to the Company and each other Preferred Stockholder as follows: 3.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION, ETC. Such Preferred Stockholder has all requisite power and authority to execute and deliver this Letter Agreement and to perform its obligations pursuant to the provisions of this Letter Agreement. The execution, delivery and performance of this Letter Agreement, and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Preferred Stockholder. This Letter Agreement has been executed and delivered by a duly authorized representative of such Preferred Stockholder and constitutes a legal, valid and binding obligation of such Preferred Stockholder enforceable against such holder in accordance with its terms. 3.2 OWNERSHIP OF SHARES. Such Preferred Stockholder represents that such Preferred Stockholder is the sole legal owner of the number of shares of Preferred Stock set forth opposite such holder's name on Schedule 3.2. Such Preferred Stockholder holds such shares of Preferred Stock of the Company free and clear of any liens, claims, interests, charges and encumbrances. Such Preferred Stockholder represents that it has not previously entered into any agreement (other than this Agreement) to sell, assign, convey, transfer or otherwise dispose of, in whole or in part, the shares of Preferred Stock to be exchanged by such Preferred Stockholder pursuant to the terms hereof. Upon exchange of the Preferred Stock for the Conversion Shares at the Closing, such Preferred Stockholder will transfer to the Company, good and valid title to the Preferred Stock held by such holder, free and clear of all liens, claims, interests, charges and encumbrances. 3.3 ACQUISITION FOR EACH OF THE PREFERRED STOCKHOLDERS' OWN ACCOUNT; RESTRICTIONS ON TRANSFER; ACCREDITED INVESTORS. Such Preferred Stockholder represents and warrants to the Company that it is acquiring and will acquire the Conversion Shares for its own account (or a separate account managed by it), with no present intention of distributing or reselling its Conversion Shares or any part thereof in violation of the Securities Act, and that such Preferred Stockholder is prepared to bear the economic risk of retaining its Conversion Shares for an indefinite period of time, all without prejudice; provided that the disposition of its property shall in all times be and remain with in its control. Such Preferred Stockholder represents and warrants that it is an "accredited investor," as such term is defined in Rule 501(a)(3) of Regulation D promulgated under the Securities Act. Such Preferred Stockholder further covenants that it will not make any sale, transfer or other disposition of the Securities of the Company in violation of the Securities Act, the Exchange Act or the rules of the SEC promulgated thereunder. -4- 3.4 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS OF EACH OF PREFERRED STOCKHOLDERS, ETC. Except as described in Schedule 3.4 hereto, none of the execution and delivery of this Letter Agreement, or the issue and exchange of the Conversion Shares for Preferred Stock or the consummation of the transactions contemplated herein or compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent under, organic foundation documents or bylaws of such Preferred Stockholder any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which such Preferred Stockholder is a party or by which it is bound or to which it is subject, or constitute a default under any such agreement or instrument, or result in the creation or imposition of any lien upon any of the revenues or assets of such Preferred Stockholder pursuant to the terms of any such agreement or instrument. 3.5 GOVERNMENTAL CONSENTS. Neither the nature of such Preferred Stockholder or of any of its respective businesses or properties, nor any relationship between such Preferred Stockholder and any other person, nor any circumstance in connection with the offer, issue or exchange of the Securities is such as to require consent, approval or authorization of, or filing, registration or qualification with, any governmental authority on the part of such Preferred Stockholder as a condition to the execution, delivery or performance of this Letter Agreement. Section 4 COVENANTS OF THE COMPANY The Company hereby covenants and agrees with the Preferred Stockholders that all times from and after the date hereof until the Closing and, with respect to any covenant to be performed in whole or in part after the Closing, to the period specified therein or if no period is specified, indefinitely: 4.1 FAIRNESS OPINION. The Company shall use commercially reasonable efforts to obtain an independent "fairness" opinion from a recognized investment banking firm addressed to the trustees of the Company, together with a letter permitting the Company to deliver the fairness opinion to each of the Preferred Stockholders, and confirming that the transactions contemplated hereby are fair, from a financial point of view, to the Company and the shareholders of the Company other than the Preferred Stockholders. 4.2 CONSENTS. The Company shall use commercially reasonable efforts to obtain the consents described in Schedule 2.5. 4.3 FULFILLMENT OF CONDITIONS. The Company will take all commercially reasonable steps to satisfy conditions and obligations of the Company under this Letter Agreement and will not take or fail to take any action that could reasonably be expected to result in non-fulfillment of any such condition or obligation under this Letter Agreement. Section 5 CONDITIONS TO CLOSING. (a) The obligations of each Preferred Stockholder hereunder are subject to the satisfaction prior to the issuance of the Conversion Shares of the following conditions: (i) the Company shall have delivered to Preferred Stockholders a certificate, dated as of the Closing Date, of the Secretary or an Assistant Secretary of the -5- Company, (A) attaching a true and complete copy of the resolutions of the Board of Trustees of the Company, and of all documents evidencing other necessary corporate or shareholder action taken by the Company in connection with the matters contemplated by this Agreement, (B) attaching a true and complete copy of the Restated Declaration of Trust, (C) setting forth the incumbency of the officer or officers of the Company who sign this Letter Agreement, the other Documents, and each certificate for the Conversion Shares, including therein a signature specimen of such officer or officers, and (D) attaching a certificate of good standing (including tax status, if applicable) of the California Secretary of State; (ii) the Company shall have received a "fairness" opinion, in form and substance satisfactory to each of the Preferred Stockholders, from Duff & Phelps, LLC (or other recognized investment banking firm) addressed to the trustees of the Company, together with a letter permitting the Company to deliver the fairness opinion to each of the Preferred Stockholders, and confirming that the transactions contemplated hereby are fair, from a financial point of view, to the Company and the shareholders of the Company other than the Preferred Stockholders. (iii) all representations and warranties of the Company contained in Section 2 shall be true in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date (other than representations and warranties that are dated as of a specified date earlier than the Closing Date, which shall be certified to be true, correct and complete as of such earlier date) the Company shall have performed all agreements on its part required to be performed under this Letter Agreement on or prior to the Closing Date and Preferred Stockholders shall have received a certificate signed by the chief executive officer of the Company dated as of the Closing Date, certifying as to the effect specified in this paragraph; (iv) the Company shall have delivered to the Preferred Stockholders such other documents, agreements, instruments, certificates and evidence relating to the matters contemplated by this Letter Agreement as Preferred Stockholders or its counsel shall reasonably require; (v) since December 31, 1997, there shall have been no material adverse change or development in the business, financial condition, operating results, assets, operations, business prospects, cash flow, net worth or any franchiser, customer, tenant, supplier or employee relationship of the Company (each a "Material Adverse Effect"); (vi) the Company shall have delivered certificates representing Conversion Shares to each of Preferred Shareholders; (vii) all of the outstanding shares of Preferred Stock shall have been tendered to the Company by Preferred Stockholders; (viii) the Company shall have obtained the consents described in Schedule 2.5 and each of the Preferred Stockholders shall have obtained the consents discussed in Section 3.4; -6- (ix) there shall not be any pending or threatened action or proceeding (a) challenging this Agreement or the transactions contemplated hereby or seeking monetary damages in connection therewith or (b) which, in the reasonable judgement of any Preferred Stockholder, could be reasonably expected to have a Material Adverse Effect on the Company; and (x) the Company and each of the Preferred Stockholders shall have executed and delivered an amendment to that certain Registration Rights Agreement, dated as of October 1, 1994, by and among the Company and each of the Preferred Stockholders (the "Registration Agreement") to clarify that (i) Conversion Shares to be received by the Preferred Stockholders pursuant to the transactions contemplated herein shall be subject to the registration rights described in the Registration Agreement; and (ii) any and all securities that the Preferred Stockholders may receive in exchange for or in respect of Conversion Shares or thereafter shall be subject to the registration rights described in the Registration Agreement; and (xi) the Preferred Stockholders shall have received the opinion of Milbank, Tweed, Hadley & McCloy, counsel for the Company, in form and substance reasonably acceptable to the Preferred Stockholders. (b) The obligations of the Company hereunder are subject to the satisfaction prior to the issuance of the Common Stock of the following conditions: (i) all representations and warranties of each of the Preferred Stockholders contained in Section 3 shall be true in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date; each of the Preferred Stockholders shall have performed all agreements on its part required to be performed under this Agreement or any other Document on or prior to the Closing Date; and the Company shall have received a certificate signed by an officer, or other comparable representative, of each of the Preferred Stockholders dated as of the Closing Date, certifying as to the effect specified in this paragraph; (ii) each of the Preferred Stockholders shall have delivered to the Company original certificates representing all shares of Preferred Stock that it owns beneficially and stock powers duly executed or endorsed in blank; (iii) the Company shall have received a "fairness" opinion in form and substance satisfactory to the trustees of the Company and the Preferred Stockholders, from Duff & Phelps, LLC (or other recognized investment banking firm) addressed to the trustees of the Company and confirming that the transactions contemplated hereby are fair, from a financial point of view, to the Company and the shareholders of the Company other than the Preferred Stockholders and the Company shall have received a letter from Duff & Phelps, LLC permitting the Company to deliver such fairness opinion to each of the Preferred Stockholders; (iv) the Company shall have obtained the consents described in Section 2.4 and each of the Preferred Stockholders shall have obtained the consents discussed in Section 3.4; and -7- (v) there shall not be pending or threatened any action or proceeding challenging this Agreement or the transactions contemplated hereby or seeking monetary damages in connection therewith. Section 6 NOTICES 6.1 NOTICES. (a) All communications under this Agreement shall be in writing and shall be mailed by first class mail, postage prepaid: (i) if to the Company, at The Peregrine Real Estate Trust 1300 Ethan Way, Suite 200 Sacramento, California 95825 Attention: Mr. Roger Snell with copy to: Milbank, Tweed, Hadley & McCloy 601 South Figueroa Street Los Angeles, California 90017 Attention: Eric H. Schunk, Esq. (ii) if to TCW, at: TCW Special Credits c/o Oaktree Capital Management, LLC 333 South Grand Avenue, 28th Floor Los Angeles, California 90071 Attention: Mr. D. Richard Masson (iii) if to Prudential, at: Prudential Insurance Company of America Prudential Capital Group 4 Gateway Center 7th Floor 100 Mulberry Street Newark, New Jersey 07102 Attention: Mr. Paul L. Meiring (iv) if to Oaktree, at: Oaktree Capital Management, LLC 333 South Grand Avenue, 28th Floor Los Angeles, California 90071 Attention: Mr. D. Richard Masson or at such other address as each such party may have furnished in writing to each other party to this Letter Agreement and all other holders of Shares at the time outstanding. -8- (b) Any notice shall be deemed to have been duly given when delivered by hand, if personally delivered, and if sent by mail, two business days after being deposited in the mail, postage prepaid. 6.2 SURVIVAL. All warranties, representations and covenants made by the parties herein or in any certificate or other instrument delivered by them or on their behalf under this Letter Agreement shall survive for a period of one year after the issuance of the Conversion Shares and the exchange of the Preferred Stock, EXCEPT FOR the representations and warranties contained in Sections 2.2, 2.3 and 3.2 which shall survive the issuance of the Conversion Shares and the exchange of the Preferred Stock until expiration of the applicable statutes of limitations. All statements in any such certificate or other instrument so delivered shall constitute representations and warranties by the Company hereunder. 6.3 INDEMNIFICATION. The Company shall indemnify each of the Preferred Stockholders in respect of, and hold each of them harmless from and against, any and all losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to any breach of representation or warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Company contained in this Letter Agreement. 6.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, this Letter Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the Preferred Stockholders, whether so expressed or not. The Company may not assign its rights, nor to delegate its duties, under this Letter Agreement. 6.5 AMENDMENT AND WAIVER, ETC. This Agreement may be amended, and the observance of any term of this Letter Agreement may be waived, but only with the written consent of each of the Preferred Stockholders. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the Company and each of the Preferred Stockholders. No failure or delay on the part of the Preferred Stockholders in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. No waiver of any of the provisions of this Letter Agreement shall be deemed to be a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 6.6 COUNTERPARTS. This Agreement may be executed in one or more counterparts each of which shall be an original and all of which together shall constitute one and the same instrument. 6.7 SEVERABILITY. In the event that any one or more of the provisions contained in this Letter Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. -9- 6.8 SPECIFIC PERFORMANCE. The Company acknowledges that the Preferred Stockholders have no adequate remedy at law for breaches by the Company of its obligations hereunder, and accordingly the Company irrevocably agrees that the Preferred Stockholders shall be entitled to the remedy of specific performance and waives any right the Company may have to object to such remedy. 6.9 EXPENSES. The Company will pay all costs and reasonable expenses (including reasonable legal fees of one counsel to the Preferred Stockholders) incurred by Preferred Stockholders including (a) costs and expenses relating to the negotiation, execution and delivery of this Letter Agreement and any other agreement, instrument, document, or certificate necessary to consummate the transactions contemplated by this Letter Agreement and the issuance of Conversion Shares, (b) transfer taxes, (c) costs and expenses relating to printing the instruments evidencing the Conversion Shares, (d) costs and expenses relating to any amendments, waivers or consents under this Letter Agreement and (e) costs and expenses incident to the enforcement by Preferred Stockholders of, or the protection or preservation of any right or remedy of any Preferred Stockholder under, this Letter Agreement. 6.10 ENTIRE AGREEMENT. This Agreement, together with all Exhibits and Schedules hereto, constitutes the entire agreement among the Company and Preferred Stockholders pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. 6.11 CHOICE OF LAW. This Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without giving effect to its principles of conflict of laws. 6.12 TERMINATION. This Letter Agreement shall terminate (a) at any time prior to the Closing by mutual written agreement of the parties hereto or (b) on or after December 31, 1998 by any of the Company or the Preferred Stockholders if the Closing shall not have occurred on or prior to such date and such failure to consummate is not caused by a breach by the terminating party. If this Letter Agreement is validly terminated pursuant to clause (a) of the first sentence of this Section 6.12, this Letter Agreement will forthwith become null and void, and there will be no liability or obligation on the part of any party hereto, except for the obligation of the Company to pay expenses pursuant to Section 6.9. Upon termination of this Agreement pursuant to clause (b) of the first sentence of this Section 6.12, the breaching party, if any, whose breach has caused such termination will remain liable to the non-breaching party for any breach of this Letter Agreement existing at the time of such termination, and the non-breaching party may use such remedies, including damages and fees of attorneys, against such breaching party with respect to such breach as are provided for in this Letter Agreement or are otherwise available in law or equity. 6.13 SHAREHOLDER LIABILITY. Each of the parties hereto agrees that the shareholders of the Company are not personally liable for any written contracts or agreements entered into by the Company and shall not be personally liable for any obligation of the Company under this Agreement. -10- If the foregoing is in accordance with your understanding of our agreement, please so indicate by having an authorized representative sign this Letter Agreement in the appropriate space provided below and return to us this Letter Agreement on or prior to November 15, 1998, whereupon this Letter Agreement and your acceptance shall represent a binding agreement between you and the Company with respect to the matters set forth herein. THE PEREGRINE REAL ESTATE TRUST By: /s/ Roger Snell ---------------------------------------- Name: Roger Snell Title: President -11- IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be duly executed and delivered as of the day and year first written above. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ Gary D. Trabka ---------------------------------------- Name: Title: GATEWAY RECOVERY TRUST By: The Prudential Insurance Company of America, its Asset Manager By: /s/ Gary D. Trabka ----------------------------------- Name: Title TCW SPECIAL CREDITS FUND IV By: TCW Special Credits, Its: General Partner By: TCW Asset Management Company, Its: Managing General Partner By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: Authorized Signatory By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Authorized Signatory -12- TCW SPECIAL CREDITS PLUS FUND By: TCW Special Credits, Its: General Partner By: TCW Asset Management Company, Its: Managing General Partner By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: Authorized Signatory By: /s/ BRUCE A. KARSH Name: Bruce A. Karsh Title: Authorized Signatory TCW SPECIAL CREDITS TRUST IV By: Trust Company of the West, Trustee By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: Authorized Signatory By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Authorized Signatory TCW SPECIAL CREDITS TRUST IVA By: Trust Company of the West, Trustee By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: Authorized Signatory By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Authorized Signatory -13- OCM REAL ESTATE OPPORTUNITIES FUND A, L.P. By: Oaktree Capital Management, LLC Its: General Partner By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: President By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Principal OCM REAL ESTATE OPPORTUNITIES FUND B, L.P. By: Oaktree Capital Management, LLC Its: General Partner By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: President By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Principal WEYERHAEUSER REAL ESTATE OPPORTUNITIES SEPARATE ACCOUNT By: Oaktree Capital Management, LLC Its: Investment Manager By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: President By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Principal -14- WEYERHAEUSER COMPANY MASTER RETIREMENT TRUST By: TCW Special Credits, Its: Investment Manager By: TCW Asset Management Company Its: Managing General Partner By: /s/ Bruce A. Karsh ----------------------------------- Name: Bruce A. Karsh Title: Authorized Signatory By: /s/ Richard Masson ----------------------------------- Name: Richard Masson Title: Authorized Signatory -15- SCHEDULE 2.5 CONSENTS 1. Prior written consent and waiver from Fleet Capital Corporation pursuant to Section 10.1.12 of the Loan and Security Agreement, dated as of December 4, 1997, between the Peregrine Real Estate Trust and Fleet Capital Corporation. 2. Prior written consent and waiver from Holiday Inns Franchising, Inc. and Holiday Hospitality Franchising, Inc. relating to the Holiday Inn-Registered Trademark- Change of Ownership License Agreement dated July 20, 1993 relating to location number 1608, the Holiday Inn-Registered Trademark- Hotel License Renewal Agreement dated January 23, 1998 relating to location number 4203 and the Holiday Inn-Registered Trademark- Hotel License Renewal Agreement dated December 18, 1997 relating to location number 5053. 3. Prior written consent and waiver from the Noteholders and The Prudential Insurance Company of America as Agent for Noteholders relating to the Second Amended and Restated Note Agreement. SCHEDULE 3.2
BENEFICIAL OWNER NOMINEE NAME PREFERRED ---------------- ------------ --------- SHARES ------ GATEWAY RECOVERY TRUST GATEWAY RECOVERY TRUST 3,102,816 THE PRUDENTIAL INSURANCE THE PRUDENTIAL INSURANCE 1,361,667 COMPANY OF AMERICA COMPANY OF AMERICA WEYERHAEUSER COMPANY MASTER SALKELD & CO. 644,894 RETIREMENT TRUST TCW SPECIAL CREDITS FUND IV SALKELD & CO. 2,077,992 TCW SPECIAL CREDITS PLUS FUND SALKELD & CO. 2,221,304 TCW SPECIAL CREDITS TRUST IV SALKELD & CO. 1,791,375 TCW SPECIAL CREDITS TRUST IVA SALKELD & CO. 429,931 WEYERHAEUSER REAL ESTATE HARE & CO. 513,416 OPPORTUNITIES OCM REAL ESTATE OPPORTUNITIES HARE & CO. 1,694,273 FUND A, L.P. OCM REAL ESTATE OPPORTUNITIES HARE & CO. 2,926,467 FUND B, L.P. TOTAL PREFERRED SHARES: 16,764,135
SCHEDULE 3.4 CONSENTS NONE -----END PRIVACY-ENHANCED MESSAGE-----