FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 1-10547
MERIDIAN POINT REALTY TRUST VIII CO.
-------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Missouri 94-3058019
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
655 Montgomery Street, Suite 800
San Francisco, California 94111
-------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 956-3031
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, American Stock Exchange
par value $0.001 per share
Preferred Stock, American Stock Exchange
par value $0.001 per share
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes X No
----- -----
The aggregate market value of the voting stock held by non-affiliates of
the registrant on February 29, 1996 was $14,960,517 computed by reference
to the respective closing sales prices of the common stock and preferred
stock reported on the American Stock Exchange and by excluding common and
preferred stock owned by directors, executive officers and principal
shareholders (i.e., holders of 5% or more of the registrant's voting
stock).
The registrant had 1,609,937 shares of common stock and 5,273,927
shares of preferred stock outstanding on February 29, 1996.
<PAGE>
MERIDIAN POINT REALTY TRUST VIII CO.
Annual Report on Form 10-K
for The Year Ended December 31, 1995
Table of Contents
Form 10-K
Item No. Name of Item Page
Part I
Item 1. Business 1
Item 2. Properties 4
Item 3. Legal Proceedings 4
Item 4 Submission of Matters to a Vote of Security Holders 4
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 5
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 11
Part III
Item 10. Directors and Executive Officers of the Registrant 12
Item 11. Executive Compensation 15
Item 12. Security Ownership of Certain Beneficial Owners
and Management 17
Item 13. Certain Relationships and Related Transaction 18
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 19
Signatures 26
Financial Statements and Financial Statement
Schedule F-1 - F-15
- i -
<PAGE>
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PART I
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ITEM 1. BUSINESS.
The Company
Meridian Point Realty Trust VIII Co. (the "Company") is a Missouri
corporation whose shares of common and preferred stock are traded on the
American Stock Exchange. The Company was organized in December 1987 under
the name Sierra Capital Realty Trust VIII Co. The Company changed its name
to Meridian Point Realty Trust VIII Co. in September 1993.
The Company was organized to qualify as a real estate investment trust
("REIT") under Sections 856-860 of the Internal Revenue Code of 1986, as
amended (the "Code"). Under the Code, a REIT must meet certain criteria,
including requirements (a) that certain percentages of its gross income be
derived from specific sources, (b) that it distribute annually to its
shareholders at least 95% of its REIT taxable income (as defined in the
Code), and (c) that it not have five or fewer shareholders who own more
than 50% of the total value of its stock. The Company did not qualify as a
REIT for the years ended December 31, 1992 and 1993 because of the failure
to satisfy requirement (c) above. However, the Revenue Reconciliation Act
of 1993 added a provision which allows stock held by a qualified trust to
be treated as held directly by its beneficiaries in proportion to their
actuarial interest; this new "look-through" rule allows the Company to
satisfy requirement (c) above. The Internal Revenue Service has permitted
the Company to re-elect its REIT status beginning in the 1994 tax year.
(See Item 7 below and Note 8 to the Company's financial statements.)
The Company was formed for the purpose of making equity investments in
income-producing industrial and commercial real estate in selected areas of
projected growth in the United States. At December 31, 1995, the Company
had nine real estate equity investments consisting of twenty four
properties (see Item 2 below for a detailed description of the properties).
The Company's principal objectives are to preserve and protect the
shareholders' capital, provide shareholders with cash dividends, and
achieve capital appreciation through potential appreciation in the values
of the Company's properties. There is no guarantee that the Company's
objectives will be met.
The Company was formed and currently operates as a self liquidating
finite-life REIT. Its self-liquidating policy generally requires that the
proceeds from the sale or refinancing of Company properties not be
reinvested in additional properties but instead be distributed to
shareholders after payment of applicable debt and the establishment of
appropriate reserves. The Directors' decision to sell one or more
properties would be based on a number of factors such as: (i) the vitality
of the real estate and money markets, (ii) the economic climate, (iii)
potential environmental liabilities, (iv) the impact of a partial
liquidation on the Company's ability to cover ongoing overhead and
adequately reserve for contingencies, and (v) the income tax consequences
to the Company and its shareholders. Additionally, under the Company's
organizational documents the preferred shares as a class have a preference
with respect to distributions of sale or refinance proceeds. If the
Company's properties were to be sold, management believes that the
preferred shareholders, because of their distribution preference, would be
entitled to all distributions to be made from the net sale proceeds.
Common shareholders would be entitled to share in the distribution of net
sale proceeds only if the property portfolio were ultimately to be sold for
an amount that is sufficient to cover the full amount of the preferred
shareholders' preference, the property selling costs and, the costs of
liquidating.
During 1995 the Company engaged C.S. First Boston as its financial
advisor to explore future opportunities available to the Company. In that
regard, the Company's Board of Directors is considering all options that
may be available, which may include liquidation of the Company's assets,
conversion of the Company to an infinite-life REIT with accompanying
changes to the self-liquidating policy, or other options. The Company
currently has no properties for sale and has no plans to liquidate its
property portfolio in the near term.
Management and Employees
The Company's affairs are overseen by a Board of Directors (referred
to herein as the "Directors"). There are seven Directors of the Company,
six of whom are independent (i.e., not an affiliate of a person or entity
providing services for the Company or performs services for the Company
other than in his capacity as a Director).
From its inception until March 31, 1991, the Company was externally
managed by companies operating on a for-profit basis. That external
management was discontinued effective April 1, 1991. From April 1, 1991
through November 30, 1995, the Company and other companies of common
initial sponsorship were effectively self-administered through an
internalized management structure. Those other companies were: Meridian
Point Realty Trust '82 (which was dissolved in October 1994), Meridian
Point Realty Trust '83, Sierra Real Estate Equity Trust '84 Co., Meridian
Point Realty Trust IV Co., Meridian Point Realty Trust VI Co., and Meridian
Point Realty Trust VII Co. (the Company and those other companies are
collectively referred to herein as the "Companies").
The Companies leased employees at cost from Meridian Point Properties,
Inc., a California corporation ("MPP"), a captive company controlled by
the Companies, to perform administrative, accounting, asset management, and
property management functions under the terms of an Amended and Restated
Employee Leasing Agreement and certain other agreements. Under this
arrangement, the Companies reimbursed MPP for actual costs incurred by it
in connection with employees leased to the Companies. As of January 1,
1995, the Companies collectively leased thirty-nine employees from MPP.
Because MPP was paid only to the extent necessary to reimburse it for
actual costs, it did not realize any profit.
Prior to December 1, 1995, the cost reimbursements made to MPP were
allocated among the Companies in accordance with the Amended and Restated
Employee Leasing Agreement and other agreements between MPP and the
Companies in the following manner. First, costs directly attributable to a
particular Company were allocated to that Company. Second, costs that were
not directly attributable to a particular Company but rather benefiting a
group or all of the Companies were allocated among those Companies under
formulas that varied depending upon the type of cost involved. From
October 1994 forward, the number of Companies participating in the self-
administered management arrangement was six.
Effective December 1, 1995, the Company terminated the Amended and
Restated Employee Leasing Agreement with MPP and entered into a management
agreement with TIS Financial Services, Inc. ("TIS") of San Francisco,
California. MPP is in the process of dissolution as a result of the merger
of certain of the other Conpanies into Meridian Industrial Trust ("MIT").
Under the new management agreement, the Company retained TIS to manage its
assets, properties and investments in addition to performing administrative
services for the Company. The initial term of the management agreement is
for six months after which the agreement will be on a month to month basis.
The Company pays TIS, for services rendered under the agreement, a base
management fee calculated on an annual basis to be an amount equal to 0.75%
of the Company's Average Invested Assets, as defined in the agreement.
This agreement requires that TIS pay the employment expenses of its
personnel. As of January 1, 1996, the Company has no full time salaried
employees.
Effective December 7, 1995, Lorraine O. Legg was elected President and
Chief Executive Officer of the Company, replacing Milton K. Reeder who
resigned on the same date. Ms. Legg is also President and Chief Executive
Officer of TIS and serves as a Director of the Company. Also on December
7, 1995, following the resignation of the other senior officers of the
Company affiliated with MPP, various other TIS employees and other
individuals were elected as officers of the Company. Those officers of the
Company affiliated with TIS receive no direct compensation from the Company
in exchange for their services.
On December 7, 1995, Lawrence P. Morris was elected to the Board of
Directors of the Company. Mr. Morris was elected by the Directors to fill
a vacancy created by the resignation of Phillip R. O'Connor, effective
September 30, 1995.
Insurance
In addition to other types of insurance maintained by the Company, the
Company carries comprehensive general liability and excess liability
coverage on properties it currently owns in the aggregate amount of
$26,000,000 to insure against liability claims and provide for the costs of
defense. Similarly, the Company is insured against the risk of direct
physical damage in amounts necessary to reimburse the Company on a
replacement cost basis for costs incurred to repair or rebuild each
property, including loss of rental income during the construction period in
the aggregate amount of $25,000,000.
Tenants
The rental revenue generated by the Company's real estate portfolio is
affected by the terms of its 50 different tenant leases. Lease terms
generally range from three to five years, with some leases having renewal
options beyond their initial terms. The schedule below lists information
regarding existing leases which expire in each of the next five years and
from 2001 forward.
- --------------------------------------------------------------------------
% of % of
Trust Annual Rent Trust
Number of Total Sq. Ft. Total of Leases Total
Leases of Leases Potential Expiring Annual
Year Expiring Expiring Sq. Ft. (in dollars)(1) Rent(1)
- ------- --------- ------------- --------- --------------- -------
1996 10 331,515 12% $809,717 9%
1997 8 315,710 12% 1,005,957 11%
1998 9 250,317 9% 757,435 9%
1999 10 561,352 21% 1,292,146 15%
2000 4 130,285 5% 330,615 4%
2001+ 9 1,109,723 41% 4,646,293 53%
- --------------------------------------------------------------------------
(1) Based on the projected 1996 base rent of existing leases.
The Company had an overall occupancy level of 98.8% as of December 31,
1995.
Three tenants represent 43% of the total rental revenue of the Company
based on the projected 1996 base rent of existing leases. Leases for these
three tenants are scheduled to expire in 2003 (15% of total annual rental
revenue based on 1996 existing leases), 2004 (14% of total annual rental
revenue based on 1996 existing leases), and 2010 (13% of total annual
rental revenue based on 1996 existing leases).
The Company's single-tenant industrial properties are generally leased
to tenants on a triple-net basis, with tenants responsible for most day-to-
day operating expenses such as real estate taxes, insurance, utilities,
maintenance of common areas and non-structural repairs. The Company's
multiple-tenant industrial properties are generally leased to tenants on a
modified gross basis, with tenants responsible for utilities, maintenance
of common areas and non-structural repairs. Under a modified gross lease,
the Company is responsible for base year real estate taxes and insurance,
with the tenants responsible for any increases over the base year for these
expenses. Triple-net and modified gross leases generally reduce the
Company's exposure to increases in operating expenses. Leases may include
both fixed rent and escalating rent during their terms. For occupancy rates
of the Company's individual investments, see Item 2 below.
Real Estate Considerations
The results of the Company's operations depend to a great extent on
the Company's ability to lease its properties. In attracting and retaining
tenants, the Company competes with similar properties for location, lease
terms and property condition. In addition, the success of the Company
depends, among other factors, upon trends in the economy, the financial
condition of tenants and prospective tenants, operating results of retail
tenants, availability and cost of capital, interest rates, increases or
decreases in operating expenses, income tax laws, governmental regulations
and legislation, real estate market fluctuations, population trends and
zoning laws.
Regulation and Supervision
Many jurisdictions have adopted laws and regulations relating to the
ownership of real estate. Compliance with these requirements may from time
to time require capital expenditures by the Company (for example,
expenditures necessary in order to comply with the Americans with
Disabilities Act or changes in local building or other codes). In
addition, the Company may from time to time have to expend capital for
environmental control facilities. While the ownership of real estate may
entail environmental risks and liabilities to the owner, Company management
is sensitive to environmental issues and is not currently aware of and does
not expect any material effects on current or future capital expenditures,
earnings or competitive position resulting from compliance with present
federal, state or local environmental control provisions.
<PAGE>
ITEM 2. PROPERTIES.
As of December 31, 1995, the Company's portfolio of nine real estate
equity investments consisted of twenty four properties (either in the form
of direct ownership of the real property or in the form of an interest in a
partnership that directly owns the real property). The table below
provides information as to the location, the general character and the
occupancy level of those properties.
<TABLE>
- ---------------------------------------------------------------------------------------------------------
NET NUMBER
NUMBER RENTABLE OF OCCUPANCY
EQUITY INVESTMENT OF PROPERTY SQ. FT. LEASES PERCENTAGE
NAME AND LOCATION PROPERTIES DESCRIPTION 12/31/95 12/31/95 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
I. Auburn I (1) 1 One office building 114,000 1 100%
Auburn Hills, MI
II. South Sayre 1 One warehouse/distribution 242,690 1 100%
Bedford Park, IL center building
III. Waldenbooks 1 One warehouse/distribution 376,800 1 100%
Facility (3) center building
La Vergne, TN
IV. Memphis 8 (2)(3) 8 Eight warehouses/ 696,232 15 100%
Memphis, TN distribution center building
V. JC Penney(3) 1 One warehouse/ 105,785 1 100%
Memphis, TN distribution building
VI. Interchange D 1 One warehouse/ 67,275 7 93%
Jackson, MS distribution building
VII. Ethan Allen 1 One warehouse/distribution 300,300 1 100%
Chino, CA
VIII. Phoenix 5 5 Five warehouse/ 333,609 17 92%
Phoenix, AZ distribution buildings
IX. Brookhollow 5 Five warehouse/ 467,730 6 100%
Dallas, TX distribution buildings
- ---------------------------------------------------------------------------------------------------------
<FN>
(1) This property serves as collateral pursuant to a first deed of trust for the repayment of a
promissory note. (See Note 5 of the Company's financial statements.)
(2) One of the Memphis 8 properties serves as collateral pursuant to a first deed of trust for the
repayment of a promissory note. (See Note 5 of the Company's financial statements.)
(3) These properties are owned by Interchange Distribution Limited Partnership, a California limited
partnership. The partners of the partnership are the Company (the limited partner) and NASH-IND
Corporation, a wholly owned subsidiary of the Company (the general partner).
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company
or any partnership in which it has an interest is a party, or to which any
of the assets of the Company or any such partnership are subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company's security holders
during the last quarter of its fiscal year ended December 31, 1995.
<PAGE>
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PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The principal market on which the Company's shares of common stock and
preferred stock are traded is the American Stock Exchange ("AMEX"). The
listing symbols of the common stock and preferred stock on the AMEX are
"MPH" and "MPHpr", respectively.
As of February 29, 1996, the Company had outstanding a total of
1,609,937 shares of common stock and 5,273,927 shares of preferred stock.
As of the same date, the common and preferred stock were held by
approximately 1,000 and 1,600 holders of record, respectively (i.e. these
figures do not reflect beneficial ownership of shares held in nominee
names).
The following table illustrates the published high and low closing
sales price information for the common stock and preferred stock during
each calendar quarter for 1994 and 1995 (amounts in dollars).
Calendar Quarter Class High Low
- -----------------------------------------------------------------
1994
First Quarter Common 1-5/8 15/16
Preferred 5 4
Second Quarter Common 1-1/2 1
Preferred 3-3/4 3
Third Quarter Common 3-7/16 3/4
Preferred 5-1/4 3-1/4
Fourth Quarter Common 3-7/16 1-1/8
Preferred 5-3/8 4-1/4
1995
First Quarter Common 2-5/8 1-1/4
Preferred 4-3/4 4-3/8
Second Quarter Common 2-5/8 1-15/16
Preferred 4-3/4 4
Third Quarter Common 2-1/8 1-3/4
Preferred 4-3/4 4
Fourth Quarter Common 2 1-1/4
Preferred 5-1/2 4-1/8
On February 29, 1996, high and low sales prices for shares of the
Company's common stock on the AMEX were $ 2-1/8 and $ 2-1/8, respectively.
On February 29, 1996, the high and low sales prices for shares of the
Company's preferred stock on the AMEX were $ 5-3/4 and $ 5-3/4,
respectively.
As a REIT, the Company is required to make distributions to
shareholders that aggregate annually at least 95% of its taxable income.
In accordance with the Company's organizational documents, dividend
distributions to be made by the Company will always be at the discretion of
the Directors and will depend on, among other factors, the Company's
operations, cash flow, and financial condition, compliance with debt
covenants, required principal amortization payments, and applicable
statutory restrictions on the payment of dividends.
<PAGE>
Holders of preferred stock are entitled to a dividend preference under
certain circumstances as specified in the Company's Articles of
Incorporation. See Note 6 to the Company's financial statements. In 1994
holders of preferred stock were not entitled to any dividend preference.
Accordingly, holders of preferred stock and holders of common stock
participated equally, share for share, in the special dividend paid by the
Company as follows:
Special Dividend
Per Share Amount
---------------------------
Fiscal 1994 Preferred Common
---------------------- --------- -------
August 23, 1994 $0.2200 $0.2200
In 1995, the Company declared and paid four quarterly dividends
whereby the holders of preferred stock and holders of common stock
participated equally, share for share, as follows:
Dividend
Per Share Amount
---------------------------
Payable Date Preferred Common
---------------------- --------- -------
May 15, 1995 $0.07 $0.07
June 30, 1995 $0.07 $0.07
September 29, 1995 $0.07 $0.07
December 29, 1995 $0.07 $0.07
Each of the 1995 preferred dividends of $.07 includes a preference
amount of $0.06018 per share.
ITEM 6. SELECTED FINANCIAL DATA.
The following table summarizes certain selected financial data for the
Company for the five years ended December 31, 1995. This table should be
read in conjunction with the more detailed financial statements included
elsewhere herein.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
For the Years Ended December 31,
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rentals from Real Estate Investments $10,868,405 $11,886,484 $11,353,018 $12,321,893 $ 13,226,658
Net Loss Before Extraordinary Item $ (144,912) $(1,874,789) $ (703,270) $(4,475,572) $ (4,767,145)
Extraordinary Item $ (129,433) $ -- $ -- $2,231,420 $ --
Net Loss $ (274,345) $(1,874,789) $ (703,270) $(2,244,152) $ (4,767,145)
Rental Properties (Net) $81,765,163 $83,469,941 $88,129,068 $92,073,618 $109,867,225
Total Assets $76,494,325 $91,757,548 $95,842,193 $98,313,849 $115,505,066
Mortgage Notes Payable (Net) $ 7,782,168 $7,976,495 $ 1,843,696 $1,856,204 $ 15,527,022
Long Term Debt Facilities $24,259,396 $36,754,964 $43,622,525 $44,529,845 $ 43,804,053
Net Loss Per Common Share:
Loss Before Extraordinary Item $ (1.01) $ (1.885) $ (0.437) $ (3.389) $ (3.967)
Extraordinary Item $ (0.08) $ -- $-- $1.386 $ --
Net Loss Per Common Share $ (1.09) $ (1.885) $ (0.437) $ (2.003) $ (3.967)
Distributions Declared Per Share:
Preferred $ 0.280 $ 0.220 $ -- $ 0.186 $ 0.307
Common $ 0.280 $ 0.220 $ -- $ 0.186 $ 0.307
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
See "Material Changes in Results of Operations" under Item 7 for
information regarding material changes in results of operations during
1995, 1994 and 1993 Material changes in results of operations during 1991
and 1990 are primarily attributable to the fact the Company was in the
property acquisition phase through 1990. The decreases in Rental
Properties (Net) since 1991 were primarily due to decreases in net
realizable value of the Company's properties and the disposition of the
Westbrooke Village Shopping Center property in 1992.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Introduction
The Company is a self-liquidating, finite-life real estate investment
trust. (See Item 1 above.) The Company's principal asset is a portfolio of
twenty-four industrial and commercial properties, which are carried at the
lower of depreciated cost or net realizable value.
This section should be read in conjunction with the financial
statements and supplementary data listed in Item 8 below. Unless otherwise
defined in this report, or unless the context otherwise requires, the
capitalized words or phrases used in this section either: (a) describe
accounting terms that are used as line items in such financial statements,
or (b) have the meanings ascribed to them in such financial statements and
the notes thereto.
Discussion of Known Trends, Events and Uncertainties
The adverse economic climate for commercial real estate, which has
persisted for over the last several years, has begun to show signs that
rental rates and property values have stabilized and in selected markets
have actually improved. Notwithstanding a stabilizing real estate market,
tenants may or may not continue to renew leases as they expire or may renew
on less favorable terms. Conditions differ in each market in which the
Company's properties are located. Because of the continuing uncertainty of
future economic developments in each market, the impact these developments
will have on the Company's future cash flow and results of operations is
uncertain.
Inflation, inflationary expectations and their effects on interest
rates may affect the Company in the future by changing the underlying value
of the Company's real estate or by impacting the costs of financing the
Company's operations. The Company's policy of negotiating leases on a
triple-net basis or modified gross basis, whenever possible, is designed to
help protect the Company against some of the increased costs that might
otherwise result from inflation.
One of the requirements for REIT qualification is that five or fewer
shareholders cannot own more than 50% of the total value of a company's
outstanding stock at any time during the last half of the taxable year (the
"five or fewer rule".) For purposes of this rule under the law as it
existed before 1994, domestic pension trusts were treated as a single
individual.
Due to fluctuations in the fair market value of its preferred stock
relative to its common stock, the Company failed to satisfy the five or
fewer rule and therefore did not qualify as a REIT for the years ended
December 31, 1992 and 1993. These fluctuations were due in part to (i)
recent declines in real estate values and (ii) the preferred shareholders'
liquidation preference. As a result of the loss of REIT status, the
Company was taxed as a regular corporation for the years ended December 31,
1992 and 1993; however, the loss of REIT status did not have a material tax
impact on the Company because the Company did not have any taxable income
in 1992 or 1993.
Beginning with the 1994 tax year, the five or fewer rule was modified
to allow REITs to "look through" to the beneficiaries of a domestic pension
trust and treat each beneficiary as owning stock in the Company in
proportion to the beneficiary's actuarial interest in the domestic pension
trust. This new "look-through" rule allowed the Company to again satisfy
the five or fewer rule and again elect REIT status beginning in the 1994
tax year.
During 1995, the Company engaged C.S. First Boston as its financial
advisor to explore future strategic opportunities available to the Trust.
In that regard, the Company's Board of Directors is considering all options
that may be available, which include liquidation of the Company's assets,
conversion of the Company to an infinite-life REIT with accompanying
changes to the self-liquidating policy, or other options. The Company
currently has no properties for sale and no plans to liquidate its property
portfolio in the near term.
The Company has determined that a soil settlement problem at the 1033
East Maricopa property in Phoenix, Arizona is far more serious than
originally understood. Outside consultants have indicated that if the soil
under the building continues to settle, a portion of the building may be
uninhabitable within a year. The Company is currently negotiating with the
building's tenant regarding an early termination of its tenancy so that the
Company can undertake a repair of the building. In addition, the Company
is pursuing a lawsuit against the entity from which it purchased the
property as well as a third party consultant. The Company has not provided
for any valuation reserves or accruals to rectify the settlement problem
because those amounts are not currently determinable. The property
represents less than one percent (1%) of the Company's investments in real
estate.
Liquidity and Capital Resources
The Company's main sources of liquidity are: (i) cash flows from
operating activities, (ii) Funds From Operations, (iii) cash reserves, and
(iv) net proceeds from the sale of the Company's real properties.
Secondary sources of liquidity may include: (i) proceeds from the issuance
of additional shares of stock, and (ii) proceeds from secured and unsecured
debt. A summary of the Company's historical cash flows is as follows:
<TABLE>
<CAPTION>
Cash flows provided by Year ending December 31,
(used in): 1995 1994 1993
<S> <C> <C> <C>
Operating activities $ 3,656,858 $ 3,764,810 $ 3,317,153
Investing activities 1,206,802 (576,413) (454,083)
Financing activities (4,807,843) (2,373,487) (1,050,672)
</TABLE>
In addition to cash flows and net income, management and industry
analysts generally consider Funds From Operations to be one additional
measure of the performance of an equity Real Estate Investment Trust (REIT)
because, together with net income and cash flows, Funds From Operations
provides investors with an additional basis to evaluate the ability of the
Company to incur and service debt and to fund acquisitions and other
capital expenditures. However, Funds From Operations does not measure
whether cash flow is sufficient to fund all of the Company's cash needs
including principal amortization, capital improvements, and distributions
to shareholders. Funds From Operations also does not represent cash
generated from operating, investing or financing activities as determined
in accordance with generally accepted accounting principles. Funds From
Operations should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to
cash flow as a measure of liquidity. Funds From Operations represents net
income (loss) before extraordinary items, adjusted for depreciation on real
property and amortization of tenant improvement costs and lease
commissions, gains from the sale of property, equity in earnings/(loss) of
unconsolidated joint ventures and net realizable value (NRV) provisions.
The Company's pro rata share of the Funds From Operations of the
Unconsolidated Joint Venture is also included in the Company's Funds From
Operations. Prior to 1993, the Company made certain non-cash rent
adjustments to Funds From Operations. To conform with the industry
definition of Funds From Operations, these years have been restated to
exclude these non-cash rent adjustments. Funds From Operations as disclosed
by other equity REITs may not be comparable to Funds From Operations as
determined by the Company. A reconciliation of the Company's net income
(loss) to Funds From Operations is as follows:
<TABLE>
<CAPTION>
Year ending December 31,
1995 1994 1993
<S> <C> <C> <C>
Net income (loss) $(274,345) $(1,874,789) $(703,270)
Reconciling items -
Depreciation and amortization 2,609,916 3,051,485 2,840,531
(Gains)/losses from sale of property (1,197) -- --
Extraordinary Item 129,433 -- --
----------- ---------- ----------
Funds From Operations, including NRV provisions 2,463,807 1,176,696 2,137,261
NRV provisions 1,182,015 2,392,000 1,381,000
---------- ---------- ----------
Funds From Operations, excluding NRV provisions $3,645,822 $3,568,696 $3,518,261
========== ========== ==========
</TABLE>
Management considers Funds From Operations, excluding NRV provisions,
to represent one of the appropriate operating performance measures of an
equity REIT. Management considers NRV provisions to reflect adjustments of
real estate values based upon rising or falling market conditions which,
although indicative of impairment of the Company's investment, do not
necessarily correlate to ongoing operating results.
The Company's principal applications of its cash resources are (i)
operating expenses related to real estate operations, general and
administrative expenses, interest expense, and legal costs, (ii) capital
improvements, (iii) principal payments under one of its long-term debt
facility (see discussion below) and mortgage notes payable, and (iv)
payment of distributions to its shareholders. During 1995, Funds From
Operations were sufficient to fully fund the Company's cash needs for the
items listed in the immediately preceding sentence.
As of December 31, 1995, the Company had approximately $5.0 million in
cash and cash equivalents.
Debt Facilities
The Company had two long-term debt facilities. The first facility,
which was entered into in May 1990, is with an insurance company. The
second facility, which was extinguished in connection with the August 11,
1994 refinancing of the Auburn Hills property, was with a bank (see
discussion below). Together, these facilities provided the Company with
financing for property acquisitions, capital improvements and general
operating needs. At the present time, there is no credit availability
under the insurance company facility. Furthermore, the insurance company
facility is unsecured and the Company has agreed not to encumber any
additional Company property without the insurance company's prior consent.
As of December 31, 1995, there were four outstanding advances totaling
$24,259,396 under the insurance company facility. These advances bear
fixed interest rates for periods ranging from twelve months to two years.
Under the existing insurance company facility agreements, the various
advances and the corresponding interest rate contracts mature on the dates
specified below.
Loan Amount
as of 12/31/94 Rate Maturity Date
------------------- -------- ----------------
$3,815,088 7.60% December 1996
6,059,256 8.87% June 1997
11,532,448 8.87% June 1997
2,852,604 8.80% May 1998
-------------------
$24,259,396
===================
The insurance company loans amortize monthly under a 22 year schedule
subject to the maturities identified above. Furthermore, should the loan
to value ratio of the Company's portfolio exceed 55%, the Company is also
required to pay the insurance company any "Excess Cash." Excess Cash is
defined as cash reserves above $4 million at the end of each quarter.
During 1993, the Company made Excess Cash payments to the insurance company
of $257,183. This action resulted in the Company returning to compliance
with the required loan-to-value ratio covenant of 55%. No Excess Cash
payments were required during 1994 or 1995.
Based on management's estimates of the values as of December 31, 1995,
the Company is in compliance with all covenants. The insurance company,
however, has complete discretion regarding valuations and is currently
reviewing management's estimates of value. If the insurance company were
to calculate a loan-to-value ratio greater than 55%, the Company would have
to make an Excess Cash payment, and the Company's dividends could be
restricted.
As of December 31, 1995, approximately 16% or $3,815,088 of the
Company's advances under the insurance facility was subject to an interest
rate contract with a remaining terms of twelve months or less. The
weighted average remaining term of all the Company's interest rate
contracts as of December 31, 1995 was approximately 1.5 years. The
weighted average interest rate of the insurance company facility during
1995, 1994, 1993 and 1992 was 8.41% 8.29%, 8.69%, and 8.94%, respectively.
As of December 31, 1995, the weighted average interest rate of the facility
was 8.67%.
On May 25, 1995, the Company sold the Kroger property located in
Jackson, Mississippi. The net sale proceeds received from that transaction
were used to make a principal payment on the insurance company facility.
On July 24, 1995, the Company sold the Tropicana Marketplace located in Las
Vegas, Nevada. The Company used the net sale proceeds from the Tropicana
Marketplace to pay the entire balance of an interest rate contract which
was maturing in October 1995 and part of the balance of the interest rate
contract maturing in December 1996. As a result of this payment, an
interest rate contract maturing in October 1995 with a notional amount of
$5,541,419 was paid off completely, and the amount due in December 1996 was
reduced.
On September 17, 1993, the shareholders of the Company elected four
individuals as new members of the board. The election of four new board
members (constituting a majority of the board) created a default under the
Company's loan agreements with the bank and the insurance company. The
insurance company has indicated that it will reserve its rights with
respect to the default but will not currently pursue any remedy available
to it under the terms of its loan agreement with the Company.
As noted above, the bank facility was extinguished in connection with
the August 11, 1994 refinancing of the Auburn Hills property. The new loan
in the original principal amount of $6,220,000 has a fifteen-year term with
a maturity date of August 1, 2009, and bears an interest rate of 8.875% per
annum. The monthly principal and interest payments are based on a schedule
specified in the loan agreement. The Company used the proceeds to pay off
the bank facility which, at the time of refinancing, had an outstanding
balance of $5,928,958. Net cash proceeds received from the refinancing
amounted to $141,672 after (i) extinguishment of the bank facility, (ii)
closing and pro-rated items totaling $87,170, and (iii) payment of a loan
fee amounting to $62,200.
For a summary of the Company's historical compliance with its existing
debt facilities, see Note 4 to the financial statements.
Real Estate Activity
The Company made no real estate acquisitions during 1995 or 1994.
On May 25, 1995, the Company sold the Kroger property located in
Jackson, Mississippi. The selling price of $2,000,000 was paid entirely in
cash. The Company received net proceeds of $1,927,677, after deductions
for closing costs and prorated items totaling $72,323. In connection with
the sale, the Company recognized a Gain on Sale of Property of $157,257.
The property had previously been written down to its estimated net
realizable value.
On July 24, 1995, the Company sold the Tropicana Marketplace located
in Las Vegas, Nevada for a selling price of $10,218,000. Net proceeds
amounted to $9,644,065 after (i) $398,935 of adjustments for closing costs,
interest earned and pro-rations, and (ii) adjustment for an escrow holdback
amounting to $175,000. The net proceeds from the sale and additional funds
of $322,553 deposited by the Company into an escrow account totaling
$9,966,618 were remitted to the insurance company as additional principal
reduction totaling $9,809,535, prepayment penalties amounting to $129,433,
and an interest payment of $27,650. The Company used the net sale proceeds
from the Tropicana Marketplace to pay the entire balance of an interest
rate contract which was maturing in October 1995 and part of the balance of
the interest rate contract maturing in December 1996.
Capital expenditures for the years ended December 31, 1995, 1994, and
1993, totaled $519,937, $560,876, and $541,791, respectively. Lease
commissions for 1995, 1994, and 1993 were $185,485, $195,636, and
$203,789, respectively. Capital expenditures for 1995 were primarily for
necessary improvements at the Memphis properties and the Belden property.
Capital expenditures for 1994 were primarily for: (i) roof repairs and
painting at one of the Brookhollow 4 properties, (ii) structural repairs
made to one of the Phoenix 5 properties, and (iii) tenant improvements at
the Memphis 8 properties. Capital expenditures for 1993 were primarily for
(i) tenant improvements at the Tropicana Marketplace and Brookhollow 4
properties and (ii) paving of the parking lots at the Memphis and Phoenix 5
properties. In formulating plans for capital improvements, the Company
considers, among other factors, the reasonable prospect of being able to
recover the costs of such improvements over a reasonable period of time
either from increased rental revenues or upon the sale of the property and
the potential effects of such improvements on funds available for
distribution. The Company has budgeted capital expenditures of $1,029,170
for 1996.
Dividends
The Company paid dividends to shareholders aggregating $1,927,483 and
$1,514,450 for the years ended December 31, 1995 and 1994, respectively.
No dividends were paid in 1993. See Item 5 above and Note 6 to the
Company's financial statements for a discussion of dividend restrictions.
Material Changes in Results of Operations
Revenues
Rentals from Real Estate Investments totaled $10,863,405, $11,886,484
and $11,353,018 for the years ended December 31, 1995, 1994 and 1993,
respectively. The decrease of $1,023,079 during 1995 as compared to the
same period in 1994 was primarily due to the loss of rents from the Kroger
and Tropicana properties which where sold during the year and adjustments
to expense recaptures. The increase of $533,466 during 1994 as compared to
the same period in 1993 was primarily due to (i) the timing in the
recognition of Expense Recaptures, and (ii) collection of rent abatements
previously given to a tenant at one of the Brookhollow properties.
Interest and Other income totaled $326,170, $194,915 and $110,954 for
the years ended December 31, 1995, 1994 and 1993, respectively. The
increases of $131,255 and $83,961 during 1995 and 1994 as compared to
their respective prior years were primarily due to increases in the
Company's average cash balances available for investment.
Expenses
Interest and Amortization of Debt Premium totaled $3,393,743,
$3,901,912 and $4,155,970 for the years ended December 31, 1995, 1994 and
1993, respectively. The decrease of $343,661 during 1995 was due primarily
to lower debt service costs as a result of reduced principal on the
Company's insurance facility resulting from the sales of Kroger and
Tropicana Marketplace properties. The decrease of $235,041 during 1994 as
compared to the prior year was primarily due to: (i) lower debt service
costs on the Company's facilities, (ii) the refinancing in October 1993 of
the mortgage note securing Memphis #20, one of the Memphis 8 properties, at
a lower interest rate, and (iii) the extinguishment in June 1992 of the
mortgage note secured by Westbrooke as a result of the deed-in-lieu of
foreclosure transaction.
Property Taxes totaled $1,536,584, $1,739,159 and $1,583,636 for the
years ended December 31, 1995, 1994 and 1993, respectively. The decrease
of $202,575 during 1995 as compared to the same period in 1994 was
primarily due to (1) city and county tax refunds received in 1995, (2) a
decrease in the assessed values of the Company's properties and a
consequent reduction in property taxes, and (3) the sales of the Kroger and
Tropicana properties. The increase of $155,523 during 1994 as compared to
the same period in 1993 was primarily attributable to (i) accrual
adjustments made to property taxes in 1993, and (ii) higher tax assessments
in 1994 on some of the Company's properties.
Property Operating Costs totaled $ 1,506,583, $1,467,066 and
$1,207,338 for the years ended December 31, 1995, 1994 and 1993,
respectively. The increase of $39,517 in 1995 was due primarily to an
increase in bad debt expenses at the Tropicana property which was sold. The
increase of $259,728 in 1994 was primarily due to: (i) increased marketing
and promotional costs to lease space at the Tropicana Marketplace property,
and (ii) roof repairs and other property maintenance costs.
Legal Costs during the years ended December 31, 1995, 1994 and 1993
totaled $63,290, $135,155 and $182,143, respectively. This decrease in
1995 was primarily due to non-recurring fees incurred in 1993 and 1994 in
connection with the restructuring of the Company's debt facility and fees
incurred in the determination of the Company's status as a real estate
investment trust
General and Administrative expenses remained stable for the year ended
December 31, 1995 at $939,607. Compared to the same period in 1993,
General and Administrative expenses increased by $336,312 to $947,820 for
the year ended December 31, 1994. The increase was primarily due to: (i)
an increase in the cost to the Company for liability insurance coverage,
(ii) additional taxes resulting from the Company's loss of real estate
investment status in 1992, and (iii) costs incurred in connection with the
refinancing of the Auburn Hills Property.
Included in Net Income are the non-cash expenses of Depreciation and
Amortization. For the years ended December 31, 1995, 1994 and 1993, these
expenses totaled $2,718,862, $3,540,584 and $3,229,172, respectively. The
decrease of $821,722 during 1995 as compared to the same period in 1994 was
primarily due to the sale of the Kroger and Tropicana properties. The
increase of $311,412 during 1994 as compared to the same period in 1993 was
primarily to: (i) depreciation on capital improvements made during 1993 and
1994 and (ii) full amortization of certain Personal Property during 1994.
Other Matters
For the years ended December 31, 1995, 1994 and 1993, the Company
recorded Provisions for Decrease in Net Realizable Value amounting to
$1,182,015, $2,392,000, and $1,381,000, respectively. The provision is to
provide for the unrealized decrease in the net realizable value of the
Company's rental properties. These provisions represent a non-cash charge
to operations. (See Note 1 to the financial statements of the Company.)
Effective September 30, 1995, Philip R. O'Conner resigned from the
Board of Directors. On December 7, 1995 the Board elected Lawrence P.
Morris to be a Director of the Company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and supplementary data listed in Item
14(a)(1) and (a)(2) below are incorporated herein by reference and filed as
part of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company has not changed its independent certified public
accountants and has not had any disagreement with its independent certified
public accountants on accounting or financial disclosures required to be
made under rules of the Securities and Exchange Commission.
<PAGE>
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PART III
-------------------------------------------------------------------------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors
The Directors are elected annually and serve until the next annual
meeting of shareholders and until their successors are elected and
qualified. The Company's Bylaws provide that the number of Directors shall
be not less than three nor more than seven. Presently the authorized
number of Directors is seven. In addition, the Company's Bylaws provide
that a majority of the Directors shall be "Independent Directors." An
"Independent Director" generally means a Director who is neither an
affiliate of a person or entity providing services to the Company nor is
himself performing services for the Company other than as a Director. The
Board of Directors of the Company presently consists of the seven
individuals named below. Six of the seven individuals named below are
"Independent Directors." Set forth below are each Director's age, current
position with the Company, and business experience during the past five
years or more.
Christopher J. Doherty
Director (2)
Age: 40
Mr. Doherty is a Partner at the Washington D.C. law firm of Fox, Bennett &
Turner. He has been with the firm for a total of six years from 1989 to
1991 and from 1993 to present. Mr. Doherty served as General Counsel and
Deputy Treasurer to the Commonwealth of Massachusetts State Treasurer and
as Massachusetts Special Assistant Attorney from 1991 to 1993. From 1986 to
1989, he served as Legislative Assistant and Counsel to the U.S. Senate
Committee on Labor and Human Resources. From 1979 to 1986 he served as a
Special Assistant to Senator Edward M. Kennedy. Mr. Doherty has a J.D.
from the Georgetown University Law Center and a B.A. from Harvard
University. Mr. Doherty has been a Director of the Company since September
1993.
Peter O. Hanson
Director (1)
Age: 62
Mr. Hanson has been the President of James E. Hanson, Inc., an industrial
real estate developer, property management and realty brokerage firm, since
1966. Since 1984, he has served as President of Property Investors
Associates, Inc. (a subsidiary of James E. Hanson, Inc.), which is the
general partner of five public real estate partnerships. He has been a
Director of seven privately-held corporations and general partner of eleven
privately-held real estate partnerships. Mr. Hanson is a member of the
Society of Industrial and Office Realtors, and served as its National
President in 1985; he is also a member of the New York Metropolitan Real
Estate Brokers Association and in 1970 was its President. Mr. Hanson has
been a Director of the Company since 1988. He also is a Trustee of
Meridian Point Realty Trust '83 and Meridian Industrial Trust.
Lorraine O. Legg
President and Chief Executive Officer and Director (2)
Age: 56
Ms. Legg has been President and Chief Executive Officer and a director of
TIS Financial Services, Inc. since 1984, TIS Mortgage Investment Company
since 1988, and TIS Asset Management, Inc. since 1990. She is also
President and Chief Executive Officer and a director of Corporate Capital
Investment Advisors. TIS Financial Services, Inc., and its affiliates
manage real estate and mortgage investment portfolios for individuals and
corporations, including TIS Mortgage Investment Company, which is a real
estate investment trust traded on the New York Stock Exchange. In
addition, Ms. Legg is a director of CFI Proservices, Inc. located in
Portland, Oregon. Ms. Legg has over thirty-two years of experience in
corporate and real estate finance. Ms. Legg has served as a Director of
the Company since March 1993 and was elected as President and Chief
Executive Officer in December 1995. She also is a Trustee of Meridian
Point Realty Trust '83.
S. Michael Lucash
Chairman and Director (1)
Age: 45
Mr. Lucash has been a Managing Director for Real Estate at Llama Company
since December 1995. Mr. Lucash was Chief Operating Officer of Boston
Capital Mortgage Company from March through December 1995. From 1993 -
1995 he was Chief Operating Officer of ARBOR National Commercial Mortgage
Corporation. Mr. Lucash was President of Commercial Mortgage Corporation
of America from 1987 to 1993. From 1985 to 1987 Mr. Lucash was Vice
President of Mortgage Banking at City Trust. Mr. Lucash has a B.S. from
Southern Connecticut State University. Mr. Lucash also attended
Massachusetts School of Law. Mr. Lucash has been the Chairman and a
Director of the Company since September 1993.
Lawrence P. Morris
Director
Age:
Mr. Morris has been the Executive Vice President and Head of the Public
Finance Department for Mesirow Financial, Inc. since 1994. From 1985 to
1994, Mr. Morris was a Vice President of First Chicago Capital Markets Inc.
where he managed the investment activities associated with bond financings
and escrow restructuring. From 1982 to 1985 Mr. Morris was an Assistant
Vice President at the First National Bank of Chicago. Mr. Morris received
his B. A. from the University of Notre Dame in 1978 and is a Certified
Public Accountant. Mr. Morris has served as a director of the Company
since December 1995.
Homer McK. Rees
Director
Age: 65
From 1982 to 1992, Mr. Rees held various positions with The Prudential
Insurance Company of America, including Chairman in 1992 and President from
1988 to 1991 of Prudential Capital Corporation, a marketing unit
responsible for origination of private placements. Mr. Rees retired in
1992. Mr. Rees has an M.B.A. from Harvard University and a B.A. from Yale
University. Mr. Rees has served as a Director of the Company since March
1993.
Micolyn M. Yalonis
Director (2)
Age: 36
Ms. Yalonis has been Vice President of Callan Associates, Inc. since 1993.
She was an independent real estate consultant from October 1992 to 1993,
providing independent real estate consulting services to advisors, plan
sponsors, and other institutional market participants. From 1988 to 1992,
she held various positions with Callan Associates Inc., including Vice
President, Manager from 1991 to 1992 and Assistant Vice President from June
1990 to November 1991. Ms. Yalonis has a B.A. from the University of
California, Los Angeles. Ms. Yalonis has been a Director of the Company
since September 1993.
- -----------------------------------------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
Executive Officers
The following table sets forth as to each person who currently serves
as an executive officer, his or her name, age, and positions with the
Company:
Name Age Position
- ---------------------- --- --------------------------------------
Lorraine O. Legg 56 President and Chief Executive Officer
John E. Castello 51 Senior Vice President and
Chief Financial Officer
Michael Gilbert 52 Vice President Real Estate
Denis F. Shanagher 39 Secretary
Michael Stone 59 Controller
Heather B. Reynolds 41 Assistant Secretary
<PAGE>
Officers of the Company hold office at the discretion of the
Directors. Each executive officer's principal occupations during the past
five years or more are set forth below.
Lorraine O. Legg
President and Chief Executive Officer and Director
Ms. Legg has been President and Chief Executive Officer and a director of
TIS Financial Services, Inc. since 1984, TIS Mortgage Investment Company
since 1988, and TIS Asset Management, Inc. since 1990. She is also
President and Chief Executive Officer and a director of Corporate Capital
Investment Advisors. TIS Financial Services, Inc., and its affiliates
manage portfolios of real estate and mortgage investments for individuals
and corporations, including TIS Mortgage Investment Company, which is a
real estate investment trust traded on the New York Stock Exchange. In
addition, Ms. Legg is a director of CFI Proservice, Inc. located in
Portland, Oregon. Ms. Legg has over thirty-two years of experience in
corporate and real estate finance. Ms. Legg has served as a Director of
the Company since March 1993 and was elected as President and Chief
Executive Officer in December 1995. She also is a Trustee of Trust '83
John E. Castello
Senior Vice President and Chief Financial Officer
John E. Castello has been Senior Vice President of TIS Financial Services,
Inc. since 1985, Executive Vice President and Chief Financial Officer of
TIS Mortgage Investment Company since 1988, and Senior Vice President and
Chief Financial Officer of TIS Asset Management, Inc. since 1991 He is a
Director, TIS Mortgage Acceptance Corporation and Assistant Secretary, INVG
Mortgage Securities Corp. (since 1992).
Michael Gilbert
Vice President Real Estate
Mr. Gilbert has served as Vice President Real Estate for TIS Financial
Services since 1995. Prior to this time he was a real estate consultant,
active in major development projects in Southern California and many other
areas of the country. Previously Mr. Gilbert was vice president of S.H.
Management, Inc. a privately owned Los Angeles based investment concern.
He was previously a vice president and director of Gordon Capital Limited,
a member firm of the major Canadian Stock Exchanges.
Denis F. Shanagher
Secretary
Mr. Shanagher has been a partner of the law firm of Preuss Walker &
Shanagher since August of 1993. Mr. Shanagher was a partner in the law
firm of Bronson, Bronson & McKinnon from 1987 - 1993, and an associate in
the firm from 1981-1987. Mr. Shanagher has a J.D. from Hastings College of
the Law and a B.A. from Stanford University. Mr. Shanagher has served as
outside General Counsel to the Company since December of 1994.
Michael Stone, CPA
Controller
Michael Stone has been Controller of TIS Financial Services, TIS Mortgage
Investment Company and TIS Asset Management since 1993. Prior to that Mr.
Stone served as Vice President - Finance at Dolby Laboratories, a position
he held for seven years. He served as Assistant Corporate Controller for
twelve years at McKesson Corporation and Accounting Manager at Crocker
Estate Company. for five years. After receiving his CPA, Mr. Stone was a
Staff Accountant at the firm of Arthur Young and Company for five years.
Heather B. Reynolds
Assistant Secretary
Heather Reynolds has been administrative assistant to Lorraine O. Legg at
TIS Financial Services, Inc. for the past seven months. Before joining
TIS, Ms. Reynolds was senior administrative assistant for two and one half
years to the Senior Managing Director and Branch Manager of Bear Stearns &
Co., Inc. Prior to that she was the Office Manager for Star Systems, a San
Francisco based software company.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Compensation of Executive Officers
As of December 31, 1995, the Company had no full time employees and is
currently managed under a Management Agreement with TIS Financial Services
Inc. This agreement requires that TIS pay the employment expenses of its
personnel.
Prior to December 1995, the Company shared employee costs under an
internalized management structure using MPP. See Item 1. The number of
Companies participating in the management arrangement was reduced to six
effective October 21, 1994, the effective date of the final liquidation of
Meridian Point Realty Trust '82. For the year ended December 31, 1995, the
Company's allocated share of each of its executive officer's cash and non-
cash compensation did not exceed $100,000.
SUMMARY COMPENSATION TABLE
A n n u a l C o m p e n s a t i o n
(a) (b) (c) (d) (i)
Name and All Other
Principal Position Year Salary(2) Bonus(4) Compensation(3)
Milton K. Reeder 1992 $ 36,383 $ 5,787 $ 1,453
President and Chief 1993 37,213 16,376 1,105
Executive Officer (1) 1994 54,602 15,000 2,139
1995 48,496 12,000 1,996
(1) Mr. Reeder was appointed as President and Chief Executive Officer of
the Company in January 1991. Mr. Reeder was employed pursuant to an
Employment Agreement dated July 2, 1991, which among other provisions,
was subject to renewal in the absence of notice to the contrary more
than six months prior to expiration of its initial term. On June 23,
1995, the Company notified Mr. Reeder of its election not to renew his
Employment Agreement following its expiration on December 31, 1995.
On December 7, 1995, Mr. Reeder submitted his resignation from the
Company and Lorraine O. Legg was elected President and Chief Executive
Officer. Pursuant to the terms of the Employment Agreement, the
Company remained responsible for its allocable share of Mr. Reeder's
compensation through December 31, 1995.
Prior to his resignation, Mr. Reeder was employed as President and
Chief Executive Officer of each of the six Companies. Mr. Reeder's
aggregate annual salary to be paid by the six Companies under the
Employment Agreement was $225,000. Mr. Reeder was also entitled to
certain fringe benefits, including paid vacation and health, life and
long-term disability insurance. Mr. Reeder's business expenses
incurred in the performance of duties under the Employment Agreement
were reimbursed by the Companies. The board members of the Company
could award Mr. Reeder a bonus each year under the Employment
Agreement based upon an annual review of Mr. Reeder's performance. In
addition to the Company's allocable share of Mr. Reeder's annual
salary specified in the Employment Agreement, Mr. Reeder received an
additional $12,000 from the Company in the form of bonus compensation
for 1995 which was paid in 1996.
(2) Amounts shown above represent the Company's share of Mr. Reeder's cash
compensation. Mr. Reeder received no non-cash compensation for 1992,
1993, 1994 and 1995. The amounts shown above include salary deferral
contributions made by Mr. Reeder under a 401(k) Investment and
Retirement Plan ("401(k) Plan") established by MPP. The aggregate
value of certain personal benefits received by Mr. Reeder has not been
included in the amounts shown above. In neither 1992, 1993, 1994 nor
1995 did the aggregate value of these benefits exceed the lesser of
$50,000 or 10% of Mr. Reeder's annual salary as set forth above.
(3) The amounts shown above include the Company's share of premiums for
the following insurance provided to Mr. Reeder in excess of that
generally provided to all leased employees: term life insurance
coverage ($188, $148, $272 and $212 in 1992, 1993, 1994 and 1995
respectively); disability insurance coverage ($539, $497, $781 and
$685 in 1992, 1993, 1994 and 1995 respectively); and dependent
medical coverage ($611, $377, $964 and $991 in 1992, 1993, 1994 and
1995 respectively). The amounts shown above also include the
Company's share of matching contributions made by MPP in 1992, 1993,
1994 and 1995 of $81, $83, $122 and $108 respectively, under the
401(k) Plan.
(4) Amounts represents bonus earned during the subject year.
<PAGE>
Compensation of Directors
Director Fees. The Company pays each Director an annual fee of $8,000.
In 1995, Ms. Legg, Ms. Yalonis, and Messrs. Doherty, Hanson, Lucash,
O'Connor, and Rees each received $8,000 as a Director fee.
Chairman's Fees. The Chairman of the Company, as a member of the
Executive Committee and Nominating Committee, is not paid a committee
meeting fee for participating in Executive Committee and Nominating
Committee meetings. Instead, the Company pays the Chairman an annual fee
of $25,000. In 1995, Mr. Lucash received $25,000 as a Chairman's fee.
Committee and Other Meeting Fees. The Directors are also entitled to
be paid $500 for each Board meeting attended in person, $400 for each
committee meeting attended in person, and $300 for each Board or committee
meeting attended by means of conference telephone call; provided, however,
that the Chairman is not paid committee fees for Executive Committee and
Nominating Committee meetings attended. Directors are also paid $300 per
half day for time spent attending to the Company's business. During 1995
Mr. Doherty was paid $5,300, Mr. Hanson was paid $3,500, Ms. Legg was paid
$4,600, Mr. Lucash was paid $7,700, Mr. O'Connor was paid $3,300, Mr. Rees
was paid $5,900, and Ms. Yalonis was paid $5,700, and Mr. Morris was paid
$500 in committee and other meeting fees.
Reimbursements. All Directors are reimbursed for reasonable travel
and other out-of-pocket expenses incurred in connection with attending
Board and committee meetings.
In December of 1995, TIS Financial Services Inc., of which Lorraine O.
Legg is President and Chief Executive Officer, became the Manager of the
Company. The management agreement provides that a management fee be paid
to TIS Financial Services in return for services. The management
agreement requires that TIS pay the employment expenses of its own
personnel. Ms. Legg receives no compensation from the Company for serving
as President and Chief Executive Officer. Ms. Legg is also a director of
the Company and receives no compensation for serving as a director.
The compensation and expense reimbursement arrangements for Directors
as set forth above may be changed by the Board of Directors pursuant to the
authority granted to it in the Company's Bylaws.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The following table sets forth the amount and nature of the beneficial
ownership of shares of common and preferred stock as of January 3, 1995, by
(i) each person known by the Company to own more than 5% of any class of
the Company's voting stock (based upon filings made with the Securities and
Exchange Commission), (ii) each Director, (iii) the executive officer named
in the Summary Compensation Table, and (iv) all Directors and executive
officers of the Company as a group.
Amount of Shares
Beneficially Owned
Directly or Title Percent
Name (1) Indirectly of Class of Class
--------- ------------------ --------- ----------
Massachusetts State 1,560,754 Preferred 29.6%
Teachers' and Employees'
Retirement Systems Trust
c/o The Commonwealth of
Massachusetts Treasury
Department,
One Ashburton Place, #1200
Boston, MA 02108
Massachusetts Bay 1,183,556 Preferred 22.4%
Transportation Authority
Retirement Fund
99 Summer Street, 17th Floor
Boston, MA 02110
Chicago Truck Driver, 521,164 Preferred 9.9%
Helpers & Warehouse Workers
Union (Independent)
Pension Fund
809 W. Madison Street
Chicago, IL 60607
Christopher J. Doherty -- -- --
Peter O. Hanson 1,600 Preferred (2)
Lorraine O. Legg -- -- --
S. Michael Lucash -- -- --
Lawrence P. Morris -- -- --
Homer McK. Rees -- -- --
Micolyn M. Yalonis -- -- --
All Directors and 1,600 Preferred (2)
executive officers
as a group (12 persons)
(1) Unless otherwise indicated in these footnotes, the persons listed
above have sole voting and investment power over the shares, subject
to community property laws were applicable.
(2) Less than 1%.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the period April 1, 1991 through October 21, 1994, the Company
and the six other Companies were self-administered through an internalized
management structure. Since the final dissolution and complete liquidation
of Meridian Point Realty Trust '82 in October, 1994, and until December 1,
1995, the number of Companies participating in the self-administered
arrangements was six (collectively, the "Participating Companies"). The
structure of the self-administered management is described in Item 1.
The REIT tax rules prohibit a REIT from owning more than 10% of the
voting securities of any company. Accordingly, each of the Participating
Companies owned 9.0% of the outstanding stock of MPP (aggregating 54% of
the outstanding stock). Milton K. Reeder, President and Chief Executive
Officer of MPP owned the remaining 46% of the outstanding stock.
Effective December 1, 1995, the Company terminated the Amended and
Restated Employee Leasing Agreement with MPP. On February 22, 1996, the
Company entered into a MPP Termination Agreement by which its interest in
MPP was terminated. Under the terms of the Agreement, the Company sold its
outstanding MPP stock to MPP and its proportionate interest in MPP's assets
to Meridian Industrial Trust ("MIT") at fair market value. MIT was formed
to merge with certain of the Participating Companies (Trusts IV, VI and
VII) and to purchase certain real estate assets from Trust '83. In
connection with those merger and purchase transactions, MPP was to be
dissolved.
The MPP Termination agreement further required the termination of
certain other agreements between the Company and MPP, and the transfer of
certain third party agreements, right in actions, rights in certain
insurance policies, books and records from MPP to the Company. The Company
and MPP further agreed to the release of any claims, known or unknown,
against the other. The Company received par value of $3.84 per share for
its stock in MPP and $71,850 for its proportionate interest in the assets
of MPP. The Company is currently awaiting a final accounting relating to
the dissolution of MPP whereafter the Company expects to receive the return
of some portion of its original advance of funds to MPP.
Effective December 7, 1995, Lorraine O. Legg was elected President and
Chief Executive Officer of the Company. Legg is also President and Chief
Executive Officer of TIS Financial Services and serves as a Director of the
Company. Effective December 1, 1995, TIS manages the Company's assets,
properties and investments in addition to performing administrative
services for the Company in return for a base management fee in an amount
equal to 0.75% of the Company's Average Invested Assets, as defined in the
Management Agreement. The Agreement further requires that TIS pay all
employment expenses of its personnel performing services for the Company.
Ms. Legg does not receive any compensation from the Company for her
services as an Officer of the Company. Ms. Legg no compensation as a
Director of the Company.
In addition, on December 7, 1995, following the resignations of the
other senior officers of the Company affiliated with MPP, various other TIS
Officers and employees were elected as officers of the Company. Those
officers of the Company affiliated with TIS receive no direct compensation
from the Company in exchange for their services.
<PAGE>
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PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.
(a) (1) Financial Statements. The following Company financial statements
are filed as part of this report:
Page
------
Report of Independent Public Accountants F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statements of Shareholders' Equity F-4
Consolidated Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-6
(a) (2) Financial Statement Schedules. The following financial statement
schedules are filed as part of this report:
Page
------
Valuation and Qualifying Accounts F-13
Real Estate and Accumulated Depreciation F-14
Schedules for which provision is made in applicable accounting
regulations of the Securities and Exchange Commission which have not been
included have been omitted because of the absence of conditions for which
they are required or because the information is included elsewhere in this
report.
(a) (3) Exhibits.
No. Description
- --- -----------
(in accordance with Item 601 of Regulation S-K)
3.1 Amended and Restated Bylaws of the Registrant dated March 5, 1992
filed as Exhibit 3.4 to Registrant's Form 10-K for the fiscal
year ended December 31, 1991 and incorporated herein by
reference.
10.1 Loan Agreement between Sierra Capital Realty Trust VIII Co. and
Citicorp Real Estate, Inc. dated as of July 14, 1989, filed as
Exhibit 10.1 to Registrant's Form 8-K dated July 14, 1989 and
incorporated herein by reference.
10.2 Letter Agreement dated as of June 13, 1990 between Sierra Capital
Realty Trust VIII Co. and Citicorp Real Estate, Inc. filed as
Exhibit 10.8 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.3 Amendment to Loan Documents dated as of July 14, 1991 between
Sierra Capital Realty Trust VIII Co. and Citicorp Real Estate,
Inc. filed as Exhibit 10.9 to Registrant's Form 10-K for the
fiscal year ended December 31, 1991 and incorporated herein by
reference.
10.4 Amended and Restated Promissory Note executed by Sierra Capital
Realty Trust VIII Co. in favor of Citicorp Real Estate, Inc.
dated July 14, 1991 filed as Exhibit 10.11 to Registrant's Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.
10.5 Mortgage and Security Agreement with Assignment of Rents dated as
of July 14, 1989 made by Sierra Capital Realty Trust VIII Co. in
favor of Citicorp Real Estate, Inc. filed as Exhibit 10.12 to
Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.6 Omnibus Amendment to Security Agreements dated as of July 14,
1991 between Sierra Capital Realty Trust VIII Co. in favor of
Citicorp Real Estate, Inc. filed as Exhibit 10.15 to Registrant's
Form 10-K for the fiscal year ended December 31, 1991 and
incorporated herein by reference.
10.7 Environmental Agreement between Sierra Capital Realty Trust VIII
Co. and Citicorp Real Estate, Inc. dated July 14, 1989, filed as
Exhibit 10.3 to Registrant's Form 8-K dated July 14, 1989 and
incorporated herein by reference.
10.8 Loan Agreement between Sierra Capital Realty Trust VIII Co. and
The Prudential Insurance Company of America dated as of May 25,
1990, filed as Exhibit 10.1 to Registrant's Form 8-K dated June
14, 1990 and incorporated herein by reference.
10.9 Promissory Note executed by Sierra Capital Realty Trust VIII Co.
in favor of The Prudential Insurance Company of America; Loan No.
7-503-316, filed as Exhibit 10.3 to Registrant's Form 8-K dated
June 14, 1990 and incorporated herein by reference.
10.10 Employment Agreement dated July 2, 1991 by and among Sierra Real
Estate Equity Trust '82, Sierra Real Estate Equity Trust '83,
Sierra Real Estate Equity Trust '84 Co., Sierra Capital Realty
Trust IV Co., Sierra Capital Realty Trust VI Co., Sierra Capital
Realty Trust VII Co., Sierra Capital Realty Trust VIII Co.,
Milton K. Reeder, and Meridian Point Company, filed as Exhibit
10.2 to Registrant's Form 10-Q for the quarter ended September
30, 1991 and incorporated herein by reference.
10.11 Change of Control Agreement dated December 12, 1991 among Al E.
Andrews, Jr. and Meridian Point Realty Trust '82, Meridian Point
Realty Trust '83, Sierra Real Estate Equity Trust '84 Co.,
Meridian Point Realty Trust IV Co., Meridian Point Realty Trust
VI Co., Meridian Point Realty Trust VII Co. and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.5l to Registrant's Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.
10.12 Change of Control Agreement dated December 12, 1991 among Robert
A. Dobbin and Meridian Point Realty Trust '82, Meridian Point
Realty Trust '83, Sierra Real Estate Equity Trust '84 Co.,
Meridian Point Realty Trust IV Co., Meridian Point Realty Trust
VI Co., Meridian Point Realty Trust VII Co. and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.52 to Registrant's Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.
10.13 Change of Control Agreement dated December 12, 1991 among Dennis
D. Higgs and Meridian Point Realty Trust '82, Meridian Point
Realty Trust '83, Sierra Real Estate Equity Trust '84 Co.,
Meridian Point Realty Trust IV Co., Meridian Point Realty Trust
VI Co., Meridian Point Realty Trust VII Co. and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.53 to Registrant's Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.
10.14 Change of Control Agreement dated December 12, 1991 among Barbara
J. Schuessler and Meridian Point Realty Trust '82, Meridian Point
Realty Trust '83, Sierra Real Estate Equity Trust '84 Co.,
Meridian Point Realty Trust IV Co., Meridian Point Realty Trust
VI Co., Meridian Point Realty Trust VII Co. and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.55 to Registrant's Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.
10.15 Stock Option Agreement, effective April 1, 1991, among Milton K.
Reeder, Meridian Point Properties, Inc., Meridian Point Company,
Meridian Point Realty Trust '82, Meridian Point Realty Trust '83,
Sierra Real Estate Equity Trust '84 Co., Meridian Point Realty
Trust IV Co., Meridian Point Realty Trust VI Co., Meridian Point
Realty Trust VII Co. and Sierra Capital Realty Trust VIII Co.
filed as Exhibit 10.60 to Registrant's Form 10-K for the fiscal
year ended December 31, 1991 and incorporated herein by
reference.
10.16 Amended and Restated Articles of Incorporation of Meridian Point
Properties, filed March 24, 1992 filed as Exhibit 10.6l to
Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.17 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Thomas B. Swartz filed as Exhibit 10.62
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.18 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Thomas B. Swartz filed as Exhibit 10.63
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.19 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Robert A. Dobbin filed as Exhibit 10.64
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.20 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Milton K. Reeder filed as Exhibit 10.65
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.21 Indemnity Agreement, dated June 26, 1989, between Sierra Capital
Realty Trust VIII Co. and Steven B. Sinnett filed as Exhibit
10.71 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.22 Indemnity Agreement, dated March 5, 1992, between Sierra Capital
Realty Trust VIII Co. and Dennis H. Higgs filed as Exhibit 10.78
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.23 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Peter O. Hanson filed as Exhibit 10.66
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.24 Indemnity Agreement, undated, between Sierra Capital Realty Trust
VIII Co. and Richard H. Hughes filed as Exhibit 10.67 to
Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.25 Indemnity Agreement, dated July 29, 1988, between Sierra Capital
Realty Trust VIII Co. and Charles L. Smythe, Jr. filed as Exhibit
10.68 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.26 Indemnity Agreement, dated August 17, 1988, between Sierra
Capital Realty Trust VIII Co. and Richard S. Stanson filed as
Exhibit 10.69 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.27 Indemnity Agreement, dated June 26, 1989, between Sierra Capital
Realty Trust VIII Co. and William B. Stevenson filed as Exhibit
10.70 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.28 Indemnity Agreement, effective June 6, 1991, between Sierra
Capital Realty Trust VIII Co. and Kermit Mowbray filed as Exhibit
10.72 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.29 Indemnity Agreement, effective June 6, 1991, between Sierra
Capital Realty Trust VIII Co. and James B. Davis filed as Exhibit
10.73 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.30 Indemnity Agreement, effective June 6, 1991, between Sierra
Capital Realty Trust VIII Co. and Lee W. Wilson filed as Exhibit
10.74 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.31 Indemnity Agreement, dated September 13, 1991, between Sierra
Capital Realty Trust VIII Co. and Al E. Andrews, Jr. filed as
Exhibit 10.75 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.32 Indemnity Agreement, dated March 5, 1992, between Meridian Point
Realty Trust VIII Co. and Milton K. Reeder filed as Exhibit 10.76
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.33 Indemnity Agreement, dated March 5, 1992, between Meridian Point
Realty Trust VIII Co. and Robert A. Dobbin filed as Exhibit 10.77
to Registrant's Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.34 Indemnity Agreement, dated March 5, 1992, between Meridian Point
Realty Trust VIII Co. and James S. McCaffrey filed as Exhibit
10.79 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.35 Indemnity Agreement, dated March 5, 1992, between Meridian Point
Realty Trust VIII Co. and Steven B. Sinnett filed as Exhibit
10.80 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.36 Indemnity Agreement, dated March 5, 1992, between Meridian Point
Realty Trust VIII Co. and Barbara J. Finnegan filed as Exhibit
10.8l to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.37 Indemnity Agreement, dated March 5, 1992, between Sierra Capital
Realty Trust VIII Co. and Meridian Point Properties, Inc. filed
as Exhibit 10.82 to Registrant's Form 10-K for the fiscal year
ended December 31, 1991 and incorporated herein by reference.
10.38 Indemnity Agreement, dated March 5, 1992, between Sierra Capital
Realty Trust VIII Co. and Meridian Point Company filed as Exhibit
10.83 to Registrant's Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference.
10.39 First Amendment to Loan Agreement dated as of April 10, 1992
between the Prudential Company of America and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.1 to Registrant's Form
10-Q for the quarter ended March 31, 1992 and incorporated herein
by reference.
10.40 Amended and Restated Employee Leasing Agreement, effective March
24, 1992, among Meridian Point Realty Trust '82, Meridian Point
Realty Trust '83, Sierra Real Estate Equity Trust '84 Co.,
Meridian Point Realty Trust IV Co., Meridian Point Realty Trust
VI Co., Meridian Point Realty Trust VII Co., and Sierra Capital
Realty Trust VIII Co. filed as Exhibit 10.1 to Registrant's Form
10-Q for the quarter ended June 30, 1992 and incorporated herein
by reference.
10.41 Amended and Restated Registrar, Transfer Agent, Dividend
Disbursement and Service Agreement, effective March 24, 1992,
among Meridian Point Properties, Inc. and Meridian Point Realty
Trust '82, Meridian Point Realty Trust '83, Sierra Real Estate
Equity Trust '84 Co., Meridian Point Realty Trust IV Co.,
Meridian Point Realty Trust VI Co., Meridian Point Realty Trust
VII Co., and Sierra Capital Realty Trust VIII Co. filed as
Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended June
30, 1992 and incorporated herein by reference.
10.42 Amendment No. 1 to Stock Option Agreement, effective March 24,
1992, among Milton K. Reeder, Meridian Point Properties, Inc.,
Meridian Point Realty Trust '82, Meridian Point Realty Trust '83,
Sierra Real Estate Equity Trust '84 Co., Meridian Point Realty
Trust IV Co., Meridian Point Realty Trust VI Co., Meridian Point
Realty Trust VII Co., and Sierra Capital Realty Trust VIII Co.
filed as Exhibit 10.3 to Registrant's Form 10-Q for the quarter
ended June 30, 1992 and incorporated herein by reference.
10.43 Amendment to Promissory Note dated April 10, 1992 to Promissory
Note dated June l4, 1990 from Sierra Capital Realty Trust VIII
Co. in favor of The Prudential Insurance Company of America in
the amount of $8,l20,000 representing Loan No. 7-503-316 filed as
Exhibit 10.5 to Registrant's Form 10-Q for the quarter ended June
30, 1992 and incorporated herein by reference.
10.44 Promissory Note dated June 29, 1990 from Sierra Capital Realty
Trust VIII Co. in favor of The Prudential Insurance Company of
America in the amount of $3,000,000 representing Loan No. 7-503-
317 filed as Exhibit 10.6 to Registrant's Form 10-Q for the
quarter ended June 30, 1992 and incorporated herein by reference.
10.45 Amendment to Promissory Note dated April 10, 1992 to Promissory
Note dated June 29, 1990 from Sierra Capital Realty Trust VIII
Co. in favor of The Prudential Insurance Company of America in
the amount of $3,000,000 representing Loan No. 7-503-317 filed as
Exhibit 10.7 to Registrant's Form 10-Q for the quarter ended June
30, 1992 and incorporated herein by reference.
10.46 Promissory Note dated October 29, 1990 from Sierra Capital Realty
Trust VIII Co. in favor of The Prudential Insurance Company of
America in the amount of $8,725,000 representing Loan No. 7-503-
319 filed as Exhibit 10.10 to Registrant's Form 10-Q for the
quarter ended June 30, 1992 and incorporated herein by reference.
10.47 Amendment to Promissory Note dated April 10, 1992 to Promissory
Note dated October 29, 1990 from Sierra Capital Realty Trust VIII
Co. in favor of The Prudential Insurance Company of America in
the amount of $8,725,000 representing Loan No. 7-503-319 filed as
Exhibit 10.11 to Registrant's Form 10-Q for the quarter ended
June 30, 1992 and incorporated herein by reference.
10.48 Amended and Restated Promissory Note dated June l4, 1992 from
Sierra Capital Realty Trust VIII Co. in favor of The Prudential
Insurance Company of America in the amount of $12,160,619.35
representing Loan No. 7-503-315 filed as Exhibit 10.12 to
Registrant's Form 10-Q for the quarter ended June 30, 1992 and
incorporated herein by reference.
10.49 Amended and Restated Promissory Note dated June 29, 1992 from
Sierra Capital Realty Trust VIII Co. in favor of The Prudential
Insurance Company of America in the amount of $6,389,289.l3
representing Loan No. 7-503-318 filed as Exhibit 10.13 to
Registrant's Form 10-Q for the quarter ended June 30, 1992 and
incorporated herein by reference.
10.50 Sublease dated September 11, 1992 between Chicago Title Insurance
Company and Meridian Point Properties, Inc. filed as Exhibit
10.95 to Registrant's Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.
10.51 Indemnity Agreement effective February l, 1992 between Sierra
Capital Realty Trust VIII Co. and Debra H. Paul filed as Exhibit
10.96 to Registrant's Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.
10.52 Indemnity Agreement dated September 10, 1992 between Sierra
Capital Realty Trust VIII Co. and Dennis D. Higgs filed as
Exhibit 10.97 to Registrant's Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.
10.53 Change of Control Agreement dated December 2, 1992 among Debra H.
Paul and Meridian Point Realty Trust '82, Meridian Point Realty
Trust '83, Sierra Real Estate Equity Trust '84 Co., Meridian
Point Realty Trust IV Co., Meridian Point Realty Trust VI Co.,
Meridian Point Realty Trust VII Co. and Sierra Capital Realty
Trust VIII Co. filed as Exhibit 10.98 to Registrant's Form 10-K
for the fiscal year ended December 31, 1993 and incorporated
herein by reference.
10.54 Indemnity Agreement dated March 4, 1993 between Sierra Capital
Realty Trust VIII Co. and Lorraine O. Legg filed as Exhibit 10.1
to Registrant's Form 10-Q for the quarter ended March 31, 1993
and incorporated herein by reference.
10.55 Indemnity Agreement dated March 4, 1993 between Sierra Capital
Realty Trust VIII Co. and Robert E. Morgan filed as Exhibit 10.2
to Registrant's Form 10-Q for the quarter ended March 31, 1993
and incorporated herein by reference.
10.56 Indemnity Agreement between Sierra Capital Realty Trust VIII Co.
and Homer McK Rees filed as Exhibit 10.3 to Registrant's Form 10-
Q for the quarter ended March 31, 1993 and incorporated herein by
reference.
10.57 Second Amendment to Loan Agreement dated as of June 24, 1993
between The Prudential Insurance Company of America and Sierra
Capital Realty Trust VIII Co. filed as Exhibit 10.1 to
Registrant's Form 10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference.
10.58 Amendment No. 1 to the Employment Agreement of Milton K. Reeder
dated September 14, 1993 filed as Exhibit 10.1 to Registrant's
Form 10-Q for the quarter ended September 30, 1993 and
incorporated herein by reference.
10.59 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Al E. Andrews, Jr. filed as Exhibit 10.2 to
Registrant's Form 10-Q for the quarter ended September 30, 1993
and incorporated herein by reference.
10.60 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Robert A. Dobbin filed as Exhibit 10.3 to
Registrant's Form 10-Q for the quarter ended September 30, 1993
and incorporated herein by reference.
10.61 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Barbara S. Finnegan filed as Exhibit 10.4 to
Registrant's Form 10-Q for the quarter ended September 30, 1993
and incorporated herein by reference.
10.62 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Dennis D. Higgs filed as Exhibit 10. 5 to
Registrant's Form 10-Q for the quarter ended September 30, 1993
and incorporated herein by reference.
10.63 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Debra H. Paul filed as Exhibit 10.6 to Registrant's
Form 10-Q for the quarter ended September 30, 1993 and
incorporated herein by reference.
10.64 Letter Agreement dated August 2, 1993 amending Change of Control
Agreement for Steven B. Sinnett filed as Exhibit 10.7 to
Registrant's Form 10-Q for the quarter ended September 30, 1993
and incorporated herein by reference.
10.65 Amendment to Promissory Note dated June 24, 1993 (Prudential Loan
No. 7-503-315) filed as Exhibit 10.8 to Registrant's Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein
by reference.
10.66 Amendment to Promissory Note dated June 24, 1993 (Prudential Loan
No. 7-503-317) filed as Exhibit 10.9 to Registrant's Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein
by reference.
10.67 Amendment to Promissory Note dated June 24, 1993 (Prudential Loan
No. 7-503-318) filed as Exhibit 10.10 to Registrant's Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein
by reference.
10.68 Amendment to Promissory Note dated June 24, 1993 (Prudential Loan
No. 7-503-319) filed as Exhibit 10.11 to Registrant's Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein
by reference.
10.69 Promissory Note executed by Meridian Point Realty Trust VIII Co.
in favor of the Prudential Insurance Company of America, Loan No.
7-503-316 filed as Exhibit 10.12 to Registrant's Form 10-Q for
the quarter ended September 30, 1993 and incorporated herein by
reference.
10.70 Indemnity Agreement dated September 17, 1993 between Micolyn
Magee Yalonis and Sierra Capital Realty Trust VIII Co. filed as
Exhibit 10.13 to Registrant's Form 10-Q for the quarter ended
September 30, 1993 and incorporated herein by reference.
10.71 Indemnity Agreement dated September 17, 1993 between Philip R.
O'Connor and Sierra Capital Realty Trust VIII Co. filed as
Exhibit 10.14 to Registrant's Form 10-Q for the quarter ended
September 30, 1993 and incorporated herein by reference.
10.72 Promissory Note and Deed of Trust dated October 1993 in the
principal amount of $1,850,000 (for refinancing of Memphis 20
property) filed as Exhibit 10.15 to Registrant's Form 10-Q for
the quarter ended September 30, 1993 and incorporated herein by
reference.
10.73 Promissory Note dated December 10, 1993 executed by Meridian
Point Realty Trust VIII Co. in favor of the Prudential Insurance
Company of America, Loan No. 7-503-319 filed as Exhibit 10.69 to
Registrant's Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.
10.74 Indemnity Agreement dated September 17, 1993, between Sierra
Capital Realty Trust VIII Co. and S. Michael Lucash filed as
Exhibit 10.70 to Registrant's Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.
10.75 Modification to Promissory Note dated June 29, 1994 (Prudential
Loan No. 7-503-317) filed as Exhibit 10.1 to Registrant's 10-Q
for the quarter ended June 30, 1994 and incorporated herein by
reference.
10.76 Mortgage and Security Agreement dated August 8, 1994 between
Meridian Point Realty Trust VIII Co. and PFL Life Insurance
Company filed as Exhibit 10.2 to Registrant's Form 10-Q for the
quarter ended June 30, 1994 and incorporated herein by reference.
10.77 Mortgage Note dated August 8, 1994 executed by Meridian Point
Realty Trust VIII Co. in favor of PFL Life Insurance Company
filed as Exhibit 10.3 Registrant's Form 10-Q for the quarter
ended June 30, 1994 and incorporated herein by reference.
10.78 Amendment No. 1 to Amended and Restated Employee Leasing
Agreement, effective as of February 1, 1994 filed as Exhibit 10.1
to Registrant's Form 10-Q for the quarter ended September 30,
1994 and incorporated herein by reference.
10.79 Indemnity Agreement effective January 31, 1995, between Meridian
Point Realty Trust VIII Co. and Brian F. Zywiciel filed as
Exhibit 10.1 to Registrant's Form 8-K dated January 31, 1995, and
incorporated herein by reference.
10.80 Indemnity Agreement effective January 31, 1995, between Meridian
Point Realty Trust VIII Co. and Barbara S. Finnegan filed as
Exhibit 10.2 to Registrant's Form 8-K dated January 31, 1995, and
incorporated herein by reference.
10.80 Indemnity Agreement effective January 31, 1995, between Meridian
Point Realty Trust VIII Co. and Brian F. Zywiciel filed as
Exhibit 10.3 to Registrant's Form 8-K dated January 31, 1995, and
incorporated herein by reference.
10.81 Management Agreement dated October 18, 1995 and effective
December 1, 1995 by and between Meridian Point Realty Trust VIII
Co. and TIS Financial Services, Inc.
10.82 MPP Termination Agreement among Meridian Point Properties, Inc.
Meridian Point Industrial Trust, Inc. Meridian Point Realty Trust
VIII Co. , Dated as of February 22, 1996.
(b) Reports on Form 8-K.
--------------------
None.
(c) The exhibits listed in Item 14(a)(3) above are submitted as part
of this report.
(d) The financial statement schedules listed in Item 14(a)(2) above
are submitted as part of this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 28, 1996 MERIDIAN POINT REALTY TRUST VIII CO.
--------------
By: /s/ Lorraine O. Legg
----------------------
Lorraine O. Legg
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and
on the dates indicated.
/s/ Lorraine O. Legg Dated: March 28, 1996
- --------------------------
Lorraine O. Legg
President and Chief Executive Officer
(Principal Executive Officer)
/s/ John E. Castello Dated: March 28, 1996
- --------------------------
John E. Castello
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ S. Michael Lucash Dated: March 28, 1996
- --------------------------
S. Michael Lucash
Chairman and Director
/s/ Christopher J. Doherty Dated: March 28, 1996
- --------------------------
Christopher J. Doherty
Director
/s/ Peter O. Hanson Dated: March 28, 1996
- --------------------------
Peter O. Hanson
Director
/s/ Lorraine O. Legg Dated: March 28, 1996
- --------------------------
Lorraine O. Legg
Director
/s/ Lawrence P. Morris Dated: March 28, 1996
- --------------------------
Lawrence P. Morris
Director
/s/ Homer McK. Rees Dated: March 28, 1996
- --------------------------
Homer McK. Rees
Director
/s/ Micolyn Magee Yalonis Dated: March 28, 1996
- --------------------------
Micolyn Magee Yalonis
Director
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Shareholders and Board of Directors
of Meridian Point Realty Trust VIII Co.:
We have audited the accompanying Consolidated Balance Sheets of
Meridian Point Realty Trust VIII Co. (a Missouri corporation) and
subsidiary as of December 31, 1995 and 1994, and the related Consolidated
Statements of Operations, Shareholders' Equity, and Cash Flows for each of
the three years in the period ended December 31, 1995. These financial
statements and the schedules referred to below are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Meridian Point
Realty Trust VIII Co. and subsidiary as of December 31, 1995 and 1994, and
the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The Financial Statement
Schedules listed in Item 14 (a)(2) are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not part of the
basic financial statements. These schedules have been subjected to the
auditing procedures applied in our audits of the basic financial statements
and, in our opinion, fairly state in all material respects the financial
data required to be set forth therein in relation to the basic financial
statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Francisco, California
February 9, 1996
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994
<CAPTION>
1995 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investment in Real Estate:
Rental Properties, Net $81,765,163 $83,465,937
Less: Accumulated Depreciation (12,987,770) (11,129,031)
- -----------------------------------------------------------------------------------------------------------------
68,777,393 72,336,906
Rental Property Held for Sale, Net of Accumulated Depreciation
of $2,221,841 as of December 31, 1994 -- 11,133,035
- -----------------------------------------------------------------------------------------------------------------
68,777,393 83,469,941
Other Assets:
Cash and Cash Equivalents 5,016,216 4,960,399
Receivables, Net of Reserves of $134,971 and $117,278
as of December 31, 1995 and 1994, respectively 585,771 728,782
Notes Receivable From Affiliates 228,000 228,000
Personal Property, Net of Accumulated Depreciation of $726,568 and
$674,485 as of December 31, 1995 and 1994, respectively 30,521 79,219
Capitalized Loan Costs, Net of Accumulated Amortization of $765,089 and
$656,555 as of December 31, 1995 and 1994, respectively 213,489 322,023
Capitalized Lease Commissions, Net of Accumulated Amortization of
$308,514 and $465,770 as of December 31, 1995 and 1994, respectively 363,504 511,743
Other Assets, Net of Accumulated Amortization of $305,295 and
$214,455 as of December 31, 1995 and 1994, respectively 1,279,431 1,457,441
- -----------------------------------------------------------------------------------------------------------------
Total Assets $76,494,325 $91,757,548
=================================================================================================================
Liabilities and Shareholders' Equity
Liabilities:
Mortgage Note Payable $7,782,168 $7,976,495
Long-Term Debt Facilities 24,259,396 36,754,964
Due To Affiliates 116,209 131,906
Accounts Payable 1,073,280 1,289,316
Prepaid Rent, Tenant Deposits and Other Liabilities 221,982 361,749
- -----------------------------------------------------------------------------------------------------------------
Total Liabilities 33,453,035 46,514,430
- -----------------------------------------------------------------------------------------------------------------
Shareholders' Equity:
Shares of Common and Preferred Stock with par value of $0.001,
an aggregate of 50,000,000 Common and Preferred Shares
authorized; 1,609,937 Common Shares and 5,273,927 Preferred Shares
issued and outstanding as of December 31, 1995 and 1994, respectively 6,884 6,884
Paid-in Capital 65,389,820 65,389,820
Distributions in Excess of Income (22,355,414) (20,153,586)
- -----------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 43,041,290 45,243,118
- -----------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $76,494,325 $91,757,548
=================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Rentals from Real Estate Investments $10,868,405 $11,886,484 $11,353,018
Interest and Other 326,170 194,915 110,954
- ---------------------------------------------------------------------------------------------------------------------------
Total Revenues 11,194,575 12,081,399 11,463,972
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Interest and Amortization of Debt Premium 3,393,743 3,901,912 4,155,970
Property Taxes 1,536,584 1,739,159 1,583,636
Property Operating Costs Including Amounts Paid to Related
Parties of $373,444, $475,644 and $593,840, respectively 1,506,583 1,467,066 1,207,338
Legal Costs 63,290 135,155 182,143
General and Administrative Including amounts paid to Related
Parties of $418,776, $438,361 and $346,487, respectively 939,607 947,820 611,508
Provision for Decrease in Net Realizable Value 1,182,015 2,392,000 1,381,000
Depreciation and Amortization 2,718,862 3,373,076 3,045,647
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 11,340,684 13,956,188 12,167,242
- ---------------------------------------------------------------------------------------------------------------------------
Loss Before Net Gain on Sale of Properties (146,109) (1,874,789) (703,270)
Net Gain on Sale of Properties 1,197 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Loss Before Extraordinary Item (144,912) (1,874,789) (703,270)
Extraordinary Item - Prepayment Penalty on Paydown (129,433) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Loss $(274,345) $(1,874,789) $(703,270)
===========================================================================================================================
Net Loss $(274,345) $(1,874,789) $(703,270)
Preferred Distributions Declared (1,476,700) (1,160,264) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Loss Available to Common Shareholders $(1,751,045) $(3,035,053) $(703,270)
===========================================================================================================================
Net Loss Per Common Share:
Loss Before Extraordinary Item $(1.01) $(1.89) $(0.44)
Extraordinary Item - Prepayment Penalty on Paydown (0.08) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Loss Per Common Share $(1.09) $(1.89) $(0.44)
===========================================================================================================================
Preferred Distributions Paid Per Share $0.28 $0.22 $--
===========================================================================================================================
Common Distributions Paid Per Share $0.28 $0.22 $--
===========================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
Common Stock Preferred Stock Distributions
------------ --------------- Paid-in in Excess
Shares Amount Shares Amount Capital Of Income
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance-
January 1, 1993 1,609,937 $ 1,610 5,273,927 $ 5,274 $65,389,820 $(16,061,077)
Net Loss -- -- -- -- -- (703,270)
- --------------------------------------------------------------------------------------------------------------
Balance-
December 31, 1993 1,609,937 1,610 5,273,927 5,274 65,389,820 (16,764,347)
Net Loss -- -- -- -- -- (1,874,789)
Distributions Declared:
Common -- -- -- -- -- (354,186)
Preferred -- -- -- -- -- (1,160,264)
- --------------------------------------------------------------------------------------------------------------
Balance-
December 31, 1994 1,609,937 1,610 5,273,927 5,274 65,389,820 (20,153,586)
Net Loss -- -- -- -- -- (274,345)
Distributions Declared:
Common -- -- -- -- -- (450,783)
Preferred -- -- -- -- -- (1,476,700)
- --------------------------------------------------------------------------------------------------------------
Balance -
December 31, 1995 1,609,937 $ 1,610 5,273,927 $ 5,274 $65,389,820 $(22,355,414)
==============================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Loss $ (274,345) $(1,874,789) $ (703,270)
Adjustments to Reconcile Net Loss to
Net Cash Provided By Operating Activities:
Depreciation 2,519,491 3,096,100 2,846,563
Amortization - Other 307,905 444,484 370,774
Rent Adjustment (16,698) (12,615) 25,597
Provision for Decrease in Net Realizable Value 1,182,015 2,392,000 1,381,000
Net Gain on Sale of Properties (1,197) -- --
Prepayment Penalty on Paydown 129,433 -- --
Increase in Capitalized Lease Commissions (185,485) (195,636) (203,789)
Decrease (Increase) in Accounts Receivable 143,011 (49,647) 79,560
Decrease (Increase) in Other Assets 56,781 (136,518) 25,356
(Decrease) Increase in Accounts Payable (242,078) 119,149 (293,765)
(Decrease) Increase in Due to Affiliates (15,697) 76,361 (10,045)
Incrrease (Decrease ) in Other Liabilities 53,722 (94,079) (200,828)
- ------------------------------------------------------------------------------------------------------------
Net Cash Provided By Operating Activities 3,656,858 3,764,810 3,317,153
- ------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Improvements to Existing Real Estate (519,937) (560,876) (541,791)
Net Cash Received on Sale of Properties 1,730,124 -- --
Rental Guarantees Received -- -- 108,000
Purchase of Personal Property (3,385) (15,537) (20,292)
- ------------------------------------------------------------------------------------------------------------
Net Cash Provided By (Used In) Investing Activities 1,206,802 (576,413) (454,083)
- ------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Principal Payments on Debt Facilities (2,686,033) (913,508) (907,320)
Cash Received (Disbursed) Due to Debt Refinancing -- 141,672 (69,917)
Principal Payments on Mortgage Note (194,327) (87,201) (21,915)
Capitalized Loan Fees -- -- (51,520)
Distributions Paid to Shareholders (1,927,483) (1,514,450) --
- ------------------------------------------------------------------------------------------------------------
Net Cash Used In Financing Activities (4,807,843) (2,373,487) (1,050,672)
- ------------------------------------------------------------------------------------------------------------
Net Increase In Cash and Cash Equivalents 55,817 814,910 1,812,398
Cash and Cash Equivalents, Beginning of Year 4,960,399 4,145,489 2,333,091
- ------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Year $5,016,216 $4,960,399 $4,145,489
============================================================================================================
Supplemental Schedule of Non-Cash Transactions:
Transactions Related to Sale of Properties:
Net Book Value of Properties Disposed $11,563,062 $ -- $ --
Other Assets Written-Off, Net of Other Liabilities 104,833 -- --
Paydown of Long-Term Debt Facility 9,809,535 -- --
Prepayment Penalties 129,433 -- --
Interest Paid in Escrow 27,650 -- --
Cash Held in Escrow 175,000 -- --
Refinancing of Auburn Hills:
Extinguishment of Bank Facility -- 5,928,958 --
Elimination of Mortgage Debt -- -- 1,772,210
Assumption of Mortgage Note Payable -- 6,220,000 1,850,000
Liabilities Extinguished -- -- 129,207
Loan Costs Incurred -- 62,200 18,500
Closing Costs -- 87,170 --
Property Basis Adjustment from Other Liabilities -- -- 283,829
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
MERIDIAN POINT REALTY TRUST VIII CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
1. Summary of Significant Accounting Policies.
(a) Organization. Meridian Point Realty Trust VIII Co. (formerly
known as Sierra Capital Realty Trust VIII Co.), ("the Company") is a
corporation organized for the purpose of acquiring, operating, holding for
investment and ultimately selling income-producing commercial and
industrial real estate. Generally, it is the Company's intention not to
invest net proceeds from sales in additional properties, and, accordingly,
the Company is a self-liquidating/finite life trustentity. The Company
commenced operations on October 17, 1988.
During their annual meeting held on September 17, 1993, the
shareholders of the Company approved a proposal to change the name of the
Company. As a result, effective September 24, 1993, the Company officially
became Meridian Point Realty Trust VIII Co.
Since April 1, 1991, the Company has operated under a self-
administered management structure in conjunction with six other commonly-
sponsored real estate investment trusts (the Company and such six other
real estate investment trusts are collectively referred to herein as the
"Companies"). Under this management structure, Meridian Point Properties,
Inc. ("MPP"), leases employees to the Company at cost to perform the
administrative, accounting, asset management, and property management
functions. In addition, through December 31, 1994, MPP, at cost, actsed as
the transfer agent for the Companies and providesd shareholder account
maintenance and dividend reimbursement and reinvestment services. The
reimbursements made to MPP are allocated among the Companies in accordance
with agreements between MPP and the Companies.
Effective December 1, 1995, the Company terminated its employee
leasing agreement with MPP and entered into a management agreement with TIS
Financial Services, Inc. ("TIS"). Under the agreement, the Company has
retained TIS to manage its assets, properties and investments in addition
to performing administrative services for the Company. The Company will
pay TIS, for services rendered under the agreement, a base management fee
in an amount to 0.75% of the Company's Average Invested Assets, as defined
in the agreement, during each calendar year. (See Note 2.)
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
During 1995 the Company engaged C.S. First Boston as its financial
advisor to explore future opportunities available to the Company. In that
regard, the Company's Board of Directors is considering all options that
may be available, which may include liquidation of the Company's assets,
conversion of the Company to an infinite-life REIT with accompanying
changes to the self-liquidating policy, or other options. The Company
currently has no properties for sale and has no plans to liquidate its
property portfolio in the near term.
(b) Consolidation. The consolidated financial statements include the
Company and NASH-IND Corporation, a wholly-owned corporate subsidiary of
the Company. All significant intercompany transactions and balances have
been eliminated.
(c) Statements of Cash Flows. For purposes of the statements of cash
flows, the Company considers all short-term investments with an original
maturity of three months or less to be cash equivalents.
Cash paid for interest was $3,366,056, $3,785,136 and $4,000,983 for
the years ended December 31, 1995, 1994, and 1993, respectively.
(d) Investment in Real Estate and Depreciation Methods. Investments
in Real Estate are stated at the lower of depreciated cost or net
realizable value. Net realizable value for financial reporting purposes:
(i) is evaluated and identified quarterly by the Company on a property by
property basis using undiscounted cashflows; (ii) is measured by comparing
the Company's estimate of fair value based upon either sales comparables or
the net cash expected to be generated by the property (comprised of the
forecasted operations for the property based upon historical results,
together with management's estimates of the property's future occupancy,
lease rates and capital improvement requirements), less estimated carrying
costs (including interest) throughout the anticipated holding period, plus
the estimated cash proceeds from the ultimate disposition of the property;
and (iii) is not necessarily an indication of a property's current value or
the amount that will be realized upon the ultimate disposition of the
property. To the extent net realizable value is less than the carrying
value of the property, a Provision for Decrease in Net Realizable Value is
recorded in the amount by which the carrying value exceeds estimated fair
value. As of December 31, 1995 and 1994, the Company's Investment in Real
Estate is stated net of a cumulative Provision for Decrease in Net
Realizable Value of $5,167,000 and $6,772,000, respectively. Investors
should consider any net realizable value provisions in evaluating
realization of their investments. (See Note 3.)
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long Lived Assets to Be
Disposed Of". This statement requires that long-lived assets be reviewed
for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. An impairment loss
is recognized when expected undiscounted cash flows are less than the
carrying value of the asset. Measurement of impairment is based upon the
fair value of the asset. The Company plans to adopt SFAS No. 121 in 1996
and believes that the adoption will not have a material impact upon its
financial position and results of operations.
Depreciation and amortization have been calculated under the straight-
line method, based upon the estimated useful lives of the assets. Property
and property additions are depreciated over 35 years. Expenditures for
maintenance, repairs, and improvements which do not materially prolong the
normal useful life of an asset are charged to operations as incurred.
Leasing commissions and tenant improvements are amortized under the
straight-line method over the term of the related lease.
(e) Rentals From Real Estate Investments. Certain of the Company's
leases relating to its properties require lessees to pay all or a portion
of real estate taxes, insurance, and operating costs ("Expense
Recaptures"). Expense Recaptures of $1,393,576 $1,693,123 and $1,445,481
were included in Rentals from Real Estate Investments for the years ended
December 31, 1995, 1994, and 1993, respectively.
All leases are classified as operating leases. The Company recognizes
rental income on the straight-line basis over the terms of the leases.
Deferred rent receivable, included in accounts receivable, represents the
excess of rental revenue recognized on a straight-line basis over cash
received under the applicable lease provisions.
(f) Loan Costs. Costs incurred in obtaining long-term debt including
advances on the property acquisition facilities are capitalized and
amortized over the life ofin relation to the corresponding debt.
(g) Unamortized Debt Premium. The Company acquired a property
subject to a mortgage note bearing an interest rate different from the
prevailing market rate on the date of acquisition. This interest rate
differential is recorded as a premium and is being amortized over the term
of the note using the effective interest method.
(h) Reclassifications. Certain prior year amounts have been
reclassified in the consolidated financial statements and related notes to
conform to the 1995 presentation.
<PAGE>
2. Related Parties.
Since April 1, 1991, the Company has operated under a self-
administered management structure. (See Note 1.) For the year ended
December 31, 1995 the Company incurred costsfees and expenses for services
rendered by the directors of the Company. Total directors' fees and
expenses amounted to totaling $168,205, which includes fees applicable for
the three months of 1996 amounting to $18,250. For the years ended
December 31, 1994 and 1993 the Company incurred directors fees and expenses
totaling $140,304 and $161,095, respectively, during these periods. Such
amounts were paid directly to the directors. Prior to December 1, 1995,
the Company has operated under a self-administered management structure.
(See Note 1)
Cost reimbursements made to MPP are presented in the table below:
<TABLE>
COSTS REIMBURSEMENTS TO MERIDIAN POINT PROPERTIES, INC.
1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Reimbursements
Reimbursements for property and asset management
costs (included in Property Operating Costs) $ 373,444 $ 475,644 $ 593,840
Leasing costs (included in Capitalized
Lease Commissions, Net) -- -- 22,620
Reimbursement of costs incurred for conducting
the Company's daily operations (included in General
and Administrative expenses) 250,571 298,057 185,392
- -----------------------------------------------------------------------------------------------------
TOTAL $ 624,015 $ 773,701 $ 801,852
=====================================================================================================
</TABLE>
In accordance with agreements then existing between the Company and
MPP, these reimbursements are allocated among the Companies based on (i)
gross rental receipts of the Companies' properties and the Companies'
relative real estate assets for property and asset management costs; and
(ii) proportionate time incurred, the number of shareholders and relative
real estate assets for costs incurred in conducting the Companies' daily
operations.
On October 18, 1995, the Company entered into a management agreement
with TIS and terminated its employee leasing agreement with MPP effective
December 1, 1995. Pursuant to the termination provisions in the agreements
between the Company and MPP, the Company is obligated for its pro-rata
share of any contractual obligations that MPP entered into on behalf and
for the benefit of the Company. Management, however, believes that the
financial impact from such contractual obligations will not have a material
impact on the Company's financial position or results of operation. A
final determination of such obligations will be completed in 1996.
Under the agreement with TIS, the Company has retained TIS to manage
its assets, properties and investments in addition to performing
administrative services for the Company. The Company will pay TIS, for
services rendered under the agreement, a base management fee in an amount
to 0.75% of the Company's Average Invested Assets, as defined in the
agreement, during each calendar year. For the year ended December 31,
1995, the Company has incurred $56,000 under this agreement with TIS. The
Company's President and Chief Executive Officer is also an officer of TIS
and serves on the board of directors of the Company.
The Companies make property and asset management cost reimbursements
to MPP for property management and asset management services rendered.
These reimbursements are allocated among the Companies based on gross
rental receipts of the Companies' properties and the Companies' relative
real estate assets in accordance with agreements between the Companies and
MPP.
Notes Receivable From Affiliates
In connection with the internalization of management, the Company made
an advances to MPP for the estimated amount of expenditures that would be
incurred in conducting the daily operations of the Company. The advances
isare payable on demand.
3. Rental Properties, Net.
Rental properties, net at December 31, 1995 and 1994 consist of the
following:
<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------------------
<S> <C> <C>
Land $14,833,973 $14,938,885
Buildings 63,957,172 65,950,508
Capital Improvements 2,850,979 2,470,847
Construction in Progress 123,039 105,697
- ------------------------------------------------------------------
Subtotal 81,765,163 83,465,937
Rental Property Held for Sale -- 13,354,876
- ------------------------------------------------------------------
TOTAL $81,765,163 $96,820,813
==================================================================
</TABLE>
<PAGE>
Current and Cumulative Provision for Decrease in Net Realizable Value
and net book value for the year ended and as of December 31, 1995 are as
follows:
<TABLE>
<CAPTION>
Cumulative
Current Provision Provision for
for Decrease in Net Decrease in Net
Property Realizable Value Realizable Value Net Book Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
South Sayre $ -- $550,000 $4,571,358
Memphis #1 -- 31,000 1,688,624
Memphis #8 -- 233,000 339,915
Memphis #20 -- 781,000 2,346,563
3821 Getwell -- 94,000 526,857
1033 East Maricopa -- 420,000 747,757
616 South 55th Avenue -- 406,000 3,127,186
2455 South 7th Street -- 910,000 1,148,214
9219 Viscount -- 203,000 2,050,444
9100 Carpenter -- 322,000 716,762
7601 Ambassador -- 1,137,000 2,392,217
7811/7901 Ambassador -- 80,000 1,982,318
- ---------------------------------------------------------------------------------------------------------------------
Subtotal -- 5,167,000 21,638,215
Total for all properties with no Cumulative Provision
for Decrease in Net Realizable Value -- -- 47,139,178
- ---------------------------------------------------------------------------------------------------------------------
TOTAL $ -- $5,167,000 $68,777,393
=====================================================================================================================
</TABLE>
All the Company's leases relating to its rental properties are
operating leases. The minimum future rental revenues from these leases as
of December 31, 1995, are as follows:
1996 $ 8,330,810
1997 7,677,538
1998 7,058,930
1999 5,858,993
2000 5,014,756
Thereafter 21,897,058
There are currently three major tenants comprising 43% of the total
rental revenue of the Company based on the projected 1996 base rent of
existing leases. As of December 31, 1995, the Company's properties were
98.8% occupied. During 1996, leases covering approximately 14% of the
Company's leased space are scheduled to expire.
4. Long-Term Debt Facilities.
Facilities
The Company had two long-term debt facilities. As of December 31,
1993, there was $6,229,053 outstanding under a facility with a bank. This
amount which was extinguished in August 1994. As of December 31, 1995 and
1994, there was outstanding $24,259,396 and $36,754,964, respectively,
under a facility with an insurance company. Together, these facilities
have provided the Company with financing for property acquisitions, capital
improvements and general operating needs. At the present time, there is no
credit availability under the insurance company facility.
Interest and Principal Maturities
Under the insurance company facility, there are four outstanding
advances totaling $24,259,396. These advances which bear fixed interest
rates for periods ranging from one to three years. Under the existing
insurance company facility agreements, the various advances and the
corresponding interest rate contracts mature on the dates specified
below.The Company has a commitment from the insurance company to reset the
interest rate of these advances on the dates specified below. This
commitment is subject to the Company being in compliance under the terms of
the loan agreement, and in no event can the advances be extended beyond May
25, 1998, at which time the total amount of principal and interest
outstanding is due and payable.
Advance and
Notional Amount Interest Maturity
as of 12/31/95 Rate Date
-------------------- --------- ------------------
$ 3,815,088 7.60% December 1996
6,059,256 8.87% June 1997
11,532,448 8.87% June 1997
2,852,604 8.80% June 1998
--------------------
$24,259,396
====================
The bank facility was extinguished in connection with the August 11,
1994 refinancing of the Auburn Hills property. The new loan for $6,220,000
has a fifteen-year term with a maturity date of August 1, 2009, and bears
an interest rate of 8.875% per annum. The monthly principal and interest
payments are based on a schedule specified in the loan agreement. The
Company used the proceeds to pay off the bank facility which, at the time
of refinancing, had an outstanding balance of $5,928,958.
Net cash proceeds received from the refinancing amounted to $141,672
after (i) extinguishment of the bank facility, (ii) closing and pro-rated
items totaling $87,170, and (iii) payment of a loan fee amounting to
$62,200.
On May 25, 1995, the Company sold the Kroger property located in
Jackson, Mississippi (see Note 10). The net sale proceeds received from
that transaction were used to make a principal payment on the insurance
company facility. On July 24, 1995, the Company sold the Tropicana
Marketplace located in Las Vegas, Nevada. The Company used the net sale
proceeds from the Tropicana Marketplace to pay the entire balance of an
interest rate contract which was maturing in October 1995 and part of the
balance of the interest rate contract maturing in December 1996. (See Note
10.)
Loan Covenants and Collateral
On June 24, 1993, the Company and the lender executed a second
amendment to the loan agreement. The amendment stipulates that if the loan
to-value-ratio is more than 55% and equal to or less than 65%, the Company
must pay the lender any excess cash which will be utilized to pay down the
outstanding principal balance. Excess cash has been defined as cash and
cash equivalents at the end of any calendar quarter in excess of $4.0
million. If the loan-to-value ratio exceeds 65%, the loan will be in
default.
Additional terms and conditions of the second amendment include: (i)
repayment of the loan in monthly principal and interest payments using a
twenty-two year amortization schedule (subject to the interest rate
contract maturities detailed above); (ii) reduction of the minimum net
worth covenant to $25.0 million; (iii) a requirement to apply 90% of the
net proceeds to the facility upon the sale of more than 2% of appraised
value of the Company's assets during any 12 month period if the loan-to-
value ratio is equal to or greater than 50%; and (iv) a requirement to
apply 70% of the net proceeds to the facility upon the sale of more than 2%
of the appraised value of the Company's assets during any 12 month period
if the loan-to-value ratio is less than 50%. Under the terms of the second
amendment, unless payment of distributions is necessary to preserve REIT
status, the Company can only pay distributions if the insurance company has
determined that the Company's loan-to-value ratio is 55% or less. (See
Note 6.)
As approved by the insurance company, the property valuations as of
December 31, 1994 indicate that the Company is in compliance with all
covenants regarding the loan-to-value ratio, and the loan-to-value ratio is
53%.
On September 17, 1993, the shareholders of the Company elected four
individuals as new members of the board. The election of four new board
members (constituting a majority of the board) created a default under the
loan agreement for the Company's debt facility. The lender has indicated
that it will reserve its rights with respect to the default but will not
currently pursue any remedy available to it under the terms of the loan
agreement with the Company.
<PAGE>
5. Mortgage Notes Payable.
The following table presents information regarding the Company's
Mortgage Note Payable at December 31, 1995 and 1994.
<TABLE>
<CAPTION>
Name and Location Interest Annual Maturity Balance as of December 31,
of Property Rate Payments Dates 1995 1994
===========================================================================================================
<S> <C> <C> <C> <C>
Memphis #20, Memphis, TN 8.000% $185,700 11/01/98 $1,761,132 $1,804,059
Auburn I, Auburn Hills, MI 8.875% 693,144 08/01/09 6,021,036 6,172,436
- -----------------------------------------------------------------------------------------------------------
TOTAL $7,782,168 $7,976,495
===========================================================================================================
</TABLE>
Principal payments are due as follows:
---------------------------------
1996 $ 211,887
1997 259,846
1998 1,953,392
1999 315,824
2000 345,022
Thereafter 4,696,197
---------------------------------
$7,782,168
=================================
In October 1993, the Company refinanced the mortgage loan securing
Memphis #20 (the "Memphis #20 mortgage"), one of the Memphis 8 properties.
The original mortgage loan bore an interest rate of 13.5% per annum and was
scheduled to mature on May 1, 1997. At the time of refinancing, the loan
had an outstanding balance of $1,772,210. The newMemphis #20 mortgage
loan, which matures on November 1, 1998, had an original principal balance
of $1,850,000, bears an interest rate of 8% per annum and requires monthly
principal and interest payments of $15,475 based on a twenty-year
amortization schedule. As of December 31, 1993, this loan had an
outstanding balance of $1,843,696. In connection with the refinancing of
the Memphis #20 mortgage loan, the Company paid a loan fee amounting to
$18,500, and incurred prepayment and closing costs totaling $68,213. A
portion of these costs was added to the principal balance of the new loan.
The Company refinanced the mortgage loan securing the Auburn Hills
property on August 11, 1994 in connection with the extinguishment of the
Company's bank facility (see Note 4).
6. Distributions.
The analysis below presents the amount of distributions paid to
shareholders and the percentage of the distribution which the Company
estimates is nontaxable for the years ended December 31, 1995, 1994 and
1993. Nontaxable distributions are considered return of capital to
shareholders.
<TABLE>
<CAPTION>
1995 1994 1993
------------------------- ------------------------- -------------------------
Common Preferred Common Preferred Common Preferred
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Distributions Paid $0.280 $0.280 $0.220 $0.220 $0.000 $0.000
Per Share
---------------------------------------------------------------------------------------------------------
Nontaxable 100% 100% 61% 2% -- --
Distributions
Taxable Distributions --% --% 39% 98% -- --
---------------------------------------------------------------------------------------------------------
100% 100% 100% 100% -- --
---------------------------------------------------------------------------------------------------------
</TABLE>
Under the Company's articles of incorporation, the Board cannot
declare any dividends on common shares until it has first declared
dividends on the preferred shares' annual preference amount as computed
under those articles.
The preferred shares generally have a non-cumulative preferential
right to such current distributions as are declared each year by the Board
of Directors up to an amount equal to the lesser of (a) an annualized 6% on
the aggregate adjusted stated value of preferred shares, (b) earnings and
profits for the prior year, or (c) the amount legally available for
distribution by the Company.
The preferred shares are generally entitled to the first declared sale
or refinance distributions attributable to a property up to an amount equal
to their proportionate share of the equity initially invested in that
property.
The preferred shares will receive all declared liquidating
distributions until these shares have recovered their entire investment via
sale or refinance distributions and liquidating distributions.
On April 28, 1995, the Board of Directors (the "Board") declared
dividends in the amount of $0.07 per preferred share and $0.07 per common
share, payable on May 15, 1995 to shareholders of record on May 4, 1995. On
June 7, 1995, the Board declared dividends for the second quarter in the
amount of $0.07 per preferred and $0.07 per common share, payable on June
30 to shareholders of record on June 20, 1995. On September 8, 1995, the
Board declared dividends for the third quarter in the amount of $0.07 per
preferred and $0.07 per common share payable on September 29, 1995 to
shareholders of record on September 19, 1995. On December 8, 1995, the
Board declared dividends for the fourth quarter in the amount of $0.07 per
preferred and $0.07 per common share payable on December 29, 1995 to
shareholders of record on December 19, 1995. The respective $0.07
dividends per preferred share declared on April 28, June 7, September 8 and
December 8, 1995 each encompass the quarterly preferred minimum preference
of $0.06018 per share based upon earnings and profits of the prior year.
7. Net Loss Per Common Share.
Net loss per share of common stock has been determined by dividing net
loss, after deduction of preferred distributions declared, by the weighted
average number of shares of common stock outstanding during the year.
Weighted average common shares outstanding totaled 1,609,937 for 1995, 1994
and 1993.
8. Income Taxes.
The Company previously made an election to be taxed as a real estate
investment trust ("REIT") beginning with the calendar tax year 1989. The
Company continued to satisfy all of the requirements to maintain its status
as a REIT for the tax years ended December 31, 1990 and 1991.
One of the requirements for REIT qualification is that five or fewer
shareholders cannot own more than 50% of the total value of the Company's
outstanding stock at any time during the last half of the taxable year (the
"five or fewer rule"). For purposes of this rule under 1992 and 1993 tax
law, domestic pension trusts are treated as a single individual. During
the last half of the year ended December 31, 1992, the Company failed to
satisfy the five or fewer rule. The failure was caused, for the most part,
by the decline and fluctuations in the fair market value of its preferred
stock relative to its common stock and was not the result of increases in
the stocks held by any shareholders. The decline and fluctuations in the
fair market value of its preferred and common stock were due in part to
recent declines in real estate values coupled with the preferred
shareholders' liquidation preference.
As a result of its loss of REIT status, the Company has beenwas taxed
as a regular corporation beginning with the tax year ended December 31,
1992. Accordingly, any of the Company's taxable income remaining after
utilizing any available net operating loss carryovers, would have been
subject to federal and state corporate income tax. However, the Company
had no material federal or state tax liability for 1992 or 1993.
Under applicable tax rules, the Company would behave been prohibited
from re-electing REIT status for a five year period (i.e. until calendar
year 1997) unless: (1) the Company satisfieds all of the REIT requirements
including, but not limited to, the five or fewer rule; and (2) the Company
had received permission from the Internal Revenue Service ("IRS") under a
special procedure. With respect to item (1), the Company should be able to
satisfy all of the REIT requirements, but most importantly, satisfy the
five or fewer rule beginning with the calendar year 1994 because of an
amendment to the five or fewer rule. The amendment, which became effective
on January 1, 1994, allowsed the Company to "look-through" to the
beneficiaries of a domestic pension trust and treat each beneficiary as
owning stock in the Company in proportion to the beneficiary's actuarial
interest in the domestic pension trust for purposes of the five or fewer
rule. With respect to item (2), the Company's formal request for re-
election of REIT status was granted by the IRS effective January 1, 1994.
The Company madeintends to an election to be taxed as a REIT
beginning with the calendar year 1994. Under certain circumstances, loss
of REIT status may resultmay result in the imposition of federal and state
corporate level tax on certain "built-in-gains" (if any) with respect to
Company properties that exist on the date of its re-election of REIT
status. The Company intends to qualify and elect to be treated as a real
estate investment trust ("REIT") for the year ending December 31, 1995. As
such, the Company should be allowed a deduction for dividends paid to
shareholders if the Company satisfies certain income, asset and
distribution requirements (see Note 6). Accordingly, no provision for
federal income taxes has been made in the accompanying Consolidated
Statements of Operations for the years ended December 31, 1995 and 1994.
9. Settlement of Contingent Liability.
On October 1, 1993, a final settlement was reached in the lawsuit
entitled Bert Gore, Jr., et al. v. Thomas B. Swartz, et al., initially
filed in September 1991 in the Superior Court of the State of California
for the County of San Francisco on behalf of the Company and five other
real estate investment trusts of common initial sponsorship (i.e., Meridian
Point Realty Trust '82, Meridian Point Realty Trust '83, Meridian Point
Realty Trust IV Co., Meridian Point Realty Trust VI Co., and Meridian Point
Realty Trust VII Co. (collectively, the "Trust Defendants")). Under the
terms of the final settlement, the lawsuit was dismissed without the
payment of any damages to the plaintiffs by the defendants. but with an
agreement that the Trust Defendants establish a special committee of
directors and trustees to review and evaluate any alternative management
proposals that might be submitted.
10. Disposition of Properties.
On May 25, 1995, the Company sold the Kroger property located in
Jackson, Mississippi. The selling price of $2,000,000 was paid entirely in
cash. The Company received net proceeds of $1,927,677, after deductions
for closing costs and prorated items totaling $72,323. In connection with
the sale, the Company recognized a Gain on Sale of Property of $157,257.
The property had previously been written down to its estimated net
realizable value.
On July 24, 1995, the Company sold the Tropicana Marketplace located
in Las Vegas, Nevada for a selling price of $10,218,000. Net proceeds
amounted to $9,644,065 after (i) $398,935 of adjustments for closing costs,
interest earned and pro-rations, and (ii) adjustment for an escrow holdback
amounting to $175,000. The net proceeds from the sale and additional funds
of $322,553 deposited by the Company into an escrow account totaling
$9,966,618 were remitted to the insurance company as additional principal
reduction totaling $9,809,535, prepayment penalties amounting to $129,433,
and an interest payment of $27,650. As a result of this payment, an
interest rate contract maturing in October 1995 with a notional amount of
$5,541,419 was paid off completely, and the amount due in December 1996 was
reduced. (See Note 4.)
In connection with the sale, the Company recognized a Loss on Sale of
Property of $156,060. The property had previously been written down to its
estimated net realizable value. Subsequent to July 24, 1995, the Company
received a partial refund of the $175,000 escrow holdback in the amount of
$126,393, reflecting deductions totaling $50,000 that were incurred in
connection with the settlement of tenant disputes outstanding on the date
the Tropicana Marketplace property was sold. The refund includes interest
earned on the escrow holdback in the amount of $1,393. The $50,000
deduction is included in the Loss on Sale of Property.
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
SCHEDULE II
Valuation And Qualifying Accounts
<CAPTION>
Balance at Balance at
Beginning of Charged to End of
Description Year Expense Deductions Year
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1992
Reserve for Bad Debts $800,576 $187,251 $(687,882) $299,945
1993
Reserve for Bad Debts 299,945 18,591 (162,778) 155,758
1994
Reserve for Bad Debts 155,758 (38,480) -- 117,278
1995
Reserve for Bad Debts 117,278 201,281 (183,588) 134,971
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
Cost Capitalized
Initial Cost to Company Subsequent to Acquisition
----------------------- ------------------------- Net Realizable
Rental Value
Description Encumbrances Land Building Improvements Guarantees Writedowns (3)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Office Building:
Auburn Hills, MI $6,021,036 $1,990,705 $11,665,913 $ -- $ -- $ --
Warehouse/
Distribution
Buildings:
Lavergne, TN -- 1,693,892 11,866,236 15,000 -- --
Bedford Park, IL -- 851,483 5,157,273 95,670 -- (550,000)
Memphis, TN 1,761,132 3,215,594 12,872,967 1,404,990 -- (1,139,000)
Richland, MS -- 203,949 2,345,404 151,177 (132,127) --
Chino, CA -- 3,416,095 7,259,203 -- --
Phoenix, AZ -- 2,488,197 9,952,790 297,617 (227,129) (1,736,000)
Dallas, TX -- 2,085,889 7,251,811 984,217 -- (1,742,000)
Other -- -- -- 25,347 -- --
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL $7,782,168 $15,945,804 $68,371,597 $2,974,018 $(359,256) $(5,167,000)
============================================================================================================================
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
SCHEDULE III cont.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
Gross Amount
Carried at end of Period
------------------------
Building & Accumulated Date of Date of Depreciable
Description Land Improvements Total (2) Depreciation Construction Acquisition Life
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Office Building:
Auburn Hills, MI $1,990,705 $11,665,913 $13,656,618 $2,337,473 1986-87 12/27/88 35 yrs.
Warehouse/
Distribution
Buildings:
Lavergne, TN 1,693,892 11,881,236 13,575,128 2,219,100 1988-89 06/28/89 35 yrs.
Bedford Park, IL 773,544 4,780,882 5,554,426 983,067 1975 08/04/89 35 yrs.
Memphis, TN 2,962,554 13,391,997 16,354,551 2,723,043 1968-82 12/21/89 & 35 yrs.
04/27/90
Richland, MS 193,379 2,375,024 2,568,403 496,884 1984-89 12/21/89 35 yrs.
Chino, CA 3,416,095 7,259,203 10,675,298 1,227,642 1982 01/31/90 35 yrs.
Phoenix, AZ 2,095,571 8,679,904 10,775,475 1,537,685 1987-89 06/29/90 35 yrs.
Dallas, TX 1,708,233 6,871,684 8,579,917 1,438,175 1958-68 10/29/90 35 yrs.
Other -- 25,347 25,347 24,701 1991 1991 17 mos.
- -------------------------------------------------------------------------------------------------------------------------
TOTAL $14,833,973 $66,931,190 $81,765,163 $12,987,770
=========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
A Reconciliation of Cost and Accumulated Depreciation for the Years ended December 31, 1995, 1994 and 1993 are as follows:
<CAPTION>
1995 1994 1993
Accumulated Accumulated Accumulated
Cost Depreciation Cost Depreciation Cost Depreciation
--------------------------------- ---------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beginning of Year $96,820,813 $13,350,872 $98,968,496 $10,839,428 $100,275,016 $8,201,398
Additions during period
Capital Improvements 519,937 -- 560,876 -- 541,791 --
Depreciation -- 2,467,408 -- 2,828,003 -- 2,713,512
Adjustment to Property Basis -- -- -- -- (283,829) --
Rental Guarantees (Received)/
Refunded -- -- -- -- (108,000) --
Provision for Decrease
in Net Realizable Value (1,182,015) -- (2,392,000) -- (1,381,000) --
Deletions (358,256) (358,256) (316,559) (316,559) (75,482) (75,482)
Cost of Real Estate Disposed (14,035,316) (1) (2,472,254) -- -- -- --
Balance at end of year $81,765,163 $12,987,770 $96,820,813 $13,350,872 $98,968,496 $10,839,428
<FN>
(1) Represents the property basis of Kroger and Tropicana Marketplace, net of Decrease in Net Realizable Value,
which were disposed on May 25, 1995 and July 24, 1995, respectively.
(2) The aggregate cost for Federal Income Tax purposes was approximately $87,028,107.
(3) Represents the cumulative Provision for Decrease in Net Realizable Value at December 31, 1995,
which is measured as the amount by which the carrying values of the properties exceed their respective
current estimated fair market values.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995 AND THE
CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,016,216
<SECURITIES> 0
<RECEIVABLES> 585,771
<ALLOWANCES> 134,971
<INVENTORY> 0
<CURRENT-ASSETS> 228,000
<PP&E> 81,765,163
<DEPRECIATION> 12,987,770
<TOTAL-ASSETS> 76,494,325
<CURRENT-LIABILITIES> 1,411,471
<BONDS> 0
<COMMON> 1,610
0
5,274
<OTHER-SE> 43,034,406
<TOTAL-LIABILITY-AND-EQUITY> 76,494,325
<SALES> 0
<TOTAL-REVENUES> 11,194,575
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,256,757
<LOSS-PROVISION> 1,182,015
<INTEREST-EXPENSE> 3,901,912
<INCOME-PRETAX> (144,912)
<INCOME-TAX> 0
<INCOME-CONTINUING> (144,912)
<DISCONTINUED> 0
<EXTRAORDINARY> (129,433)
<CHANGES> 0
<NET-INCOME> (274,345)
<EPS-PRIMARY> (1.09)
<EPS-DILUTED> 0
</TABLE>
MPP TERMINATION AGREEMENT
AMONG
MERIDIAN POINT PROPERTIES, INC.
MERIDIAN INDUSTRIAL TRUST, INC.
MERIDIAN POINT REALTY TRUST VIII CO.
Dated as of February 22, 1996
<PAGE>
TABLE OF CONTENTS
DEFINITIONS 5
AGREEMENT 7
Article 1. Termination of MPP Contracts and Purchase of
MPP Shares. 7
1. 1. Termination Date 7
1.2. Purchase of MPP Shares 7
1.3. Termination of Option to Purchase MPP Shares 7
1.4. Transfer of Third Party Agreements 7
1.5. Transfer of Rights in Actions 8
1.6. Transfer of Rights in Certain Insurance Policies 8
1.7. Transfer of Certain Books and Records 8
Article 2. Purchase of Assets and Transfer of Certain
Interests. 8
2.1. Purchase of Assets 8
Article 3. Releases 9
3.1. Release by Trust VIII 9
3.2. Release by MPP 9
Article 4. The MPP Termination Time Closing 10
4.1. Time of the Closing 10
Article 5. Post-Closing Adjustments 10
5.1. Post-closing Adjustment 10
Article 6. Indemnification 11
6.1. No Waiver of Indemnification Rights 11
Article 7. Representations and Warranties of Trust VIII 11
7.1. Authorization and Enforceability 11
7.2. Authorization and Enforceability 11
7.3. Legal Proceedings 12
7.4. Transfer of Property 12
Article 8. Representations and Warranties of MIT 12
8.1. Organization and Related Matters 12
8.2. Authorization and Enforceability 12
8.3. Legal Proceedings 12
Article 9. Representations and Warranties of MPP 12
9.1. Organization and Related Matters 12
9.2. Authorization and Enforceability 12
9.3. Legal Proceedings 13
9.4. Assets Used in its Business 13
Article 10. Conditions Precedent to the Obligations of the
Parties 13
10.1. Reservations and Warranties 13
10.2. Performance of Obligations 13
10.3. Delivery of Documents 13
10.4. No Proceedings Pending 13
10.5. Third Party Consents 13
Article 11. Additional Covenants by MPP and Trust VIII 14
11.1. Liquidation by MPP 14
11.2. Cooperation 14
Article 12. Miscellaneous 14
12.1. Expenses 14
12.2. Certain Taxes 14
12.3. Survival of Representations and Warranties 14
12.4. Notices 14
12.5. Assignment: Binding Effect Benefit 16
12.6. Entire Agreement 16
12.7. Amendment 16
12.8. Governing Law 16
12.9. Counterparts 16
12.10. Headings 16
12.11. Waivers 16
12.12. Severability 17
12.13. Enforcement of Agreement 17
12.14. Parties in Interest 17
12.15. Attorneys' Fees 17
MPP TERMINATION AGREEMENT
This MPP Termination Agreement (the "Agreement") is dated as of
February 22, 1996, among Meridian Point Properties, Inc., a California
corporation ("MPP"), Meridian Point Realty Trust VIII Co., a Missouri
corporation ("Trust VIII") and Meridian Industrial Trust, a Maryland
corporation ("MIT").
BACKGROUND
1. MPP was formed for the purpose of facilitating the sharing of
employees and services among Trust VIII, Meridian Point Realty Trust '83, a
California business trust ("Trust '83"), Sierra Real Estate Equity.Trust
'84 Co., a Missouri corporation ("Trust '84"), Meridian Point Realty Trust
IV Co., a Missouri corporation ("Trust IV"), Meridian Point Realty Trust VI
Co., a Missouri corporation ("Trust VI"), Meridian Point Realty Trust VII
Co., a Missouri corporation ("Trust VII"), and Meridian Point Realty Trust
'82, a California business trust. Trust '83, Trust '84, Trust IV, Trust VI
and Trust VII are collectively referred to herein as the "Trusts".
Employees and services are provided by MPP under an Amended and Restated
Employee Leasing Agreement, effective as of March 24, 1992, as amended (the
"Employee Leasing Agreement") and the Amended and Restated Registrar
Transfer Agent Dividend Disbursement and Service Agreement, effective March
24, 1992 (the "Transfer Agent Agreement"). In addition, MPP entered into a
Stock Option Agreement with the Trusts, Trust '82, Trust VIII, Meridian
Point Company and Milton K. Reeder, President of MPP, concerning the
acquisition of MPP common stock, effective April 1, 1991, as amended (the
"Option Agreement"). Currently, the Trusts, Trust VIII and Milton K.
Reeder are shareholders of MPP.
2. MPP and Trust VIII have entered into various indemnification
agreements providing for the indemnification of MPP and its officers and
directors.
3. It is currently contemplated that Trusts IV, VI and VII will
merge into MIT (the "Merger"), and MIT will purchase certain real estate
assets from Trust '83 and certain other assets from Trust '83, Trust '84
and Trust VII.
4. Trust VIII has terminated the Employee Leasing and Transfer Agent
Agreements with MPP, effective November 30, 1995 and now desires to enter
into an agreement concerning the transfer of certain rights and liabilities
and the establishment of certain procedures and agreements as a result of
such termination.
5. MIT desires to purchase certain interests in tangible property
from Trust VII, effective as of February 22, 1996, and MPP and Trust VIII
desire to sell those assets to MIT.
DEFINITIONS
As used in this Agreement, these terms have these meanings:
"Action" means any action, complaint, investigation, suit or other
proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator, government agency, bureau, commission, court, department,
official, political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign.
"Assets" means the furniture, fixtures, equipment and software owned
or subject to capital leases listed on Schedule 2.1 which are owned by the
Trusts and Trust VII.
The "Business" means the business of providing employees and services
under the Employee Leasing and Transfer Agent Agreement for the benefit of
the Trusts.
"Claim" means any claim, Action, assessment, obligation, amount paid
in settlement, deficiency or loss.
"Employee Leasing Agreement" means the Amended and Restated Employee
Leasing Agreement, effective as of March 24, 1992, as amended, among MPP,
the Trusts and Trusts '82 and VIII.
"Environmental Laws" means (i) the Resource Conservation and Recovery
Act, as amended by the Hazardous and Solid Waste Amendments of 1984, as now
or hereafter amended (42 U.S.C. Sections 6901 et seq.); (ii) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of 1986, as now
or hereafter amended (42 U.S.C. Sections 9601 et seq.); (iii) the Clean
Water Act, as now or hereafter amended (33 U.S.C. Sections 1251 et seq.;
(iv) the Toxic Substances Control Act, as now or hereafter amended (15
U.S.C. Sections 2601 et seq.); (v) the Clean Air Act, as now or hereafter
amended (42 U.S.C. Sections 7401 et seq.); (vi) any local, state or foreign
law, statute, regulation, or ordinance analogous to any of the laws
specified in items (i) through (v) above; or (vii) any other federal,
state, local, or foreign law (including any common law), statute,
regulation, or ordinance regulating, prohibiting, or otherwise restricting
the placement, release (whether by spilling, leaking, pumping, pouring,
emitting, emptying, discharging, ejecting, escaping, leaching, disposing,
seeping, infiltrating, draining or dumping (hereinafter "Release")),
threatened Release, generation, treatment, or disposal upon or into any
environmental media of any substance, pollutant, or waste which is now or
hereafter classified or considered to be hazardous or toxic to human health
or the environment.
"Existing MPP Indemnification Agreements" has the meaning set forth
in Section 6. 1.
"Merger" means the merger of Trusts IV, VI and VII into MIT under the
Agreement and Plan of Merger as it may be amended from time to time among
Trusts IV, VI and VII and MIT dated as of November 10, 1995.
"MIT" means Meridian Industrial Trust, Inc., a Maryland corporation.
"MPP" means Meridian Point Properties, Inc., a California
corporation.
"MPP Shares" means the outstanding common stock of MPP.
"MPP Termination Time" has the meaning set forth in Section 1.1.
"MPP Termination Time Closing" has the meaning set forth in Section
4.1.
"Option Agreement" means the Stock Option Agreement, effective April
1, 1991, as amended, among Milton K. Reeder, MPP, the Trusts, Meridian
Point Company and Trust '82 and Trust VIII.
"Organizational Documents" means a corporation's articles of
incorporation and bylaws or a business trust's declaration of trust and
regulations.
"Person" means an association, a corporation, an individual, a
partnership, a joint venture, a limited liability company, a trust or any
other entity or organization, including a governmental entity.
"Post-Closing" has the meaning set forth in Section 5. 1.
"Selected Releasees" has the meaning set forth in Section 3. 1.
"Third Party Agreements" has the meaning set forth in Section 1.4.
"Transfer Agent Agreement" means the Amended and Restated Registrar,
Transfer Agent, Dividend Disbursement and Service Agreement, effective
March 24, 1992, as amended, among MPP, the Trusts, Trust '82 and Trust VII.
"Trust '82" means Meridian Point Realty Trust '82, a California
business trust.
"Trust '83" means Meridian Point Realty Trust '83, a California
business trust.
"Trust '84" means Sierra Real Estate Equity Trust '84 Co., a Missouri
corporation.
"Trust IV" means Meridian Point Realty Trust IV Co., a Missouri
corporation.
"Trust VI" means Meridian Point Realty Trust VI Co., a Missouri
corporation.
"Trust VII" means Meridian Point Realty Trust VII Co., a Missouri
corporation.
"Trust VIII" means Meridian Point Realty Trust VII Co., a Missouri
corporation.
AGREEMENT
The parties agree as follows:
Article 1. Termination of MPP Contracts and Purchase of MPP Shares.
1. 1. Termination Date. Effective as of 5:00 p.m. (Pacific Time)
on November 30, 1995, Trust VIII terminated the Employee Leasing Agreement
and Transfer Agent Agreement (the "MPP Termination Time"). The
indemnification protections set forth in Article 10 of the Employee Leasing
Agreement and Article 5 of the Transfer Agent Agreement shall survive the
termination of the Employee Leasing and Transfer Agent Agreements, with to
actions taken by MPP and MPP's directors, officers and employees on behalf
of Trust VIII before the MPP Termination Time.
1.2. Purchase of MPP Shares. Trust VIII shall sell to MPP and MPP
shall purchase the 90 MPP Shares owned by Trust VIII at the MPP Termination
Time Closing. The purchase price for the MPP Shares shall be the price
specified in MPP's Organizational Documents of $3.84 per share. At the MPP
Termination Time Closing, MPP shall deliver checks payable to or endorsed
for payment to Trust VIII in the amount of $345.60 and Trust VIII shall
transfer the above specified MPP Shares to MPP.
1.3. Termination of Option to Purchase MPP Shares. Effective at the
MPP Termination Time Closing, Trust VIII shall release its option to
purchase additional MPP Shares as specified in the Option Agreement.
1.4. Transfer of Third Party Agreements. MPP has entered into various
agreements and arrangements, including those listed on Schedule 1.4 (the
"Third Party Agreements"). MPP shall take all actions as are necessary and
requested by Trust VIII to permit Trust VIII, as indicated on Schedule 1.4,
to assign MPP's rights insofar as they involve Trust VIII and assume MPP's
obligations insofar as they involve Trust VIII effective as of or before
the Closing, if any, under the Third Party Agreements listed on Schedule
1.4. Trust VIII agrees to the assignment of rights and assumption of
liabilities under the Third Party Agreements as set forth in Schedule 1.4.
1.5. Transfer of Rights in Actions. MPP is a party to certain Actions
listed on Schedule 1.5 arising out of MPP's duties and obligations to the
Trusts under the Employee Leasing and Transfer Agent Agreements. MPP shall
take all actions as are necessary and requested by Trust VIII to permit
Trust VIII to assign MPP's rights to Trust VIII and have Trust VIII assume
MPP's obligations as a party to the Actions as specified on Schedule 1.5 as
of the MPP Termination Time Closing. The actions to be taken shall
include: (i) assisting in the smooth transition and taking all steps
necessary to prevent any unnecessary delay or waiver of any rights that
Trust VIII may have in such Actions; (ii) assisting in the substitution of
Trust VIII for MPP in such Actions; (iii) causing Trust VIII to obtain the
benefit of the Actions; and (iv) permitting Trust VIII to assume the cost
and, to the extent practical, assume supervision of the Actions, all
effective, to the extent practicable as of the MPP Termination Time
Closing.
1.6. Transfer of Rights in Certain Insurance Policies. MPP is a named
insured on certain insurance policies arising out of MPP's duties and
obligations to Trust VIII under the Employee Leasing and Transfer Agent
Agreements. MPP shall take all actions as are necessary and requested by
Trust VIII to permit Trust VIII to assign MPP's rights insofar as they
involve Trust VIII to Trust VIII and have Trust VIII assume MPP's
obligations as of the MPP Termination Time Closing. The actions to be
taken shall include: (i) taking all steps necessary to prevent any
unnecessary delay or waiver of any rights to insurance proceeds that Trust
VIII may have to such proceeds; (ii) assisting in the substitution of Trust
VIII for MPP on such policies; and (iii) causing Trust VIII to obtain the
benefits of any insurance proceeds to the extent practicable effective as
of and after the MPP Termination Time Closing.
1.7. Transfer of Certain Books and Records. MPP and MIT shall
cooperate in the transfer to Trust VIII of all books, records, contracts,
leases, receipts and other items relating to Trust VIII's assets or
business as requested by Trust VIII and Trust VIII shall bear the cost of
transferring such records. Insofar as such books of records relate jointly
to Trust VIII and the Trusts ("Joint Records"), MPP shall provide copies of
such Joint Records to Trust VIII as requested and Trust VIII shall bear the
cost of making such copies.
Article 2. Purchase of Assets and Transfer of Certain Interests.
2.1. Purchase of Assets. Subject to the terms and conditions of this
Agreement, at the MPP Termination Time Closing, Trust VIII shall sell and
deliver to MIT, and MIT shall purchase and accept from Trust VIII, Trust
VIII's interest in all the Assets listed on Schedule 2.1. At the MPP
Termination Time Closing, MIT shall deliver a check payable to Trust VIII
in an amount equal to the fair market value of Trust VIII's interest in the
Assets as specified on Schedule 2.1.
Article 3. Releases.
3.1. Release by Trust VIII. At the MPP Termination Time Closing, and
without the need to deliver additional documents or take any other actions,
Trust VIII shall release and discharge MPP and its officers and directors,
both past and present listed on Schedule 3.1 (collectively "Selected
Releasees"), with respect to and from any and all Claims, whether now known
or unknown, and whether or not concealed or hidden, all of which Trust VIII
now owns or holds or has at any time owned or held against any Selected
Releasee. However, Trust VIII shall not release and discharge Selected
Releasees (i) from their obligations under this Agreement; (ii) from any
Claim arising out of a unlawful personal gain to a Selected Releasee; (iii)
any Claim arising out of dishonest, fraudulent or criminal acts by a
Selected Releasee; or (iv) any Claim arising out of willful malfeasance by
a Selected Releasee. In furtherance of this intention, Trust VIII hereby
expressly waives, effective as of the MPP Termination Time Closing, any and
all rights and benefits conferred upon it by Section 1542 of the California
Civil Code and expressly consents that this release shall be given full
force and effect according to each and all of its express terms and
provisions.
Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
3.2. Release by MPP. At the Closing, and without the need to deliver
additional documents or take any other actions, MPP shall release and
discharge Trust VIII with respect to and from any and all Claims arising
under Environmental Laws with respect to real property owned directly or
indirectly by Trust '83, whether known or unknown, and whether or not
concealed or hidden. In furtherance of this intention, MPP hereby
expressly waives, effective as of the MPP Termination Time Closing, any and
all rights and benefits conferred upon it by Section 1542 of the California
Civil Code and expressly consents that this release relating to Claims
under the Environmental Laws with respect to real property owned directly
or indirectly by Trust '83 shall be given full force and effect according
to each and all of its express terms and provisions.
Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Article 4. The MPP Termination Time Closing.
4.1. Time of the Closing. The WP Termination Time Closing shall take
at the offices of Heller Ehrman White & McAuliffe, at 333 Bush Street, San
Francisco, California 94104 on Thursday, February 22, 1996 at 5:00 p.m.
local time. At the MPP Termination Time Closing, the following events
shall take place:
(a) Each of the parties to this Agreement shall deliver certified
Board resolutions or minutes authorizing the consummation of the
transactions contemplated by this Agreement;
(b) Trust VIII shall deliver a bill of sale, in such form that is
acceptable to the parties, representing the Transfer of its interest in the
Assets to MIT;
(c) MIT shall deliver to Trust VIII a check in respect of such
Trust's respective interests in the Assets as set forth on Schedule 2.1;
(d) MPP shall deliver copies of all written notices of assignment as
required pursuant to the Third Party Agreements to be transferred as
specified on Schedule 1.4;
(e) MPP shall deliver evidence of any required assignment or transfer
by MPP of rights and assumption of obligations with respect to Actions
listed on Schedule 1.5; and
(f) The Trusts and MPP shall deliver an assignment and assumption
agreement relating to (i) the assignment and assumption of the Third Party
Agreements and (ii) the assignment or transfer of rights and assumption of
obligations with respect to the Actions listed on Schedule I.5.
(g) Trust VIII shall deliver its MPP Shares as required pursuant to
Section 1.2; and
(h) MPP shall deliver a check to Trust VIII representing payment for
the MPP Shares purchased from Trust VIII as required by Section 1.2.
Article 5. Post-Closing Adjustments.
5.1. Post-closing Adjustment. Within 90 days after the MPP
Termination Time Closing, MPP shall determine the amounts owed to Trust
VIII and owed by Trust VIII under the Employee Leasing Agreement, the
Transfer Agent Agreement and this Agreement. MPP shall prepare and
deliver, within 100 days after the MPP Termination Time Closing, a report
(the "Post-Closing Report") to Trust VIII and MIT verifying the amounts
payable under the Employee Leasing and Transfer Agent Agreements and this
Agreement, and setting forth amounts owed to MPP and Trust VIII under such
agreements including, but not limited to, the advance of funds paid by
Trust VIII to MPP pursuant to Section 6.2 of the Employee Leasing Agreement
(the "Advance"). MIT and Trust VIII shall have up to 30 days to object to
any item in the Post Closing Report. If no objections are raised during
such thirty day period MIT, MPP and Trust VIII shall pay the amounts due,
if any, as set forth in such Post Closing Report. If any objections to the
Post Closing Report are raised, MPP, MIT and Trust VIII shall cooperate to
promptly resolve any differences. MIT and Trust VIII notify MPP in writing
as soon as each of them has approved the Post Closing Report and within ten
days thereafter, MPP, MIT and Trust VIII shall pay to the appropriate party
such amounts owed, if any, as are specified in such Post-Closing Report.
Article 6. Indemnification.
6.1. No Waiver of Indemnification Rights. Other than the release by
MPP set forth in Section 3.2, nothing in this Agreement shall be construed
as (i) a termination by Trust VIII or MPP of any obligation to indemnify
MPP or its present or former officers, directors, employees or agents ("MPP
Indemnitees") or (ii) a waiver by any MPP Indemnitee of his or her right to
be indemnified by MPP or Trust VIII. Accordingly, the MPP Indemnitees
shall retain all rights of indemnification they are presently entitled to
including, but not limited to, those permitted or required (i) by law, (ii)
under MPP's and Trust VIII's Organizational Documents, (iii) under the
Employee Leasing and Transfer Agent Agreements; and (iv) under all existing
arrangements or agreements providing for the indemnification of MPP and its
officers, directors, employees and agents (the "Existing MPP
Indemnification Agreements").
Article 7. Representations and Warranties of Trust VIII.
Trust VIII represents and warrants to MPP and MIT as follows:
7.1. Authorization and Enforceability. Trust VIII is duly
incorporated and validly existing under the laws of the State of Missouri.
Trust VIII has all necessary corporate power and corporate authority to
execute, deliver and perform this Agreement.
7.2. Authorization and Enforceability. The execution, delivery and
performance of this Agreement by Trust VIII has been duly and validly
authorized by the Trust VIII's Board of Directors, and no other corporate
proceedings on the part of Trust VIII (including stockholder approval) is
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by Trust VIII, and constitutes the legal, valid and binding
obligation of Trust VIII, enforceable against Trust VIII in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
7.3. Legal Proceedings. There is no Action which is pending, or to
the knowledge of Trust VIII against Trust VIII, which questions the
validity or propriety of this Agreement or any action to be taken by Trust
VIII in connection with this Agreement.
7.4. Transfer of Property. To the best of Trust VIII's knowledge, the
Assets listed on Schedule 2.3 constitute all of the tangible and intangible
property used by MPP to run MPP's business in which Trust VIII has an
ownership interest except for such tangible or intangible property that is
located at a commercial property owned by Trust VIII.
Article 8. Representations and Warranties of MIT.
MIT represents and warrants to Trust VIII and MPP as follows:
8.1. Organization and Related Matters. MIT is duly incorporated and
validly existing under the laws of the State of Maryland. MIT has all
corporate power and corporate authority to execute, deliver and perform
this Agreement.
8.2. Authorization and Enforceability. The execution, delivery and
performance of this Agreement by MIT has been duly and validly authority by
the Board of Directors of MIT and no other corporate proceedings on the
part of MIT (including stockholder approval) are necessary to authorize
this Agreement or to consummate the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by MIT and
constitutes the legally valid and binding obligation of MIT, enforceable
against MIT in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles relating to or limiting creditors'
rights generally.
8.3. Legal Proceedings. There is no Action which is pending or, to
the knowledge of MIT, threatened, against MIT which questions the validity
or propriety of this Agreement or any action to be taken by MIT in
connection with this Agreement.
Article 9. Representations and Warranties of MPP.
MPP represents and warrants to MIT and Trust VIII as follows:
9.1. Organization and Related Matters. MPP is duly incorporated and
validly existing under the laws of the State of California. MPP has all
necessary corporate power and corporate authority to execute, deliver and
perform this Agreement.
9.2. Authorization and Enforceability. The execution, delivery and
performance of this Agreement by MPP has been duly and validly authorized
by the Board of Directors of MPP and no other corporate proceedings on the
part of MPP are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by MPP and constitutes the legally valid and binding
obligation of MPP, enforceable against MPP in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
9.3. Legal Proceedings. There is no Action which is pending or, to
the knowledge of MPP threatened, against MPP as of the date hereof which
questions the validity or propriety of this Agreement or any action to be
taken by MPP in connection with this Agreement.
9.4. Assets Used in its Business. All of the furniture, fixtures,
equipment, and software that currently is used or has been used by MPP to
perform services under the Employee Leasing Agreement and Transfer Agent
Agreement is or was owned by the Trusts and Trust '82 and Trust VIII and
not by MPP.
Article 10. Conditions Precedent to the Obligations of the Parties.
The obligations of each party to this Agreement to be performed at the
MPP Termination Time Closing are subject to satisfaction of each of the
following conditions or to waiver by the party or parties that benefit by
such condition:
10.1. Reservations and Warranties. The representations and
warranties made by each other party in Articles 7, 8 and 9 shall be true
and correct on and as of the MPP Termination Time Closing with the same
force and effect as though all such representations and warranties had been
made on and as of the Closing, except as otherwise contemplated by this
Agreement.
10.2. Performance of Obligations. All the other parties to this
Agreement shall have performed in all material respects those Of their
obligations set forth in this Agreement required to be performed by them
before the Closing.
10.3. Delivery of Documents. All of the other parties to this
Agreement shall have delivered the documents, certificates and checks
specified in Section 4.1.
10.4. No Proceedings Pending. No Action shall have been
instituted or threatened and no law, statute, rule or regulation shall be
in effect which may materially restrain, prohibit or invalidate any of the
transactions contemplated by this Agreement.
10.5. Third Party Consents. MPP and Trust VIII shall have
delivered to MIT all written consents and waivers or advisable in the
reasonable judgment of MIT to permit the sale of Assets to MIT and the
consummation of the other transactions contemplated herein including the
assignment of all Third Party Agreements listed on Schedule 1.5.
Article 11. Additional Covenants by MPP and Trust VIII.
11.1. Liquidation by MPP. MPP shall liquidate and dissolve in
accordance with the voluntary dissolution procedures set forth in Division
1, Chapter 19 of the California Corporations Code as soon as feasible after
the MPP Termination Time Closing.
11.2. Cooperation. MPP and MIT shall use their best efforts to:
(i) cooperate and cause others under their control or influence to
cooperate with Trust VIII and their counsel, accountants, and other
designated representatives to Provide MIT and Trust VIII with full access
to the books, contracts, commitments and other records (including computer
files, retrieval programs and related documentation) of MPP and Trust VIII
concerning any matter that is a subject of this Agreement.
Article 12. Miscellaneous.
12.1. Expenses. Except as otherwise provided in this Agreement,
each party shall pay its own expenses incident to the drafting, negotiation
and execution of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, all legal and
accounting fees and disbursements.
12.2. Certain Taxes. If any sales taxes are in respect of the
sale of any of Trust VIII's interest in the Assets to MIT, Trust VIII and
MIT shall each pay half of those taxes.
12.3. Survival of Representations and Warranties. The respective
representations and warranties of the parties shall survive the MPP
Termination on Time Closing and shall remain in effect for a period of one
year following the MPP Termination Time Closing Date.
12.4. Notices. Any notice required to be given hereunder shall be
in writing and shall be sent by facsimile transmission, courier service
(with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid) and addressed as
follows:
If to MPP:
Milton K. Reeder
President
Meridian Point Properties, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Telephone: (415) 281-3900
Facsimile: (415) 284-2840
If to MIT:
Allen J. Anderson
Chairman
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Telephone: (415) 281-3900
Facsimile: (415) 284-2840
If to Trust VIII:
Ms. Lorraine Legg
President
Meridian Point Realty Trust VIII Co.
655 Montgomery Saw, Suite 800
San Francisco, California 94111
Telephone: (415) 393-8000
Facsimile: (415) 393-8006
with a copy of any notice to any party to:
Mr. Milton K. Reeder
President
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Telephone: (415) 281-3900
Facsimile: (415) 284-2840
with an additional copy of any notice to any party to:
Daniel E. Titelbaum, Esq.
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104-2878
Telephone: (415) 772-6000
Facsimile: (415) 772-6268
Denis F. Shanagher, Esq.
Preuss Walker & Shanagher LLP
595 Market Street, 16th Floor
San Francisco, California 94105
Telephone: (415) 978-2600
Facsimile: (415) 978-2613
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date so delivered.
12.5. Assignment: Binding Effect Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement be binding upon and shall inure to the
benefit of the parties hereto and their respective successor and assigns.
12.6. Entire Agreement. This Agreement, including its schedules
and exhibits, constitutes the entire agreement among the parties with
respect to its subject matter and supersedes all prior agreements and
understandings among the parties with respect thereto except to the extent
the Agreement expressly preserves those agreements or understandings.
12.7. Amendment. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing signed by all
parties.
12.8. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF CALIFORNIA,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION
(WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF CALIFORNIA.
12.9. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the
same instrument.
12.10. Headings. Headings in this Agreement are for the convenience
of the parties only, and shall be given no substantive or interpretive
effect whatsoever.
12.11. Waivers. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed
to constitute a waiver by the party taking such action of compliance with
any representations, warranties or covenants contained in this Agreement.
The waiver by any party hereto of a breach of any provision hereunder shall
not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.
12.12. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
12.13. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent a breach of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of competent jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
12.14. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any other person or entity that is not
a party to this Agreement any rights or remedies of any nature whatsoever
under or by reason of this Agreement, except for the (i) benefits conferred
upon Selected MPP Indemnitees in respect of the indemnifications described
in Article 6 and (ii) the benefits conferred upon Selected Releasees
described in Article 3, which are intended for the benefit of such persons
or entities and may be enforced by them. Nothing in this Agreement is in
to relieve or discharge the obligation of any third person or entity to, or
to confer any right of subrogation or action over or against, any party to
this Agreement.
12.15. Attorneys' Fees. If any Action is instituted by any party
to this Agreement to enforce on any of the terms, the prevailing party or
parties shall be entitled to recover from the other party or parties all
fees, costs and expenses of such prevailing party's or parties' counsel,
accountants and experts in addition to any other amount to which the
prevailing party or parties may be entitled as a result of such Action.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"MPP"
MERIDIAN POINT PROPERTIES, INC.,
a California corporation
By _______________________________________
Milton K. Reeder
Its President
"MIT"
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By________________________________________
Allen J. Anderson
Its Chairman of the Board
and Chief Executive Officer
"TRUST VIII"
MERIDIAN POINT REALTY TRUST VII CO.,
a Missouri corporation
By________________________________________
Lorraine O. Legg
President
<PAGE>
MPP TERMINATION AGREEMENT
-------------------------
SCHEDULE 1.4 - TRANSFER OF THIRD PARTY AGREEMENTS
-------------------------------------------------
1. Real Estate Management Agreement between Trammell Crow Management
Services (formerly Memphis Industrial Overhead L.P.) and Meridian Point
Properties, Inc. dated February 8, 1990 as amended by Amendment No. I dated
November 15, 1991, Amendment No. 2 dated March 1, 1994, and Amendment No. 3
dated June 8, 1994
2. Real Estate Management Agreement between Carpenter Properties,
Inc. and Meridian Point Properties, Inc. dated January 1, 1993
3. Real Estate Management Agreement between O'Donnell Property
Services, Inc. and Meridian Point Properties, Inc. dated September 1, 1993
as amended by the First Addendum effective March 1, 1994
4. Real Estate Management Agreement between Primewest L.L.C. (as
successor to Primewest West Real Estate Services, Inc.) and Meridian Point
Properties dated August 1, 1993)
5. Real Estate Management Agreement between Wilcox Realty Group,
Inc. and Meridian Point Properties, Inc. dated August 1, 1993
6. Real Estate Management Agreement between H.P. Industrial
Management #2, Inc. and Meridian Point Properties, Inc. dated June 15, 1993
7. Letter of Credit re Sterling Logistics in favor of Meridian Point
Properties, Inc. effective through July 31, 1996
8. Tax Services Agreement between Meridian Point Properties, Inc.
and George McElroy & Assoc. dated January 6, 1995
<PAGE>
MPP TERMINATION AGREEMENT
SCHEDULE 1.5 - TRANSFER OF RIGHTS IN ACTIONS
Although MMP and Trust VIII have not been named as a defendant in any of
the following actions and MPP is not aware of any reason why it or Trust
VII should be named, in the event that MPP were named in the future in
connection with the following actions, MPP's rights and obligations would
be assigned or assumed by Trust VII as follows:
1. 1033 E. Maricopa
CalMat Properties Co., R.E. Accommodation Company, Agra Earth &
Environmental Inc., SHB Agra, Inc., Air Cargo Transit, Inc., Frank Stewart
Construction Consultants, Inc., Western Soils Stabilization, Inc., John
Does 1-100 Breach of Contract, Professional Negligence, Negligent
Misrepresentation, Fraud, Indemnity.
<PAGE>
MPP TERMINATION AGREEMENT
-------------------------
SCHEDULE 2.1 - PURCHASE OF ASSETS FROM TRUST VIII
-------------------------------------------------
Description of Assets
Desks, Credenzas & Tables:
3/Anderson Oak Executive, 72"
4/Anderson Oak Managers, 62"
6/Anderson Oak desk with return
U-shaped workstation w/credenza
2/Hardwood house, work table, mahogany
Hardwood house, workwall unit, mahogany
Barclay, tandem credenza unit, mahogany
New Harmony, custom conference table, mahogany
3/Hardwood house, Conference, mahogany
2/Oval 2 pedestal Conference, mahogany
Double pedestal Oval Conference, Lt. Oak
Cherry Credenza in main conference room
6/Anderson Oak credenza
2/Hardwood house, credenza, mahogany
1/small credenza with fridge, mahogany
2/Hickory, Braun sq. table, mahogany
Hickory, federal corner, coffee & sofa tables, Dk cherry
3/Johnson kitchen tables, white & oak finish
2/Long & narrow oak work tables
3/Folding tables, grain laminated top
1/Tier sorters with dividers
2/Metal utility tables, wood grain laminated top
Sofa & Chairs:
Brickel cherry wood frame sofa, summer garden
2/Brickel cherry wood frame lounge
3/Bernhardt, loose cushion lounge, summer garden
12/Gunlock swivel arm, wool cisele cedar, walnut
4/Gunlock arm, wool cisele cedar, walnut
4/Gunlock arm, walnut (2/rain forest & 2 sq. root)
14/Brickel swivel arm, green Corduroy, cherry
28/Gunlock swivel arm, rain forest, walnut
25/Hayes visitor arm, green/oak
23 /Secretary, condi peli with arms
15/Secretary, condi peli
2/Manager's, Kimball, green/oak
1/Executive highback, green
1/Executive highback, leather
2/Tweed reception chairs
10/Windsor kitchen arm, natural wood
4 /Stools with arms & casters, gray
File Cabinets & Bookcases:
16/Harpers metal 5 drawer
18/Harpers metal 4 drawer
9/Harpers metal 3 drawer
9/Harpers metal 2 drawer
2/Metal Fire File cabinets (2-drawer
10/Anderson Oak 2 drawer file
Hardwood House 2 drawer file, mahogany
3/Anderson Oak 2 shelf
10/Anderson Oak 3 shelf
4/Egan Visual, mahogany
Miscellaneous Furniture & Shelving:
White Aisle-Saver CD 1000 storage system
5/Aluminum shelves
30/Posters, framed in German silver
35/Desktop items (stapler, calendar holder, tape dispenser) Christmas
Decorations
Haworth Systems Furniture:
9/8 x 8 stations with power
21/10 x 10 stations with power
5/Miscellaneous stations & offices
(please see attachment for more detail)
Equipment:
Voicepoint teleconference unit
2 Sound Station Audioconferencing System
3/Plantronics w/supra headset
4/Plantronics w/mirage headset
4/Ultralight Helloset (headset)
5/HP calculators
15/Casio 12 digit table model calculators
15/Sharp 12 digit table model calculators
2/Dictaphones, hand held 1253 & 1254/ Sanyo TRC3576)
2/Dictaphone transcribes 1880 & 1882)
3/Xerox 6010 typewrite
IBM wheelwriter typewriter
2/IBM selectric 11 typewriter
Smith Corona, XD7700
Pitney Bowes, 1861 folder & inserter
IMS F307, mail machine
Freiden Alcatel 5001, letter opener
Brother P-25 Touch label printer
Cannon L70 plain paper fax
Fujitsu, Dex 140 Fax (thermal paper)
Kodak 500 Star Reeder
910 Power shredder
Appliances:
Sub-zero refrigerator
2/microwaves
2/mini-refrigerators
Equipment:
Xerox 2058 Copier
Mita LDC-650 Fax Machine
lMS Hasler Postage Scale
SAN FRANCISCO OFFICE:
Executive Assistant Area (3 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
7/Tac Board/Tweed; 36W x 16H
3/Tac Board/Fog Flannel; 36W x 16H
3/Power Panel/Tweed; 30W x 48H
12/Power Panel/Tweed; 36W x 48H
8/Power Panel/Tweed; 36W x 66H
2/Work Surface Greytone; 36W x 29H
4/Work Surface/Greytone; 72W x 29H
2/Work Surface/Greytone; 72W x 23H
Accounting Run (6 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr w/Task Light/Tweed; 36W x 16H
6/Pedestal/Greytone; Tray/Box/File
2/Tac Board/Tweed; 36W x 16H
10/Tac Board/Fog Flannel; 36W x 16H
1/Tac Board/Fog Flannel; 60W x 16H
7/Power Panel/Tweed; 24W x 66H
7/Power Tweed; 30W x 66H
12/Power Tweed; 36W x 66H
5/Power Tweed; 48W x 66H
8/Power Tweed; 60W x 66H
5/Work Greytone; 23W x 29H
5/Work Surface/Greytone; 72W x 29H
5/Work Surface/Greytone; 23W x 60H
Real Estate (I Statim):
2/Flipper Dr w/Task Light/Fog 1; 36W x 16H
1/Flipper Dr w/Task Light/Fog Flannel; 60W x 16H
1/Pedestal/Greytone; Tray/Box/File
1/Tac Board/Tweed; 36W x 16H
1/Tac Board/Fog 1; 60W x 16H
2/Power Panel/Tweed; 36W x 48H
3/Power Panel/Tweed; 24W x 66H
2/Power Panel/Tweed; 36W x 66H
1/Power Panel/Tweed; 42W x 66H
2/Work Surface/Greytone; 42W x 23H
1/Work Surface/Greytone; 60W x 23H
2/Work Surface/Greytone; 72W x 23H
Real Estate (3 Stations):
4/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
2/Tac, Board/Tweed; 60W x 16H
2/Power Panel/Tweed; 24W x 48H
2/Power Panel/Tweed; 36w x 48H
2/Power Panel/Tweed; 24W x 66H
2/Power Panel/Tweed; 30W x 66H
8/Power Panel/Tweed; 36W x 66H
4/Power Panel/Tweed; 60W x 66H
1/Work Surface/Greytone; 36W x 23H
2/Work Surface/Greytone; 60W x 23H
1/Work Surface/Greytone; 72W x 23H
2/Work Surface/Greytone; 36W x 29H
2/Work Surface/Greytone; 72W x 29H
Old Legal Area (4 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
8/Tac Board/Fog Flannel; 36W x 16H
1/Power Panel/Tweed; 24W x 48H
1/Power Panel/Tweed; 30W x 48H
3/Power Panel/Tweed; 24W x 66H
9/Power Panel/Tweed; 30W x 66H
14/Power Panel Tweed; 36W x 66H
1/Power Panel/Tweed; 48W x 66H
2/Power Panel/Tweed; 60W x 66H
3/Work Surface/Greytone; 60W x 23H
2/Work Surface/Greytone; 72W x 23H
3/Work Surface/Greytone; 30W x 29H
1/Work Surface/Greytone; 36W x 29H
4/Work Surface/Greytone; 72W x 29H
Investor Services (6 Stations):
15/Flipper Dr. w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr. w/Task Light/Fog Flannel; 48W x 16H
6/Pedestal/Greytone; Tray/Box/File
9/Tac Board Tweed; 36W x 16H
3/Tac Board Tweed; 60W x 16H
2/Tac Board Fog Flannel; 36W x 16H
5/Tac Board Fog Flannel; 60W x 16H
7/Power Panel/Glass; 24W x 66H
5/Power Panel/Glass; 30W x 66H
5/Power Panel/Glass; 36W x 66H
3/Power Panel/Tweed; 24W x 48H
4/Power Panel/Tweed; 24W x 66H
5/Power Panel/Tweed; 30W x 66H
16/Power Panel/Tweed; 36W x 66H
2/Power Panel/Tweed; 48W x 66H
3/Power Panel/Tweed; 60W x 66H
6/Work Surface/Greytone; 48W x 23H
5/Work Surface/Greytone; 60W x 23H
3/Work Surface/Greytone; 36W x 29H
6/Work Surface/Greytone; 72W x 29H
Acct./MIS/Finance (12 Stations):
21/Flipper Dr. w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr. w/Task Light/Tweed; 36W x 16H
21/Pedestal/Greytone; Tray/Box/File
22/Tac Board/Fog Flannel; 36W x 16H
16/Power Panel/Glass; 30W x 66H
1/Power Panel/Glass; 36W x 66H
12/Power Panel/Tweed; 24W x 66H
19/Power Panel/Tweed; 30W x 66H
1/Power Panel/Tweed; 36W x 66H
2/Power/Panel/Tweed; 48W x 66H
10/Power Tweed; 60W x 66H
17/Work Surface/Greytone; 60W x 23H
1/Work Surface/Greytone; 24W x 29H
3/Work Surface/Greytone; 72W x 29H
PC Inventory:
User I.D./Description
AL - Memphis; UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor
ALICLAE; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
BARBARAS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
BOBD; Gateway 2000; 486/33V; 8 Mb RAM; 207 HDD; 17" Monitor
BRL4,NZ; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 15" Monitor
CFTESTEW; UC Computer; 386/33; 8 Mb RAM; 102 HDD; 14" Monitor
Check Printer PC; Acer; 38&16; 4 Mb RAM; 329 HDD; 14" Monitor
CHRISTIA; UC Computer; 386/40; 4 Mb RAM; 127 HDD; 14" Monitor
DAVIDS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
DEBBEEW; Gateway 2000; 48&33; 16 Mb RAM; 200 HDD; 14" Monitor
DENNISH; Gateway 2000; 486/33C; 8 Mb RAM; 207 HDD; 14" Monitor
DICKW; Gateway 2000; 486133V; 16 Mb RAM; 250 HDD; 14" Monitor
JENNYM; Gateway 2000; 486166; 16 Mb RAM; 333 HDD; 14" Monitor
JIMS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
JOANNEL; UC Computer; 386133; 4 Mb RAM; 117 HDD; 14" Monitor
KARENC; Gateway 2000; 486/33V; 16 Mb RAM; 207 HDD; 14" Monitor
KIMN; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
LINDAH; Gateway 2000; P5/60; 8 Mb RAM; 5W HDD; 17" Monitor
LINDAM; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
LOUISER; UC Computer; 386/33; 8 Mb RAM; 117 HDD; 14" Monitor
MARCIAL; Gateway 2000; 486/33; 4 Mb RAM; 200 HDD; 17" Monitor
MICHELLE; Gateway 2000; 486/33V; 12 Mb RAM; 207 HDD; 17" Monitor
MILTR; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
MILTR - Notebook; Compaq; 486150; 8 Mb RAM;'250 HDD; 9" Monitor
NANCY; Gateway 2000; 486133; 8 Mb RAM; 200 HDD; 17" Monitor
NEMESIO; Gateway 2000; 486/33V; 16 Mb RAM; 117 HDD; 14" Monitor
NOELK; Gateway 2000; 486133; 16 Mb RAM; 207 HDD; 14" Monitor
Notebook#l; Gateway 2000; 486/25; 4 Mb RAM; 250 HDD; 9" Monitor
Notebook#2; Gateway 2000; 486125; 4 Mb RAM; 250 HDD; 9" Monitor
Project; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 14" Monitor
Report Station; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 14" Monitor
RUSSELLT; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
SANNYP; UC Computer; 386/33; 4 Mb RAM; 207 HDD; 14" Monitor
SILVIA - Memphis; UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor
Spare1; UC Computer; 386/40; 4 Mb RAM; 117 HDD; 14" Monitor
Spare2; UC Computer; 386/33; 4 Mb RAM; 127 HDD; 14" Monitor
Spare3; UC Computer; 386/33; 4 Mb RAM; 122 HDD; 14" Monitor
Spare4; UC Computer; 386/33; 4 Mb RAM; 122 HDD; 14" Monitor
STEVEJ; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
Temp (Bemie-Old); UC Computer; 386/40; 4 Mb RAM; 127 HDD; 14" Monitor
Temp (MIS printer); UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor -
Memphis; Gateway 2000; 486/66; 8 Mb RAM; 207 HDD; 15" Monitor
VANL; UC Computer; 386/40; 4 Mb RAM; 119 HDD; 14" Monitor
VERNT; Gateway 2000; 486133; 16 Mb RAM; 207 HDD; 14" Monitor
ALLENA; Gateway 2000; P5/100; 16 Mb 850; 17" Monitor
MIS Util PC Gateway 2000; 486/66 E; 64 Mb; 2000; 14" Monitor
Asset Manager; 486/66 upgrade
Bemardb P5/120 upgrade
Invest relations 486/33V upgrade
Software Summary:
1/Afterdark; Windows Screen Saver; 2.0
1/Aldus Pagemaker; Public Software; 4.0
1/Cheyenne Arcserve; Network Backup Software; 5.OIG
1/Intel NetSatisFAxtion; Network Fax Server Software; 3.1
14/Microsoft Access; Windows Database Program; 2.0
51/Microsoft DOS; PC Operating System Software; 5.0, 6.2x 26/Microsoft
Excel; Windows Spreadsheet Program; 5-Oa
13/Microsoft Powerpoint; Windows Graphic/Presentation Program; 4.0
1/Microsoft Project; Windows Organizational Program; 4.0
31/Microsoft Windows; PC Graphic User Interface Software; 3.11
17/Microsoft Word; Windows Word Processor; 6.Oa
1/Norton utilities; PC Utilities Program; 8.0
1/Novell Netware 4.1 100 USET
1/Novell Netware 4.1 5 USEZ
3/QEMM; PC Memory Manager; 6.02,7.01,7.5
1/Sidekick; Personal Information Manager; 1.0
1/SKYLINE; Property Management & Accounting Software; 3.51.02
1/Wordperfect Office; E-mail, Network Menu, Calendar Software; 3.1
I/XtreeNet; Network File Manager; 3.0
2 Windows '95
2 Office '95
Modem Inventory:
ALICIAE; Microcomm QX/12K; External; v.22
BARBARAS; Hayes Optima 9600; External; v.32
DAVIDS; Microcomm QX/12K; External; v.22
DENNISH; Microcomm QX/12K; External; v.22
FAXSVR; Intel Satisfaction; Internal; v.32
H0l; Hayes Optima 288; External; v.34
H02; Hayes Optima 288; External; v.34
H03; Hayes Optima 288; External; v.34
MILTR; Hayes Acura 288; External; v.fc
RUSSELLT; Hayes Optima 288; External; v.34
STEVEJ; Microcomm QX/12K; External; v.22
TIMMIEL; Hayes Optima 288; External; v.34
Computer Room Inventory:
ColorWorks; Proxima - Colorworks A502C; VGA Connecting overhead projection
unit
Ethemet Hub (12 port); Synoptics 3030 10Base-T; 10-BaseT nit 1 retiming
module and 1x12 port card
FAXSVR; UC Computer 386/33; IntelNetSatisfaction v3.0 with 1 IntelFaxmodem
board
H01; Gateway 386/33; Remote Access PC #1
H02; Gateway 386/33; Remote Access PC #2
LAN Tape Drive; HP 35480a SCSI II Fast, 4mm dat drive; 4mm DAT drive for
the file server and SAA gateway
LANPlex 6004 10BaseT; 3COM LANPlex 6004 Switched Ethemet; 8 port Switched
Ethemet module
LANPlex 6004 Chassis; 3COM LANPlex 6004 Chassis; 4 slot LanPlex 6000
Chassis
LANPlex 6004 FDDI; 3COM LANPlex 6004 FDDI Module; 12 port FDDI module
LANPlex 6004 Mgmt; 3COM LANPlex 6004 Mgmt Module; 3 MAC Management module
LinkBuidderl; 3COM LinkBuilder -TP/8; 8 Port 10-BaseT Hub
LinkBuilder2; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder3; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder4; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder5; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder6; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder7; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
MERIDIAN File Server; Compaq Proliant 4500R; Running Novell v4.1 - 100
user, 2/4x4.3Gb SCSI-II fast/wide pluggable drives + lx2X - CDROM drive in
RAID 5 config & 320 Mb RAM
MERIDIAN_SAA File Server; Gateway 486&66 EISA; Novell v4.1 - 5 user w/lx2Gb
SCSI-II fast drive + lx2X-CDROM drive in an external chassis and 32Mb RAM
MIS Util PC; Gateway 486/66 EISA; 64Mb RAM w/lx2Gb SCSI-II Fast drive
running DOS 6.22 + Windows 3.11
ScanJet 4c; HP ScanJet 4c; 600 dpi color, flatbed scanner
SMTP Gateway; Running SMTP Gateway for Groupwise
UPS1; APC Smart-UPS 1200; 1200 Watt output Uninterruptable Power Supply
UPS2; APC Smart-UPS 1400RM; 1400 Watt output Uninterruptable Power Supply
Printer Inventory:
COMMON; HP LASERJET III; 5 RAM; Ethernet - No
FILEROOM; HP LASERJET III; 2 RAM; Ethernet - Yes
MEMPHIS; HP LASERJET 4SI; 10 RAM; Ethernet - Yes
MEMPHIS; HP LASERJET 4; 5 RAM; Ethernet - No
MIS; HP LASERJET III 3 RAM; Ethernet - Yes
Exec/Queue HP Laserjet 4 Plus
Legal Queue HP Laserjet 4 Plus
FAIR MARKET VALUE TRUST VIII - $ 71,850
--------
<PAGE>
MPP TERMINATION AGREEMENT
-------------------------
SCHEDULE 3.1 - SELECTED RELEASEES
---------------------------------
The following entity and persons constitute the Selected Releasees
described in Section 3.1.
1. Meridian Point Properties, Inc.
2. Peter O. Hanson
3. S. Michael Lucash
4. James M. Pollak
5. Herbert E. Stansbury, Jr.
6. Lee W. Wilson
7. Richard S. Stanson
8. Milton K. Reeder
9. Brian F. Zywiciel
10. Dennis D. Higgs
11. Al E. Andrews
12. Robert A. Dobbin
13. Barbam S. Finnegan
14. Celeste K. Woo
15. Debra H. Paul
16. Steven B. Sinnett
17. James S. McCaffrey
18. Sandra K. Burton
19. Susan R. Maher
20. Robert D. Goodsit
21. Sidney Bloom
22. James T. Hancock
23. Robert R. Walker
24. B. Patricia Cinelli
25. Keith L. Earnest
<PAGE>
BILL OF SALE - TRUST VIII
-------------------------
This Bill of Sale ( Bill of Sale ) is dated February 22, 1996 and
entered into by and between Meridian Point Realty Trust VIII Co., a
Missouri corporation ( Trust VIII ), as seller, and Meridian Industrial
Trust, Inc., a Maryland corporation ( MIT ), as buyer.
RECITALS
A. Trust VIII and MIT, among other entities, are parties to that
certain MPP Agreement dated as of May 31, 1995 as amended (the MPP
Agreement ) which, among other things, contemplates that Trust VIII shall
sell and deliver to MIT Trust VIII's interest in certain assets.
B. This Bill of Sale will document the transfer by Trust VIH to MIT
of certain assets as set forth on Schedule A.
AGREEMENT
In consideration for the foregoing, the parties agree as follows:
1. Trust VIII hereby grants, conveys, assigns and transfers to MIT
all of Trust VIII's rights, title and interest in, but none of the
obligations or liabilities associated with, the assets described on
Schedule A for the consideration specified in the MPP Agreement.
2. MIT hereby accepts the grant, conveyance, assignment and transfer
from Trust VIII of Trust VIII's rights, title and interest in, but none of
the obligations or liabilities associated with, the assets described on
Schedule A.
3. Nothing contained in this Bill of Sale is intended to confer any
benefit on, or create any claim in favor of, any person or entity who is
not a party to this Bill of Sale.
4. This Bill of Sale is to be governed by, and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Bill of Sale as of
the date first written above.
MERIDIAN POINT REALTY TRUST VIII CO.,
a Missouri corporation
By:
Lorraine O. Legg
Its President
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By:
Allen J. Anderson
Its Chairman of the Board
and Chief Executive Officer
<PAGE>
SCHEDULE A
----------
Description of Assets
Desks, Credenzas & Tables:
3/Anderson Oak Executive, 72"
4/Anderson Oak Managers, 62"
6/Anderson Oak desk with return
U-shaped workstation w/credenza
2/Hardwood house, work table, mahogany
Hardwood house, workwall unit, mahogany
Barclay, tandem credenza unit, mahogany
New Harmony, custom conference table, mahogany
3/Hardwood house, Conference, mahogany
2/Oval 2 pedestal Conference, mahogany
Double pedestal Oval Conference, Lt. Oak
Cherry Credenza in main conference room
6/Anderson Oak credenza
2/Hardwood house, credenza, mahogany
1/small credenza with fridge, mahogany
2/Hickory, Braun sq. table, mahogany
Hickory, federal corner, coffee & sofa tables, Dk cherry
3/Johnson kitchen tables, white & oak finish
2/Long & narrow oak work tables
3/Folding tables, grain laminated top
1/Tier sorters with dividers
2/Metal utility tables, wood grain laminated top
Sofa & Chairs:
Brickel cherry wood frame sofa, summer garden
2/Brickel cherry wood frame lounge
3/Bemhardt, loose cushion lounge, summer garden
12/Gunlock swivel arm, wool cisele cedar, walnut
4/Gunlock arm, wool cisele cedar, walnut
4/Gunlock arm, walnut (2/rain forest & 2 sq. root)
14/Brickel swivel arm, green corduroy, cherry
28/Gunlock swivel arm, rain forest, walnut
25/Hayes visitor arm, green/oak
23/Secretary, condi peli with arms
15/Secretary, condi peli
2/Manager's, Kimball, green/oak
1/Executive highback, green
1/Executive highback, leather
2/Tweed reception chairs
10/Windsor kitchen arm, natural wood
4/Stools with arms & casters, gray
File Cabinets & Bookcases:
16/Harpers metal 5 drawer
18/Harpers metal 4 drawer
9/Harpers metal 3 drawer
9/Harpers metal 2 drawer
2/Metal Fire File cabinets (2-drawer)
10/Anderson Oak 2 drawer file
Hardwood House 2 drawer file, mahogany
3/Anderson Oak 2 shelf
10/Anderson Oak 3 shelf
4/Egan Visual, mahogany
Miscellaneous Furniture & Shelving:.
White Aisle-Saver CD 1000 storage system
5/Aluminum shelves
30/Posters, framed in German silver
35/Desktop items (stapler, calendar holder, tape dispenser)
Christmas Decorations
Haworth Systems Furniture:
9/8 x 8 stations with power
21/10 x 10 stations with power
5/Miscellaneous stations & offices
(please see attachment for more detail)
Equipment:
Voicepoint teleconference unit
2 Sound Station Audioconferencing System
3/Plantronics w/supra headset
4/Plantronics w/mirage headset
4/Ultralight Helloset (headset)
5/HP calculators
15/Casio 12 digit table model calculators
15/Sharp 12 digit table model calculators
2/Dictaphones, hand held 1253 &1254/ Sanyo TRC3576)
2/Dictaphone.transcribes 1880 & 1882)
3/Xerox 6010 typewriter
IBM wheelwriter typewriter
2/IBM selectric 11 typewriter
Smith Corona, XD7700
Pitney Bowes, 1861 folder & inserter
IMS F307, mail machine
Freiden Alcatel 5001, letter opener
Brother P-25 Touch label printer
Cannon L70 plain paper fax
Fujitsu, Dex 140 Fax (thermal paper)
Kodak 500 Star Reeder
910 Power shredder
Appliances:
Sub-zero refrigerator
2/microwaves
2/mini-refrigerators
Equipment:
Xerox 2058 Copier
Mita LDC-650 Fax Machine
1MS Hasler Postage Scale
SAN FRANCISCO OFFICE:
Executive Assistant Area (3 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
7/Tac Board/Tweed; 36W x 16H
3/Tac Board/Fog Flannel; 36W x 16H
3/Power Panel/Tweed; 30W x 48H
12/Power Panel/Tweed; 36W x 48H
8/Power Panel/Tweed; 36W x 66H
2/Work Surface/Greytone; 36W x 29H
4/Work Surface/Greytone; 72W x 29H
2/Work Surface/Greytone; 72W x 23H
Accounting Run (6 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr w/Task Light/Tweed; 36W x 16H
6/Pedestal/Greytone; Tray/Box/File
2/Tac Board/Tweed; 36W x 16H
10/Tac Board/Fog Flannel; 36W x 16H
1/Tac Board/Fog Flannel; 60W x 16H
7/Power Panel/Tweed; 24W x 66H
7/Power Panel/Tweed; 30W x 66H
12/Power Panel/Tweed; 36W x 66H
5/Power Panel/Tweed; 48W x 66H
8/Power Panel/Tweed; 60W x 66H
5/Work Surface/Greytone; 23W x 29H
5/Work Surface/Greytone; 72W x 29H
5/Work Surface/Greytone; 23W x 60H
Real Estate (1 Station):
2/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
1/Flipper Dr w/Task Light/Fog Flannel; 60W x 16H
1/Pedestal/Greytone; Tray/Box/File
1/Tac Board/Tweed; 36W x 16H
1/Tac Board/Fog Flannel; 60W x 16H
2/Power Panel/Tweed; 36W x 48H
3/Power Panel/Tweed; 24W x 66H
2/Power Panel/Tweed; 36W x 66H
I/Power Panel/Tweed; 42W x 66H
2/Work Surface/Greytone; 42W x 23H
1/Work Surface/Greytone; 60W x 23H
2/Work Surface/Greytone; 72W x 23H
Real Estate (3 Stations):
4/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
2/Tac Board/Tweed; 60W x 16H
2/Power Panel/Tweed; 24W x 48H
2/Power Panel/Tweed; 36W x 48H
2/Power Panel/Tweed; 24W x 66H
2/Power Panel/Tweed; 30W x 66H
8/Power Panel/Tweed; 36W x 66H
4/Power Panel/Tweed; 60W x 66H
1/Work Surface/Greytone; 36W x 23H
2/Work Surface/Greytone; 60W x 23H
1/Work Surface/Greytone; 72W x 23H
2/Work Surface/Greytone; 36W x 29H
2/Work Surface/Greytone; 72W x 29H
Old Legal Area (4 Stations):
8/Flipper Dr w/Task Light/Fog Flannel; 36W x 16H
4/Pedestal/Greytone; Tray/Box/File
8/Tac Board/Fog Flannel; 36W x 16H
1/Power Panel/Tweed; 24W x 48H
I/Power Panel/Tweed; 30W x 48H
3/Power Panel/Tweed; 24W x 66H
9/Power Panel/Tweed; 30W x 66H
14/Power Panel/Tweed; 36W x 66H
1/Power Panel/Tweed; 48W x 66H
2/Power Panel/Tweed; 60W x 66H
3/Work Surface/Greytone; 60W x 23H
2/Work Surface/Greytone; 72W x 23H
3/Work Surface/Greytone; 30W x 29H
1/Work Surface/Greytone; 36W x 29H
4/Work Surface/Greytone; 72W x 29H
Investor Services (6 Stations):
15/Flipper Dr. w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr. w/Task Light/Fog Flannel; 48W x 16H
6/Pedestal/Greytone; Tray/Box/File
9/Tac Board Tweed; 36W x 16H
3/Tac Board Tweed; 60W x 16H
2/Tac Board Fog Flannel; 36W x 16H
5/Tac Board Fog Flannel; 60W x 16H
7/Power Panel/Glass; 24W x 66H
5/Power Panel/Glass; 30W x 66H
5/Power Panel/Glass; 36W x 66H
3/Power Panel/Tweed; 24W x 48H
4/Power Panel/Tweed; 24W x 66H
5/Power Panel/Tweed; 30W x 66H
16/Power Panel/Tweed; 36W x 66H
2/Power Panel/Tweed; 48W x 66H
3/Power Panel/Tweed; 60W x 66H
6/Work Surface/Greytone; 48W x 23H
5/Work Surface/Greytone; 60W x 23H
3/Work Surface/Greytone; 36W x 29H
6/Work Surface/Greytone; 72W x 29H
Acct./MIS/Finance (12 Stations):
21/Flipper Dr. w/Task Light/Fog Flannel; 36W x 16H
2/Flipper Dr. w/Task Light/Tweed; 36W x 16H
21/Pedestal/Greytone; Tray/Box/File
22/Tac Board/Fog Flannel; 36W x 16H
16/Power Panel/Glass; 30W x 66H
1/Power Panel/Glass; 36W x 66H
12/Power Panel/Tweed; 24W x 66H
19/Power Panel/Tweed; 30W x 66H
11/Power Panel/Tweed; 36W x 66H
2/Power/Panel/Tweed; 48W x 66H
10/Power Panel/Tweed; 60W x 66H
17/Work Surface/Greytone; 60W x 23H
1/Work Surface/Greytone; 24W x 29H
3/Work Surface/Greytone; 72W x 29H
PC Inventory:
User I.D./Description
AL - Memphis; UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor
ALICIAE; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
BARBARAS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
BOBD; Gateway 2000; 486/33V; 8 Mb RAM; 207 HDD; 17" Monitor
BRIANZ; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 15" Monitor
CELESTEW; UC Computer; 386/33; 8 Mb RAM; 102 HDD; 14" Monitor
Check Printer PC; Acer; 386/16; 4 Mb RAM; 329 HDD; 14" Monitor
CHRISTIA; UC Computer; 386/40; 4 Mb RAM; 127 HDD; 14" Monitor
DAVIDS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
DEBBIEW; Gateway 2000; 486/33; 16 Mb RAM; 200 HDD; 14" Monitor
DENNISH; Gateway 2000; 486/33C; 8 Mb RAM; 207 HDD; .14" Monitor
DICKW; Gateway 2000; 486/33V; 16 Mb RAM; 250 HDD; 14" Monitor
JENNYM; Gateway 2000; 486/66; 16 Mb RAM; 333 HDD; 14" Monitor
JIMS; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
JOANNEL; UC Computer; 386/33; 4 Mb RAM; 117 HDD; 14" Monitor
KARENC; Gateway 2000; 486/33V; 16 Mb RAM; 207 HDD; 14" Monitor
KIMN; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
LINDAH; Gateway 2000; P5/60; 8 Mb RAM; 500 HDD; 17" Monitor
LINDAM; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
LOUISER; UC Computer; 386/33; 8 Mb RAM; 117 HDD; 14" Monitor
MARCIAL; Gateway 2000; 486/33; 4 Mb RAM; 200 HDD; 17" Monitor
MICHELLE; Gateway 2000; 486/33V; 12 Mb RAM; 207 HDD; 17" Monitor
MILTR; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 17" Monitor
MILTR - Notebook; Compaq; 486/50; 8 Mb RAM; 250 HDD; 9" Monitor
NANCY; Gateway 2000; 486/33; 8 Mb RAM; 200 HDD; 17" Monitor
NEMESIO; Gateway 2000; 486/33V; 16 Mb RAM; 117 HDD; 14" Monitor
NOELK; Gateway 2000; 486/33; 16 Mb RAM; 207 HDD; 14" Monitor
Notebook#l; Gateway 2000; 486/25; 4 Mb RAM; 250 HDD; 9" Monitor
Notebook#2; Gateway 2000; 486/25; 4 Mb RAM; 250 HDD; 9" Monitor
Project; Gateway 2000; P5/90; 16 Mb RAM; 500 HDD; 14" Monitor
Report Station; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 14" Monitor
RUSSELLT; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
SANNYP; UC Computer; 386/33; 4 Mb RAM; 207 HDD; 14" Monitor
SILVIA - Memphis; UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor
Spare1; UC Computer; 386/40; 4 Mb RAM; 117 HDD; 14" Monitor
Spare2; UC Computer; 386/33; 4 Mb RAM; 127 HDD; 14" Monitor
Spare3; UC Computer; 386/33; 4 Mb RAM; 122 HDD; 14" Monitor
Spare4; UC Computer; 386/33; 4 Mb RAM; 122 HDD; 14" Monitor
STEVEJ; Gateway 2000; P5/100; 16 Mb RAM; 500 HDD; 17" Monitor
Temp (Bemie-Old); UC Computer; 386/40; 4 Mb RAM; 127 HDD; 14" Monitor
Temp (MIS printer); UC Computer; 386/33; 4 Mb RAM; 119 HDD; 14" Monitor
TIMMIE - Memphis; Gateway 2000; 486/66; 8 Mb RAM; 207 HDD; 15" Monitor
VANL; UC Computer; 386/40; 4 Mb RAM; 119 HDD; 14" Monitor
VERNT; Gateway 2000; 486/33- 16 Mb RAM; 207 HDD; 14" Monitor
ALLENA; Gateway 2000; P5/100; 16 Mb 850; 17" Monitor
MIS Util PC Gateway 2000; 486/66 E;,64 Mb; 2000; 14" Monitor Asset Manager;
486/66 upgrade
Bemardb P5/120 upgrade
Invest relations 486/33V upgrade
Software Summary:
1/Afterdark; Windows Screen Saver; 2.0
1/Aldus Pagemaker; Desktop Publishing Software; 4.0
1/Cheyenne Arcserve; Network Backup Software; 5.0IG
1/Intel NetSatisFAXtion; Network Fax Server Software; 3.1
14/Microsoft Access; Windows Database Program; 2.0
51/Microsoft DOS; PC Operating System Software; 5.0, 6.2x
26/Microsoft Excel; Windows Spreadsheet Program; 5.0a
13/Microsoft Powerpoint; Windows Graphics/Presentation Program; 4.0
1/Microsoft Project; Windows Organizational Program; 4.0
31/Microsoft Windows; PC Graphic User Interface Software; 3.11
17/Microsoft Word; Windows Word Processor; 6.0a
1/Norton Utilities; PC Utilities Program; 8.0
1/Novell Netware 4.1 100 USET
1/Novell Netware 4.1 5 USEZ
3/QEMM; PC Memory Manager; 6.02,7.01,7.5
1/Sidekick; Personal Information Manager; 1.0
1/SKYLINE; Property Management & Accounting Software; 3.51.02
1/WordPerfect Office; E-Mail, Network Menu, Calendar Software; 3.1
1/XtreeNet; Network File Manager; 3.0
2 Windows '95
2 Office '95
Modem Inventory:
ALICIAE; Microcomm QX/12K; External; v.22
BARBARAS; Hayes Optima 9600; External; v.32
DAVIDS; Microcomm QX/12K; External; v.22
DENNISH; Microcomm QX/12K; External; v.22
FAXSVR; Intel Satisfaction; Internal; v.32bis
H01; Hayes Optima 288; External; v.34
H02; Hayes Optima 288; External; v.34
H03; Hayes Optima 288; External; v.34
MILTR; Hayes Acura 288; External; v.fc
RUSSELLT; Hayes Optima 288; External; v.34
STEVEJ; Microcomm QX/12K; External; v.22
TIMMIEL; Hayes Optima 288; External; v.34
Computer Room Inventory:
ColorWorks; Proxima - Colorworks A502C; VGA Connecting overhead projection
unit
Ethernet Hub (12 port); Synoptics 3030 10Base-T; 10-BaseT nit with 1
retiming module and lxl2 port card
FAXSVR; UC Computer 386/33; IntelNetSatisfaction v3.0 with 1 IntelFaxmodem
board
H01; Gateway 386/33; Remote Access PC #1
H02; Gateway 386/33; Remote Access PC #2
LAN Tape Drive; HP 35480a SCSI H Fast, 4mm dat drive; 4mm DAT drive for the
file server and SAA gateway
LANPlex 6004 10BaseT; 3COM LANPlex 6004 Switched Ethernet; 8 port Switched
Ethernet module
LANPlex 6004 Chassis; 3COM LANPlex 6004 Chassis; 4 slot LanPlex 6000
Chassis
LANPlex 6004 FDDI; 3COM LANPlex 6004 FDDI Module; 12 port FDDI module
LANPlex 6004 Mgmt; 3COM LANPlex 6004 Mgmt Module; 3 MAC Management module
LinkBuilder1; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder2; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder3; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder4; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder5; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder6; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
LinkBuilder7; 3COM LinkBuilder TP/8; 8 Port 10-BaseT Hub
MERIDIAN File Server; Compaq Proliant 4500R; Running Novell v4.1 - 100
user, 2/4x4.3Gb SCSI-II fast/wide pluggable drives + lx2X - CDROM drive in
RAID 5 config & 320 Mb RAM
MERIDIAN_SAA File Server; Gateway 486/66 EISA; Novell v4.1 - 5 user w/lx2Gb
SCSI-II fAst drive + lx2X-CDROM drive in an external chassis and 32Mb RAM
MIS Util PC; Gateway 486/66 EISA; 64Mb RAM w/lx2Gb SCSI-][[ Fast drive
running DOS 6.22 + Windows 3. 11
Scanjet 4c; HP ScanJet 4c; 600 dpi color, flatbed scanner
SMTP Gateway; Running SMTP Gateway for Groupwise
UPS1; APC Smart-UPS 1200; 1200 Watt output Uninterruptable Power Supply
UPS2; APC Smart-UPS 1400RM; 1400 Watt output Uninterruptable Power Supply
Printer Inventory:
COMMON; BP LASERJET HI; 5 RAM; Ethernet - No
FILEROOM; BP LASERJET HI; 2 RAM; Ethernet - Yes
HPIVSI; HP LASERJET 4SI; 10 RAM; Ethernet - Yes
MEMPHIS; HP LASERJET 4; 5 RAM; Ethernet - No
MIS; HP LASERJET III; 3 RAM; Ethernet - Yes
Exec/Queue HP Laserjet 4 Plus
Legal Queue HP Laserjet 4 Plus
<PAGE>
BILL OF SALE,
ASSIGNMENT OF RIGHTS
AND ASSUMPTION OF LIABILITIES
This Bill of Sale, Assignment of Rights and Assumption of Liabilities
( Bill of Sale ) is dated as of February 23, 1996 and is entered into by
and among Meridian Point Properties, Inc., a California corporation ( MPP
), Meridian Industrial Trust, Inc., a Maryland corporation ( MIT ),
Meridian Point Realty Trust '83, a California business trust ( Trust '83 ),
Meridian Point Realty Trust IV Co., a Missouri corporation ( Trust IV ),
Meridian Point Realty Trust VI Co., a Missouri corporation ( Trust VI ),
Meridian Point Realty Trust VII Co., a Missouri corporation ( Trust VII )
and Meridian Point Realty Trust VIII Co., a Missouri corporation ( Trust
VIII ). Trusts '83, IV, VI and VII are sometimes collectively referred to
herein as the Trusts.
RECITALS
A. MPP, MIT, Trust '83, Trust IV, Trust VI and Trust VII are parties
to that certain MPP Agreement dated as of May 31, 1995, and MPP and Trust
VIII are parties to that certain MPP Termination Agreement dated as of
February 22, 1996, which agreements, among other things, contemplate the
assignment to MIT and the Trusts of all of the rights, title and interests
of MPP (i) under various agreements and arrangements (the Contract Rights
) relating to the assets and business of MPP and the Trusts and (ii) with
respect to certain actions, complaints, investigations, suits. or other
proceedings (the Action Rights ), and the (iii) assumption by the
respective assignees of MPP's obligations and liabilities relating to the
Contract Rights and Action Rights.
B. This Bill of Sale will document the transfer by MPP to MIT and
the Trusts of the Contract Rights and Action Rights and the assumption by
MIT and the Trusts of MPP's obligations and liabilities relating to the
Contract Rights and Action Rights.
AGREEMENT:
In consideration for the foregoing, the parties agree as follows:
1. Assignment of Contract Rights. MPP hereby grants, conveys,
assigns and transfers, as specified in Schedule A hereto, to MIT and the
Trusts, all of the Contract Rights relating to the various agreements and
arrangements listed in Schedule A hereto. To the extent that an assignment
is made to more than one of MIT, Trust '83, Trust IV, Trust VI, Trust VII
and Trust VIII, then MIT, Trust '83, Trust IV, Trust VI, Trust VII or Trust
VIII shall receive only such contract rights that relate to its respective
business and assets, including the properties listed on Schedule B hereto.
2. Assignment of Action Rights. MPP hereby grants, conveys, assigns
and transfers, as specified in Schedule C hereto, to MIT and the Trusts,
all of the Action Rights relating to the actions, complaints,
investigations, suits or other proceedings, listed in Schedule C hereto.
To the extent that an assignment is made to more than one of MIT, Trust
'83, Trust IV, Trust VI, Trust VII and Trust VIII, then MIT, Trust '83,
Trust IV, Trust VI, Trust VII or Trust VIII shall receive only such Action
Rights that relate to its respective business and assets, including the
properties listed on Schedule B hereto.
3. Acceptance by MIT and the Trusts. Each of MIT and the respective
Trusts hereby accepts the respective assignment to such party of the
Contract Rights and Action Rights specified on Schedule A and Schedule C.
4. Assumption of Liabilities. Each of MIT and the respective Trusts
hereby assumes those obligations and liabilities of the MPP relating to the
specific Contract Rights and Action Rights that have been assigned to such
party pursuant to Section 1 and Section 2 above, and agree to discharge
such obligations and liabilities in the same manner and on the same basis
and to the same extent as MPP would be required to discharge them. Neither
MIT nor any Trust is assuming any obligations or liabilities pursuant to
this Section 4 unless MIT or the respective Trust has accepted the
assignment of a Contract Right and Action Right to which the obligation or
liability relates.
5. No Benefit to Third Parties. Nothing contained in this Bill of
Sale is intended to confer any benefit on, or create any claim in favor of
any person or entity who is not a party to this Bill of Sale. The
assumption by MIT and the respective Trusts of the obligations and
liabilities of MPP pursuant to Section 4 hereof shall not expand the rights
or remedies of any third party against MPP, MIT and the respective Trusts
as compared to the rights and remedies which such third party would have
had against MPP had MIT or the respective Trusts not assumed such
obligations and liabilities. Without limiting the generality of the
preceding sentence, the assumption by MIT and the respective Trusts of the
obligations and liabilities of MPP shall not create any third party
beneficiary rights.
6. Captions. The captions and section headings used in this Bill of
Sale are for convenience of the parties only and shall not be used in
construing it.
7. Governing Law. This Bill of Sale is to be governed by, and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale
as of the date first written above.
MPP
MERIDIAN POINT PROPERTIES, INC.,
a California corporation
By
Robert A. Dobbin
Its Vice President
MIT
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By
Allen J. Anderson
Its Chairman of the Board
and Chief Executive Officer
TRUST '83
MERIDIAN POINT REALTY TRUST '83,
a California business trust
By
Milton K. Reeder
Its President
[Signatures Continued]
<PAGE>
TRUST IV
MERIDIAN POINT
REALTY TRUST IV CO.,
a Missouri corporation
By
Milton K. Reeder
Its President
TRUST VI
MERIDIAN POINT
REALTY TRUST VI CO.,
a Missouri corporation
By
Milton K. Reeder
Its President
TRUST VII
MERIDIAN POINT
REALTY TRUST VII CO.,
a Missouri corporation
By
Milton K. Reeder
Its President
[Signatures Continued]
<PAGE>
TRUST VIII
MERIDIAN POINT REALTY TRUST VIII CO.,
a Missouri corporation
By
Lorraine O. Legg
Its President
<PAGE>
SCHEDULE A
TRANSFER OF THIRD PARTY AGREEMENTS
Recipient of
Assignment of Rights
and/or Party to
Agreement Title/Date Assume Obligations
1. Real Estate Management Agreement between the Trust VII
Irwin Bentley Rystrom Company and Meridian Point
Properties, Inc. dated October 1, 1990 and as
amended by Amendment No. 1 dated November 15,
1991
2. Real Estate Management Agreement between Trust VII
InterSouth Properties, LLC (formerly Samples
Properties, Inc.) and Meridian Point Properties,
Inc. dated July 1, 1990 as amended by Amendment
No. 1 dated February 27, 1992 and letter dated
March 2, 1994
3. Real Estate Management Agreement between Faison Trust VII
& Associates, Inc. (formerly Ewing South East
Realty, Inc.) and Meridian Point Properties,
Inc. dated July 1, 1989 as amended by letter
agreement dated August 12, 1994
4. Real Estate Management Agreement between Trusts '83, VI and
Trammell Crow Management Services (formerly VIII
Memphis Industrial Overhead L.P.) and Meridian
Point Properties, Inc. dated February 8, 1990 as
amended by Amendment No. 1 dated November 15,
1991, Amendment No. 2 dated March 1, 1994, and
Amendment No. 3 dated June 8, 1994
5. Real Estate Management Agreement between Kidder Trust VII
Mathews & Segner and Meridian Point Properties,
Inc. dated October 1, 1993
6. Real Estate Management Agreement between Weston Trust VI
Management Company and Meridian Point
Properties, Inc. dated March 1, 1995, as amended
by Amendment No. I dated November 1, 1995
(Terminated effective March 1, 1996)
7. Real Estate Management Agreement between Weston Trust VII
Management Company and Meridian Point
Properties, Inc. (as successor to Sierra Capital
Realty Services) dated June 29, 1990, as amended
by Amendment No. 1 dated September 1, 1992
(Terminated effective March 1, 1996)
8. Real Estate Management Agreement between Frank Trust IV
L. Smith Company and Meridian Point Properties,
Inc. dated March 1, 1992, as amended by
Amendment No. 1 dated August 1, 1994 (Terminated
effective March 1, 1996)
9. Real Estate Management Agreement between Trust VIII
Carpenter Properties, Inc. and Meridian Point
Properties, Inc. dated January 1, 1993
10. Real Estate Management Agreement between Trusts '83, IV, VI,
O'Donnell Property Services, Inc. and Meridian VII and VIII
Point Properties, Inc. dated September 1, 1993
as amended by the First Addendum effective March
1, 1994
11. Real Estate Management Agreement between Trusts '83, IV and
Primewest L.L.C. (as successor to Primewest West VIII
Real Estate Services, Inc.) and Meridian Point
Properties dated August 1, 1993)
12. Real Estate Management Agreement between TR Trust VI
Management Corporation and Meridian Point
Properties, Inc. dated July 19, 1991
13. Real Estate Management Agreement between TRF Trust VI
Management Corporation and Meridian Point
Properties, Inc. dated July 19, 1991
14. Real Estate Management Agreement between Wilcox Trusts IV, VI, VII and
Realty Group, Inc. and Meridian Point VIII
Properties, Inc. dated August 1, 1993
15. Real Estate Management Agreement between H.P. Trusts IV, VI, VII and
Industrial Management #2, Inc. and Meridian VIII
Point Properties, Inc. dated June 15, 1993
16. Real Estate Management Agreement between Trust VI
HerbertTrust VI Properties Corporation and
Meridian Point Properties, Inc. dated March 1,
1993
17. Business Continuity Services, Support Services MIT
Agreement between XL Datacomp., Inc. (Sungard
Recovery Services, Inc.) and Meridian Point
Properties, Inc. dated September 1, 1992
18. Software License Agreement between SOFTA Group, MIT
Inc. (Melson Technologies, Inc.) and Meridian
Point Properties, Inc.
19. Storage Agreement between Roberts of San MIT
Francisco (dba Datasafe) and Meridian Point
Properties dated September 15, 1991
20. Agreement between Delaware Charter Guarantee & MIT
Trust Company and Meridian Point Properties (as
successor to Meridian Point Company) dated
January 24, 1992
21. Lease Agreement No. 47427 re Ricoh 8780 Copier MIT
between Alco Capital Resources, Inc. and
Meridian Point Properties dated September 21,
1992
22. Service Agreement between Taylor Made and MIT
Meridian Point Properties, Inc. dated October 3,
1994 re Ricoh 8780 copier
23. Service Agreement between Taylor Made and MIT
Meridian Point Properties, Inc. dated July 18,
1994 re Canon Fax L770
24. Service Agreement between Pitney Bowes and MIT
Meridian Point Properties, Inc. dated March 1,
1995 re Folder and Inserter Equipment
25. Service Agreement between Eastman Kodak Company MIT
and Meridian Point Properties, Inc. (as
successor to Meridian Point Company) dated
October 29, 1994
26. Service Agreement between Casey's Office Machine MIT
and Meridian Point Properties, Inc. dated
February 18, 1995
27. Letter of Credit re Sterling Logistics in favor Trust VIII
of Meridian Point Properties, Inc. effective
through July 31, 1996
28. Sublease between Chicago Title Insurance Company MIT
and Meridian Point Properties, Inc. dated
September 11, 1992 re 50 California St., San
Francisco, California
29. Office Lease Agreement between Lakecrest MIT
(Memphis) Association, L.P. and Meridian Point
Properties, Inc. dated August 13, 1991, as
amended by Amendment No. 1 dated July 18, 1994
and Amendment No. 2 dated July 18, 1995
(Terminated effective May 1, 1996)
30. Meridian Point Properties, Inc. 401K Investment MIT
and Retirement Plan effective January 1, 1989
(Connecticut General Life Insurance Company)
31. Prudential Health Care Dental Plan MIT
32. UNUM Group Life & Accidental Death & MIT
Dismemberment Insurance
33. UNUM Long Term Disability Income Benefits Plan MIT
34. Liberty Mutual Workers Compensation and General MIT
Liability Plan dated September 13, 1994
35. Liberty Mutual Blanket Employees Dishonesty MIT
Policy dated September 13, 1994
36. ITT Hartford Insurance Travel Policy and Rider MIT
#6 issued November 5, 1993
37. Exclusive Agency to Lease Agreement between Trust IV
McKee and McFarland, Inc. and Meridian Point
Properties dated January 1, 1992
38. Fixed Fee Agreement for services between MIT
Meridian Point Properties, Inc. and Meridian
Point Realty Trust '82 dated October 21, 1994
39. Lincoln National Life Insurance Medical Plan MIT
effective April 1, 1994
40. Protective Signalling System Purchase Order and Trust VI
Service Agreement between Blanket Security, Inc.
and Meridian Point Properties, Inc. dated
January 25, 1993
41. Construction Contract between Meridian Point Trust IV
Realty and Anderson & Shah Roofing, Inc. dated
April 24, 1995
42. Lawn Care and Snow Removal Contract between Ace Trust VII
Lawn Care & Snow Removal Inc. and Meridian Point
Properties, Inc.
43. Tax Services Agreement between Meridian Point Trusts 83, IV, VI, VII
Properties, Inc. and George McElroy & Assoc. and VIII
dated January 6, 1995
44. Security Systems Agreement between ADT Security Trust IV
Systems and Meridian Point Properties, Inc.
dated July 21, 1992
45. Fax Service Agreement between Noble Inc. and MIT
Meridian Point Realtors dated February 23, 1995
46. Postage Meter Rental Agreement between MIT
International Mailing Systems, Inc. and Meridian
Point Properties dated October, 1991
47. Warranty Extension Contract between Xerox MIT
Corporation and Meridian Point Properties, Inc.
dated January 11, 1995
48. Retainer Agreements (11) between Crane and Trust VI
Norcross and Meridian Point Properties, Inc.
dated March 21, 1995 and May 4, 1995
49. Service Contract between Environmental Design Trust VI
Group and Meridian Point Properties, Inc. dated
March 1, 1995
50. Fire Protection System Inspection Agreement Trust VI
between Automatic Sprinkler and Meridian Point
Properties, Inc.
51. Service Agreement between Meridian Point MIT
Properties, Inc. and Compaq
52. Overnight Hardware Replacement Agreement between MIT
Meridian Point Properties, Inc. and 3Com
53. Construction Agreement between Meridian Point Trust VI
Properties, Inc. and Itasca Construction
Associates re 100 Progress, Lombard II, IL dated
October 25, 1995
54. Fire Alarm Service Agreement between Meridian Trust VI
Point Properties, Inc. and S.M.G. re 5101 West
122nd Street, Alsip, IL, dated December 22, 1994
55. Fire Service Agreement between Meridian Point Trust VI
Properties, Inc. and S.M.G. re Elk Grove
Village, IL, dated December 22, 1994
56. Electrical Service Agreement between Meridian Trust IV
Point Properties, Inc. and A. & G. Electric Co.
re 1634 J.P. Hennessy Warehouse, La Vergne, TN,
dated January 18, 1996
57. Placement Agreement between PrimeWest LLC, as Trust IV
agent for Meridian Point Properties, Inc. and
Federal Express re Phoenix Plaza I, Phoenix, AZ,
dated April, 1994
58. Service Agreement between Meridian Point Trust IV
Properties, Inc. and BFI Waste Systems re 4030
Plaza I, Phoenix, AZ, dated May 16, 1995
59. Maintenance Agreement between Meridian Point Trust VI
Properties, Inc. and Whatcom Security Agency re
Meridian Village, Bellingham, Washington, dated
December 2, 1994
60. Customer Service Agreement between Meridian Trust '83
Point Properties, Inc. and Great Western
Reclamation re 1800 East Carnegie, Santa Ana,
CA, dated December 7, 1994
61. Service Agreement between Meridian Point Trust '83
Properties, Inc. and Waste Management re 1800
East Carnegie, Santa Ana, CA, dated September
20, 1995
62. Agreement between Sammamish Sweepers and Sierra Trust VII
Capital Realty Services dated November 21, 1989
63. Agreement between Northwestern Landscape Company Trust VIII
and Meridian Point Properties, Inc., dated May
3, 1995
SCHEDULE B
TRUST PROPERTIES
I. TRUST IV PROPERTIES
Property Name Location Building Type
Hennessey Warehouse La Vergne, Distribution Warehouse
Tennessee
Palisades I Plano, Texas Distribution Warehouse
Palisades II Plano, Texas Distribution Warehouse
San Carlos Industrial San Carlos, Retail
California
Bedford Park Bedford Park, Distribution Warehouse
Illinois
Phoenix Plaza One Phoenix, Light Industrial
Arizona
Phoenix Plaza Two Phoenix, Light Industrial
Arizona
4030 Phoenix Plaza Phoenix, Light Industrial
Arizona
Phoenix W. Weldon Phoenix, Arizona Light Industrial
Phoenix Deer Valley Phoenix, Light Industrial
Arizona
Phoenix W. Fairmount Phoenix, Light Industrial
Arizona
Phoenix N. 23rd Phoenix, Light Industrial
Arizona
Phoenix N. 27th Phoenix, Light Industrial
Arizona
Phoenix Plaza Three Phoenix, Light Industrial
Arizona
1550 Heil Quaker La Vergne, Distribution Warehouse
Tennessee
1600 Corporate Place La Vergne, Distribution Warehouse
Tennessee
4013 Premier Memphis, Distribution Warehouse
Tennessee
4000 Air Park Cove Memphis, Distribution Warehouse
Tennessee
Cypress B Building Cypress, Light Industrial
California
Chatsworth Office Building Chatsworth, Light Industrial
California
Moorpark R & D Building Moorpark, Distribution Warehouse
California
Park Tan Center Chandler, Retail
Arizona
Live Oak Parkway Norcross, Retail
Georgia
(TRUST IV-DALLAS NINE PROPERTIES (51% owned by Trust IV))
Property Name Location Building Type
Northgate #4 Dallas, Texas Distribution Warehouse
Northgate #5 Dallas, Texas Light Industrial
Northgate #28 Dallas, Texas Light Industrial
Las Colinas #1 Irving, Texas Distribution Warehouse
Las Colinas #4 Irving, Texas Light Industrial
Las Colinas #5 Irving, Texas Light Industrial
Valley Branch #1 Farmers Branch, Texas Light Industrial
Valley Branch #2 Farmers Branch, Texas Distribution Warehouse
Regal Empress Dallas, Texas Light Industrial
Beltline Carrollton, Texas Distribution Warehouse
Greatsouthwest - #4 Arlington, Texas Distribution Warehouse
II. TRUST VI PROPERTIES
Property Name Location Building Type
Lombard I Lombard, Illinois Distribution Warehouse
Willow Lake Business Memphis, Tennessee Office
Park
700 Pratt Elk Grove Village, Distribution Warehouse
Illinois
900 Pratt Elk Grove Village, Distribution Warehouse
Illinois
1090 Pratt Elk Grove Village, Distribution Warehouse
Illinois
1100 Pratt Elk Grove Village, Distribution Warehouse
Illinois
1180 Pratt Elk Grove Village, Distribution Warehouse
Illinois
801 Lunt Elk Grove Village, Distribution Warehouse
Illinois
1201 Busse Elk Grove Village, Distribution Warehouse
Illinois
5101 W. 122nd Street Alsip, Illinois Distribution Warehouse
17025 Wallace South Holland, Illinois Distribution Warehouse
17129 Wallace South Holland, Illinois Distribution Warehouse
1000 Lunt Elk Grove Village, Distribution Warehouse
Illinois
3400 West Lake Glenview, Illinois Distribution Warehouse
1815 Landmeier Elk Grove, Illinois Distribution Warehouse
2375 Touhy Ave Elk Grove, Illinois Distribution Warehouse
Seatac Village Federal Way, Retail
Washington
Meridian Village Bellingham, Retail
Washington
6355 Nancy Ridge Dr. San Diego, California Industrial
Birmingham 1 Birmingham, Distribution Warehouse
Alabama
Birmingham 2 Birmingham, Alabama Distribution Warehouse
Olive Branch Olive Branch Distribution Warehouse
Mississippi
201 Regal Row Dallas, Texas Distribution Warehouse
(TRUST VI-DALLAS NINE PROPERTIES (49% owned by Trust VI))
Property Name Location Building Type
Northgate #4 Dallas, Texas Distribution Warehouse
Northgate #5 Dallas, Texas Industrial
Northgate #28 Dallas, Texas Industrial
Las Colinas #1 Irving, Texas Distribution Warehouse
Las Colinas #4 Irving, Texas Industrial
Las Colinas #5 Irving, Texas Industrial
Valley Branch #1 Farmers Branch, Texas Industrial
Valley Branch #2 Farmers Branch, Texas Distribution Warehouse
Regal Empress Dallas, Texas Industrial
Beltline Carrollton, Texas Distribution Warehouse
Greatsouthwest #4 Arlington, Texas Distribution Warehouse
III. TRUST VII PROPERTIES
Property Name Location Building Type
Marietta Trade Center Marietta, Georgia Retail
Pontiac Pontiac, Michigan Distribution Warehouse
Troy Tech II Troy, Michigan Light Industrial
Great Southwest 110 Arlington, Texas Distribution Warehouse
Wildwood Irving, Texas Distribution Warehouse
Northgate International Garland, Texas Distribution Warehouse
Valwood 20 Farmers Branch, Texas Distribution Warehouse
Centreport 17 Fort Worth, Texas Distribution Warehouse
Cypress A Building Cypress, California Light Industrial
Cypress C Building Cypress, California Light Industrial
Valencia Industrial Valencia, California Distribution Warehouse
Building
Progress Center I Huntsville, Alabama Light Industrial
Progress Center II Huntsville, Alabama Light Industrial
8215 Highway Building Madison, Alabama Light Industrial
Park at Woodinville Woodinville, Light Industrial
Washington
Port Distribution Little Rock, Arkansas Distribution Warehouse
Baxter Little Rock, Arkansas Distribution Warehouse
Delp Distribution Memphis, Tennessee Distribution Warehouse
IV. TRUST '83 PROPERTIES (Exclusive of Charleston)
Property Name Location Building Type
Scripps Venturers San Diego, California Light Industrial
Golden Cove Shopping Rancho Palos Verdes, Retail
Center
California
North Irvine Santa Ana, California Light Industrial
El Dorado Industrial Phoenix, Arizona Distribution Warehouse
Plaza
Airport Bldg #3 Memphis, Tennessee Distribution Warehouse
Airport Bldg #14 Memphis, Tennessee Distribution Warehouse
Airport Bldg #16A Memphis, Tennessee Distribution Warehouse
Airport Bldg #16B Memphis, Tennessee Distribution Warehouse
Airport Bldg #17 Memphis, Tennessee Distribution Warehouse
V. TRUST VIII PROPERTIES
Property Name Location Building Type
Auburn I (1) Auburn Hills, Missouri Office Building
South Sayre Bedford Park, Illinois Distribution Warehouse
Waldenbooks Facility (3) La Vergne, Tennessee Distribution Warehouse
Memphis 8 (2)(3) Memphis, Tennessee Distribution Warehouse
JC Penney (3) Memphis, Tennessee Distribution Warehouse
Interchange D Jackson, Mississippi Distribution Warehouse
Ethan Allen Chino, California Distribution Warehouse
Phoenix (5) Phoenix, Arizona Distribution Warehouse
Brookhollow (4) Dallas, Texas Distribution Warehouse
<PAGE>
CERTIFICATE OF SECRETARY
The undersigned, who is the Secretary of Meridian Point Properties,
Inc., a California corporation (the "Company"), hereby certifies that:
1. At a meeting held on February 19, 1996, the Company's Board of
Directors adopted the following resolution:
WHEREAS, it has been proposed that the Company enter into an
agreement for the termination of the Company's relationship with
Meridian Point Realty Trust VIII Co. under the terms set forth on the
attached Attachment 1.
WHEREAS, it would be in the Company's best interest to enter into
such an agreement.
NOW, THEREFORE, BE IT RESOLVED, that the Company enter into an
agreement for the termination of the Company's relationship with
Meridian Point Realty Trust VIII Co. containing the terms set forth in
the attached Attachment 1 together with such additions and changes
thereto as the Company's officers consider appropriate.
RESOLVED FURTHER, that the Company's officers be, and each of
them hereby is, authorized, empowered, and directed on behalf of the
Company (i) to execute any agreements, instruments, or certificates or
amendments or supplements thereto and (ii) to do and to cause to be
done any and all other acts and things as those officers in their
discretion deem necessary or appropriate to carry out the purposes of
the foregoing resolution, the execution and delivery of those
documents and the taking of those actions to be conclusive evidence of
the necessity or appropriateness thereof.
2. These resolutions have not been subsequently amended or modified
and are in full force and effect as of the date of this Certificate.
Dated:____________________ __________________________________
Robert A. Dobbin, Secretary
<PAGE>
[Draft 2/15/96]
DRAFT TERM SHEET
Meridian Point Realty Trust VIII Co. - Termination of
Meridian Point Properties, Inc.
1. Termination Date. Meridian Point Properties ("MPP") Services
termination effective November 30, 1995.
2. MPP Shares Owned-by Trust VIII. Trust VIII owns 90 shares of MPP
stock for which it paid $3.84 per share. MPP to redeem Trust VIII's
shares for $3.84 per share.
3. Termination of Option to Purchase MPP Stock. Each Trust has the
option to purchase MPP shares from Mr. Reeder at no more than $3.84
per share (Mr. Reeder currently owns 460 shares). Trust VIII agrees
to terminate this option.
4. Transfer of Third Party Agreements. MPP has signed various agreements
as agent of the Trusts. MPP will assign to Trust VIII those
agreements that relate to Trust VIII properties (e.g., a roof repair
contract).
5. Transfer of Rights in Actions. MPP is a party to various litigation
actions (essentially slip and fall cases and unlawful detainer
actions). MPP will assign its rights and obligations as they relate
to Trust VIII properties to Trust VIII.
6. Transfer of Rights in Insurance Policies. MPP to transfer rights in
insurance policies as they relate to Trust VIII matters. (E.g.,
insurance proceeds relating to a Trust VIII property).
7. Transfer of Books/Records. MPP to transfer Trust VIII's books and
records as instructed by Trust VIII with Trust VIII to bear costs of
transferring files.
8. Purchase of Trust VIII Assets. Trust VIII has an undivided interest
in furniture, fixtures and equipment used by MPP to manage the Trusts.
Meridian Industrial Trust has agreed to purchase all such assets. The
proposed aggregate purchase price is $239,500 (i.e. the same price
that was used in the MPP Agreement with Trusts 83, IV, VI and VII).
Trust VIII's share is approximately $71,850.
<PAGE>
9. Releases of Trust VIII and MPP. Trust VIII to release MPP and MPP to
release Trust VIII and their representatives, officers and directors
for claims, except for those arising out of dishonest, fraudulent or
criminal acts, unlawful personal gains, or willful malfeasance.
10. Closing. Closing to occur on or before February 22, 1996.
11. Post-Closing Adjustments. Within 90 days following the Closing, Trust
VIII to receive a final accounting.
12. Indemnification. No indemnification rights or obligations to be
waived or altered in connection with this termination agreement.
Attachment 1
------------
<PAGE>
CERTIFICATE OF SECRETARY
The undersigned, who is the Secretary of Meridian Industrial Trust
Inc., a Maryland corporation (the "Company"), hereby certifies as follows:
1. That at a meeting held on February 21, 1996, the Company's Board
of Directors adopted the following resolutions:
WHEREAS, it has been proposed that the Company enter into an
agreement with Meridian Point Properties, Inc. ("MPP") and Meridian
Point Realty Trust VIII Co. ("Trust VIII") providing that the Company
shall purchase Trust VIII's share of certain furniture, fixtures and
equipment for a price of $71,850.00 and containing such other terms as
are considered appropriate by the Company's officers and its outside
corporate counsel.
WHEREAS, it would be in the Company's best interest to enter into
such an agreement.
NOW, THEREFORE, BE IT RESOLVED, that the Company enter into an
agreement with MMP and Trust VIII providing that the Company shall
purchase Trust VIII's undivided interest in certain furniture,
fixtures and equipment for a price of $71,850.00 and containing such
other terms and conditions as the Company's officers and its outside
corporate counsel consider appropriate.
RESOLVED FURTHER, that the Company's officers be, and each of
them hereby is, authorized, empowered, and directed on behalf of the
Company (i) to execute any agreements, instruments, or certificates or
amendments or supplements thereto and (ii) to do and to cause to be
done any and all other acts and things as those officers in their
discretion deem necessary or appropriate to carry out the purposes of
the foregoing resolution, the execution and delivery of those
documents and the taking of those actions to be conclusive evidence of
the necessity or appropriateness thereof.
2. These resolutions have not been subsequently amended or modified
and are in full force and effect as of the date of this Certificate.
Dated:____________________ _________________________________
Robert A. Dobbin, Secretary
MANAGEMENT AGREEMENT
THIS AGREEMENT, dated as of October 18, 1995, by and between MERIDIAN
POINT REALTY TRUST VIII, a Missouri corporation (the "Company"), and TIS
FINANCIAL SERVICES, INC., a Delaware corporation (the "Manager").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is the owner, either directly or indirectly
through one or more affiliated entities, of certain improved real property
or properties located throughout the United States and qualifies as real
estate investment trust ("REIT") under the Internal Revenue Code of 1986,
as amended.
WHEREAS, the Company desires to retain the Manager to manage the
assets, properties and investments of the Company and to perform
administrative services for the Company in the manner and on the terms set
forth herein;
NOW THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used herein shall have the
respective meanings assigned them below.
(a) "Affiliate" means, when used with reference to a specified
Person
(i) any Person that directly or indirectly controls or is
controlled by or is under common control with the specified Person;
(ii) any Person that is an officer, director, employee, partner
or trustee of, or serves in a similar capacity with respect to, the
specified Person, or of which the specified Person is an officer,
director, employee, partner or trustee of or with respect to which the
specified Person serves in a similar capacity;
(iii) any Person that, directly or indirectly, is the beneficial
owner of 5% or more of any class of equity securities issued by the
specified Person, or any Person 5% or more of whose equity securities
are, directly or indirectly, beneficially owned by such other Person;
and
(iv) any Person that has a material business or professional
relationship with the specified Person, provided, however, that a
Person shall not be deemed to be an Affiliate of the Manager or of any
Person which is an Affiliate of the Manager solely by reason of
serving as a director of one or more investment companies of which the
Manager or an Affiliate of the Manager serves as investment advisor or
in any other capacity;
(b) "Average Invested Assets" for any period means the average
of the aggregate book value of the consolidated assets of the Company,
its trusts and subsidiaries, before reserves for depreciation or bad
debts or other similar non-cash reserves;
(c) "Board of Directors" means the Board of Trustees of the
Company;
(d) "Person" means a natural person, corporation, partnership,
association, trust (including any beneficiary thereof), company, joint
venture, joint stock company, unincorporated organization or other
entity; and
(e) "Unaffiliated Directors" means those members of the Board of
Directors who (i) are not Affiliates of the Manager or of any person
that is an Affiliate of the Manager and (ii) are not employed by, or
receiving any compensation (except for serving as a director) from,
the Company.
SECTION 2. General Duties of the Manager. Subject to the supervision
and control of the Board of Directors, the Manager shall provide services
to the Company, and to the extent directed by the Board of Directors, shall
provide similar services to any subsidiary of the Company as follows:
(f) serve as the Company's consultant with respect to
formulation of criteria regarding the assets and properties to be
acquired and held by the Company, and recommend policy guidelines to
the Board of Directors;
(g) represent the Company in connection with the purchase or
sale of properties;
(h) furnish reports and statistical and economic research to the
Company regarding the Company's assets and activities and the services
performed for the Company by the Manager;
(i) provide the executive and administrative personnel, office
space and services required in rendering services to the Company;
(j) administer or supervise the administration of the day-to-day
operations of the Company and perform or supervise the performance of
such other administrative functions necessary in the management of the
Company as may be agreed upon by the Manager and the Board of
Directors, including the collection of revenues and the payment of the
Company's debts and obligations and maintenance of appropriate
computer services to perform such administrative functions;
(k) communicate or supervise communications on behalf of the
Company with the holders of the equity and debt securities of the
Company as required to satisfy the reporting and other requirements of
any governmental bodies or agencies and to maintain effective
relations with such holders;
(l) counsel the Company in connection with policy decisions to
be made by the Board of Directors;
(m) engage in activities on behalf of the Company consistent
with the Company's status as a real estate investment trust;
(n) invest or reinvest any money of the Company;
(o) perform or supervise the performance of such other services
as may be required from time to time for management and other
activities relating to the assets of the Company as the Manager or the
Board of Directors shall deem appropriate under the particular
circumstances.
SECTION 3. Additional Activities of Manager. Nothing herein shall
prevent or restrict the Manager or any of its Affiliates from engaging in
any business or rendering services of any kind to any other person or
entity, including the purchase of, or rendering advice to others purchasing
assets which meet the Company's policies and criteria, except that the
Manager and its Affiliates are prohibited from providing, directly or
indirectly, any such services to any industrial real estate investment
trust other than the Company and its subsidiaries, unless the provision of
such services is approved by a majority of the Unaffiliated Directors.
Directors, partners, officers, employees and agents of the Manager or
Affiliates of the Manager may serve as directors, partners, officers,
employees, agents, nominees or signatories for the Company or any
subsidiary of the Company. When executing documents or otherwise acting in
such capacities for the Company, such persons shall use their respective
titles in the Company.
SECTION 4. Records; Confidentiality. The Manager shall maintain
appropriate books of account and records relating to services performed
hereunder, and such books of account and records shall be accessible for
inspection by representatives of the Company or any subsidiary of the
Company at any time during normal business hours. The Manager shall keep
confidential any and all information obtained in connection with the
services rendered hereunder and shall not disclose any such information to
nonaffiliated third parties except with the prior written consent of the
Board of Directors.
SECTION 5. Obligations of Manager. The Manager shall require each
seller or transferor of property to the Company to make such
representations and warranties regarding such property as may, in the
judgment of the Manager, be necessary and appropriate. In addition, the
Manager shall take such other action as it deems necessary or appropriate
with regard to the protection of the Company's investments and properties.
SECTION 6. Compensation.
(p) Base Fee. The Company shall pay to the Manager, for
services rendered under this Agreement, a base management fee in an
amount equal to .0075 of the Average Invested Assets of the Company
during each calendar year. An amount equal to one quarter of the base
management fee (or in the case of a partial calendar quarter a pro
rata amount based on the number of days elapsed during such quarter),
shall be paid to the Manager within sixty (60) days after the end of
each calendar quarter as payment on account of the base management
fee, subject to adjustment under Section 6(b) of this Agreement.
(q) Adjustment and Payment. The Manager shall compute the
estimated compensation payable under Section 6(a) hereof within 45
days after the end of each calendar quarter. A copy of such
computations shall be thereafter promptly submitted to each member of
the Board of Directors, whereupon such compensation shall be due and
payable. The aggregate amount of the Manager's compensation payable
under Section 6(a) hereof for each calendar year shall be determined
within 15 days after the audited financial statements of the Company
for the year have been completed, and any excess owed to, or shortfall
owed by, the Manager as a result of the payments on account with
respect to such compensation shall be promptly remitted by, or paid
to, the Company.
(r) Incentive Compensation. In the event this Agreement remains
in effect following its initial term as set forth in Section 11
herein, the parties may negotiate an incentive compensation provision.
SECTION 7. Expenses of the Manager.
(s) Without regard to the compensation received hereunder by the
Manager, the Manager shall bear the following expenses, except to the
extent that such expenses are obligations of the Company pursuant to
Section 8 of this Agreement:
(i) Employment expenses of the personnel employed by the
Manager, including, but not limited to, salaries, wages, payroll
taxes, and the cost of employee benefit plans;
(ii) Travel and other expenses of directors, officers and
employees of the Manager, except expenses of such persons who are
directors, officers or employees of the Company or any subsidiary of
the Company incurred in connection with attending meetings,
conferences or conventions that relate solely to the business affairs
of the Company or any subsidiary of the Company;
(iii) Rent, telephone, utilities, office furniture, equipment and
machinery (including computers) incurred in connection with the
performance of the Manager's obligations hereunder;
(iv) Any cost of computer services incurred in connection with
the performance of the Manager's obligations hereunder;
(v) All expenses connected with communications to holders of
Securities issued by or on behalf of the Company or any subsidiary of
the Company and with governmental agencies and the other bookkeeping
and clerical work necessary in maintaining relations with holders of
such securities and in complying with the continuous reporting and
other requirements of governmental bodies or agencies, including,
without limitation, any costs of computer services in connection with
this function, the cost of printing and mailing certificates for such
securities and reports to third parties required under any indenture
or other agreement to which the Company or any subsidiary of the
Company is a party;
(vi) Miscellaneous administrative expenses incurred in
supervising and monitoring the Company's investments or any
subsidiary's investments or relating to performance by the Manager of
its functions hereunder.
SECTION 8. Expenses of the Company. The Company or any subsidiary of
the Company shall pay all of its expenses, except those that are the
responsibility of the Manager pursuant to Section 7 of this Agreement, and
without limiting the generality of the foregoing, the following expenses of
the Company or any subsidiary of the Company shall be paid by the Company
or such subsidiary and shall not be paid by the Manager:
(t) Expenses related to raising capital, including the cost of
borrowed money, interest payments, discounts, loan and commitment
fees, points and any other related charges;
(u) All license fees and all taxes applicable to the Company or
any subsidiary of the Company, including interest and penalties
thereon;
(v) Legal, audit, accounting, underwriting, brokerage, listing,
rating agency, registration and other fees, printing, engraving and
other expenses and taxes incurred in connection with the issuance,
sale, distribution, transfer, registration and stock exchange listing
of the securities of the Company or of any subsidiary of the Company;
(w) Fees and expenses paid to employees, agents, advisers and
independent contractors, consultants, managers, and other agents
(other than the Manager) employed directly by the Company or any
subsidiary of the Company or by the Manager at the request of the
Company or such subsidiary for the account of the Company or the
subsidiary;
(x) Expenses connected with the acquisition, disposition,
operation, maintenance, management and ownership of the assets of the
Company or any subsidiary of the Company, including, without
limitation, commitment, appraisal, guaranty and hedging fees,
brokerage and acquisition fees and commissions, ad valorem taxes,
costs of foreclosure, maintenance, repair and improvement of property,
maintenance and protection of the lien of mortgages, property
management fees, loan origination fees, servicing and master servicing
fees, legal fees, premiums for insurance on property owned by the
Company or any subsidiary of the Company and insurance and abstract
expenses; provided, that with regard to brokerage fees, unless
approved by a majority of the Unaffiliated Directors, neither the
Manager nor any of its Affiliates shall charge a brokerage commission
or similar fee to the Company or any subsidiary of the Company in
connection with the acquisition, disposition or ownership of the
assets of the Company or the subsidiary;
(y) Expenses of organizing, reorganizing or dissolving the
Company or any subsidiary of the Company;
(z) All insurance costs not included in paragraph (e) hereof and
incurred by the Company or any subsidiary of the Company, including
without limitation the cost of officer and director liability
insurance;
(aa) Expenses connected with payments of dividends or interest or
distributions in cash or any other form made or caused to be made by
the Board of Directors to holders of the securities of the Company or
any subsidiary of the Company;
(bb) All fees and expenses incurred in connection with the
issuance of securities issued or caused to be issued by the Company,
including trustee, accounting and auditing, consulting, legal, rating
agency, registration, printing and engraving, tax advisory and tax
preparation fees and expenses, underwriting discounts, issued
discounts, master servicing fees, insurance premiums and costs of
credit enhancements;
(cc) All expenses connected with communications to holders of
equity securities or debt securities of the Company or any subsidiary
of the Company and with governmental agencies and the other
bookkeeping and clerical work necessary in maintaining relations with
holders of such securities and in complying with the continuous
reporting and other requirements of governmental bodies or agencies,
including, without limitation, any costs of computer services in
connection with this function, the cost of printing and mailing
certificates for such securities and proxy solicitation materials and
reports to holders of the Company's or any subsidiary's securities and
reports to third parties required under any indenture to which the
Company or any subsidiary of the Company is a party, except such
expenses that are the responsibility of the Manager as set forth in
Section 7 hereof;
(dd) Fees and charges of any transfer agent or registrar;
(ee) Fees and expenses paid to directors of the Company or any
subsidiary of the Company, except, in each case, directors who are
Affiliates of the Manager;
(ff) Legal, accounting and auditing fees, and tax advisory and
tax preparation fees, relating to the operations of the Company or any
subsidiary;
(gg) Legal, accounting and auditing fees, tax advisory and tax
preparation fees, consulting fees and expenses relating to the
administration of securities issued or caused to be issued by the
Company;
(hh) Any judgment rendered against the Company or any subsidiary
of the Company, or against any director of the Company or any
subsidiary of the Company in his capacity as such by any court or
governmental agency;
(ii) Amounts payable by the Company to the Manager under Section
9 of this Agreement;
(jj) Expenses relating to accounting, bookkeeping and related
administrative functions, including the employment expenses of any
persons performing these functions who are employed by the Company, or
by the Manager to the extent that such persons perform such services
for the Company;
(kk) Any cost of computer services incurred in connection with
the conduct of the Company's business; and
(ll) Other miscellaneous expenses of the Company or any
subsidiary of the Company which are not expenses of the Manager under
Section 7 of this Agreement.
SECTION 9. Limits of Responsibility of the Manager.
(mm) The Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder. The Manager,
its partners, officers and employees will not be liable to the
Company, any subsidiary of the Company, the Unaffiliated Directors or
the Company's stockholders for any acts or omissions by the Manager,
its partners, officers or employees under or in connection with this
Agreement, except by reason of acts constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties.
The Company or any subsidiary shall reimburse, indemnify and hold
harmless the Manager, its partners, officers and employees of and from
any and all losses, damages, liabilities, demands, charges and claims
of any nature whatsoever (including expenses and reasonable attorneys'
fees incurred in the defense thereof) in respect of or arising from
any acts or omissions of the Manager, its partners, officers and
employees in the performance of the Manager's duties in accordance
with this Agreement and not constituting bad faith, willful
misconduct, gross negligence or reckless disregard of its or their
duties.
(nn) The Manager shall reimburse, indemnify and hold harmless the
Company or any of their stockholders, directors, officers and
employees from any and all losses, damages, liabilities, demands,
charges and claims (including expenses and reasonable attorneys' fees
incurred in the defense thereof) arising out of any acts or omissions
by the Manager, its partners, officers or employees under or in
connection with this Agreement constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties.
SECTION 10. No Joint Venture. The Company and the Manager are not
partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any
liability as such on either of them.
SECTION 11. Term; Termination. This Agreement shall take effect
December 1, 1995, and shall remain in effect for a minimum term of six (6)
months. It shall be thereafter terminable at will by either party upon
thirty (30) days prior written notice to the other. If this Agreement
terminates pursuant to this Section 11, such termination shall be without
any further liability or obligation of either party to the other, except as
provided in Section 13 of this Agreement.
SECTION 12. Assignments. This Agreement shall terminate
automatically in the event of its assignment, in whole or in part, by the
Manager, unless such assignment is consented to in writing by the Company
with the consent of a majority of the Unaffiliated Directors. Any such
assignment shall bind the assignee hereunder in the same manner as the
Manager is bound. In addition, the assignee shall execute and deliver to
the Company a counterpart of this Agreement naming such assignee as
Manager. This Agreement shall not be assigned by the Company without the
prior written consent of the Manager, except in the case of assignment by
the Company to a REIT or other organization which is a successor (by
merger, consolidation or purchase of assets) to the Company.
SECTION 13. Action Upon Termination.
(oo) From and after the effective date of termination of this
Agreement, pursuant to Sections 11 or 12 of this Agreement, the
Manager shall not be entitled to compensation for further services
hereunder, but shall be paid all compensation accruing to the date of
termination. Upon such termination, the Manager shall forthwith:
(i) after deducting any accrued compensation and reimbursement
for its expenses to which it is then entitled, pay over to the Company
or any subsidiary of the Company all money collected and held for the
account of the Company or any subsidiary of the Company pursuant to
this Agreement;
(ii) deliver to the Board of Directors a full accounting,
including a statement showing all payments collected by it and a
statement of all money held by it, covering the period following the
date of the last accounting furnished to the Board of Directors with
respect to the Company or any subsidiary of the Company; and
(iii) deliver to the Board of Directors all property and
documents of the Company or any subsidiary of the Company then in the
custody of the Manager.
SECTION 14. Release of Money or Other Property Upon Written Request.
The Manager agrees that any money or other property of the Company or any
subsidiary of the Company held by the Manager under this Agreement shall be
held by the Manager as custodian for the Company or such subsidiary, and
the Manager's records shall be appropriately marked clearly to reflect the
ownership of such money or other property by the Company or such
subsidiary. Upon the receipt by the Manager of a written request signed by
a duly authorized officer of the Company requesting the Manager to release
to the Company or such subsidiary of the Company any money or other
property then held by the Manager for the account of the Company or any
subsidiary of the Company under this Agreement, the Manager shall forthwith
release such money or other property to the Company or such subsidiary.
The Manager shall not be liable to the Company, any subsidiary of the
Company, the Unaffiliated Directors, or the Company's or its subsidiary's
stockholders for any acts performed or omissions to act by the Company or
any subsidiary of the Company in connection with the money or other
property released to the Company or any subsidiary of the Company in
accordance with this Section. The Company and any subsidiary of the
Company shall indemnify the Manager, its partners, officers and employees
against any and all expenses, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever, which arise in connection with
the Manager's release of such money or other property to the Company or any
subsidiary of the Company in accordance with the terms of this Section 14
of this Agreement, except insofar as such expenses, losses, damages,
liabilities, demands, charges and claims arise out of acts of the Manager,
its partners, officers and employees constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties.
Indemnification pursuant to this provision shall be in addition to any
right of the Manager to indemnification under Section 9 of this Agreement.
SECTION 15. Representations and Warranties.
(pp) The Company hereby represents and warrants to the Manager as
follows:
(i) The Company is duly organized, validly existing and in good
standing under the laws of the State of Missouri, has the corporate
power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such
qualification, except for failures to be so qualified, authorized or
licensed that could not in the aggregate have a material adverse
effect on the business operations, assets or financial condition of
the Company and its subsidiaries, taken as a whole. The Company does
not do business under any fictitious business name.
(ii) The Company has the corporate power and authority to
execute, deliver and perform this Agreement and all obligations
required hereunder and has taken all necessary corporate action to
authorize this Agreement on the terms and conditions hereof and the
execution, delivery and performance of this Agreement and all
obligations required hereunder. No consent of any other person
including, without limitation, stockholders and creditors of the
Company, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required by the
Company in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each
instrument or document required hereunder will be, executed and
delivery by a duly authorized officer of the Company; and this
Agreement constitutes, and each instrument or document required
hereunder when executed and delivered hereunder will constitute, the
legally valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder, will not violate
any provision of any existing law or regulation binding on the
Company, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Company, or the
governing instruments of, or any securities issued by the Company or
of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company is a party or by which
the Company or any of its assets may be bound, the violation of which
would have a material adverse effect on the business operations,
assets, or financial condition of the Company and its subsidiaries,
taken as a whole, and will not result in, or require, the creation or
imposition of any lien on any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture, lease,
contract or other agreement, instrument or undertaking.
(qq) The Manager hereby represents and warrants to the Company as
follows:
(i) The Manager is duly formed, validly existing and in good
standing under the laws of the State of Delaware has the power to own
its assets and to transact the business in which it is now engaged and
is duly qualified to do business and is in good standing under the
laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for
failures to be so qualified, authorized or licensed that could not in
the aggregate have a material adverse effect on the business
operations, assets or financial condition of the Manager and its
subsidiaries, taken as a whole. The Manager does not do business
under any fictitious business name.
(ii) The Manager has the power and authority to execute, deliver
and perform this Agreement and all obligations required hereunder and
has taken all necessary corporate action to authorize this Agreement
on the terms and conditions hereof and the execution, delivery and
performance of this Agreement and all obligations required hereunder.
No consent of any other person including, without limitation, partners
and creditors of the Manager, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required by
the Manager in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement
and all obligations required hereunder. This Agreement has been, and
each instrument or document required hereunder will be, executed and
delivered by a duly authorized agent of the Manager, and this
Agreement constitutes, and each instrument or document required
hereunder when executed and delivered hereunder will constitute, the
legally valid and binding obligation of the Manager enforceable
against the Manager in accordance with its terms.
(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder, will not violate
any provision of any existing law or regulation binding on the
Manager, or any order, judgment, award or decree of any court,
arbitrator or governmental authority binding on the Manager, or any
securities issued by the Manager or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the
Manager is a party or by which the Manager or any of its assets may be
bound, the violation of which would have a material adverse effect on
the business operations, assets or financial condition of the Manager
and its subsidiaries, taken as a whole, and will not result in, or
require, the creation or imposition of any lien on any of its
property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
SECTION 16. Notices. Unless expressly provided otherwise herein, all
notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing.
SECTION 17. Binding Nature of Agreement; Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives,
successors and assigns as provided herein.
SECTION 18. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of
the terms hereof. This Agreement may not be modified or amended other than
by an agreement in writing.
SECTION 19. Controlling Law. The Agreement and all questions
relating to its validity, interpretation, performance and enforcement shall
be governed by and construed, interpreted and enforced in accordance with
the laws of the State of California, notwithstanding any California or
other conflict-of-law provisions to the contrary.
SECTION 20. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TIS FINANCIAL SERVICES, INC.
By:
Its President
MERIDIAN POINT REALTY TRUST VIII
By:
Its Chairman of the Board
