<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 15, 1997 (July 1, 1997)
MID-ATLANTIC REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 1-12286 52-1832411
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
170 West Ridgely Road, Suite 300, Lutherville, MD 21093
(Address of principal executive offices)
Registrant's telephone number, including area code (410) 684-2000
N.A.
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Effective July 1, 1997, Mid-Atlantic Realty Trust ("MART") acquired a
portfolio of shopping centers in the Baltimore metropolitan area from family
members and affiliates of the Pechter family (the "Pechter Group"). The
acquisition comprised ten commercial properties totaling approximately 1.07
million square feet. The ten projects are:
Enchanted Forest Shopping Center
Shawan Plaza Shopping Center
Glen Burnie Village Shopping Center
Ingleside Shopping Center
Radcliffe Shopping Center at Towson
Timonium Shopping Center
Timonium Crossing Shopping Center
Club Center at Pikesville
Perry Hall Shopping Center
Orchard Square Medical Office
At the closing of the transaction, MART formed a Maryland limited
partnership, MART Limited Partnership, of which MART is the general partner and
members of the Pechter Group were admitted as limited partners. MART assigned to
MART Limited Partnership its beneficial interest in the properties owned by MART
and its subsidiaries in exchange for a number of units of limited partnership
interest ("Units") of MART Limited Partnership equal to the number of
outstanding common shares of beneficial interest of MART.
The consideration for the properties was the issuance by MART Limited
Partnership to the members of the Pechter Group of approximately 3.235 million
Units. The parties have valued the Units at $13 per Unit for this transaction.
In addition, MART Limited Partnership has assumed approximately $81 million in
existing mortgage indebtedness on the properties.
Under the Agreement of Limited Partnership of MART Limited Partnership,
subject to certain restrictions, the Units may be "put" to the partnership for
cash at any time after one year following the closing. MART may assume the
payment obligation at any time and pay it in cash or, at its option, may
substitute common shares of MART on a one-for-one basis.
As a result of this transaction, MART converted into an UPREIT
structure. "UPREIT" is the REIT industry acronym for "umbrella partnership real
estate investment trust". In this format, the properties of the REIT are owned
by an operating limited partnership in which the REIT (or an affiliate) is the
sole general partner. This structure enables property owners (including partners
in real estate partnerships) to contribute their real estate or partnership
interests to MART and defer current tax on such contributions until the
operating partnership interests are converted into cash or, at MART's option,
are paid in common shares of benefical interest of the real estate investment
trust.
2
<PAGE>
At closing, Jack H. Pechter was elected Deputy Chairman and a trustee
of MART, as well as a senior real estate advisor to the company.
MART is a Maryland real estate investment trust (REIT) which owns,
leases, develops and manages neighborhood and community shopping centers and
other commercial real estate, primarily in the Middle Atlantic region. MART's
common shares are traded on the American Stock Exchange under the symbol "MRR".
<TABLE>
<CAPTION>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits. Page
<S> <C> <C> <C> <C> <C> <C>
(a). Financial Statements - JHP Commercial Properties
Audited Financial Statements
----------------------------
Independent Auditors' Report 5
Combined Balance Sheets - December 31, 1996, December 31, 1995 and
December 31, 1994 6
Combined Statements of Income - For the Years Ended December 31,
1996, 1995 and 1994 8
Combined Statements of Partners Capital - For the Years Ended
December 31, 1996, 1995 and 1994 9
Combined Statements of Cash Flows - For the Years Ended December
31, 1996, 1995 and 1994 10
Notes to Combined Financial Statements 11
Unaudited Financial Statements
------------------------------
Combined Balance Sheets - March 31, 1997 (Unaudited) and
December 31, 1996 17
Combined Statements of Income - Three Months Ended March 31, 1997
and March 31, 1996 (Unaudited) 19
Combined Statements of Cash Flows - Three Months Ended March 31,
1997 and March 31, 1996 (Unaudited) 20
Note to Combined Financial Statements 21
(b). Pro Forma Financial Information - Mid-Atlantic Realty Trust and
Subsidiaries
Pro Forma Condensed Combined Balance Sheet - March 31, 1997
(Unaudited) 23
Pro Forma Condensed Combined Statement of Operations - Three
Months Ended March 31, 1997 (Unaudited) 24
Pro Forma Condensed Combined Statement of Operations - For the
Year Ended December 31, 1996 (Unaudited) 25
Notes to Pro Forma Condensed Combined Financial Statements 26
(c). Exhibits
1. Agreement for Contribution of Interests dated April 1, 1997
("Contribution Agreement") among Mid-Atlantic Realty Trust
and the Contributors named therein, including all exhibits
thereto.
2. Agreement of Limited Partnership of MART Limited Partnership
dated as of June 30, 1997 (included as Exhibit A to
Contribution Agreement).
3. Consent of Scheiner, Mister & Grandizio, P.A.
</TABLE>
3
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MID-ATLANTIC REALTY TRUST
Date: July 15, 1997 By:/s/Paul G. Bollinger
--------------------
Paul G. Bollinger, Vice President
and Controller
Principal Financial Officer
mart.pr
4
<PAGE>
Item 7(a). Financial Statements - JHP Commercial Properties
INDEPENDENT AUDITORS' REPORT
To the Partners
JHP Commercial Properties
We have audited the accompanying combined balance sheets of JHP Commercial
Properties as of December 31, 1996, 1995 and 1994, and the related combined
statements of income, partners' capital and cash flows for the years then ended.
These combined financial statements are the responsibility of the Properties'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 combined financial statements referred to above present
fairly, in all material respects, the financial position of JHP Commercial
Properties as of December 31, 1996, 1995 and 1994, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.
Scheiner, Mister & Grandizio, P.A.
Lutherville, MD
February 14, 1997
(except for Notes 10 and 11,
as to which the date is July 10, 1997)
5
<PAGE>
<TABLE>
<CAPTION>
JHP COMMERCIAL PROPERTIES
COMBINED BALANCE SHEETS
December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
PROPERTY
Operating Properties $90,869,991 $84,913,138 $84,802,416
Less: Accumulated Depreciation
and Amortization 13,779,863 11,908,068 10,341,779
----------- ----------- -----------
TOTAL 77,090,128 73,005,070 74,460,637
----------- ----------- -----------
Cash and Cash Equivalents 119,111 15,979 -0-
Accounts Receivable (Less Allowance for
Doubtful Accounts, 1996 - $28,000) 377,755 316,485 399,194
Accounts Receivable - Long-Term 452,080 282,519 102,900
Prepaid Expenses 500,415 493,168 482,580
Mortgage Escrow Deposits 214,089 187,508 155,782
Other 31,342 84,768 31,624
Deferred Financing Costs (Net of
Accumulated Amortization; 1996 -
$611,664; 1995 - $566,724;
1994 - $551,472) 572,581 712,999 852,978
----------- ----------- -----------
TOTAL 2,267,373 2,093,426 2,025,058
----------- ----------- -----------
TOTAL ASSETS $79,357,501 $75,098,496 $76,485,695
=========== =========== ===========
</TABLE>
The independent auditors' report and the
accompanying notes are an integral part of
these financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
JHP COMMERCIAL PROPERTIES
COMBINED BALANCE SHEETS
December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES
Accounts Payable and Accrued Expenses $ 1,154,710 $ 732,216 $ 637,397
Accrued Interest 613,180 593,243 591,300
Tenant Security Deposit Liability 377,118 398,442 413,394
Deferred Income 742,345 614,412 642,296
Mortgages and Notes Payable 82,609,814 79,471,106 80,487,824
----------- ----------- -----------
TOTAL LIABILITIES 85,497,167 81,809,419 82,772,211
----------- ----------- -----------
PARTNERS' CAPITAL (DEFICIT) (6,139,666) (6,710,923) (6,286,516)
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $79,357,501 $75,098,496 $76,485,695
=========== =========== ===========
</TABLE>
The independent auditors' report and the
accompanying notes are an integral part of
these financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
JHP COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF INCOME
For the Years Ended December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Rentals $13,229,061 $12,971,882 $12,055,677
Other Income 17,077 29,836 56,967
----------- ----------- -----------
TOTAL REVENUES 13,246,138 13,001,718 12,112,644
----------- ----------- -----------
COSTS AND EXPENSES
Interest 7,267,830 7,588,268 6,949,541
Depreciation and Amortization 2,071,963 2,121,005 2,078,828
Operating 2,087,278 1,871,210 1,903,975
General and Administrative 1,098,921 952,662 1,020,653
Loss on Disposal of Fixed Assets -0- -0- 232,565
----------- ----------- -----------
TOTAL COSTS AND EXPENSES 12,525,992 12,533,145 12,185,562
----------- ----------- -----------
NET EARNINGS (LOSS) $ 720,146 $ 468,573 $ (72,918)
=========== =========== ===========
</TABLE>
The independent auditors' report and the
accompanying notes are an integral part of
these financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
JHP COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Years Ended December 31, 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PARTNERS' CAPITAL (DEFICIT) -
BEGINNING OF YEAR $(6,710,923) $(6,286,516) $(5,668,736)
Net Earnings (Loss) 720,146 468,573 (72,918)
Withdrawals (Net) (148,889) (892,980) (544,862)
----------- ----------- -----------
PARTNERS' CAPITAL (DEFICIT) -
END OF YEAR $(6,139,666) $(6,710,923) $(6,286,516)
=========== =========== ===========
</TABLE>
The independent auditors' report and the
accompanying notes are an integral part of
these financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
JHP COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings (Loss) $ 720,146 $ 468,573 $ (72,918)
Adjustments to Reconcile Net Earnings (Loss)
to Net Cash Provided by Operating Activities:
Depreciation and Amortization 2,071,963 2,121,005 2,078,828
Loss on Disposal of Fixed Assets -0- -0- 232,565
(Increase) Decrease in Operating Assets:
Accounts Receivable (230,831) (96,910) (8,910)
Prepaid Expenses (7,247) (10,588) (35,433)
Other 53,426 (53,144) (31,624)
Increase (Decrease) in Operating Liabilities:
Accounts Payable and Accrued Expenses 422,494 94,819 149,851
Accrued Interest 19,937 1,943 75,698
Tenant Security Deposit Liability (21,324) (14,952) 24,674
Deferred Income 127,933 (27,884) 58,288
---------- ---------- ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3,156,497 2,482,862 2,471,019
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Property Acquisition (5,849,591) (373,917) (4,331,140)
Mortgage Escrow Deposits (26,581) (31,726) 5,073
---------- ---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (5,876,172) (405,643) (4,326,067)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Deferred Costs (167,012) (151,558) (548,385)
Payments on Mortgages and Notes Payable (1,596,979) (1,314,517) (856,405)
Proceeds from Long-Term Debt 4,735,687 297,815 3,776,962
Partners Withdrawals (Net) (148,889) (892,980) (544,862)
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 2,822,807 (2,061,240) 1,827,310
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 103,132 15,979 (27,738)
Cash and Cash Equivalents - Beginning
of Year 15,979 -0- 27,738
---------- ---------- ----------
CASH AND CASH EQUIVALENTS - END
OF YEAR $ 119,111 $ 15,979 $ -0-
========== ========== ==========
</TABLE>
The independent auditors' report and the
accompanying notes are an integral part of
these financial statements.
10
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Description of Business
- -----------------------
JHP Commercial Properties represents nine commercial shopping centers and one
commercial office building. These properties are owned by various partnerships.
These financial statements encompass the operations of these properties only and
not the partnerships owning the properties. All significant inter-company
transactions have been eliminated in the combination of the properties. Related
party payables and receivables have been eliminated through the partners' equity
accounts and included in the withdrawals (net) classification. The properties
are located in the Baltimore, Maryland metropolitan area.
The properties included are as follows:
Club Centre
Enchanted Forest Shopping Center
Glen Burnie Village Shopping Center
Ingleside Shopping Center
Orchard Square
Perry Hall Square
Radcliffe Shopping Center
Shawan Plaza
Timonium Crossing
Timonium Shopping Center
The properties are held in partnerships that are controlled by one family. Two
of the partnerships include non-family members and are held by those partners as
general and limited partners.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Cash and Cash Equivalents
- -------------------------
All highly liquid unrestricted investments with original maturities of three
months or less are considered cash equivalents for purposes of the statement of
cash flows.
11
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
- ---------------------------------------------------------------
Recognition of Revenues from Rentals
- ------------------------------------
The Properties earn rental income under operating leases from tenants. Minimum
rental payments are recognized as rental revenues in the period they are earned
according to the applicable lease term. Percentage rent revenues are based on
store sales for certain periods and are charged according to a percentage over a
breakpoint amount of sales for the period according to the lease agreement.
Percentage rents are recorded when paid. The leases also provide for additional
rentals for the reimbursement of certain operating costs.
Accounts Receivable
- -------------------
Accounts receivable are shown net of an allowance for doubtful accounts.
Accounts receivable - long-term represents the cumulative difference between the
straight-line minimum rentals due from tenants based upon terms and length of
lease and actual minimum rentals due per the lease agreements. Listed below are
the additions to income to recognize annual revenues on the straight-line basis:
Year ended December 31,
-----------------------
1994 $102,900
1995 179,619
1996 169,561
--------
TOTAL $452,080
========
Real Estate Costs
- -----------------
Costs that clearly relate to the acquisition, development and construction of a
real estate project are capitalized. Interest costs are capitalized while
development and construction are in progress. Interest capitalized during 1996,
1995 and 1994 amounted to $114,050, $20,824 and $468,762, respectively.
Depreciation
- ------------
Depreciation of buildings is provided using the straight-line method over the
estimated useful lives of the properties. Improvements for tenants are amortized
on a straight-line basis over the terms of the related tenant leases.
Expenditures for normal maintenance and repairs are charged against income as
incurred.
12
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
- ---------------------------------------------------------------
Income Taxes
- ------------
The properties included in these financial statements are all owned by
partnerships. Therefore, no provision for income taxes has been recorded because
the partners are taxed on their proportionate share of the income from each
partnership.
Deferred Financing and Leasing Costs
- ------------------------------------
Costs associated with the issuance of debt are capitalized and recorded as
deferred finance costs and amortized on a straight-line basis over the term of
the related debt.
Costs associated with the acquisition of leases are capitalized and amortized
over the term of the related leases.
Advertising
- -----------
Advertising costs are charged to expense as incurred.
Deferred Income
- ---------------
Deferred income represents rents and real estate tax and insurance recoveries
received in advance.
NOTE 2: OPERATING PROPERTIES
- -----------------------------
Operating properties consist of the following:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Land $22,338,592 $22,338,592 $22,338,592
Land Improvements 7,069,291 7,069,291 6,978,733
Buildings 55,235,179 49,952,830 49,834,859
Tenant Improvements 4,607,907 4,223,597 4,300,764
Furniture, Fixtures and
Equipment 305,435 305,435 288,479
Deferred Lease Costs 1,313,587 1,023,393 1,060,989
----------- ----------- -----------
90,869,991 84,913,138 84,802,416
Less: Accumulated Depreciation
and Amortization 13,779,863 11,908,068 10,341,779
----------- ----------- -----------
TOTAL $77,090,128 $73,005,070 $74,460,637
=========== =========== ===========
</TABLE>
13
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 2: OPERATING PROPERTIES (Continued)
- -----------------------------------------
Included in the above amounts is construction in progress which relates to
tenant improvements or renovations generally placed in service the following
year. The construction in progress amounts to $15,053, $278,130 and $652,380 at
December 31, 1996, 1995 and 1994, respectively.
NOTE 3: PROPERTIES AND RELATED ACCUMULATED DEPRECIATION AND MORTGAGES PAYABLE
- -----------------------------------------------------------------------------
A summary of the properties and related mortgages payable at December 31, 1996
follows:
<TABLE>
<CAPTION>
Accumulated
Depreciation
Mortgages Total and Net
Classification Payable Cost Amortization Cost
-------------- ------- ---- ------------ ----
<S> <C> <C> <C> <C> <C> <C>
Shopping Centers $80,339,961 $88,153,066 $13,032,460 $75,120,606
Office Building $ 2,269,853 $ 2,716,925 $ 1,120,441 $ 1,596,484
</TABLE>
Mortgages payable aggregating $82,609,814 at December 31, 1996 bear interest at
8% to 10% and mature in installments through 2020. Aggregate annual principal
payments applicable to mortgages payable for the five years subsequent to
December 31, 1996 are:
1997 $ 6,397,047
1998 4,922,052
1999 17,228,590
2000 3,650,569
2001 1,624,565
Thereafter 48,786,991
-----------
TOTAL $82,609,814
===========
Several of the mortgages have been guaranteed by general partners. Six of the
mortgages contain cross-default or cross-collateral clauses with other mortgages
included in this group. One of the mortgages contains two five-year extensions
exercisable at the option of the mortgagor. For purposes of future maturities,
it is assumed that the options will be exercised.
14
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 4: LEASES
- ---------------
The properties are leased, generally on a long-term basis. All leases are
classified as operating leases. Future minimum payments receivable under
non-cancelable operating leases are as follows:
1997 $11,814,388
1998 10,295,591
1999 8,816,894
2000 7,499,169
2001 6,313,218
Thereafter 51,729,597
-----------
TOTAL $96,468,857
===========
The future minimum lease payments do not include contingent rentals which may be
paid under certain leases on the basis of a percentage of sales in excess of
stipulated amounts. Renewal option minimum lease payments are not included in
the totals above. The future minimum lease payments do not include charges for
reimbursement of operating costs.
NOTE 5: CONCENTRATIONS OF RISK
- -------------------------------
The Properties lease commercial properties to commercial and retail businesses
primarily headquartered in the Baltimore Metropolitan area. The terms of the
leases generally require basic rent payments at the beginning of each month.
Most tenants are required to make a deposit at the inception of the lease
generally in an amount equal to its last months rent. Credit risk associated
with the lease agreements is limited to the amount of rents receivable from
tenants less related security deposits.
NOTE 6: RELATED-PARTY TRANSACTIONS
- -----------------------------------
Management Fees and Administrative Charges
- ------------------------------------------
The Properties pay management fees to TriStar Management, Inc., a related party
through common ownership. Management fees are generally paid at the rate of 4%
of rental collections plus other income items. Total management fees amounted to
$523,395, $510,676 and $440,502 for 1996, 1995 and 1994, respectively, and are
included in general and administrative expenses. TriStar Management, Inc. also
handles administrative functions for the properties including the payroll
function. A portion of its administrative payroll is allocated to the
Properties. As of December 31, 1996, 1995 and 1994, the Properties owe Tristar
Management, Inc., the amounts of $109,048, $21,296 and $35,313, respectively.
These amounts are included in accounts payable.
15
<PAGE>
JHP COMMERCIAL PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
- ----------------------------------------------------
NOTE 6: RELATED-PARTY TRANSACTIONS (Continued)
- -----------------------------------------------
Development Costs
- -----------------
JHP Development Company, Inc., a related party through common ownership, was the
general contractor for renovation projects on two of the properties during 1996.
Development fees amounting to $100,000 have been accrued and included in
accounts payable and building costs. Also included in accounts payable are
amounts owed to JHP Development Company, Inc. for construction costs. These
costs amount to $372,761. Total construction costs for the projects amounted to
approximately $5,500,000. As of December 31, 1996, the projects are
substantially complete.
During 1994, JHP Development Company, Inc. was the general contractor for a
renovation project on one of the properties. Development fees amounted to
$75,000 and are included in building costs. Total construction costs for the
project amounted to approximately $4,050,000. The project was completed during
1994.
NOTE 7: SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
- ---------------------------------------------------------
Cash Paid for:
1996 1995 1994
---------- ---------- -------
Interest Expense $7,247,893 $7,586,325 $6,873,843
========== ========== ==========
NOTE 8: OTHER MATTERS
- ----------------------
The Properties are the lessor regarding a land lease agreement for a parcel of
land in the Timonium Shopping Center. Under the terms of the agreement, the
lessee has the option to purchase the property for $300,000 plus other
consideration as provided for in the agreement.
NOTE 9: CONTINGENCIES
- ----------------------
Two of the Partnerships that own some of the projects included in these
financial statements, have been named as co-defendants in two separate lawsuits.
The suits ask for damages totalling in excess of $4,000,000. Outside counsel for
the Properties has advised that at this stage in the proceedings, they cannot
offer an opinion as to the probable outcome. The Partnerships believe the suits
are without merit and are vigorously defending their position.
NOTE 10: SUBSEQUENT EVENT
- --------------------------
The owners of the Properties entered into a Contribution Agreement with
Mid-Atlantic Realty Trust (MART), a publicly traded Real Estate Investment
Trust, for the contribution of the Properties to MART Limited Partnership.
Closing was effective as of July 1, 1997.
NOTE 11: ENVIRONMENTAL ISSUES
- ------------------------------
Certain environmental issues exist on three (3) of the project sites. At this
stage in the examination, it is not possible to determine if the sites will
require cleanup, nor is it possible to estimate the amount of any cleanup costs.
As part of an indemnification agreement entered into pursuant to the
aforementioned Contribution Agreement, certain individuals have indemnified
against these costs for a specified period of time. No provision for any
estimated loss is reflected in the accompanying financial statements.
16
<PAGE>
JHP COMMERCIAL PROPERTIES
COMBINED BALANCE SHEETS
March 31, December 31,
1997 1996
(UNAUDITED)
- -------------------------------------------------------------------------------
ASSETS
PROPERTY
Operating Properties $91,066,647 $90,869,991
Less: Accumulated Depreciation
and Amortization 14,262,202 13,779,863
----------- -----------
TOTAL 76,804,445 77,090,128
----------- -----------
Cash and Cash Equivalents 116,176 119,111
Accounts Receivable, Less Allowance for
Doubtful Accounts 312,048 377,755
Accounts Receivable - Long-Term 494,589 452,080
Prepaid Expenses 282,577 500,415
Mortgage Escrow Deposits 334,029 214,089
Other 31,513 31,342
Deferred Financing Costs (Net of
Accumulated Amortization, 1997 - $656,890;
1996 - $611,663) 527,355 572,581
----------- -----------
TOTAL 2,098,287 2,267,373
----------- -----------
TOTAL ASSETS $78,902,732 $79,357,501
=========== ===========
The accompanying note is an integral part of
these financial statements.
17
<PAGE>
JHP COMMERCIAL PROPERTIES
COMBINED BALANCE SHEETS
March 31, December 31,
1997 1996
(UNAUDITED)
- ------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts Payable and Accrued Expenses $ 1,094,614 $ 1,154,710
Accrued Interest 613,180 613,180
Tenant Security Deposit Liability 376,666 377,118
Deferred Income 725,548 742,345
Mortgages and Notes Payable 82,201,879 82,609,814
----------- -----------
TOTAL LIABILITIES 85,011,887 85,497,167
----------- -----------
PARTNERS' CAPITAL (DEFICIT) (6,109,155) (6,139,666)
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $78,902,732 $79,357,501
=========== ===========
The accompanying note is an integral part of
these financial statements.
18
<PAGE>
JHP COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended March 31, 1997 1996
- ------------------------------------------------------------------------------
REVENUES
Rentals $3,528,727 $3,195,251
Other Income 7,975 53,825
---------- ----------
TOTAL REVENUES 3,536,702 3,249,076
---------- ----------
COSTS AND EXPENSES
Interest 1,816,923 1,800,336
Depreciation and Amortization 527,565 517,991
Operating 577,866 620,737
General and Administrative 298,896 229,467
---------- ----------
TOTAL COSTS AND EXPENSES 3,221,250 3,168,531
---------- ----------
NET EARNINGS $ 315,452 $ 80,545
========== ==========
The accompanying note is an integral part of
these financial statements.
19
<PAGE>
JHP COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 1997 1996
- -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings $ 315,452 $ 80,545
Adjustments to Reconcile Net Earnings to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 527,565 517,991
(Increase) Decrease in Operating Assets:
Accounts Receivable 23,198 (10,958)
Prepaid Expenses 217,838 195,427
Other (171) (1,850)
Increase (Decrease) in Operating
Liabilities:
Accounts Payable and Accrued Expenses (60,096) (150,308)
Tenant Security Deposit Liability (452) (13,037)
Deferred Income (16,797) 3,221
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,006,537 621,031
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Property Acquisition (196,656) (722,971)
Mortgage Escrow Deposits (119,940) (127,070)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (316,596) (850,041)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Mortgages and Notes Payable -0- 755,957
Payments on Mortgages and Notes Payable (407,935) (434,921)
Partners Withdrawals (Net) (284,941) (65,675)
---------- ----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (692,876) 255,361
---------- ----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (2,935) 26,351
Cash and Cash Equivalents - Beginning of Period 119,111 15,979
---------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 116,176 $ 42,330
========== ==========
The accompanying note is an integral part of
these financial statements.
20
<PAGE>
JHP Commercial Properties
Note to Combined Financial Statements
March 31, 1997
NOTE 1: BASIS OF PRESENTATION
- -----------------------------
The unaudited condensed combined financial statements of JHP Commercial
Properties as of March 31, 1997 and for the three-month periods ended March 31,
1997 and 1996 included herein have been prepared in conformity with the
generally accepted accounting principles used in preparing the Properties'
annual audited financial statements, but do not include all of the information
and disclosures that would be required in a complete set of audited financial
statements. They should, therefore, be read in conjunction with the Properties'
audited consolidated financial statements and notes thereto for the years ended
December 31, 1996, 1995 and 1994. The combined financial statements include all
adjustments which are necessary, in the opinion of the Properties' management,
to fairly reflect the Properties' financial position, results of operations and
cash flows. All such adjustments are of a normal, recurring nature.
21
<PAGE>
Item 7.(b). Pro Forma Financial Information - Mid-Atlantic Realty Trust and
Subsidiaries
The following unaudited pro forma combined financial statements are based
upon the consolidated financial statements of Mid-Atlantic Realty Trust (Company
or MART) and the combined financial statements of JHP Commercial Properties
(JHP). The unaudited pro forma combined financial statements were adjusted to
give effect to the combination of the Company and JHP. The pro forma condensed
combined balance sheet and statements of operations have been prepared using the
purchase method of accounting. These statements reflect how the balance sheet of
the Company might have appeared at March 31, 1997, if the acquisition had been
consummated at that date and how the statements of operations of the Company
might have appeared if the acquisition had been consummated at the beginning of
the periods presented. These unaudited pro forma condensed combined financial
statements are not necessarily indicative of the results of operations or
financial position of the Company that would have occurred had the acquisition
occurred at the beginning of the periods presented or on the date indicated, nor
are they necessarily indicative of the future results or financial position of
the Company.
These unaudited pro forma condensed combined financial statements
should be read in conjunction with the audited consolidated financial statements
of the Company included in its Form 10-K for the year ended December 31, 1996,
the unaudited consolidated financial statements of the Company included in its
Form 10-Q for the three months ended March 31, 1997, the audited combined
financial statements of JHP as of and for the years ended December 31, 1996,
1995 and 1994 included herein and the unaudited combined financial statements of
JHP as and for the three months ended March 31, 1997 and March 31, 1996 included
herein. The unaudited pro forma adjustments are based upon this financial
information and certain other assumptions included in the notes to the unaudited
pro forma condensed combined financial statements.
As indicated above, the acquisition will be accounted for by the
purchase method of accounting. The Company's cost to acquire JHP, including the
fair value of liabilities assumed, approximated the fair values of the assets
acquired. The purchase allocation adjustments made in connection with the
development of the unaudited pro forma condensed combined financial statements
are based on the information available at this time. Subsequent adjustments and
refinements to the allocation may be made based on additional information.
As indicated above, the pro forma condensed combined financial
statements are not necessarily indicative of the future results or financial
position of the Company. The pro forma financial statements do not include the
full effect of redevelopment and leasing activity at the JHP properties during
the first six months of 1997.
22
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MART
MART Pro Forma and Subsidiaries
and Subsidiaries JHP Adjustments (Pro Forma
(Historical) (Historical) (Note B) Combined)
------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Properties:
Operating properties $200,026 91,066 28,921 (a)
1,057 (b) 321,070
Less accumulated depreciation and amortization 43,752 14,262 (14,262) (a) 43,752
------------------------------------------------------------------------
156,274 76,804 44,240 277,318
Development operations 4,722 -- (125) (b) 4,597
Property held for development or sale 6,828 -- -- 6,828
------------------------------------------------------------------------
167,824 76,804 44,115 288,743
Cash and cash equivalents 1,118 116 (774) (b) 460
Notes and accounts receivable-tenants and other 733 839 (839) (b) 733
Prepaid expenses and deposits 385 617 (176) (b) 826
Deferred financing costs 2,089 527 (527) (b) 2,089
------------------------------------------------------------------------
$172,149 78,903 41,799 292,851
========================================================================
LIABILITIES AND OWNERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 3,539 2,085 (1,374) (b) 4,250
Notes payable 17,500 -- -- 17,500
Construction loans payable -- -- 25,610 (c) 25,610
Mortgages payable 70,000 82,202 2,720 (a)
(999) (b)
(25,610) (c) 128,313
Convertible subordinated debentures 39,534 -- -- 39,534
Deferred income 896 725 (722) (b) 899
------------------------------------------------------------------------
131,469 85,012 (375) 216,106
Minority interest in consolidated 2,874 -- 36,065 (a) 38,939
joint ventures
Owners' Equity 37,806 (6,109) 4,398 (a)
1,711 (b) 37,806
------------------------------------------------------------------------
$172,149 78,903 41,799 292,851
========================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
23
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MART
MART Pro Forma and Subsidiaries
and Subsidiaries JHP Adjustments (Pro Forma
(Historical) (Historical) (Note C) Combined)
------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Rentals $6,945 3,529 (293) (a)
(43) (b) 10,138
Tenant recovery 1,202 -- 293 (a) 1,495
Other 58 8 (8) (c) 58
-------------------------------------------------------------------------
8,205 3,537 (51) 11,691
COSTS AND EXPENSES:
Interest 2,776 1,817 (60) (d) 4,533
Depreciation and amortization of
property and improvements 1,394 527 3 (e)
78 (f) 2,002
Operating 2,118 578 (15) (g) 2,681
General and Administrative 573 299 (206) (h) 666
-------------------------------------------------------------------------
6,861 3,221 (200) 9,882
-------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
BEFORE MINORITY INTEREST 1,344 316 149 1,809
Minority interest expense (67) -- (486) (i) (553)
-------------------------------------------------------------------------
EARNINGS FROM OPERATIONS 1,277 316 (337) 1,256
Gain on properties 75 -- -- 75
-------------------------------------------------------------------------
NET EARNINGS $1,352 316 (337) 1,331
=========================================================================
NET EARNINGS PER SHARE $0.18 0.18
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
24
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MART
MART Pro Forma and Subsidiaries
and Subsidiaries JHP Adjustments (Pro Forma
(Historical) (Historical) (Note C) Combined)
------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Rentals $26,562 13,229 (1,574) (a)
(170) (b) 38,047
Tenant recovery 5,135 -- 1,574 (a) 6,709
Other 709 17 (33) (c) 693
------------------------------------------------------------------------
32,406 13,246 (203) 45,449
COSTS AND EXPENSES:
Interest 12,354 7,268 (274) (d) 19,348
Depreciation and amortization of
property and improvements 5,414 2,072 14 (e)
368 (f) 7,868
Operating 8,818 2,087 (58) (g) 10,847
General and Administrative 2,098 1,099 (727) (h) 2,470
------------------------------------------------------------------------
28,684 12,526 (677) 40,533
------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
BEFORE MINORITY INTEREST 3,722 720 474 4,916
Minority interest expense (514) -- (1,229) (i) (1,743)
------------------------------------------------------------------------
EARNINGS FROM OPERATIONS 3,208 720 (755) 3,173
Gain on properties 301 -- -- 301
------------------------------------------------------------------------
NET EARNINGS: $3,509 720 (755) 3,474
========================================================================
NET EARNINGS PER SHARE $0.56 0.56
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
25
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
On July 1, 1997 the Company transferred all of its interests in real
properties to a newly-formed partnership, MART Limited Partnership, (MLP), in
exchange for 8,277,687 operating partnership units in MLP. On the same date,
various entities affiliated with JHP contributed their interests in a portfolio
consisting of nine shopping centers and one medical office building to MLP in
exchange for 3,205,770 operating partnership units in MLP. As a result of these
transactions, MART is the sole general partner of MLP and has an ownership
interest of approximately 72% in MLP.
Under the agreement for contribution of interests and the limited
partnership agreement, the limited partners (excluding MART) have the right to
"put" their units to MLP for cash, subject to various limitations and
conditions. In the event units are put to MLP, MART may assume MLP's obligation
to pay cash or, at its option, may settle the obligation by issuing common
shares of beneficial interest on a one-to-one basis.
B. ADJUSTMENTS TO PRO FORMA CONDENSED COMBINED BALANCE SHEET
The accompanying unaudited pro forma condensed combined balance sheet
as of March 31, 1997 reflects certain adjustments which are required to give
effect to matters directly attributable to the acquisition. Explanations of the
adjustments are as follows:
(a) Adjust assets acquired and liabilities assumed to fair value
and record fair value of operating partnership units issued.
(b) Eliminate the assets and liabilities not acquired by the
Company and record costs incurred at closing. Costs incurred
include approximately $1,057,000 added to operating properties
of which $125,000 was transferred from development operations.
Assets and liabilities transferred from JHP to MART included
adding approximately $441,000 in prepaid expenses and
deposits, $711,000 in accounts payable and accrued expenses,
and $3,000 in deferred income. Cash was reduced by $658,000
for the net costs incurred and liabilities assumed at closing.
(c) Reclassify liabilities to conform to presentation used by the
Company.
26
<PAGE>
C. ADJUSTMENTS TO PRO FORMA CONDENSED COMBINED STATEMENTS OF
OPERATIONS
The accompanying unaudited pro forma condensed combined statements of
operations for the three months ended March 31, 1997 and the year ended December
31, 1996 reflect certain adjustments which are explained below. These
adjustments are required to give effect to matters directly attributable to the
acquisition and to reclassify certain revenues and expenses of JHP to conform to
the presentation used by the Company. Explanations of the adjustments are as
follows:
(a) Reclassify tenant recovery revenues to conform to the
presentation used by the Company.
(b) Eliminate the effect of JHP using the straight-line basis to
recognize minimum rent revenues under tenant leases which
provide for varying rents over their terms. MART has not used
the straight-line basis due to immateriality.
(c) Reduce interest income to reflect the use of short-term
investments (assumed to earn interest at 5%) to pay
acquisition costs.
(d) Reduce interest expense to eliminate interest on JHP debt not
assumed and to reflect the different basis in mortgages
payable assumed.
(e) Record depreciation expense on capitalized transaction costs
($1,057,000) incurred in connection with closing.
(f) Increase depreciation expense for the difference in property
basis due to fair value adjustments.
(g) Eliminate commercial management payroll of JHP for non-common
area maintenance operating expenses. The related services
required for JHP will be performed by MART employees and
charged to general and administrative expenses.
(h) Reduce general and administrative expenses to eliminate
expenses which are not expected to be incurred by the combined
organization (primarily compensation and related costs of
former JHP employees who are not joining MART and who
management does not intend to replace).
(i) Record non-MART partners' share of combined earnings.
27
<PAGE>
D. EARNINGS PER SHARE
The weighted average number of common shares of beneficial interest
outstanding used in the calculation of earnings per share for the three months
ended March 31, 1997 and the year ended December 31, 1996 were 7,448,000 and
6,216,000, respectively, on a primary basis.
28
<PAGE>
(c) Exhibits
<PAGE>
Exhibit (c)1
<PAGE>
MART LIMITED PARTNERSHIP
AGREEMENT FOR CONTRIBUTION OF INTERESTS
April 1, 1997
<PAGE>
TABLE OF CONTENTS
Page
1. CONTRIBUTION OF INTERESTS.......................................... 2
1.1 Certain Definitions........................................... 2
1.2 Contribution.................................................. 2
1.3 Consideration for Contribution................................ 3
1.4 Intentionally omitted]........................................ 3
1.5 Subject to Partnership Agreement.............................. 3
2. ADDITIONAL PROPERTY PURCHASE; ADJUSTMENTS.......................... 3
2.1 Purchase of Certain Properties................................ 3
2.2 Unit Adjustment............................................... 4
2.3 Adjustments with Respect to Shares............................ 4
3. REDEMPTION OF UNITS................................................ 4
3.1 Partner Put................................................... 4
3.2 No Call of Initial Units...................................... 4
3.3 No Installment Payments....................................... 5
3.4 Limit on Redemptions.......................................... 5
3.5 Registration Rights........................................... 5
4. OPERATION OF PROPERTY THROUGH CLOSING.............................. 5
4.1 Business Practice............................................. 5
4.2 No Sale of Encumbrance........................................ 5
4.3 New Leases; Modification...................................... 6
4.4 Termination of Management Company............................. 6
4.5 Compliance.................................................... 6
4.6 Notice of Inaccuracy or Incompleteness........................ 6
4.7 Access........................................................ 6
4.8 Insurance..................................................... 7
4.9 Fulfillment of Obligation..................................... 7
4.10 Financial Statements and Reports.............................. 7
5. STATUS OF TITLE TO PROPERTY........................................ 7
5.1 State of Title................................................ 7
5.2 Preliminary Evidence of Title................................. 8
5.3 Title Defects................................................. 9
6. CLOSING PRORATIONS AND ADJUSTMENTS................................. 10
6.1 Statement of Prorations....................................... 10
6.2 Post Closing Adjustment; Finality............................. 11
6.3 Certain Deposits.............................................. 12
7. CLOSING............................................................ 12
7.1 Closing Date.................................................. 12
7.2 Closing Documents............................................. 12
7.3 Conditions to Closing......................................... 15
7.4 .............................................................. 16
7.5 Transaction Costs............................................. 17
8. CASUALTY LOSS AND CONDEMNATION..................................... 17
8.1 Casualty...................................................... 17
<PAGE>
C66242v.609 T
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8.2 Condemnation.................................................. 18
9. REPRESENTATIONS AND WARRANTIES OF THE REPRESENTORS................. 18
9.1 Organization.................................................. 18
9.2 Authority..................................................... 18
9.3 Interest in Contributed Entities.............................. 19
9.4 Investment.................................................... 19
9.5 Title to the Properties....................................... 20
9.6 No Defaults................................................... 21
9.7 No Litigation; No Condemnation................................ 21
9.8 No Violation.................................................. 21
9.9 Required Obligations.......................................... 22
9.10 Condition of Properties....................................... 22
9.11 [Intentionally omitted]...................................... 22
9.12 Utilities.................................................... 22
9.13 Zoning....................................................... 23
9.14 Improvements................................................. 23
9.15 Environmental Matters........................................ 23
9.16 Insurance.................................................... 25
9.17 Management................................................... 25
9.18 Compliance................................................... 26
9.19 Leases; Rent Rolls........................................... 26
9.20 Service Contracts............................................ 27
9.21 Permits...................................................... 28
9.22 Financial Statements......................................... 28
9.23 Undisclosed Liabilities...................................... 28
9.24 Contracts.................................................... 29
9.25 Labor Unions................................................. 29
9.26 Employee Benefit Plans; Labor Matters........................ 29
9.27 [Intentionally Omitted]
9.28 Taxes........................................................ 29
9.29 Special Filings.............................................. 30
9.30 All Assets................................................... 30
9.31 Books and Records............................................ 30
9.32 No Brokers................................................... 30
9.33 All Material Information..................................... 30
9.34 Non-Survival of Certain Warranties........................... 31
9.35 Knowledge of Breach.......................................... 32
10. REPRESENTATIONS AND WARRANTIES OF INVESTORS........................ 32
10.1 Authority.................................................... 32
10.2 Interest in Contributed Entities............................. 32
10.3 Investment................................................... 33
10.4 No Defaults.................................................. 34
10.5 No Litigation................................................ 34
10.6 No Violation................................................. 34
10.7 Required Obligations......................................... 35
10.8 Special Filings.............................................. 35
10.9 No Brokers................................................... 35
- ii -
<PAGE>
C66242v.609 T
2:3/31/97
10.10 Survival of Warranties...................................... 35
11. REPRESENTATIONS AND WARRANTIES OF MART AND THE
PARTNERSHIP........................................................ 36
11.1 Organization................................................. 36
11.2 Filing of Reports............................................ 36
11.3 Listed Shares................................................ 36
11.4 Tax Status................................................... 36
11.5 Litigation................................................... 36
11.6 No Brokers................................................... 37
11.7 Survival..................................................... 37
12. COVENANTS.......................................................... 37
12.1 Covenants of MART and the Partnership........................ 37
12.2 Covenants of the Contributors and the Contributed
Entities..................................................... 40
12.3 No Goodwill.................................................. 40
12.4 No Claim Against Contributed Entity.......................... 40
12.5 DRO Election; Bottom Guaranty Election....................... 41
12.6 ............................................................. 42
13. DUE DILIGENCE PERIOD............................................... 42
13.1 Due Diligence Period......................................... 42
13.2 Access to Properties and Materials........................... 42
13.3 Cooperation of Management Company............................ 43
13.4 Adjustment Following Due Diligence........................... 43
14. DEFAULTS AND REMEDIES.............................................. 43
14.1 Indemnification by Contributors.............................. 43
14.2 Remedies..................................................... 44
14.3 Indemnification by MART and the Partnership.................. 45
15. MISCELLANEOUS...................................................... 46
15.1 Assignment................................................... 46
15.2 Entire Agreement............................................. 46
15.3 Survival of Provisions....................................... 46
15.4 Time of the Essence.......................................... 47
15.5 Notices...................................................... 47
15.6 Governing Law................................................ 48
15.7 No Trial by Jury............................................. 48
15.8 Litigation Costs............................................. 48
15.9 Counterparts................................................. 48
15.10 Offer and Acceptance........................................ 48
EXHIBITS
A. Partnership Agreement
B. Registration Rights Agreement
C. Survey Certification
D. Subscription Documents
- iii -
<PAGE>
C66242v.609 T
2:3/31/97
E. [Intentionally Omitted]
F. Lender's Estoppel Certificate
G. Opinion of Counsel to Contributors and Contributed
Entities
H. Opinion of Counsel to MART and the Partnership
I. Tenant Estoppel Letter
SCHEDULES
* DISCLOSURE SCHEDULE
I. Contributors and Contributing Entities [Names and
Addresses]
II. Contributors' Interest in Contributed Entities
III. Properties Owned by Contributed Entities and Interest
of Contributed Entities in Property
IV. Allocation of Initial Units
V. Environmental Permits and Authorizations
VI. Insurance
VII. Leases and Rent Rolls
VIII. [Intentionally Omitted]
IX. Service Contracts
X. Contracts
XI. Employee Benefit Plans/Employment Contracts
XII. Assumed Liabilities of Contributed Entities
XIII. [Intentionally Omitted]
XIV. Permitted Exceptions
XV. Properties with Special Allocations
- iv -
<PAGE>
C66242v.609 T
2:3/31/97
MART LIMITED PARTNERSHIP
AGREEMENT FOR CONTRIBUTION OF INTERESTS
THIS AGREEMENT FOR CONTRIBUTION OF INTERESTS (the "Agreement") is made
and entered into as of this April 1, 1997, by and among the persons and entities
named on Schedule I hereto consisting of all of the owners of an interest in any
of the Contributed Entities (as hereinafter defined) (each individually, a
"Contributor" and collectively, "Contributors"), each Contributed Entity listed
on Schedule I hereto, which term includes each Predecessor Entity and each
Successor Entity listed on Schedule II hereto, including Allview Center Limited
Partnership ("Allview") and Tripec Associates Limited Partnership ("Tripec"),
and MID-ATLANTIC REALTY TRUST, a Maryland real estate investment trust ("MART"),
having offices at 1302 Concourse Drive, Suite 204, Linthicum, Maryland 21090, on
its own behalf and on behalf of MART LIMITED PARTNERSHIP, a Maryland limited
partnership (the "Partnership"), having offices at 1302 Concourse Drive, Suite
204, Linthicum, Maryland 21090.
RECITALS
A. At the Closing (as defined in Section 7.1 hereof) MART will form
MART Limited Partnership as a Maryland limited partnership pursuant to the terms
of the Limited Partnership Agreement appended hereto as Exhibit A (the
"Partnership Agreement"). The Partnership is intended to result in an umbrella
partnership real estate investment trust in which MART shall be the general
partner (the "General Partner") and shall hold the number of Units (as
hereinafter defined) of limited partnership interest set forth in Schedule A to
the Partnership Agreement.
B. At the Closing, MART shall contribute and shall cause its
subsidiaries to contribute to the Partnership all of MART's beneficial interests
in all real property owned directly or indirectly (through one or more
subsidiaries) by MART, so that the Partnership shall be the owner of such
interests.
C. Each Contributor has an interest in the entities ("Predecessor
Entities") set forth opposite its name on Schedule II hereto. Each Predecessor
Entity is the legal and beneficial owner of fee simple title to all of the real
property set forth on Schedule III hereto, which, together with the "Deeded
Properties" and "Dorsey Hall" (as hereinafter defined) are individually referred
to as a "Property" and collectively, the "Properties". Prior to the Closing,
each Predecessor Entity shall have conveyed and transferred the Properties owned
by it to the entity set forth opposite its name on Schedule II hereto (the
"Successor Entities") (each of the Predecessor Entities and the Successor
Entities are sometimes referred to herein as a
<PAGE>
C66242v.609 T
2:3/31/97
"Contributed Entity" and collectively "Contributed Entities", as described in
Section 1.3 hereof).
D. Each of the Contributors desire to transfer their interest in each
of the Successor Entities to the Partnership in exchange for limited partnership
interests in the Partnership upon and subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of and in reliance upon the above
Recitals, the terms, covenants and conditions contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. CONTRIBUTION OF INTERESTS
1.1 Certain Definitions. For purposes of this Agreement:
1.1.1 "Units" means units of limited partnership interest in
the Partnership, including the limited partnership interests held by MART and
those to be issued to the Contributors pursuant to this Agreement. The Units to
be issued to the Contributors pursuant to this Agreement are sometimes referred
to herein as the "Initial Units."
1.1.2 "Shares" means the common shares of beneficial interest,
par value $.01 per share, of MART.
1.1.3 "Contributed Entities" means the "Successor Entities",
as defined in the Recitals hereto, for purposes of the Contribution to the
Partnership; provided that, (i) for purposes of the representations, warranties,
covenants and agreements hereof, the term "Contributed Entities" shall also
include the Predecessor Entities, and (ii) for purposes of all matters relating
to the Properties, including matters relating to the Contributions hereunder (as
defined in Section 1.2), and to the representations, warranties, covenants and
agreements relating thereto, the term "Contributed Entities" shall also include
Allview and Tripec.
1.2 Contribution. Subject to the terms and conditions of this
Agreement, at the Closing (as hereinafter defined), each of the Contributors
shall cause the following to occur:
1.2.1 each Predecessor Entity shall merge into, or convey and
transfer the Properties owned by it to, the Successor Entity set forth opposite
its name on Schedule II hereto, and each Contributor shall assign and transfer
to the
- 2 -
<PAGE>
C66242v.609 T
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Partnership the entire right, title and interest of such Contributor in the
Successor Entity;
1.2.2 in accordance with the requirements and other provisions
of Section 5 hereof, fee simple title to the Properties known as Club Centre,
Orchard Square, Glen Burnie Village and Timonium Crossing owned by Tripec (the
"Deeded Properties") shall be conveyed to the Partnership by deeds containing
covenants of special warranty and further assurances.
The interests and Properties to be transferred as herein provided are
hereinafter collectively referred to as the "Contribution".
1.3 Consideration for Contribution. In consideration for the
Contribution, the Partnership shall issue to each of the Contributors the number
of Units set forth on Schedule IV hereto. The parties agree that, as of the date
hereof and as of the Closing Date, the Initial Units have a fair market value of
$13.00 per Unit and the Shares have a fair market value of $13.00 per Share. The
Contributors represent and warrant that the Properties are subject to mortgage
indebtedness of $85,078,000 as of December 31, 1996.
1.4 [Intentionally omitted]
1.5 Subject to Partnership Agreement. The Units issued pursuant to
this Agreement shall be subject in all respects to the terms and provisions of
the Partnership Agreement.
2. ADDITIONAL PROPERTY PURCHASE; ADJUSTMENTS
2.1 Purchase of Certain Properties. Jack Pechter will use his
reasonable efforts to cause the Dorsey Hall Medical Center Property owned by
Allview ("Dorsey Hall") to be conveyed to the Partnership at the Closing,
provided, however, that the failure to do so shall not affect the closing of the
transactions contemplated hereby. Such Property may be conveyed in either of the
following manners: (A) all partners of Allview shall consent to the conversion
of Allview to a Maryland limited liability company, and thereafter all members
of the limited liability company shall transfer their interests to the
Partnership in consideration of the issuance to them of 165,000 Shares of MART;
or (B) title to the Property shall be conveyed and transferred to the
Partnership in consideration for (i) the assumption by the Partnership of the
mortgage currently outstanding on such Property, and (ii) the issuance by MART
to Allview of 165,000 Shares. In either case, the Property shall be conveyed in
accordance with the requirements and provisions of Section 5 hereof, and the
Shares shall be registered by MART for resale
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promptly after issuance. Jack Pechter shall notify the Partnership of the method
for transferring such Property within 60 days after the date hereof. All costs
(including without limitation the payment of all transfer and recordation taxes)
associated with any such transaction shall be borne solely by Allview and not in
any way by MART or the Partnership.
2.2 Unit Adjustment. To the extent the total mortgage debt on a
Property exceeds the amount on Schedule III, an adjustment shall be made to the
number of Units to be issued to the Contributors of the Contributed Entity
hereunder, or in the case of Allview, to the number of Shares to be issued
hereunder, by dividing the total dollar amount of the excess mortgage debt by 13
(based on the agreed upon fair market value of $13.00 per Unit), and the
quotient thereof shall be the number of Units adjusted.
2.3 Adjustments with Respect to Shares. In the event of any stock
split, stock dividend, reclassification, recapitalization or other adjustment in
respect of the outstanding Shares prior to the Closing Date, the number of Units
to be issued to the Contributors will be proportionately adjusted so that the
Units will equate to the Shares on a one-to-one basis.
3. REDEMPTION OF UNITS
Anything in the Partnership Agreement to the contrary
notwithstanding, the following provisions shall apply. (Capitalized terms used
in this Section 3 that are not otherwise defined herein shall have the meanings
assigned to them in the Partnership Agreement.)
3.1 Partner Put. Notwithstanding the provisions of Section 6.1 of
the Partnership Agreement, the Contributors and their Permitted Transferees (as
defined in Section 12.1.9 hereof) shall have the right to exercise the Partner
Put with respect to the Initial Units at any time, in whole or in part, from and
after the first anniversary of the Closing Date. Notwithstanding the provisions
of Section 6.3(a) of the Partnership Agreement, in the event of a Partner Put,
settlement for the repurchase of Units shall take place on the 30th day after
the Put Notice is given.
3.2 No Call of Initial Units. Notwithstanding the provisions of
Section 6.2 of the Partnership Agreement, the Partnership shall not have the
right to effect a Partnership Call and thereby require the repurchase of the
Initial Units held by the Contributors.
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3.3 No Installment Payments. Notwithstanding the provisions of
Section 6.3(c) of the Partnership Agreement, in the event of a repurchase of any
Units pursuant to Section 6.1 of the Partnership Agreement, the entire
Redemption Price shall be paid in cash at the time of settlement; subject to
Section 3.4 hereof, if the obligation to pay the Redemption Price has been
assumed by MART pursuant to Section 6.4 of the Partnership Agreement and MART
has made the election to pay the Redemption Price in Shares, all such Shares
issuable in respect of such redemption (subject to Section 3.4 hereof) shall be
issued at the settlement.
3.4 Limit on Redemptions. Notwithstanding the provisions of Section
3.1 hereof and Section 6.4 of the Partnership Agreement, if MART assumes the
obligation to pay the Redemption Price and elects to make such payment in
Shares, then, to the extent that the exercise of such Partner Put and the
delivery of Shares in payment of the Redemption Price will result in any person,
entity or group being the Beneficial Owner of Shares in excess of the applicable
Ownership Limit or otherwise cause such Shares to be Excess Shares, such portion
of the Partner Put shall be deemed to have been canceled and neither the
Partnership nor MART shall not be obligated to repurchase Units or to deliver
Shares in connection with such canceled portion of the Partner Put.
3.5 Registration Rights. At the Closing, MART and the Contributors
shall enter into a registration rights agreement (the "Registration Agreement")
substantially in the form attached hereto as Exhibit B.
4. OPERATION OF PROPERTY THROUGH CLOSING
Through the Closing Date:
4.1 Business Practice. Except as otherwise provided in this Section
4, the Contributors and the Contributed Entities shall cause any management
company currently managing any of the Properties (the "Management Company") to
continue to manage and operate the Properties in accordance with sound and
prudent business practices and keep the Properties and the tangible personal
property thereon in good condition and repair, ordinary wear and tear excepted.
The Contributors and the Contributed Entities shall instruct the Management
Company not to make any change in its management of the Properties or in its
normal and customary leasing and billing practices.
4.2 No Sale of Encumbrance. None of the Contributed Entities shall
sell, mortgage, pledge, hypothecate or otherwise transfer or dispose of all or
any part of the Properties or any interest therein, nor shall any Contributed
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Entity initiate, consent to, approve or otherwise take any action with respect
to zoning or any other governmental rules or regulations presently applicable to
all or any part of the Properties, nor shall any Contributor sell, mortgage,
pledge, hypothecate or otherwise transfer or dispose of all or any part of
his/her interest in any of the Contributed Entities or permit any new limited or
general partners or member to be admitted to any Contributed Entity.
4.3 New Leases; Modification. The Contributors and the Contributed
Entities shall not cause or permit the Management Company or any Contributed
Entity to terminate, modify, extend, amend or renew any Lease or Service
Contract (as those terms are defined in Section 9.19.2 and 9.20) or enter into
any new Lease or Service Contract without the prior written consent of MART;
provided, however, that the failure of MART to object to any such action within
10 days after written notice to it shall be deemed to reflect the Partnership's
consent thereto.
4.4 Termination of Management Company. Prior to the Closing Date the
Contributors shall cause the termination of all management contracts relating to
the respective Properties as of the Closing Date.
4.5 Compliance. Neither the Contributors nor the Contributed
Entities shall knowingly take or fail to take any action that will cause the
Properties to fail to comply with any federal, state, municipal and other
governmental laws, ordinances, requirements, rules, regulations, notices, codes
and orders, or any agreements, covenants, conditions, easements and restrictions
currently in effect relating to the Properties.
4.6 Notice of Inaccuracy or Incompleteness. The Contributors and the
Contributed Entities shall promptly give written notice to MART of the
occurrence of any event of which Contributors have knowledge and which may
adversely affect the completeness or accuracy of any representation or warranty
made or to be made by Contributors or the Contributed Entities under or pursuant
to this Agreement.
4.7 Access. From and after the date hereof, the Contributors and the
Contributed Entities shall cause MART and its representatives to have complete
and unencumbered access to the Properties, subject to the prior rights, if any,
of tenants; provided, however, that without the consent of the Agent (as defined
in Section 5), the representatives of the Partnership shall not disclose to any
tenant the existence of this Agreement or the transactions contemplated hereby.
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4.8 Insurance. The Contributors and the Contributed Entities shall
cause the existing insurance coverages on the Properties to be maintained in
full force and effect.
4.9 Fulfillment of Obligation. To the extent any Contributed Entity
is obligated, pursuant to any contract, agreement, covenant, lease or other
understanding entered into prior to the date hereof with any tenant, prospective
tenant, governmental subdivision or any other third party, to effect any
construction, make any improvements or take any action, the Contributors and the
Contributed Entities shall cause any such construction, improvements and/or
action to be taken, completed and fully paid for by such Contributed Entity, at
its expense, prior to the Closing Date. No such obligation shall be unfulfilled,
and no liability for or payment in respect of any such obligation shall be
unsatisfied as of the Closing Date.
4.10 Financial Statements and Reports. The Contributors and the
Contributed Entities shall cause the Partnership to be provided with financial
statements, agings of accounts receivable, rent rolls, and leasing status
reports for all of the Properties upon any reasonable request of the
Partnership, and the general partner of each Contributed Entity shall certify
that, to the best of his or its knowledge, such financial statements and other
reports are true, accurate and complete in all material respects.
5. STATUS OF TITLE TO PROPERTY
The parties acknowledge that Jack H. Pechter will serve as Agent for
the Contributors and the Contributed Entities for certain purposes specified in
this Agreement. Accordingly, references herein to the "Agent" shall refer to
Jack H. Pechter acting on behalf of the Contributors and the Contributed
Entities. If Jack H. Pechter is unable to serve in such capacity, then Martin
Pechter shall serve as the Agent in his place.
5.1 State of Title. At Closing, the Contributed Entities shall own,
beneficially and of record, good and marketable fee simple title to the
Properties, subject only to the Leases, the mortgages listed on Schedule XII
hereto (the "Mortgages") and those covenants, conditions and restrictions set
forth on Schedule XIV hereto (the "Scheduled Exceptions"). Within 30 days after
the date of this Agreement, the Partnership shall specify by notice to the Agent
those of the Scheduled Exceptions that are acceptable to the Partnership and
those of the Scheduled Exceptions that are not acceptable to the
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Partnership. The Leases, Mortgages and acceptable Scheduled Exceptions are
referred to collectively herein as the "Permitted Exceptions".
5.2 Preliminary Evidence of Title. Within 30 days after the date
hereof, MART shall have the right to obtain the following documents to evidence
the condition of the title to each of the Properties:
5.2.1 Commitments (the "Title Commitments") to the Partnership
for ALTA Form B (1987) Owner's Title Insurance Policies committing to insure, at
standard rates title to each Property as being good and marketable, subject only
to the Permitted Exceptions, in the amount of the fair market value of each such
Property, issued by the Commonwealth Land Title Insurance Company (the "Title
Insurer"). The Title Commitments shall be effective as of the Closing Date, and
shall reflect that fee simple title is held by the respective Contributed
Entity. Each Owner's Title Insurance Policy to be issued to the Partnership at
Closing pursuant to Section 7.2.2.2 below ("Title Insurance Policies") shall
contain an extended coverage endorsement over the general or standard exceptions
which are a part of the printed form of the policy and subject only to the
Permitted Exceptions. Each Title Insurance Policy shall, in addition, (A)
include provisions for co-insurance, in such amounts of liability acceptable to
the Partnership and MART; (B) not contain any exceptions for (i) liens for labor
or material, whether or not of record, (ii) parties in possession (other than
tenants under the Leases, solely as such tenants), (iii) unrecorded easements,
(iv) taxes and special assessments not shown on the public records, and (v) any
matter that the Surveys disclose and (C) provide for the following endorsements:
(i) an access endorsement insuring that there is direct and unencumbered access
to the Land from all adjacent public streets and roads, (ii) a survey
endorsement insuring that all foundations in place as of the date of such policy
are within the lot lines and applicable setback lines, that the improvements do
not encroach on adjoining land or any easements, and that there are no
encroachments of improvements from adjoining land on any or the Properties or
any part thereof, (iii) an ALTA Form 3.1 zoning endorsement insuring that the
Properties are zoned for the buildings and the operation thereof as contemplated
by the terms and provisions of this Agreement, (iv) a non-imputation
endorsement, by which the Title Insurer waives any defense based upon knowledge
of any person or entity other than the knowledge of the Partnership or its
designee(s), (v) each Property constitutes a separate lot of record and is
separately assessed for real estate tax purposes, (vi) an endorsement commonly
referred to as a "Fairway endorsement," providing among other things, that the
Title Insurer waives any defense based on a
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dissolution or termination of the insured partnership or the formation of a new
partnership solely by reason of one or more transfers of all or any part of the
partnership interests of any one or more of the general partners of the insured
to MART or the Partnership and/or any one or more of the limited partners of the
insured, and/or the transfer of any one or more of the limited partner's
interests to the current general partner, MART or the Partnership, and (vii)
such other endorsements as the Partnership and MART may reasonably require. The
cost of such Title Commitments and Title Insurance Policies shall be borne by
the Partnership, as provided in Section 7.5.
5.2.2 Written results of searches reflecting any liens,
judgements, tax liens, bankruptcies, and open dockets (the "UCC Searches"),
conducted by a company reasonably acceptable to the Partnership. The UCC
Searches shall name each Contributor, Contributed Entity and Property, and shall
search the appropriate land records and central filing office for Uniform
Commercial Code financing statements.
5.2.3 Legible copies of all documents of record referred to in
any Title Commitment or disclosed by the UCC Searches, and all other documents
evidencing or, to the extent in the possession or control of Contributors or any
Contributed Entities, relating to, matters reflected in any Title Commitment or
the UCC Searches.
5.2.4 Current ALTA/ACSM land title surveys of each of the
Properties (the "Surveys") dated after the date of this Agreement, certified to
the Partnership and the Title Insurer (and such other persons or entities as the
Partnership may designate) by a surveyor registered in the State of Maryland.
Each Survey shall also contain a surveyor's certification in substantially the
form attached hereto as Exhibit C.
5.3 Title Defects. If the Title Commitments, UCC Searches or Surveys
(or any revision or update of any of them) discloses exceptions to title other
than Permitted Exceptions or any other matter which does not conform to the
requirements of this Agreement and which could adversely affect the use of any
Property or its fair market value, the Partnership shall so notify the Agent and
the Agent shall, (i) as to any such exception or other matter of a nonmonetary
nature, within ten (10) days after the date of such notice, use reasonable
efforts to have each such unpermitted exception removed or correct such other
matter, and (ii) as to any such exception or other matter of a monetary nature,
cause such lien or encumbrance or other matter to be discharged and released, in
each case to the reasonable satisfaction of the Partnership. If, within the time
specified, the Agent fails to have each such unpermitted
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exception removed or to correct each such other matter, the Partnership may, at
its option and as its exclusive remedy, either (i) terminate this Agreement, in
which event this Agreement, without further action of the parties, shall become
null and void and neither party shall have any further rights or obligations
under this Agreement, or (ii) elect to accept such title to the Property and
discharge or release any liens, encumbrances or other matters of a monetary
nature or which may otherwise be discharged, released or removed by the payment
of a monetary sum and deduct from the number of Initial Units issuable to the
Contributors the number of Units determined by dividing such aggregate monetary
sums paid by the Partnership (plus expenses in connection therewith) by 13. If
the Partnership fails to make any such election, the Partnership shall be deemed
to have elected the option contained in clause (ii).
6. CLOSING PRORATIONS AND ADJUSTMENTS
6.1 Statement of Prorations. A statement of prorations and other
adjustments shall be prepared by the Partnership in conformity with the
provisions of this Agreement and submitted to Contributors for review and
approval not less than ten (10) days prior to the Closing Date. For purposes of
prorations, the Partnership shall be deemed the owner of the Properties on the
Closing Date. In addition to prorations and other adjustments that may otherwise
be provided for in the Agreement, the following items are to be prorated or
adjusted, as the case may require, as of the Closing Date (all such prorations
and adjustments shall be to the Initial Units to be issued to Contributors and
to the Shares to be issued to Allview in consideration for Dorsey Hall
hereunder):
6.1.1 real estate and personal property taxes and assessments
(initially prorated on the basis of 100% of the most recent ascertainable bill,
but subject to reproration upon issuance of the actual final bill therefor,
including any adjustments thereto as a result of any pending property tax
appeals, to effectuate the actual proration);
6.1.2 common area maintenance fees and reimbursements for
prior years property taxes payable by tenants; provided, however, such sums
which are due and payable to any Contributor by any tenant but uncollected as of
the Closing shall not be adjusted, but the Partnership shall cause such sums for
the period prior to Closing to be remitted to Contributors if, as and when
collected. The Partnership will make reasonable efforts to collect the same on
behalf of the Contributors.
6.1.3 the rent payable by tenants under the Leases; provided,
however, that rent and all other sums which
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are due and payable to any Contributor by any tenant but uncollected as of the
Closing shall not be adjusted, but the Partnership shall cause the rent and
other sums for the period prior to Closing to be remitted to Contributors if, as
and when collected. At Closing, Contributors shall deliver to the Partnership a
schedule of all such past due uncollected rent and other sums owed by tenants.
The Partnership shall promptly remit to Contributors any such rent or other sums
paid by scheduled tenants, but only if a deficiency in the then current rent is
not thereby created. For amounts due any Contributed Entity not collected within
two (2) months after Closing, such Contributed Entity shall have the right to
sue to collect same, but in no event may such Contributed Entity seek to evict
any tenant or terminate any Lease;
6.1.4 the full amount of security deposits and any
non-refundable cleaning fees paid under the Leases, together with interest
thereon if required by law or otherwise;
6.1.5 water, electric, telephone and all other utility and
fuel charges which are meter read will be read by the appropriate utility and
service transferred as of the Closing Date;
6.1.6 amounts due and prepayments under the Service Contracts;
6.1.7 assignable license and permit fees;
6.1.8 debt service on indebtedness secured by or otherwise
relating to the Properties;
6.1.9 other expenses of operation and similar items; and
6.1.10 any refunds of real or personal property taxes for tax
years beginning prior to the Closing Date shall belong to Contributors, and if
paid to the Partnership shall be promptly refunded by the Partnership to
Contributors in cash.
6.2 Post Closing Adjustment; Finality. Except with respect to
general real estate and personal property taxes (which shall be reprorated upon
the issuance of the actual final bills, if necessary), any proration which must
be estimated at Closing shall be reported and finally adjusted as soon as
practicable after the Closing Date; otherwise all prorations shall be final.
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6.3 Certain Deposits. Anything in this Agreement to the contrary
notwithstanding, (i) in the event Howard County, Maryland returns the $100,000
deposit (or such lesser amount as it may return) on Bethany Bridge, and (ii) in
the event any other cash deposit deposited by any Contributed Entity or any
Contributor on behalf of any Contributed Entity is returned in whole or in part,
the Partnership will, or will cause the appropriate Contributed Entity to,
return such deposit to the Agent for its distribution.
7. CLOSING
7.1 Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur at the offices of Gordon, Feinblatt,
Rothman, Hoffberger & Hollander, LLC at 10:00 a.m. within 90 days after the date
of this Agreement provided that all conditions to Closing have been satisfied or
waived, or at such other time and place as the Agent and MART shall agree in
writing, provided, however, that under no circumstances shall the Closing occur
later than June 30, 1997. The "Closing Date" shall be the date of Closing.
7.2 Closing Documents
7.2.1 Contributors. Not later than three (3) business days
prior to the Closing Date, the Contributors and Allview and Tripec,
respectively, shall deliver the following:
7.2.1.1 special warranty deeds for the Deeded
Properties, and special warranty deeds or assignments with respect to Allview;
7.2.1.2 assignments to the Partnership of all of the
interests in each of the Successor Entities;
7.2.1.3 any affidavits, certificates and other
documents (including without limitation non-imputation affidavits and/or
certificates) that are reasonably necessary for the Title Insurer to issue the
Owner's Title Insurance Policies in the form and condition required by this
Agreement;
7.2.1.4 for each Contributor that is a corporation, a
corporate resolution authorizing the transactions contemplated by this
Agreement, a certificate of good standing, a certified copy of the articles of
incorporation and bylaws, and a certificate of incumbency certifying the titles
and signatures of the corporate officers authorized to consummate the
transactions contemplated hereunder on behalf of Contributor
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and such other evidence of Contributor's power and authority as MART reasonably
requests;
7.2.1.5 for each Contributor that is a partnership or a
limited liability company, and for the Contributed Entities that are Tripec and
Allview, a resolution authorizing the Contribution in exchange for the Initial
Units (or Shares, as the case may be) and the execution of closing documents, a
certificate of good standing, a certified copy of the partnership or operating
agreement governing such Contributor and Contributed Entity, and a certificate
of incumbency certifying the titles and signatures of the general partners or
members authorized to consummate the transactions contemplated hereunder on
behalf of Contributor and Contributed Entity and such other evidence of power
and authority of the Contributor and Contributed Entity as the Partnership
reasonably requests;
7.2.1.6 for each Contributed Entity, a certified copy
of its certificate of organization and operating agreement, and a certificate of
good standing.
7.2.1.7 for each Contributor, Tripec and Allview, an
affidavit stating, under penalty of perjury, its U.S. taxpayer identification
number and that it is not a foreign person within the meaning of Section 1445 of
the Internal Revenue Code of 1986, as amended (the "Code");
7.2.1.8 a counterpart of the Partnership Agreement
executed by each Contributor;
7.2.1.9 subscription documents ("Subscription
Documents") in the form attached to this Agreement as Exhibit D executed by each
Contributor;
7.2.1.10 a letter advising tenants under the Leases of
the change in management of the Properties and directing them to pay rent to the
Partnership or as the Partnership may direct;
7.2.1.11 an updated Rent Roll (as defined in Section
9.19.2) as of the Closing Date (including a listing of all delinquent and
prepaid rents);
7.2.1.12 all of the original Leases and written Service
Contracts, and any and all building plans, surveys, site plans, engineering
plans and studies, utility plans, landscaping plans, development plans,
specifications, drawings, marketing artwork, construction drawings, soil tests,
all keys for the Properties, with identification of the lock to which each such
key relates, complete warranty book including all
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contractors and subcontractors and other documentation concerning all or any
part of the Property to the extent that any of the foregoing documents are in
the possession or control of Contributors;
7.2.1.13 any bonds, warranties or guaranties which are
in any way applicable to the Properties or any part thereof to the extent any of
the foregoing are in the possession or control of Contributors;
7.2.1.14 a letter (a "Tenant Estoppel Letter") in the
form included herewith as Exhibit I, dated not more than thirty (30) days prior
to the Closing Date, from each tenant under each Lease described in Schedule
VII, and from each tenant under each Lease entered into after the date of this
Agreement. The Tenant Estoppel Letter shall be fully completed in a manner
reasonably satisfactory to MART, and with no modifications other than those
reasonably acceptable to MART. In the event Tenant Estoppel Letters in form and
content reasonably satisfactory to MART are not received by MART and the
Partnership within the time prescribed herein from (i) all tenants occupying
4,000 square feet or more, and (ii) tenants representing 95% or more of the
remaining tenants on the Properties, then the Partnership and MART, at their
option and as their exclusive remedy, upon notice to the Agent, may immediately
terminate this Agreement. In the event that Tenant Estoppel Letters are received
from (i) all tenants occupying 4,000 square feet or more, and (ii) tenants
representing 95% or more of the remaining tenants on the Properties, then the
Partnership and MART, as their exclusive remedy, may either (a) require the
Representors (as defined in Section 9) to personally certify in form and content
reasonably acceptable to MART, to the best of their knowledge, the information
required to be in the Tenant Estoppel Letter, or (b) may terminate this
Agreement upon notice to the Agent.
7.2.1.15 a certificate in the form attached hereto as
Exhibit F (a "Lender's Estoppel Certificate") from each mortgagee of each
Contributed Entity and Property and from any other person or entity that has, or
may have as a result of the transactions contemplated hereby, a security
interest in any of the Properties, failing which the Partnership and MART, at
their option and as their exclusive remedy, may terminate this Agreement upon
notice to the Agent.
7.2.1.16 an opinion of Stuart Kaplow, Esq.
substantially in the form attached hereto as Exhibit G.
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7.2.1.17 all other documents reasonably required by
MART in connection with the transactions contemplated by this Agreement.
7.2.2 Partnership. At the Closing, the Partnership shall
deliver the following:
7.2.2.1 Initial Units, as required by Sections 1 and 2
of this Agreement;
7.2.2.2 the Registration Agreement;
7.2.2.3 the Partnership shall obtain an Owner's Title
Insurance Policy (or marked-up commitment therefor) for each Property insuring
fee simple title to the each such Property in the respective Contributed Entity
set forth opposite the name of such Property on Schedule III in the amount of
the fair market value of such Property subject only to Permitted Exceptions, and
otherwise in the form and condition required by this Agreement;
7.2.2.4 an executed counterpart of the Partnership
Agreement executed by MART, as the general partner of the Partnership;
7.2.2.5 for MART, a resolution of its Board of Trustees
authorizing the transactions contemplated hereby and a certificate of good
standing from the State Department of Assessments and Taxation of the State of
Maryland;
7.2.2.6 for the Partnership, a certified copy of the
Partnership Agreement and a Certificate of Limited Partnership certified by the
Secretary of State of Maryland; and
7.2.2.7 an opinion of Gordon, Feinblatt, Rothman,
Hoffberger & Hollander, LLC substantially in the form attached hereto as Exhibit
H.
7.3 Conditions to Closing. At the option of the Partnership, the
obligations of MART and the Partnership under this Agreement are subject to the
satisfaction of the following conditions (unless waived):
7.3.1 Each Contributed Entity shall have terminated all
existing management contracts with any Management Company.
7.3.2 Each and every representation and warranty of the
Contributors and the Contributed Entities is
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true, correct and complete as of the date hereof and at all times through the
Closing Date.
7.3.3 All tenants shall be paying rental on all Properties as
set forth in the Tenant Estoppel Letter approved by MART and sent to each such
tenant.
7.3.4 The Contributors and Contributed Entities shall have
fully performed and satisfied each and every obligation, term and condition to
be performed and satisfied by them under this Agreement.
7.3.5 All consents, authorizations, certificates, Tenant
Estoppel Letters, Lender's Estoppel Certificates and approvals required to be
obtained by the Contributors and the Contributed Entities in connection with the
Agreement shall have been obtained, including but not limited to all consents,
approvals and authorizations (without any conditions or requirements) required
to be obtained under any mortgage, deed of trust or other instrument relating to
any of the Properties or pursuant to which any of the Contributed Entities or
the Contributors are bound in order to complete the transactions contemplated
under this Agreement.
7.4 The obligations of the Contributors and the Contributed Entities
under this Agreement are subject to one or more of the following conditions
(unless waived):
7.4.1 Each of the representations and warranties of the
Partnership contained in this Agreement is true, correct and complete as of the
date hereof and at all times through the Closing Date.
7.4.2 The Partnership and MART shall have fully performed and
satisfied each and every obligation, term and condition to be performed and
satisfied by them under this Agreement.
7.4.3 MART shall form the Partnership and shall have
transferred to the Partnership, and shall have caused each of its subsidiaries
to have transferred to the Partnership, beneficial ownership of all of their
respective real properties.
7.4.4 All consents, authorizations and approvals required to
have been obtained by MART and the Partnership in connection with this Agreement
shall have been obtained.
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7.5 Transaction Costs.
7.5.1 The Partnership shall bear and pay the survey costs and
the cost of the premium for the Title Commitment and Title Insurance Policy for
each Property; the Contributors shall bear and pay all costs incurred to repay
any liens other than for mortgage indebtedness. The Partnership shall bear the
cost of its due diligence activities. The Contributors will pay all costs
(including any taxes) in connection with the transfer by the Contributors and
the Contributed Entities of the Deeded Properties. To the extent any other
transfer or recordation taxes are payable in respect of any other real property,
the Partnership may, at its option, either pay such taxes or terminate this
Agreement.
7.5.2 The Contributors will pay one-half of any assumption
fees, lender's consent fees or other such charges ("Consent Fees") imposed by
Canada Life Insurance Company or its agent or affiliates in connection with the
transactions contemplated hereby; the Partnership will pay all other such
Consent Fees imposed by all other lenders in connection with the transactions
contemplated hereby.
7.5.3 At the option of the Contributors, the Partnership will
pay some or all of the transfer taxes and/or the Consent Fees payable by the
Contributors hereunder and will deduct from the Initial Units issuable to the
Contributors pursuant to Section 1.3 hereof a number of Initial Units equal to
the quotient obtained by dividing the amount of such transfer taxes and/or
Consent Fees paid by the Partnership by 13.
7.5.4 Except as specified above and elsewhere in this
Agreement, each party shall bear and pay its expenses in connection with this
Agreement and the transactions contemplated herein, including the fees of their
respective professional advisors.
8. CASUALTY LOSS AND CONDEMNATION
8.1 Casualty. If, prior to Closing, the Properties or any part
thereof shall be destroyed or materially damaged by fire or other casualty, the
Partnership may, at its option, either (i) require the appropriate Contributed
Entity and the related Contributors to repair such damage prior to Closing to
the reasonable satisfaction of the Partnership, at no cost or expense to MART or
the Partnership, in which event the proceeds of any insurance applicable thereto
shall be paid to the Contributed Entity or to the Agent on behalf of the
Contributors, or (ii) itself settle the loss under all policies of insurance
applicable to the destruction or damage and receive the proceeds
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of insurance applicable thereto, and the Contributed Entity shall, at Closing
and thereafter, execute and deliver to the Partnership all required proofs of
loss, assignments of claims and other similar items.
8.2 Condemnation. If, prior to Closing, the Properties or any part
thereof shall be condemned, the Partnership may (i) terminate this Agreement, or
(ii) complete the transactions contemplated by this Agreement notwithstanding
such condemnation. If the Partnership elects to complete the transactions
contemplated hereby, the Partnership shall be entitled to receive the
condemnation proceeds and the Contributed Entity shall, at Closing and
thereafter, execute and deliver to the Partnership all required assignments of
claims and other similar items. If the Partnership elects to terminate this
Agreement, then upon written notice to the Agent and without further action of
the parties, this Agreement shall become null and void and no party shall have
any rights or obligations under this Agreement.
9. REPRESENTATIONS AND WARRANTIES OF THE REPRESENTORS
NOTE: The representations and warranties contained in this Section
shall expire and terminate in accordance with the provisions of Section 9.34
hereof.
Each of Jack H. Pechter, Martin Pechter, Jeffrey Pechter and each
Contributed Entity (excluding natural persons that are general partners of
Contributed Entities but that are not also Representors) (individually and
collectively referred to as the "Representors"), jointly and severally,
represent and warrant to the Partnership and to MART that, except (i) as
described on the Disclosure Schedule attached hereto and made a part hereof or
(ii) as otherwise disclosed in writing by the Representors to MART or the
Partnership, the following are complete and accurate as of the date of this
Agreement and as of the Closing Date.
9.1 Organization. Each Contributed Entity is duly formed and validly
existing under the laws of the state of its organization, and has all requisite
power and authority to own and operate its Properties in the manner in which it
is being owned and operated. Each Contributed Entity is duly qualified and
authorized to transact the business which it presently conducts in all
jurisdictions in which such qualification is required.
9.2 Authority. This Agreement and the documents and instruments
executed and delivered in connection herewith constitutes the legal, valid and
binding obligations of the
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Representors, enforceable in accordance with their respective terms. To the
knowledge of the Representors, no consent, authorization, approval or waiver by
any governmental agency or authority or by any third party is required in
connection with the execution and delivery of, and the performance of the
obligations to be performed under, this Agreement and the documents and
instruments executed and delivered in connection herewith, or if any of the
foregoing is required, it has been obtained.
9.3 Interest in Contributed Entities. Each Representor is the record
and beneficial owner of, and has good and marketable title to, the interests in
the Contributed Entities set forth opposite such Representor's name on Schedule
II, free and clear of all liens, options, adverse claims or encumbrances, and
such interest is not the subject of any agreement (other than this Agreement)
providing for the sale, assignment or transfer thereof. Such Representor has the
full power, capacity and authority to sell, transfer and assign the legal and
equitable ownership of his/her or its interest to the Partnership as provided in
this Agreement. Schedule II is true, complete and accurate in all respects as to
each such Represen- tor, and the Representors have not entered into any
agreement and have no knowledge of any agreement or understanding to issue any
additional interests in any Contributed Entity to any other person or entity.
9.4 Investment. Each Representor that is a natural person hereby
represents and warrants that:
9.4.1 Such Representor is acquiring the Units issued to him
hereunder for investment for his own account and not as an agent or nominee for
any other person or entity.
9.4.2 The Representors will not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of such
Units (each such action, a "Transfer") unless (1) such Transfer complies with
the provisions of the Partnership Agreement, (2) either (a) the Transfer is
pursuant to an effective registration statement under the Securities Act of
1933, as amended, and the rules and regulations in effect thereunder (the
"Act"), or (b) the Representor shall have furnished MART and the Partnership
with an opinion of counsel which opinion of counsel shall be reasonably
satisfactory to the Partnership, to the effect that no such registration is
required because of the availability of an exemption from registration under the
Act, and (3) such Transfer shall be in compliance with any applicable state or
foreign securities and "blue sky" laws.
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9.4.3 The Representor has been advised by the Partnership
that: (1) neither the offer nor sale of the Units have been registered under the
Act or any state or foreign securities and "blue sky" laws; (2) the Units are
characterized as a "restricted security" under the Act inasmuch as it is being
acquired from the Partnership in a transaction not involving a public offering;
(3) the Units must be held indefinitely and Contributor must continue to bear
the economic risk of the investment in the Units unless the offer and sale of
such Units are subsequently registered under the Act or an exemption from such
registration is available and all applicable state or foreign securities and
"blue sky" laws are complied with; (4) it is not anticipated that there will be
any public market for the Units in the foreseeable future; (5) Rule 144
promulgated under the Act is not presently available with respect to the offers
or sales of any securities of the Partnership and the Partnership has made no
covenant to make such Rule available nor has it made any covenants with respect
to other rules by which offers or sales may be made; (6) when and if the Units
may be disposed of without registration under the act in reliance on Rule 144,
such disposition can be made only in limited amounts in accordance with the
terms and conditions of such Rule; and (7) if the Rule 144 exemption is not
available, public offer or sale of the Units without registration will require
the availability of another exemption under the Act.
9.4.4 The Representor is (A) an "accredited investor" as
defined in the Act and (B) has such knowledge, skill and experience in business,
financial and investment matters so that it is capable of evaluating the merits,
risks and consequences of an investment in the Units and is able to bear the
economic risk of loss of this investment.
9.4.5 The Representor has been afforded (a) the opportunity to
ask such questions as he has deemed necessary of, and to receive answers from,
representatives of the Partnership concerning an investment in the Units and the
merit and risks of investing in the Units, and (b) access to information about
the Partnership's financial condition, business, results of operations and
prospects sufficient to enable him to evaluate his investment in the Units.
9.5 Title to the Properties. To the knowledge of the Representors,
as of the date which is 10 days after the date of the Title Commitments and as
of the Closing Date, each Contributed Entity is the sole owner beneficially and
of record of good, marketable and insurable fee simple title to the Properties
as set forth on Schedule III free and clear of all liens, claims or encumbrances
except the Permitted Exceptions, and Schedule III is true, accurate and complete
in all material
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respects. Between the date hereof and the Closing Date, no liens, claims or
encumbrances will be created or permitted to be created on any Property other
than the Permitted Exceptions. Prior to or at the Closing all monetary
encumbrances on any Property, other than the Permitted Exceptions, shall be duly
canceled, removed and discharged of record, and proof thereof satisfactory to
the Title Insurer, MART and the Partnership shall be delivered to the
Partnership. Except for tenants, there are no parties in possession of any part
of the Properties as of the Closing Date, and there are no other rights of
possession which have been granted to any third parties.
9.6 No Defaults. (i) To the knowledge of the Representors, the
Representors are not in default of any of their obligations under any contract,
certificate, affidavit or covenant affecting title to the Properties or to their
interest in any Contributed Entity; (ii) there are no contracts or agreements,
such as maintenance, service, or utility contracts affecting the Properties
other than the Service Contracts, and, to the knowledge of the Representors, no
party to such contracts is in default or breach under the terms and conditions
thereof; and (iii) except for the Permitted Exceptions and Leases, there are no
contracts, agreements or obligations of any kind or nature relating to the
Properties and to which the Contributed Entities will be bound or the Properties
will be subject after the Closing except as expressly described in the
Disclosure Schedule attached hereto.
9.7 No Litigation; No Condemnation. There are no actions, suits,
proceedings or claims pending, or to the knowledge of the Representor,
threatened or contemplated, with respect to or in any manner affecting the
Properties, the Contributed Entities or the Representor's interest therein; or
the ability of the Representors to complete the transactions contemplated by
this Agreement or which could prevent Representors from satisfying its
obligations under this Agreement. The Representors have not received notice of
any pending or threatened condemnation or similar proceedings or special
assessments affecting the Properties, or any part thereof.
9.8 No Violation. Neither the execution and delivery of this
Agreement and the documents and instruments executed and delivered in connection
herewith nor the consummation of the transactions contemplated hereby or the
operation of any Property will: (i) conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default under, any agreement
or instrument to which the Representor is a party or is subject, or to the
knowledge of the Representors, any Contributed Entity is a party or to which any
Property or any Contributed Entity is subject; (ii) violate
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any agreement, restriction, easement, restrictive covenant, or instrument to
which the Representor, or to the knowledge of the Representors any Property or
any Contributed Entity, is subject; (iii) to the knowledge of the Representors,
constitute a violation of any applicable code, resolution, law, statute,
regulation, ordinance, rule, judgment, decree or order; (iv) with respect to the
Contributed Entities, violate any provision of the charter, bylaws or other
organizational document; (v) except as to any indebtedness in respect of which
the consent of the lender shall have been obtained prior to the Closing Date,
and except as described on the Disclosure Schedule or as disclosed in writing by
the Representors to MART or the Partnership, result in the acceleration of any
indebtedness or any encumbrance pertaining to any Contributed Entity or any
Property, or the cancellation of any contract or Lease pertaining to any
Property; or (vi) except as to any indebtedness in respect of which the consent
of the lender shall have been obtained prior to the Closing Date, and except as
described on the Disclosure Schedule or as disclosed in writing by the
Representors to MART or the Partnership, result in the creation of any
encumbrance upon any Property or on the Representor's interest in a Contributed
Entity. The Representors have not received any written notice of any violation
(both as to condition and use) of any applicable laws, statutes, ordinances,
codes (including, but not limited to, zoning, building, subdivision, pollution,
environmental protection, water disposal, health, fire and safety engineering
codes, and laws and regulations with respect to the submetering of any utilities
serving any Property), and the rules and regulations of, by governmental
authority having jurisdiction over the Properties.
9.9 Required Obligations. Each of the Contributed Entities has paid
and performed all obligations required to have been paid or performed prior to
the date hereof and prior to the Closing Date, including but not limited to all
principal installments, interest payments, penalties and other charges in
connection with all indebtedness relating to or secured by any of the Properties
or an interest in any of the Properties.
9.10 Condition of Properties. Except as disclosed on the Disclosure
Schedule, the Representors have not been notified that the structural,
mechanical, electrical, plumbing, roofing and other major systems on each of the
Properties and items of equipment and components located thereon, require to be
replaced or are in need of material repair.
9.11 [Intentionally omitted]
9.12 Utilities. To the knowledge of the Representors: usable
sanitary and storm sewers and public water,
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and electrical utilities (collectively, the "Utilities") of adequate capacity
required for the operation of the Properties, are installed in, and are duly
connected to, the Properties and can be used without any charge except the
normal user charges for sanitary sewers and the normal and usual charges imposed
for public water, gas and electric utilities.
9.13 Zoning. To the knowledge of the Representors, the Properties
are currently located in the areas zoned for its current use, as indicated on
the Disclosure Schedule hereto, which classification permits the development,
use and operation of the improvements on such Properties as such improvements
currently are being used without special exception or permit. The Representors
have no knowledge of any threat of, and has not received written notice of, any
proceeding to change adversely or down-zone the existing zoning classification
as to any portion of any Property.
9.14 Improvements. To the knowledge of the Representors, all
improvements on the Properties have been constructed in accordance with, and
comply with, all requirements of all applicable laws, ordinances, regulations
and orders, including without limitation applicable zoning, building and fire
safety codes and all restrictive covenants, if any, and other easements,
encumbrances or agreements affecting title to any Properties or improvements.
9.15 Environmental Matters. Certain capitalized terms used in this
Section are defined in Subsection 9.15.10.
9.15.1 To the knowledge of the Representors, each Contributed
Entity and Property is in full compliance with all applicable Environmental
Laws, which compliance includes, but is not limited to, the possession by each
Contributed Entity of all permits and other governmental authorizations required
under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Representors have not received any communication
(written or oral), whether from an applicable authority, citizens group,
employee or otherwise, that alleges that any Contributed Entity or Property is
not in such full compliance. All permits and other governmental authorizations
currently held by each Contributed Entity pursuant to Environmental Laws are
identified on Schedule V hereto.
9.15.2 To the knowledge of the Representors, there have been
no Releases, discharges, emissions or disposal of Hazardous Materials on or
under any Property that have not been remediated to the satisfaction of the
applicable authority with jurisdiction over said Release, discharge,
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emission, or disposal. Neither the business of any Contributed Entity nor any
Property is, nor to the knowledge of the Representors contains, a treatment,
storage, or disposal facility as defined by the federal Resource Conservation
and Recovery Act, 42 U.S.C ss. 6901 et seq. or the analogous state law. To the
knowledge of the Representors, no person, including but not limited to the
Representors, the Partnership or MART, will be required to conduct closure, post
closure, or corrective action with respect to any Property of the business of
any Contributed Entity pursuant to the Resource Conservation and Recovery Act or
the analogous state law, as a result of activities at any Property or the
business of any Contributed Entity prior to the Closing Date.
9.15.3 Without in any way limiting the generality of the
foregoing, to the knowledge of the Representors, there are/is no: (i) on site
locations where Hazardous Materials have been disposed of or Released, (ii)
underground storage tanks located on any Property, (iii) asbestos contained in
or forming part of any building, building component, structure or office space
on any Property, or (iv) polychlorinated biphenyls used or stored on any
Property.
9.15.4 The Representors have not received any written request
for information, or been notified that it is a potentially responsible party,
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), or any similar state, local or foreign law with
respect to any real property owned or leased by it.
9.15.5 The Representors (i) have delivered to MART and the
Partnership, prior to the date hereof, true, complete and correct copies and
results of any reports, studies, analysis, tests or monitoring, and any other
information or data, possessed or initiated by or in the control of the
Representors pertaining to Hazardous Materials in, on or under any Property or
concerning any Contributed Entity's compliance with Environmental Laws; (ii)
except as disclosed in writing to MART and the Partnership, have no knowledge of
any violation or claim of violation of or noncompliance with any Environmental
Law, or any other claim pertaining to Hazardous Materials in, or under any
Property or pertaining to any Environmental Law applicable to any Property and,
to the Representor's knowledge, there is no basis for any of the foregoing; and
(iii) represent that, to the knowledge of the Representors, no Representor or
Contributed Entity has, directly or indirectly, taken any action with respect to
any Property that could result in any violation of a noncompliance with any
Environmental Law or in a claim under any Environmental Law.
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9.15.6 For purposes of this Agreement, (i) "Environmental Law"
means all applicable federal, state, local and foreign statutes, laws,
ordinances, rules, regulations, decrees, judgments, orders, and common law
standards or decisions relating to pollution or protection of the environment
(including without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata, or Natural Resources) including, without
limitation, laws and regulations relating to emissions, discharges, Releases or
threatened Releases or Hazardous Materials (including but not limited to CERCLA;
the Solid Waste Disposal Act, 42 U.S.C. ss.ss. 6901 et seq.; the Emergency
Planning and Community Right-To-Know Act of 1986, 42 U.S.C. ss. 11001 et seq.;
the Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. ss.ss. 1251 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. ss.ss. 1801 et seq.; the Clean Air Act,
42 U.S.C. ss.ss. 7401 et seq.; and the Resource Conservation Recovery Act, 42
U.S.C. ss.ss. 6901 et seq.); (ii) "Hazardous Materials" shall mean any waste
(including solid wastes), toxic substance, hazardous substance, pollutant,
contaminant, oil, asbestos, polychlorinated biphenyl, non- indigenous
radioactive material, including but not limited to any substance defined as such
or regulated as such under any Environmental Law, or for which a person may be
subject to liability under any Environmental Law; and (iii) "Release" means any
release, spill, emission, discharge, leaking, pumping, injection, deposit,
disposal or discharge into the environment (including without limitation,
ambient air, surface water, groundwater, and surface and subsurface strata) or
into or out of any property, including the movement of Hazardous Materials
through or in the air, soil, surface water, groundwater or property.
9.16 Insurance. Schedule VI contains a complete and correct
description of all policies of insurance presently maintained by the Contributed
Entities with respect to any Property and the operation thereof. To the
knowledge of the Representors, the Contributed Entities and the Properties are
in compliance with the requirements of each such policy, there is not violation
of any of the provisions of the insurance policies, and all of such insurance
policies are in full force and effect. The Representors have not received from
any insurance company which carries underwriters insurance on any Property, or
any Board of Fire Underwriters, any notice of any defect or inadequacy in
connection with any Property or its operation which, since the date of such
notice, has not been corrected.
9.17 Management. Except as disclosed on the Disclosure Schedule, on
the Closing Date, there will be no contract or agreement in effect between
Representors and any third party for the management or leasing of any Property
except
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the Management Contract (as defined in Section 12.2.4), and there shall be no
leasing commissions due and owing, or to become due and owing, in connection
with any of the Leases.
9.18 Compliance. To the knowledge of the Representors, the
Contributors and the Contributed Entities have complied in all material respects
with all laws, ordinances, rules, regulations and orders of all governmental
authorities applicable to the ownership, management, operation, construction,
maintenance and repair of any Property.
9.19 Leases; Rent Rolls.
9.19.1 Copies of all leases for each of the Properties and all
parts thereof, as amended through the date hereof ("Leases") have been made
available to MART and the Partnership; such copies are and shall be, in all
material respects, true, accurate and complete records of all agreements and
understandings with respect to the use or lease of any portion of any of the
Properties or otherwise constituting leases that are currently outstanding (as
referenced on the Rent Roll) including all amendments and modifications thereto.
9.19.2 Schedule VII (the "Rent Roll") is a true, complete and
correct list of all current Leases for the Properties or any part thereof. To
the knowledge of the Representor, the Rent Roll contains a summary of all Leases
that is true, complete and correct in all material respects.
9.19.3 To the knowledge of the Representors, each of the
Leases is in full force and effect, constitutes the legal, valid and binding
obligation of the tenant thereunder, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy and similar laws
affecting the enforcement of creditors' rights generally or equitable
considerations which may affect a court's exercise of its equitable powers, and
has not been modified, amended or extended.
9.19.4 To the knowledge of the Repre- sentors, none of the
tenants is in default in the performance or observance of any of the terms,
covenants or conditions to be kept, observed or performed by it under its Lease
and no event has occurred which, with the lapse of time or the giving of notice
or both, would constitute a default thereunder.
9.19.5 No tenant has an option or right of refusal to purchase
any Property or any part thereof;
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9.19.6 Except as specified in the Tenant Estoppel Letter
approved by MART and sent to a tenant, no tenant is entitled to any rebate,
concession, deduction or offset.
9.19.7 Except as specified in the Tenant Estoppel Letter
approved by MART and sent to a tenant, no tenant has paid any rent, additional
rent or other charge of any nature for a period of more than thirty (30) days in
advance.
9.19.8 Except as specified in the Tenant Estoppel Letter
approved by MART and sent to a tenant, all tenants are paying full rental under
all Leases.
9.19.9 To the knowledge of the Representors, no tenant has any
claim or basis for any claim for reduction, deduction or set-off against the
landlord or the rent under such Lease.
9.19.10 To the knowledge of the Representors, no tenant has
given the Representors or any Contributed Entity oral or written notice of any
intent to terminate its Lease or vacate its premises prior to the end of the
stated term thereof or otherwise to cease occupancy of its premises.
9.19.11 To the knowledge of the Representors, the landlord
under each of the Leases has performed all obligations, including repairs, if
any, required to be performed by it, and is not in default under any of the
Leases.
9.19.12 Except as disclosed in the Disclosure Schedule with
respect to rent payable to a mortgagee of any Property, the landlord named in
each of the Leases has the sole right to collect all rents under the Lease for
that Property and all parts thereof, and neither such right nor any of the
Leases has been assigned, pledged, hypothecated or otherwise encumbered.
9.19.13 The Representors have not received notice, and has no
knowledge, that any default exists under any Lease by the landlord thereunder,
and, to such Representor's knowledge, no event has occurred which with the lapse
of time or the giving of notice or both would constitute a default thereunder.
9.20 Service Contracts. Schedule IX is a list of all employment,
union, purchase, service and maintenance agreements, leasing agreements, listing
agreements, equipment leases and any other agreements, contracts, licenses and
permits of (i) each Contributed Entity other than Allview and Tripec, and (ii)
affecting or pertaining to the Properties or any part
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thereof(including the Deeded Properties and Dorsey Hall (the "Service
Contracts"). The Representors are not party to any licenses or leases of
personal property or any other contracts or agreements, written or oral, of any
kind or character, relating to the management, operation, maintenance or repair
of any Property, or otherwise, except for the Leases and the Service Contracts.
To the knowledge of the Representors, the Contributors and the Contributed
Entities have performed all obligations required to be performed by them and are
not in default under any of the Service Contracts. To the knowledge of the
Representors, each of the Service Contracts is in full force and effect and
constitutes the legal, valid and binding obligation of the respective parties
thereto, enforceable in accordance with its terms, and has not been modified,
amended or extended.
9.21 Permits. To the knowledge of the Repre- sentors, all permits,
licenses inspections and other approvals from all applicable governmental
authorities having jurisdiction over the Contributed Entities and the Properties
that are necessary in connection with the operation of the Contributed Entities
and the use, ownership and operation of the Properties as they are currently
used, have been obtained and are in full force and effect.
9.22 Financial Statements. Representors have delivered to the
Partnership the Financial Statements (as defined in Section 12.2.1) and the
related statements of income, changes in equity, and cash flow and all schedules
and the notes thereto. The Financial Statements: (i) present fairly the
financial condition and the results of operations, changes in equity, and cash
flow of each Contributed Entity or Property, as the case may be, as at the
respective dates of and for the periods referred to in such Financial
Statements, all in accordance with generally accepted accounting principals and
standards; (ii) reflect the consistent application of such accounting principles
throughout the periods involved and for each and all Contributed Entities and/or
Properties; and (iii) are true, complete and correct. Since the latest date of
the Financial Statements, there have been no changes in any of the accounting
policies, practices or procedures of any Contributed Entity.
9.23 Undisclosed Liabilities. Schedule XII hereto is a true,
complete and accurate description of all debts, liabilities and obligations of
each of the Contributed Entities and of or relating to each of the Properties.
There are no debts, liabilities or obligations (whether known or unknown,
disputed or undisputed, fixed, contingent or otherwise) associated with or
relating to any of the Contributed Entities or the Properties, or secured by any
of the Contributed Entities or
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by any of the Properties, other than those specified and described on Schedule
XII hereto.
9.24 Contracts. Attached hereto as Schedule X is a complete and
accurate list of all contracts, agreements or understandings (whether or not in
writing), other than the Leases and Service Contracts, relating to any of the
Properties, or to which any of the Contributed Entities (other than Allview and
Tripec) is a party or by which it or any of the Properties (including the Deeded
Properties and Dorsey Hall) is bound.
9.25 Labor Unions. No Contributed Entity is a party to any contract
or agreement with any labor union.
9.26 Employee Benefit Plans; Labor Matters. Except as described on
Schedule XI hereto, Representors and each entity within a controlled group or
under common control with a Representor within the meaning of Section 414(b) or
(c) of the Code ("Controlled Group Members"): (i) has no employees and does not
now and never has sponsored or contributed to any employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended; and (ii) does not and never has sponsored or contributed to
any other plan or arrangement which provides any fringe benefits of any sort to
any employee. To the extent the Partnership, MART or any of their affiliates
employs, or to the extent any Contributed Entity continues to employ, any person
previously employed by any Representor or Controlled Group Member, it will not
incur any obligation, liability or expense relating to or arising out of the
previous employment of such employee or any claim in connection therewith. No
entity that was ever a Controlled Group Member ever sponsored or contributed to
any defined benefit pension plan covered by Title IV of ERISA.
9.27 [Intentionally Omitted]
9.28 Taxes. The Representors have furnished or made available to
MART complete and accurate copies of all federal, state and local tax returns
filed and required to be filed by each of the Contributed Entities for the years
of 1993, 1994 and 1995; such tax returns are true, complete and accurate in all
respects. The tax returns for the 1996 year will be prepared and filed prior to
the time that it is required to be filed, and a copy will be furnished to the
Partnership promptly after it is filed; such tax return will be true, complete
and accurate in all respects. All tax returns for federal, state and local
income, excise, sales and use, personal property and franchise taxes required by
law to be filed by the Contributed Entities prior to the date of this Agreement
have been filed, and are complete and accurate. All taxes payable with respect
to any
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periods prior to the Closing Date, whether or not disputed, including all real
property taxes and other assessments against all properties, payroll,
withholding, employment, social security, workers compensation, etc., have been,
or by the Closing will be, paid in full.
9.29 Special Filings. To the knowledge of the Representors, the
Representors are not required to submit any notice, report or other filing to
any governmental or regulatory authority in connection with the execution,
delivery or performance of this Agreement or any document or instrument executed
and delivered in connection herewith or the consummation of the transactions
contemplated hereby other than the filing of the tax returns required by the
terms of this Agreement; and no consent, approval or authorization of any
governmental or regulatory authority is required to be obtained by the
Representors in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby.
9.30 All Assets. The only assets owned by the Contributed Entities
(other than cash) (other than Allview and Tripec) immediately prior to the
Closing will be the Properties, and the only assets owned by the Successor
Entities at any time prior to the Closing shall be the Properties. The
Contributed Entities have not assumed and are not liable for any obligation
whether direct, indirect, contingent, fixed or unliquidated, and have not
guaranteed or become surety for any obligations except as disclosed in the
Financial Statements.
9.31 Books and Records. The books and records of each Contributed
Entity, all of which have been or will be made available to MART and the
Partnership, are, and will be at all times, complete and correct in all material
respects. All of such books and records shall be delivered to MART prior to the
Closing.
9.32 No Brokers. The Representors have not dealt with any agent,
broker or other person acting pursuant to express or implied authority of any
Representor, and no person or entity is entitled to a commission or finder's fee
in connection with the contribution described by this Agreement or will be
entitled to make any claim against MART, the Partnership or any Contributed
Entity for a commission or finder's fee by reason of a Representor having
engaged him/her/it.
9.33 All Material Information. With respect to all representations
and warranties made herein to the knowledge of the Representors, the
Representors hereby represent and warrant that to their knowledge no such
representation or
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warranty made in this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein not misleading or necessary in order to provide the
Partnership or MART with adequate information. With respect to all other
representations and warranties made by the Representors herein, the Representors
represent and warrant that no such representation or warranty contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein not misleading or necessary in
order to provide the Partnership or MART with adequate information. The
Representors have not failed to disclose any material fact known to a
Representor that is necessary to make the statements by any Representor herein
or in any schedule or exhibit hereto or in any other instruments delivered in
connection herewith not misleading. The Representors have no knowledge or
information of any facts, circumstances or conditions which do or could
materially and adversely affect any Property or the operation or intended use of
the same.
9.34 Non-Survival of Certain Warranties.
(a) Except as provided in Sections 9.34(b), (c) and (d)
hereof, the representations and warranties of Representors made in this Section
9 shall terminate and expire one year after the Closing Date and the
consummation of the transactions contemplated by this Agreement.
(b) Notwithstanding Section 9.34(a) hereof, the
representations and warranties of the Representors made in Sections 9.1, 9.2,
9.3, 9.4, 9.7, 9.8, 9.9, 9.15.5, 9.17, 9.22, 9.23, 9.24, 9.28, 9.29, 9.30, 9.31,
9.32 and 9.33 shall survive the Closing and consummation of the transactions
contemplated by this Agreement, and shall remain in full force and effect until
the applicable statute of limitations relating thereto.
(c) Notwithstanding Section 9.34(a) hereof, and subject to
Section 9.34(d) hereof, the representations and warranties of the Representors
made in Sections 9.6, 9.19.1, 9.19.8, 9.19.11 and 9.20 shall survive the Closing
and consummation of the transactions contemplated by this Agreement and shall
remain in full force and effect for a period of two years from and after the
Closing Date, after which time such representations and warranties shall
terminate and expire.
(d) Notwithstanding any other provision of this Agreement,
including Sections 9.34(a), (b) and (c) hereof, to the extent any representation
or warranty is fraudulently made by any of the Representors or shall constitute
fraud, such representation or warranty, and all rights of the Partnership and
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MART in respect of any such fraudulent representation or warranty, shall survive
the Closing and consummation of the transactions contemplated by this Agreement,
and shall remain in full force and effect until the expiration of any and all
statutes of limitations under which any action may be brought for any reason
under or in respect of this Agreement.
9.35 Knowledge of Breach. Except for any breach of the
representations and warranties contained in Section 9.23 hereof, neither MART
nor the Partnership shall assert a claim against the Representors or the
Investors (as hereinafter defined) for breach of a representation or warranty to
the extent the Partnership or MART has knowledge on the Closing Date that such
representation or warranty made by the Representors is false; the preceding,
however, shall not affect the rights of the Partnership or MART to assert any
claims against the Repre- sentors or the Investors in respect of any breach of
covenant or agreement hereunder or in respect of any liability or obligation to
any third party not covered by the indemnity provided by MART and the
Partnership in Section 14.3 hereof.
10. REPRESENTATIONS AND WARRANTIES OF INVESTORS
Each Contributor other than the Representors (each an "Investor"
and collectively "Investors") represents and warrants to the Partnership and to
MART that, except (i) as described on the Disclosure Schedule attached hereto
and made a part hereof or (ii) as otherwise disclosed in writing by the
Representors or the Investors to MART or the Partnership, the following are
complete and accurate as of the date of this Agreement and as of the Closing
Date with respect to such Investor.
10.1 Authority. This Agreement and the documents and instruments
executed and delivered in connection herewith constitutes the legal, valid and
binding obligations of such Investor, enforceable in accordance with their
respective terms. No consent, authorization, approval or waiver by any
governmental agency or authority or by any third party is required, or has been
obtained, in connection with the execution and delivery by such Investor of this
Agreement and the performance by such Investor of the obligations to be
performed by such Investor under this Agreement and the documents and
instruments executed and delivered in connection herewith.
10.2 Interest in Contributed Entities. Such Investor is the record
and beneficial owner of, and has good and marketable title to, the interest in
the Contributed Entities set forth opposite such Investor's name on Schedule II,
free and clear of all liens, options, adverse claims or encumbrances, and such
partnership interest is not the subject of any agreement
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(other than this Agreement) providing for the sale, assignment or transfer
thereof. Such Investor has the full power, capacity and authority to sell,
transfer and assign the legal and equitable ownership of his/her or its interest
to the Partnership as provided in this Agreement.
10.3 Investment.
10.3.1 Investor is acquiring the Units issued to it hereunder
for investment for its own account and not as an agent or nominee for any other
person or entity.
10.3.2 Investor will not, directly or indirectly, offer,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of such Units
(each such action, a "Transfer") unless (1) such Transfer complies with the
provisions of the Partnership Agreement, (2) either (a) the Transfer is pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, and the rules and regulations in effect thereunder (the "Act"), or (b)
Investor shall have furnished MART and the Partnership with an opinion of
counsel which opinion of counsel shall be reasonably satisfactory to the
Partnership, to the effect that no such registration is required because of the
availability of an exemption from registration under the Act, and (3) such
Transfer shall be in compliance with any applicable state or foreign securities
and "blue sky" laws.
10.3.3 Investor has been advised by the Partnership that: (1)
neither the offer nor sale of the Units have been registered under the Act or
any state or foreign securities and "blue sky" laws; (2) the Units are
characterized as a "restricted security" under the Act inasmuch as it is being
acquired from the Partnership in a transaction not involving a public offering;
(3) the Units must be held indefinitely and Contributor must continue to bear
the economic risk of the investment in the Units unless the offer and sale of
such Units are subsequently registered under the Act or an exemption from such
registration is available and all applicable state or foreign securities and
"blue sky" laws are complied with; (4) it is not anticipated that there will be
any public market for the Units in the foreseeable future; (5) Rule 144
promulgated under the Act is not presently available with respect to the offers
or sales of any securities of the Partnership and the Partnership has made no
covenant to make such Rule available nor has it made any covenants with respect
to other rules by which offers or sales may be made; (6) when and if the Units
may be disposed of without registration under the act in reliance on Rule 144,
such disposition can be made only in limited amounts in accordance with the
terms and conditions of such Rule; and (7) if the Rule 144 exemption is not
available, public offer or sale of the Units
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without registration will require the availability of another exemption under
the Act.
10.3.4 Investor (A) is an "accredited investor" as defined in
the Act, (B) has such knowledge, skill and experience in business, financial and
investment matters so that it is capable of evaluating the merits, risks and
consequences of an investment in the Units, or has a representative meeting such
qualifications that is advising the Investor in connection with the transactions
contemplated herein, and (c) is able to bear the economic risk of loss of this
investment.
10.3.5 Investor has been afforded (a) the opportunity to ask
such questions as he has deemed necessary of, and to receive answers from,
representatives of the Partnership concerning an investment in the Units and the
merit and risks of investing in the Units, and (b) access to information about
the Partnership's financial condition, business, results of operations and
prospects sufficient to enable him to evaluate his investment in the Units.
10.4 No Defaults. To the knowledge of the Investor, the Investor is
not in default of any of its obligations under any contract or covenant
affecting title to his/her/its interest in any Contributed Entity.
10.5 No Litigation. There are no actions, suits, proceedings or
claims pending, or to the knowledge of the Investor threatened or contemplated,
to which the Investor is a party that would in any manner affect the Properties,
the Contributed Entities or such Investor's interest therein, or the ability of
the Investor to complete the transactions contemplated by this Agreement, or
which could prevent the Investor from satisfying its obligations under this
Agreement.
10.6 No Violation. Each Investor represents and warrants as to
him/her/it that neither the execution and delivery of this Agreement and the
documents and instruments executed and delivered in connection herewith nor the
consummation of the transactions contemplated hereby or the operation of any
Property will: (i) conflict with, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any agreement or
instrument to which the Investor is a party or is subject; (ii) violate any
agreement, restriction, easement, restrictive covenant, or instrument to which
the Investor is subject; (iii) with respect to an Investor that is not a natural
person, violate any provision of the charter, bylaws or other organizational
document of such Investor; (iv) except as to any indebtedness in respect of
which the consent of the lender shall have been obtained prior to the Closing
Date, and except as
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described on the Disclosure Schedule or as disclosed in writing by the
Representors to MART or the Partnership, result in the acceleration of any
indebtedness or any encumbrance pertaining to the Investor; or (v) except as to
any indebtedness in respect of which the consent of the lender shall have been
obtained prior to the Closing Date, and except as described on the Disclosure
Schedule or as disclosed in writing by the Representors to MART or the
Partnership, result in the creation of any encumbrance upon any Property or on
his/her/its interest in a Contributed Entity.
10.7 Required Obligations. The Investor has paid and performed all
obligations required to have been paid or performed by him/her/it relating to or
secured by the Investor's interest in any Contributed Entity, including and
other payments which may become due and payable by him/her/it as a result of the
assignment of his/her/its interest as contemplated by this Agreement.
10.8 Special Filings. To the knowledge of the Investor, the
Investor is not required to submit any notice, report or other filing to any
governmental or regulatory authority in connection with the execution, delivery
or performance of this Agreement or any document or instrument executed and
delivered in connection herewith or the consummation of the transactions
contemplated hereby other than the filing of the tax returns required by the
terms of this Agreement; and no consent, approval or authorization of any
governmental or regulatory authority is required to be obtained by the Investor
in connection with the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated hereby.
10.9 No Brokers. The Investor has not dealt with any agent, broker
or other person acting pursuant to express or implied authority of such
Investor, and no person or entity is entitled to a commission or finder's fee in
connection with the contribution described by this Agreement or will be entitled
to make any claim against MART, the Partnership or any Contributed Entity for a
commission or finder's fee by reason of the Investor having engaged him/her/it.
10.10 Survival of Warranties. The representations and warranties of
the Investors made in this Section 10 shall survive the Closing and consummation
of the transactions contemplated by this Agreement and shall remain in full
force and effect until the applicable statute of limitations relating thereto;
provided, however, that the representations and warranties of the Investors in
Section 10.4 shall survive the Closing and consummation of the transactions
contemplated by this
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Agreement and shall remain in full force and effect for a period of two years
from and after the Closing Date, after which time such representations and
warranties shall terminate and expire.
11. REPRESENTATIONS AND WARRANTIES OF MART AND THE PARTNERSHIP
Each of the Partnership and MART represents and warrants to the
Contributors and the Contributed Entities that the following are true, complete
and correct as of the date of this Agreement and as of the Closing:
11.1 Organization. MART is duly organized, validly existing, in
good standing and qualified and empowered to conduct their respective
businesses, and have full power and authority to enter into and fully perform
and comply with the terms of this Agreement. Neither the execution and delivery
of this Agreement nor its performance by the Partnership or MART, will conflict
with or result in the breach of any material contract, agreement, law, rule or
regulation to which the Partnership or MART is a party or by which the
Partnership or MART is bound. This Agreement is valid and enforceable against
the Partnership and MART in accordance with its terms and each instrument to be
executed by the Partnership or MART pursuant to this Agreement, or in connection
herewith or therewith, will, when executed and delivered, be valid and
enforceable against the Partnership and MART in accordance with its terms. Upon
Closing, the Partnership shall deliver to the Contributors good and marketable
title to the Units, free and clear of all liens, claims, encumbrances, and
restrictions, except as contained in this Agreement, the Partnership Agreement,
or as required under federal and state securities laws.
11.2 Filing of Reports. MART has filed all reports required by the
Securities Exchange Act of 1934 and the information contained therein is true
and correct in all material respects as of the date of each such filing.
11.3 Listed Shares. At the time of Closing, MART's Shares are
listed and traded on a national stock exchange and there has been no suspension
of trading in such Shares.
11.4 Tax Status. As of the Closing, the Partnership will be
qualified as a partnership for Federal income tax purposes, and MART is
qualified as a real estate investment trust.
11.5 Litigation. Neither the Partnership nor MART is involved in
any pending or threatened litigation that would materially or adversely effect
its operations or financial
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condition or the ability to perform under this Agreement or the Partnership.
11.6 No Brokers. Neither the Partnership nor MART have dealt with
any agent, broker or other person acting pursuant to express or implied
authority of either such party, and no person or entity is entitled to a
commission or finder's fee in connection with the transactions contemplated by
this Agreement or will be entitled to make any claim against the Contributor or
any Contributed Entity for a commission or finder's fee by reason of MARt or the
Partnership having engaged him/her/it.
11.7 Survival. The foregoing warranties and representations of the
Partnership shall survive the execution and delivery of this Agreement, the
Closing and delivery of all documents and any and all performances in accordance
with this Agreement. The foregoing warranties and representations shall not be
affected by any investigation or verification made by or on behalf of
Contributor prior to Closing.
12. COVENANTS
12.1 Covenants of MART and the Partnership. Each of MART and the
Partnership hereby covenants as follows:
12.1.1 Immediately prior to the Closing, MART will contribute
to the Partnership, and cause each of its subsidiaries to contribute to the
Partnership, beneficial ownership of all real property of MART and each of its
subsidiaries, subject in each case to all liabilities of MART and each of its
subsidiaries, and all other assets and liabilities of MART and each of its
subsidiaries (other than assets and liabilities associated with MART's property
management operations), less an amount of cash necessary to pay dividends to
MART's shareholders for periods prior to the Closing Date, in exchange for that
number of Units equal to the number of Shares outstanding as of the time of such
contribution. MART shall take such action (other than transferring legal
ownership of such properties) as may be necessary to ensure that the Partnership
shall have the economic incidents of ownership of the Properties and liabilities
associated therewith.
12.1.2 As of the Closing Date, Jack H. Pechter shall be
elected to the Board of Trustees of MART and appointed to serve on the
Investment Committee.
12.1.3 If this Agreement is terminated for any reasons, (1)
the Partnership and MART shall promptly return to Contributors, and Contributed
Entities, all materials
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furnished by Contributors, and Contributed Entities, to the Partnership and MART
pursuant to this Agreement, and (2) the Partnership and MART shall promptly
restore the Properties to substantially the same condition in which they existed
immediately prior to any physical tests conducted by or on behalf of the
Partnership and MART.
12.1.4 Prior to the Closing Date, except as may be required to
be disclosed by law, regulation or legal process, or unless otherwise consented
to in writing by the Contributors or the Contributed Entities, which consent
shall not be unreasonably withheld, the Partnership and MART shall keep all
information learned by the Partnership and MART in connection with the
Properties or any operation thereof confidential.
12.1.5 In connection with inspection of the Properties, the
Partnership and MART shall not unreasonably interfere with any tenants or any
Contributed Entity's business operations.
12.1.6 Until the seventh anniversary of the Closing Date the
Partnership shall not sell any of the Properties. From and after the seventh
anniversary of the Closing Date, the Partnership may sell no more than one
Property in any calendar year. Notwithstanding the provisions of this Section,
the Partnership may, at any time, sell or exchange one or more of the Properties
in a "like kind exchange" under Section 1031 the Code (or any successor or
similar section) in which no gain is recognized by the Partnership.
12.1.7 MART and the Partnership agree as follows:
(i) Without the consent of holders of a majority of the
Initial Units then outstanding, the Partnership will not prepay any existing
mortgage loan secured by any of the Properties known as Timonium Shopping
Center, Timonium Crossing, Perry Hall Square and Enchanted Forest (other than
through scheduled amortizations or required principal curtailments that are
beyond the control of MART and the Partnership, or through refinancing with
qualified non-recourse financing as such term is defined for the purposes of the
at-risk rules contained in the Code). In addition, without the consent of
holders of a majority of the Initial Units then outstanding, the Partnership
will use its best efforts not to take any action which will produce for the
holders of the then outstanding Initial Units (a) a constructive distribution in
excess of their basis in the Units or (b) a negative at risk amount with respect
to such activity of the Partnership.
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(ii) Nothing in this Agreement, including this Section
12.1.7, Section 12.5 or Section 12.6, shall require MART or the Partnership to
take any action on the part of the Partnership or MART which the Trustees of
MART believe are not in the best interests of MART's shareholders or refrain
from taking any action on the part of the Partnership or MART which the Trustees
of MART believe to be in the best interests of the shareholders of MART. The
provisions of this Section shall terminate at such time as the number of
outstanding Initial Units is less than 300,000 Units. The Partnership shall be
entitled from time to time as necessary to seek and rely on a certificate,
signed either by the Agent or by the holders of a majority of the then
outstanding Initial Units issued hereunder to the Contributors, of the basis and
at risk amounts relevant to the provisions of this Section.
12.1.8 For purposes of Section 704(c) of the Code, the
Partnership will use the traditional method of making allocations respecting all
properties contributed to the Partnership at or before the Closing, except that
with respect to the properties listed on Schedule XV the Partnership will use
the remedial allocation method.
12.1.9 So long as the Contributors and their Permitted
Transferees hold 10% or more of the Initial Units, MART agrees that from and
after the Closing Date substantially all of MART's business for profit shall be
conducted by or through the Partnership; provided, however, that business may be
conducted through MART or a MART subsidiary provided that all labor, services
and goods furnished by MART or its subsidiary shall be at the cost of such
entity, substantially all of the pecuniary benefit derived from such activity
shall inure to the benefit of the Partnership, and MART shall not make any
distributions to its shareholders from any funds other than distributions that
MART receives from the Partnership in respect of its Units.
12.1.10 Subject to the provisions of clauses (b), (c), (d),
(e) and (f) of Section 11.5 of the Partnership Agreement, MART, as the General
Partner, will consent to a transfer (as defined in the Partnership Agreement) of
Units among (i) the Contributors, (ii) persons who or which were, as of January
1, 1997, holders of direct or indirect interests in any Contributors that are
entities, (iii) members of their families, and (iv) entities owned or controlled
by any of the foregoing ("Permitted Transferees").
12.1.11 The Partnership will use its reasonable efforts to
obtain the release of the $1 million letter of credit that the Representors have
caused to be given in respect of Shawan Plaza, failing which the Partnership and
MART
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will pay and indemnify and defend the Representors from and against any and all
liability or obligation in respect of such letter of credit.
12.2 Covenants of the Contributors and the Contributed Entities.
Each Contributor and each Contributed Entity hereby covenants as follows:
12.2.1 Within 30 days after the date hereof, the Agent shall
cause each Contributed Entity, at its expense, to deliver to the Partnership
audited financial statements and financial statement schedules for such
Contributed Entity (other than Allview and Tripec) and for the Deeded Properties
and Dorsey Hall (collectively, the "Financial Statements") in form acceptable to
KPMG Peat Marwick, LLP, covering the periods required for reporting in a
registration statement under the Securities Act of 1933 and in reports to by
filed by MART under the Securities Exchange Act of 1934.
12.2.2 If this Agreement is terminated for any reasons, each
Contributor and each Contributed Entity shall promptly return to MART or the
Partnership, as the case may be, all materials furnished by MART or the
Partnership, to such Party pursuant to this Agreement.
12.2.3 Each Contributor and each Contributed Entity shall keep
all information learned by such party in connection with the Partnership or MART
or any operation thereof confidential.
12.2.4 On or prior to the Closing Date, each Contributed
Entity shall enter into an agreement with the Partnership with respect to the
Properties for management and brokerage services (the "Management Contract")
providing that the Partnership shall be paid with respect to each Property:
management fees equal to 4% of gross rentals, customary brokerage commissions,
and general, administrative and operating expenses.
12.3 No Goodwill. The parties hereto acknowledge and agree that
there is no value inherent in any goodwill of the Contributed Entities or
associated with the Properties.
12.4 No Claim Against Contributed Entity. Each Contributor hereby
represents, warrants, covenants and agrees that, as of the Closing Date:
he/she/it will have no claim of any kind or nature against any Contributed
Entity or any Property; by reason of the execution of this Agreement, as of the
Closing hereof hereby waives, releases and discharges any claim it has or may
have; and he/she/it shall not make any claim or bring any
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action against any Contributed Entity or Property for or in respect thereof.
This representation, warranty, covenant and agreement shall survive the closing
of the transactions contemplated hereby and shall continue in effect for so long
as any statute of limitations may be applicable.
12.5 DRO Election; Bottom Guaranty Election.
12.5.1 The Partnership hereby agrees to send to each
Contributor (the "Annual Notice") who holds Initial Units the following
information on an annual basis at least 30 days prior to the filing of the tax
return of the Partnership:
(i) the amount of the debt secured by the Partnership's
properties and the amount of the Partnership's total recourse, non-recourse and
partner non-recourse debt as of the end of the most recent fiscal year;
(ii) the amount of recourse, nonrecourse, and partner
non-recourse debt allocated to each such Contributor;
(iii) the adjusted basis of the Partnership's
properties as of the end of the most recent fiscal year; and
(iv) the projected taxable income or loss of the
Partnership for such fiscal year.
12.5.2 Each Contributor who holds Initial Units, at its
written election but with no obligation to do so, may affirmatively make on an
annual basis (a) a DRO Election or (b) a Bottom Guaranty Election. Any such
election shall be made by notice delivered to the Partnership no later than the
30th day after the Annual Notice was given.
12.5.3 A DRO Election shall state that if the Contributor has
a deficit balance in its capital account following the liquidation of the
Contributor's interest in the Partnership or the liquidation of the Partnership,
as the case may be, such Contributor shall contribute to the capital of the
Partnership, no later than the end of the fiscal year during which the
Contributor's interest in the Partnership is liquidated or during which the
Partnership is liquidated, as the case may be (or, if later, 90 days after the
date on which the Contributor's interest in the Partnership is liquidated, as
the case may be) (the "Liquidation Date") an amount of money equal to a
designated portion of the deficit in the Contributor's capital account. The term
"liquidation" shall have the meaning given to it in Treas. Regs. Section
1.704-1.
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12.5.4 A Bottom Guaranty Election shall state that if the
Partnership shall be in default with respect to the mortgage loan securing any
of the properties of the Partnership, then the Contributor agrees to contribute
to the capital of the Partnership a designated portion of the principal balance
of such mortgage loan (the "Contribution Limit"); however, such contribution
shall only occur if the mortgage lender shall have exhausted all of its remedies
against such property in order to collect the amount owing the mortgage lender,
and such Contribution Limit shall be reduced on a dollar-for-dollar basis for
every dollar received by the mortgage lender from exercising such remedies. Any
such contribution shall be made by the Liquidation Date. For example, if the
amount of the mortgage loan were $10,000,000 and the amount of the Contribution
Limit were $1,000,000, the capital contribution would only be required if the
Property were sold in foreclosure and the proceeds of sale were less than
$1,000,000. In the event that more than one Partner submits a Bottom Guaranty
Election with respect to the same debt, the Partnership shall notify each such
Partner and allow such Partners to appropriately modify their respective Bottom
Guaranty Elections.
12.6 Until such time as the number of outstanding Initial Units
issued to the Contributors hereunder is less than 300,000 Units, the Partnership
will use its best efforts to maintain debt secured by properties of the
Partnership in an amount which is not less than $50 million.
13. DUE DILIGENCE PERIOD
13.1 Due Diligence Period. The period from the date hereof until
the Closing Date is referred to herein as the "Due Diligence Period".
13.2 Access to Properties and Materials. During the Due Diligence
Period, MART and the Partnership and their agents, engineers, surveyors,
appraisers, auditors and other representatives shall have the right to enter
upon the Properties to inspect, examine, survey, obtain engineering inspections
and environmental studies, appraise, and otherwise do that which, in the opinion
of the Partnership and MART, is necessary to determine the boundaries, acreage
and condition of the Properties and to determine the suitability of the
Properties for the uses intended by the Partnership (including, without
limitation, inspect, review and copy any and all documents in the possession or
control of Contributors, any Contributed Entity, or their respective agents,
contractors or employees, and which pertain to the construction, ownership, use,
occupancy or operation of the Properties or any part thereof). During the Due
Diligence Period, the Contributed Entities, at their expense, shall make
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available to MART and the Partnership copies or originals of all of their
respective books, files and records relating in any way to the Properties,
complete copies (or originals when requested) of all title information and title
insurance policies, easements, leases, brokerage agreements, licenses, permits
surveys, zoning information, environmental reports, structural reports,
violation notices, contracts, tax bills and assessments, information regarding
pending or threatened law suits, and all consents and other documents required
to be obtained for the completion of the transactions contemplated hereunder.
13.3 Cooperation of Management Company. The Contributors and the
Contributed Entities shall use reasonable efforts to cause the Management
Company to cooperate with MART and the Partnership so as to allow each party to
perform its obligations under this Agreement.
13.4 Adjustment Following Due Diligence. If MART determines that
any Property is unsuitable for its purposes, or that one or more representations
or warranties hereunder relating to any Property is incomplete or inaccurate in
any material respect, MART shall have the option to: (a) proceed with the
transactions contemplated hereby, or (b) declare this Agreement null and void in
which case no party shall have any rights or obligations under this Agreement.
MART shall, within 10 days after the expiration of the Due Diligence Period,
give written notice to the Agent of its determination.
14. DEFAULTS AND REMEDIES
14.1 Indemnification by Contributors. Each Contributor, Allview and
Tripec (each, for purposes of this paragraph, an "Indemnifying Party") agrees to
indemnify, defend and hold harmless the Partnership, MART and their respective
shareholders, directors, trustees, officers, agents, employees, successors and
assigns (collectively, for purposes of this paragraph, the "Indemnified
Parties") from and against any and all losses, damages, claims, liabilities,
actions, suits, proceedings and costs and expenses of defense thereof, including
attorneys' fees payable as incurred, arising out of or relating to any (i)
misrepresentation or breach of warranty by such Indemnifying Party or
nonfulfillment of any covenant or agreement to be performed or complied with by
such Indemnifying Party under this Agreement; (ii) untrue or incomplete
statement (or allegation by a third party of an untrue or incomplete statement)
of a material fact contained in any information provided by such Indemnifying
Party or based on any omission (or allegation by a third party of an untrue or
incomplete statement) to state therein a material fact required to be stated
therein or other information necessary to make the statements therein not
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misleading, to the extent such alleged untrue or incomplete statement or
omission was made with the Contributor's knowledge that the statement was untrue
or incomplete or omitted to state a material fact; (iii) any debts, liabilities
or obligations (whether known or unknown, disputed or undisputed, fixed,
contingent or otherwise) associated with or relating to any of the Contributed
Entities or the Properties, or secured by any of the Contributed Entities or by
any of the Properties, except those specified on Schedule XII hereto, including
any obligations of the landlord under any of the Leases and Service Contracts,
to the extent any such obligation was to be performed prior to the Closing Date,
or was to be performed after the Closing Date as a result of a breach or default
under any of the Leases or Service Contracts by the Contributed Entity prior to
the Closing Date; (iv) any action taken, or any failure to act, by such
Indemnifying Party in connection with this transaction constituting a breach of
this Agreement or a breach of a duty owed to any person, including, without
limitation, any action taken to redeem or otherwise liquidate the interest of
certain holders in anticipation of the transactions contemplated herein, to the
extent such action or failure to act results in a violation (or alleged
violation) of applicable laws or of the fiduciary duties owed to such holders;
and (v) regardless of whether it arises as a breach of any representation or
warranty, any debts, liabilities or obligations of the Contributed Entities
(whether known or unknown, disputed or undisputed, fixed, contingent or
otherwise) of, associated with or relating to any asset or property other than
the Properties, except those specified on Schedule XII hereto. This indemnity
shall survive Closing.
14.2 Remedies.
14.2.1 Subject to subsection 14.2.2 and 14.2.3 hereof, after
the Closing hereunder the sole remedy of the Partnership in the event of a
breach of any representation or warranty under Section 9 hereof shall be to
proceed against Jack Pechter personally (the "Indemnitor").
14.2.2 Notwithstanding Section 14.2.1: (a) each Investor shall
be fully responsible and liable for each representation and warranty made by
him/her/it hereunder, and any and all losses, damages, claims, liabilities,
actions, suits, proceedings and costs and expenses of defense thereof, including
attorneys' fees payable as incurred, arising out of or relating thereto; and (b)
each Representor shall be fully responsible and liable for any of the following
and any and all losses, damages, claims, liabilities, actions, suits,
proceedings and costs and expenses of defense thereof, including attorneys' fees
payable as incurred, arising out of or relating to: (i) each representation
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and warranty made by him hereunder relating to or associated with title to his
interest in any Contributed Entity, his ability to convey his interest as
contemplated by this Agreement, and his representations under Section 9.4
hereof; (ii) regardless of whether it arises as a breach of any representation
or warranty, any debts, liabilities or obligations (whether known or unknown,
disputed or undisputed, fixed, contingent or otherwise) of, associated with or
relating to any of the Contributed Entities or the Properties, or secured by any
of the Contributed Entities or by any of the Properties, except those specified
on Schedule XII hereto, and (iii) regardless of whether it arises as a breach of
any representation or warranty, any debts, liabilities or obligations of the
Contributed Entities (whether known or unknown, disputed or undisputed, fixed,
contingent or otherwise) of, associated with or relating any other asset or
property other than the Properties, except those specified on Schedule XII
hereto.
14.2.3 Jack Pechter hereby represents, warrants, covenants and
agrees that he presently has, and that he will maintain at all times that any
representations and warranties under Section 9 hereof remain in effect (the
"Warranty Period"), a personal individual tangible net worth (such term meaning
net worth exclusive of the value (if any) of goodwill, going concern value and
similar assets, but inclusive of the value of shares of stock, interests in
partnerships and other business enterprises and similar assets) of not less than
$10,000,000 (the "Minimum Net Worth"). In the event of the death or incompetency
of Jack Pechter, or that Jack Pechter fails to maintain the minimum net worth as
provided herein, then the provisions of Section 14.2.1 hereof shall be of no
effect and each Representor shall be responsible and liable for all
representations and warranties made under Section 9 hereof; provided, however,
that in the event of the death or incompetency of Jack Pechter, if within 30
days thereafter a person or entity presents evidence reasonably satisfactory to
the Partnership and MART that it has the Minimum Net Worth and undertakes in
writing to (i) maintain the Minimum Net Worth for the Warranty Period and (ii)
perform all obligations of Jack Pechter under this Agreement, then the
provisions of Section 14.2.1 shall remain in effect except that such person or
entity shall be substituted as the Indemnitor.
14.3 Indemnification by MART and the Partnership. MART and the
Partnership (each, for purposes of this paragraph, an "Indemnifying Party")
agree to indemnify, defend and hold harmless each Contributor and their
respective shareholders, directors, officers, partners, agents, employees,
successors and assigns (collectively, for purposes of this paragraph,
"Indemnified Parties") from and against any and all losses,
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damages, claims, liabilities, actions, suits, proceeds and costs and expenses of
defense therefore, including attorneys' fees payable as incurred, arising out of
or relating to any (i) misrepresentation or breach of warranty by such
Indemnifying Party or nonfulfillment of any covenant or agreement to be
performed or complied with by such Indemnifying Party under this Agreement; (ii)
untrue or incomplete statement (or allegation by a third party of an untrue or
incomplete statement) of a material fact contained in any information provided
by such Indemnifying Party or based on any omission (or allegation by a third
party of an untrue or incomplete statement) to state therein a material fact
required to be stated therein or other information necessary to make the
statements therein not misleading, to the extent such alleged untrue or
incomplete statement or omission was made with MART's or the Partnership's
knowledge that the statement was untrue or incomplete or omitted to state a
material fact; or (iii) any debts, liabilities or obligations (whether known or
unknown, disputed or undisputed, fixed, contingent or otherwise) specified on
Schedule XII hereto or arising and incurred after the Closing Date (other than
as a result of a breach by any Contributor of any representation, warranty,
covenant or agreement hereunder), including the obligations of the landlord
under any of the Leases and Service Contracts, to the extent any such obligation
is to be performed after the Closing Date, except to the extent any such
obligation is to be performed after the Closing Date as a result of a breach or
default under any of the Leases or Service Contracts by the Contributed Entity
prior to the Closing Date. This indemnity shall survive Closing.
15. MISCELLANEOUS
15.1 Assignment. Neither this Agreement nor any interest hereunder
may be assigned or transferred by any Contributor or the Partnership.
15.2 Entire Agreement. Any prior agreement or understanding among
the parties concerning the subject matter hereof is hereby superseded. This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and shall not be modified or amended except in a written
document signed by all of the parties hereto. Notwithstanding the foregoing,
this Agreement may be amended with the written consent of MART, the Partnership
and the Agent provided that, subject to Section 2.2 hereof, no such amendment
shall materially adversely alter the rights and obligations of the Contributors
hereunder without the prior written consent of such Contributors.
15.3 Survival of Provisions. The representations and warranties
contained in Section 9, 10 and 11 hereof shall
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survive the closing of the transactions contemplated by this Agreement for the
periods specified in Section 9.34, 10.10 and 11.7, respectively. All
representations, warranties, covenants and agreements that are intended to be
performed or complied with after the Closing Date shall survive the closing of
the transactions contemplated by this Agreement and shall continue in full force
and effect.
15.4 Time of the Essence. Time is of the essence of this Agreement.
15.5 Notices. All notices or other communications required or
permitted under this Agreement shall be in writing and delivered personally or
by certified mail, return receipt requested, postage prepaid, or by a nationally
recognized overnight courier (such as Federal Express) with receipted delivery,
or by facsimile transmission. Notices to the parties shall be addressed as
follows:
If to the Contributors or the Agent:
to the addresses contained in Schedule I; provided,
that notice to the Contributors may be given to:
Jack H. Pechter
40 York Road
Towson, Maryland 21204
with a copy to:
Holt, Ney, Zatcoff & Wasserman, LLP
100 Galleria Parkway, Suite 600
Atlanta, Georgia 30339
Attention: Michael Wasserman, Esq.
If to the Partnership or to MART:
c/o Mid-Atlantic Realty Trust
1306 Concourse Drive, Suite 200,
Linthicum, Maryland 21090
Attention: Paul F. Robinson
Vice President and General Counsel
With a copy to:
Gordon, Feinblatt, Rothman,
Hoffberger & Hollander, LLC
The Garrett Building
233 E. Redwood Street
Baltimore, Maryland 21202
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C66242v.609 T
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Attention: Abba David Poliakoff, Esq.
All notices given in accordance with the terms hereof shall be deemed given and
received on the day such notice is sent in the manner described above. Any party
hereto may change the address for receiving notices by notice sent in accordance
with the terms of this Section.
15.6 Governing Law. This Agreement shall be governed and
interpreted in accordance with the laws of the State of Maryland without regard
to its principals of conflicts of law, and any action brought under or arising
out of this Agreement or the matters relating hereto shall be submitted to the
jurisdiction of the courts of the State of Maryland.
15.7 No Trial by Jury. Each party hereby irrevocably and expressly
waives all right to a trial by jury in any action, suit, proceeding or
counterclaim (whether based upon contract, tort, or otherwise) arising out of or
relating to this Agreement or the transactions contemplated hereby.
15.8 Litigation Costs. If there is any legal action or proceeding
between the parties hereto arising from or based upon this Agreement, the
unsuccessful party to such action or proceeding shall pay to the prevailing
party all litigation costs and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in such action or proceeding and in any appeal
in connection therewith, and if such prevailing party recovers a judgment in any
such action, proceeding or appeal, such costs, expenses and attorneys' fees
shall be included in as part of such judgment.
15.9 Counterparts. This Agreement may be executed in any number of
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
15.10 Offer and Acceptance. This Agreement constitutes an offer by
MART which must be accepted, by delivery to MART of a duly signed and completed
signature page hereof, by (i) all of the Contributors and Contributed Entities
except Allview, Timonium Shopping Center Limited Partnership and Perry Hall
Square (the "Outside Partnerships") within 5 days after the date this Agreement
is signed by MART, and (ii) all of the Contributors and Contributed Entities
constituting the Outside Partnerships within 45 days after the date this
Agreement is signed by MART.
15.10.1 If, within such time period, less than all of the
persons owning any interest in a Contributed
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C66242v.609 T
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Entity shall have signed this Agreement, then the Contributed Entity and the
Property owned by such Contributed Entity shall, at the sole option of MART, be
excluded from the Contribution hereunder, this Agreement shall remain in full
force and effect as to the other Contributed Entities and Properties, and an
appropriate adjustment shall be made to the consideration pursuant to Section 2
hereof; if after the expiration of such time period all of the Contributors
execute this Agreement, MART, at its sole option, may elect to re-include, or
may continue to exclude, any such Contributed Entity and Property.
15.10.2 If any Contributor hereunder is not an "accredited
investor" as defined in the Act, then MART, at its sole option, may exclude such
Contributed Entity and any such Property from the Contribution hereunder, this
Agreement shall remain in full force and effect as to the other Contributed
Entities and Properties, and an appropriate adjustment shall be made to the
consideration pursuant to Section 2 hereof; if thereafter all Contributors
become accredited investors, then MART, at its sole option, may elect to
re-include, or may continue to exclude, any such Contributed Entity and
Property.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 49 -
<PAGE>
C66242v.609 T
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By:__________________________(SEAL)
F. Patrick Hughes, President
and Chief Executive Officer
CONTRIBUTOR OR CONTRIBUTED ENTITY:
_________________________ By:__________________________(SEAL)
Social Security # or TIN
_________________________ Print Name:_______________________
(Address)
_________________________ Telephone #:______________________
- -------------------------
- 50 -
<PAGE>
C66242v.609 T
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: /s/ F. Patrick Hughes (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
CONTRIBUTOR OR CONTRIBUTED ENTITY:
_________________________ By:__________________________(SEAL)
Social Security # or TIN
_________________________ Print Name:_______________________
(Address)
_________________________ Telephone #:______________________
- -------------------------
- 50-1 -
<PAGE>
C66242v.609 T
2:3/31/97
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
------------------------------
F. Patrick Hughes, President
and Chief Executive Officer
TRIPEC ASSOCIATES LIMITED PARTNERSHIP
By:
General Partner
---------------
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-2
<PAGE>
Tristar Management, Inc.
52 1544626 By: /s/ Martin Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin Pechter, President
40 York Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, MD 21204
- -------------------------
- -------------------------
50-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
CONTRIBUTOR OR CONTRIBUTED ENTITY:
TRIPEC ASSOCIATES LIMITED PARTNERSHIP
By: General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
Limited Partners
----------------
Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md.
- -------------------------
Tristar Management, Inc.
52-1544626 By: /s/ Martin Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin Pechter, President
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, MD 21204
- -------------------------
50-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
STONEHENGE LIMITED PARTNERSHIP
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
50-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
STONEHENGE LIMITED PARTNERSHIP
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
52-1544626 By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #: 410-486-7215
- ------------------------- --------------------
(Address)
- -------------------------
50-4A
<PAGE>
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### By: /s/ Shelly Pechter Himmelrich(SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
50-5
<PAGE>
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md.
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
8612 Keller Avenue Telephone #: 410-486-7217
- ------------------------- --------------------
(Address)
Stevenson, MD 21153
- -------------------------
###-##-#### By: /s/ Shelly Pechter Himmelrich(SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
50-5A
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
RADCLIFFE LIMITED PARTNERSHIP
By:
General Partner
---------------
Radcliffe Properties Inc.
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
ROUNDHOLLOW LIMITED PARTNERSHIP
By:
General Partner
---------------
Radcliffe Properties Inc.
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
YORKWAY LIMITED PARTNERSHIP
By:
General Partner
---------------
Radcliffe Properties Inc.
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
TALTON LIMITED PARTNERSHIP
By:
General Partner
---------------
Radcliffe Properties Inc.
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
THE PECHTER FAMILY LIMITED PARTNERSHIP
By:
General Partner
---------------
Radcliffe Properties Inc.
###-##-#### /s/ Jack H. Pechter (SEAL)
- ------------------------- ---------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
The Pechter Family Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
50-10
<PAGE>
###-##-#### By: /s/ Marilyn Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Marilyn Pechter
6 Talton Court Telephone #: 410-484-1590
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Shelly Pechter Himmelrich(SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Zachary Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Zachary Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Danielle Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Danielle Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Nicole Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Nicole Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
50-11
<PAGE>
###-##-#### By: /s/ Max Himmelrich (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Max Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
50-12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
TIMONIUM SHOPPING CENTER LIMITED PARTNERSHIP
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
50-13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
TIMONIUM SHOPPING CENTER LIMITED PARTNERSHIP
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #: 410-486-7215
- ------------------------- --------------------
(Address)
- -------------------------
50-13A
<PAGE>
Limited Partners
----------------
Tripec Associates Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md. 21204
- -------------------------
TSC Associates
By: /s/ (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### /s/ Albert Perlow
###-##-#### By: /s/ Sonia Perlow (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Albert & Sonia Perlow
7930 Winterset Avenue Telephone #: 410-484-0960
- ------------------------- --------------------
(Address)
- -------------------------
By: /s/ Morton Greenberg (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Morton Greenberg
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
50-14
<PAGE>
Limited Partners
----------------
Tripec Associates Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md. 21204
- -------------------------
TSC Associates
By: /s/ (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### /s/ Albert Perlow
###-##-#### By: /s/ Sonia Perlow (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Albert & Sonia Perlow
7930 Winterset Avenue Telephone #: 410-484-0960
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### By: /s/ Morton Greenberg (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Morton Greenberg
19572 Plantans Point Dr. Telephone #: 561-487-7341
- ------------------------- --------------------
(Address)
Boca Raton, FL 33434
- -------------------------
50-14A
<PAGE>
Limited Partners
----------------
Tripec Associates Limited Partnership
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Balto. Md. 21204
- -------------------------
TSC Associates
###-##-#### By: /s/ Jean Schreirman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jean Schreirman
1 Gristmill Court #50 Telephone #: 410-486-3328
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### /s/ Albert Perlow
###-##-#### By: /s/ Sonia Perlow (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Albert & Sonia Perlow
7930 Winterset Avenue Telephone #: 410-484-0960
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### By: /s/ Morton Greenberg (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Morton Greenberg
19572 Plantans Point Dr. Telephone #: 561-487-7341
- ------------------------- --------------------
(Address)
Boca Raton, FL 33434
- -------------------------
50-14B
<PAGE>
###-##-#### By: /s/ Stuart Weitzman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Stuart Weitzman
11906 Ridge Valley Dr. Telephone #: 410-252-0770
- ------------------------- --------------------
(Address)
Owings Mills, MD 21117
- -------------------------
###-##-#### By: /s/ Robert Meyers (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Robert Meyers
12759 Folly Quarter Rd. Telephone #: 410-531-3805
- ------------------------- --------------------
(Address)
Ellicott City, MD 21042
- -------------------------
###-##-#### By: /s/ Marilyn Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Marilyn Pechter
6 Talton Court Telephone #: 410-484-1590
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### By: /s/ Darrell Friedman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Darrell Friedman
3508 Bon Field Road Telephone #: 410-358-5128
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
50-15
<PAGE>
###-##-#### By: /s/ Ronald Weitzman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ronald Weitzman
3309 Terrapin Telephone #: 410-484-4775
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### By: /s/ I. Gerald Sidle (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN I. Gerald Sidle
1 Roland Brook Court Telephone #:
- ------------------------- --------------------
(Address)
Lutherville, MD 21093
- -------------------------
###-##-#### By: /s/ Dora Schwartz (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Dora Schwartz
14 Tavo Lane Telephone #:
- ------------------------- --------------------
(Address)
New City, NY 10917
- -------------------------
52-6739222 By: /s/ Ronald Weitzman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ronald Weitzman (Trustee)
Telephone #: 410-484-4775
- ------------------------- --------------------
(Address)
- -------------------------
50-16
<PAGE>
###-##-#### By: /s/ Ronald Weitzman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ronald Weitzman
3309 Terrapin Telephone #: 410-484-4775
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
TSFP Associates
###-##-#### By: /s/ I. Gerald Sidle (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN I. Gerald Sidle
1 Roland Brook Court Telephone #:
- ------------------------- --------------------
(Address)
Lutherville, MD 21093
- -------------------------
###-##-#### By: /s/ Dora Schwartz (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Dora Schwartz
14 Tavo Lane Telephone #: 914-634-6428
- ------------------------- --------------------
(Address)
New City, NY 10917
- -------------------------
52-6739222 By: /s/ Ronald Weitzman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ronald Weitzman (Trustee)
Telephone #: 410-484-4775
- ------------------------- --------------------
(Address)
- -------------------------
50-16A
<PAGE>
By: /s/ Ben Schreibman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ben Schreibman
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
###-##-#### By: /s/ Saul Offitt (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Saul Offitt
12 Talton Court Telephone #: 410-486-5882
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### By: /s/ Shelly Pechter Himmelrich(SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
50-17
<PAGE>
###-##-#### By: /s/ Ben Schreibman (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Ben Schreibman
#1 Gristmill Court, Apt. 501 Telephone #: 410-486-3328
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### By: /s/ Saul Offitt (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Saul Offitt
12 Talton Court Telephone #: 410-486-5882
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
###-##-#### By: /s/ Shelly Pechter Himmelrich(SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
50-17A
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
PERRY HALL SQUARE
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
Telephone #: 410-486-7215
- ------------------------- --------------------
(Address)
- -------------------------
50-18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
PERRY HALL SQUARE
By:
General Partner
---------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
40 York Road Balto. Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Md. 21204
- -------------------------
###-##-#### By: /s/ Martin H. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Martin H. Pechter
11 Merry Hill Court Telephone #: 410-653-8828
- ------------------------- --------------------
(Address)
Balto., MD 21208
- -------------------------
###-##-#### By: /s/ Jeffrey S. Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Jeffrey S. Pechter
8612 Keller Avenue Telephone #: 410-486-7215
- ------------------------- --------------------
(Address)
Stevenson, MD 21153
- -------------------------
50-18A
<PAGE>
###-##-#### By: /s/ Shelly Pechter Himmelrich (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Shelly Pechter Himmelrich
8408 Park Heights Avenue Telephone #: 410-602-1835
- ------------------------- --------------------
(Address)
Baltimore, MD 21208
- -------------------------
Trust F/B/O Pechter Children
###-##-#### By: /s/ Marilyn Pechter (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Print Name: Marilyn Pechter
--------------------
6 Talton Court Telephone #: 410-484-1590
- ------------------------- --------------------
(Address)
Baltimore, MD 21117
- -------------------------
###-##-#### By: /s/ Emmanuel S. Glasser (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Emmanuel S. Glasser
2402 Vewet Valley Way Telephone #: 410-363-6360
- ------------------------- --------------------
(Address)
Owings Mills, MD 21117
- -------------------------
Victor Cohen Irrevocable Trust
By: (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN Print Name:
--------------------
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
- -------------------------
50-19
<PAGE>
(SEAL)
- ------------------------- --------------------------------
Social Security # or TIN Nancy Cohen
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
- -------------------------
50-20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
MID-ATLANTIC REALTY TRUST
By: (SEAL)
--------------------------
F. Patrick Hughes, President
and Chief Executive Officer
ALLVIEW CENTER LIMITED PARTNERSHIP
By:
General Partners
----------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter
40 York Road Telephone #: 410-321-8777
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
Limited Partners
----------------
###-##-#### By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Pechter Family Limited Partnership
40 York Road Telephone #
- ------------------------- --------------------
(Address)
Towson, Baltimore
- -------------------------
21204 Md.
- -------------------------
50-21
<PAGE>
Tripec Associates Limited Partnership
By: /s/ Jack H. Pechter (SEAL)
- ------------------------- ------------------------------
Social Security # or TIN Jack H. Pechter, General Partner
- ------------------------- Print Name:
(Address) ---------------------
Telephone #: 321-8777
- ------------------------- --------------------
- -------------------------
(SEAL)
- ------------------------- --------------------------------
Social Security # or TIN David A. Carney Jr.
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
- -------------------------
Primary Care Ltd. Partnership
By: (SEAL)
- ------------------------- -----------------------------
Social Security # or TIN , General Partner
- ------------------------- Print Name:
(Address) --------------------
Telephone #:
- ------------------------- --------------------
- -------------------------
(SEAL)
- ------------------------- --------------------------------
Social Security # or TIN Carole A. Parnes. M.D.
Telephone #:
- ------------------------- --------------------
(Address)
- -------------------------
- -------------------------
50-22
<PAGE>
ASSIGNMENT OF PARTNERSHIP INTEREST
----------------------------------
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the ESTATE OF ALBERT WEITZMAN (the "Assignor"), hereby
assigns, sets over, and transfers to the NON-EXEMPT MARITAL TRUST U/W ALBERT
WEITZMAN (the "Assignee"), effective as of July 1, 1996, all of its right, title
and interest to a 3.234% Limited Partnership Interest in Timonium Shopping
Center Associates Limited Partnership (the "Partnership").
The Assignee accepts the foregoing assignment of a 3.234% Limited
Partnership Interest in the Partnership and agrees to be bound by the terms and
conditions of the Agreement of Limited Partnership among the partners of the
Partnership as in effect on the effective date of this Assignment.
Dated as of this 1st day of July, 1996.
WITNESS: ESTATE OF ALBERT WEITZMAN
/s/ Diane C. Frommeyer By: /s/ Evelyn L. Weitzman
- ------------------------- -----------------------------
Evelyn L. Weitzman,
Personal Representative
/s/ Diane C. Frommeyer By: /s/ Ronald Weitzman
- ------------------------- -----------------------------
Ronald Weitzman,
Personal Representative
- ASSIGNOR -
NON-EXEMPT MARITAL TRUST U/W
ALBERT WEITZMAN
/s/ Diane C. Frommeyer By: /s/ Evelyn L. Weitzman
- ------------------------- -----------------------------
Evelyn L. Weitzman, Trustee
/s/ Diane C. Frommeyer By: /s/ Ronald Weitzman
- ------------------------- -----------------------------
Ronald Weitzman, Trustee
/s/ Diane C. Frommeyer By: /s/ Sidney Weiman
- ------------------------- -----------------------------
Sidney Weiman, Trustee
- ASSIGNEE -
<PAGE>
The undersigned, on behalf of the General Partners of the Partnership, does
hereby consent to the above Assignment pursuant to the Agreement and consents to
the admission of the Assignee as a Limited Partner in the Partnership. The
undersigned also agrees that the Agreement shall be amended as necessary to
reflect the above Assignment.
WITNESS:
/s/ Pat A. Rubin /s/ Jack H. Pechter
- ------------------------- --------------------------------
Jack H. Pechter
<PAGE>
Agreement of Limited Partnership
of MART Limited Partnership
(see Exhibit (c)2)
<PAGE>
C67812d.108 R
2:03/31/97
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of
______________, 1997 among MID-ATLANTIC REALTY TRUST, a Maryland real estate
investment trust ("MART"), and the persons and entities named on Schedule 1
hereto (individually, a "Contributor" and collectively the "Contributors").
RECITALS
a. Pursuant to an Agreement for Contribution of Interests dated as of
__________________, 1997 ("Contribution Agreement"), among the Contributors,
MART and MART Limited Partnership, a Maryland limited partnership (the
"Partnership"), the Contributors have received units of limited partnership
interest in the Partnership (the "Initial Units").
b. Pursuant to the Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement") and the Contribution Agreement, by reason of certain
Puts (as defined and described in the Partnership Agreement and Contribution
Agreement), the Partnership may in the future have the obligation to repurchase
Initial Units. In such event, MART will have the option to assume all or any
part of the obligation of the Partnership to pay all or any part of the
repurchase price and, in such event, may do so with its Common Shares of
Beneficial Interest, par value $.01 per share (the "Common Shares").
c. MART has agreed to provide to the Contributors and the Permitted
Transferees (as defined in the Contribution Agreement) the registration rights
herein set forth with respect to any Common Shares issued by MART to the
Contributors upon a Put of their Initial Units.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following shall have
the following meanings:
"Closing" shall have the meaning set forth in the Contribution
Agreement.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Demand Period" shall mean the period of time beginning with the end
of the Shelf Period and ending on the earliest of (i) the completion of demand
registrations for registration of the number of Registrable Securities held by
Qualified Holders at the end of the Shelf Period, (ii) at such time as the
number of outstanding Registrable Securities is less than 300,000, or (iii) the
20th anniversary of the Closing.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.
<PAGE>
C67812d.108 R
2:03/31/97
"Form S-3" shall mean such form under the Securities Act as is in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the Commission which permits inclusion or
incorporation of substantial information by reference to other documents filed
by a reporting entity with the Commission.
"Outstanding Registrable Securities" shall mean the number of
Registrable Securities held by a Qualified Holder that are then issued and
outstanding as the result of a Put of Initial Units and issued as a dividend
thereon or other distribution with respect thereto.
"Participating Holder" shall mean any Qualified Holder that elects to
include his/her/its Registrable Securities in a registration pursuant to the
terms of this Agreement.
"Permitted Transferee" shall have the meaning set forth in the
Contribution Agreement.
"Person" shall mean and include an individual, an entity, or an
unincorporated organization.
"Qualified Holder" shall mean a Contributor or Permitted Transferee
that holds Initial Units or Outstanding Registrable Securities.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement.
"Registrable Securities" shall mean all the Common Shares held by a
Qualified Holder that are: (i) issued to him/her/it upon a Put of Initial Units
by a Qualified Holder, or issuable to him/her/it upon the exercise by MART of
its election to pay the Redemption Price (as defined in the Partnership
Agreement) in Shares, and (ii) issued as a stock split, stock dividend or other
distribution or in connection with any recapitalization or reclassification with
respect to any Common Shares referred to in clause (i); excluding in all cases,
however, (x) any Registrable Securities sold pursuant to registration under the
Securities Act, and (y) any Registrable Securities sold or eligible for sale
without registration pursuant to Rule 144 (or similar or successor rule)
promulgated under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder, all as
the same shall be in effect at the time.
SECTION 2. SHELF REGISTRATION. The Company shall prepare and file with the
Commission a shelf registration statement under Rule 415 of the Securities Act
to register the Registrable Securities. The Company shall use its best efforts
to cause such registration statement to be declared effective as soon as
possible after the first anniversary of the Closing, and to keep such
registration statement continuously effective for a period of four years plus
any
2
<PAGE>
C67812d.108 R
2:03/31/97
additional extension periods pursuant to the next sentence. The Shelf Period
shall be extended for an additional number of days equal to the number of
business days during the pendency of all Suspension Periods and Blackout Periods
under Section 5 hereof.
SECTION 3. DEMAND REGISTRATION.
(a) Request for Registration. At any time during the Demand Period,
any Qualified Holder holding at least 300,000 Registrable Securities or such
Qualified Holder holding the largest number of Registrable Securities may
request in writing (a "Registration Request") that MART file a registration
statement , for his/her/its benefit and/or for the benefit of any other
Qualified Holders, with the Commission under the Securities Act on Form S-3
(each, a "Demand Registration") covering the registration of at least 100,000
Registrable Securities. Within 10 days after the receipt of a Registration
Request, MART shall give written notice to all other Qualified Holders (the
"Registration Notice") of such request and permit such other Qualified Holders
to participate in such registration by written notice (the "Holder Notice")
received by MART within 10 days after the date the Registration Notice was
given.
Nothing in this Agreement is intended to confer upon any person the
right to demand Shares upon the Put of his/her/its Initial Units, or to require
MART to exercise its right to issue Shares in payment of the Redemption Price.
(b) Obligations of MART. Upon a Registration Request for a Demand
Registration pursuant to Subsection (a) above, MART shall use its best efforts
(subject to Section 5 hereof) to cause the Demand Registration to become
effective within 45 days after the date the Registration Request was made
("Outside Effective Date") and to remain in effect for at least 90 days after
such Demand Registration is declared effective (excluding business days during
the pendency of any Suspension Period or Blackout Period pursuant to Section 5
of this Agreement). Except as provided in Subsection (c) below, MART shall be
obligated to effect, or to take action to effect, only two Demand Registrations
in any 12 month period pursuant to this Section 3 ("Permitted Demand
Registrations").
(c) Third Request for Demand Registration. If Participating Holders
have made two consecutive requests for a Demand Registration and no registration
statement shall have been declared effective as a result of two or more
Suspension Periods or Blackout Periods, then the Participating Holders in such
registrations shall have the right to make a special request for a Demand
Registration (the "Third Demand Registration") without regard to the number of
prior Permitted Demand Registrations during such 12 month period.
(d) Demand In Connection with a Put. If a Participating Holder
exercises his or her demand rights in connection with a Put of Initial Units,
then the Put will not be settled for Shares prior to the effective date of the
registration statement. If the registration statement is not declared effective
by the Outside Effective Date, then any Participating Holder may withdraw his or
her Registrable Securities from such registration and such registration will not
count toward the number of Permitted Demand Registrations in such 12 month
period. If a
3
<PAGE>
C67812d.108 R
2:03/31/97
Third Demand Registration request is made immediately following two consecutive
Registration Requests that have not been declared effective or have not
permitted sales due to consecutive Suspension Periods and/or Blackout Periods,
and the Third Demand Registration is not declared effective by the 180th day
after the first Registration Request was made, even if such delay is due to a
Market Stand-Off Period, then MART shall be required to honor the Put by payment
of cash to the Participating Holders promptly following such 180th day.
(e) Puts by Small Holders. If a Contributor or Permitted Transferee
Puts less than 100,000 Initial Units and there is not then pending, requested or
proposed any registration of Registrable Securities for any Qualified Holder,
and if MART elects to assume the obligation of the Partnership to pay the
Redemption Price, then, notwithstanding Section 3(a) hereof, MART shall either
(i) pay the Redemption Price in cash or (ii) register the Shares that may be
issued to such holder in accordance with all other terms of this Agreement and
this Section 3. In such event, the registration of such Shares shall not be
deemed as a Demand Registration for purposes of calculating the Permitted Demand
Registrations under Section 3(b) hereof.
(f) Underwritten Demand Registration. If the Participating Holders
initiating the Demand Registration request ("Initiating Holders") intend to
distribute their Registrable Securities covered by their request by means of an
underwritten offering, they shall so advise MART as a part of their request for
registration pursuant to this Section 3, and MART shall include such information
in the Registration Notice. In such event, the right of any Participating Holder
to include his or her Registrable Securities in such Demand Registration shall
be conditioned upon such Participating Holder's entering into an underwriting
agreement in customary form with the managing underwriter or underwriters
selected for such underwriting by MART, provided that the charges payable by the
Participating Holders to such underwriter shall be commercially reasonable.
Notwithstanding any other provision of this Section 3, if the underwriter(s)
advise(s) MART in writing that successful marketing of the securities to be
distributed in such offering requires a limitation of the number of securities
to be underwritten, then MART shall so advise all Participating Holders, and the
number of Registrable Securities that may be included in the underwriting shall
be reduced as required by the underwriter(s), and the number of Registrable
Securities to be included in such registration shall be allocated among the
Participating Holders on a pro rata basis according to the number of Registrable
Securities held by each Participating Holder requesting Demand Registration
(including the Initiating Holders).
SECTION 4. PIGGYBACK REGISTRATION.
(a) Right to Piggyback Registration. If, at any time that at least 10%
of the Registrable Securities are held by Qualified Holders, MART proposes to
file a registration statement under the Securities Act with respect to an
offering (a "Primary Offering") of Common Shares for its own account (other than
a registration statement (i) on Form S-8 or any successor form or in connection
with any employee or director benefit or compensation plan, (ii) on Form S-4 or
any successor form or in connection with an exchange offer, (iii) in connection
with a rights offering exclusively to existing holders of Common Shares of other
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securities of MART, (iv) in connection with an offering solely to employees of
MART or its affiliates, (v) relating to a transaction described in Rule 145 of
the Securities Act, or (vi) a shelf registration described in Rule 415 of the
Securities Act, then MART will:
(i) give written notice of such proposed Primary Offering to all
Qualified Holders as soon as practicable but in no event less than 20 days
before the anticipated filing date of the registration statement (the "Piggyback
Notice"). The Piggyback Notice shall offer such Qualified Holders the
opportunity to request that MART register such amount of their Registrable
Securities as each such Qualified Holder may request, and shall state the date
that the offering is anticipated to become effective (the "Anticipated Offering
Date"); and
(ii) include in such proposed Primary Offering all Registrable
Securities specified in written requests by the Qualified Holders that are
received by MART within 10 days after the date the Piggyback Notice was given.
If it is expected that the Anticipated Offering Date will be
delayed by more than 30 days, then MART shall use its best efforts to again give
notice to the Qualified Holders of the new Anticipated Offering Date and permit
them the opportunity to include their Registrable Securities in, or remove their
Registrable Securities from, the registration statement.
(b) Excluded from Piggyback Registration Rights. Notwithstanding the
piggyback registration rights of Qualified Holders described in this Section 4,
such rights do not apply in the event that:
(i) it is reasonably anticipated at the time MART reaches
agreement with the managing underwriter that the Primary Offering will commence
within 20 days from and after such date;
(ii) the underwriters, acting reasonably, determine that the
Primary Offering would be unreasonably delayed by the allowance of piggyback
registration rights hereunder; and
(iii) the Primary Offering, in fact, does not include any Shares
held by any person other than MART.
(c) Underwritten Public Offering. If the Primary Offering is an
underwritten public offering on behalf of MART, MART's obligation to include in
such registration the Registrable Securities of any Participating Holder shall
be conditioned upon the Participating Holder entering into an underwriting
agreement with the underwriters, agreeing to be bound by all terms and
conditions of the offering, and providing such complete and accurate information
as the underwriter may request, including information for inclusion in the
registration statement. If the managing underwriter advises MART in writing that
the total number of Common Shares requested to be included in such offering by
the Participating Holders and by MART exceeds the number of Common Shares which,
in the opinion and at the reasonable discretion of such
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managing underwriter, can be included in the offering without adversely
affecting the offering, the price range of the Common Shares offered or the
probability of success of such offering, MART will include in such offering (i)
first, all Common Shares that MART proposes to offer, and (ii) second, up to the
full number of Registrable Securities requested by Participating Holders to be
included in such registration that the managing underwriter reasonably believes
will not so affect the offering. In such event, the number of Common Shares to
be included in such offering by all holders, including the Participating
Holders, shall be allocated pro rata among all such holders on the basis of the
total number of Common Shares (including Registrable Securities) subject to
registration rights that are held by each such holder (regardless of the number
of Common Shares requested to be included in such registration). In the case of
a request for registration pursuant to this Section 4 in connection with a Put,
the Put will not be settled for Shares before the effective date of the
registration statement which includes such Registrable Securities and shall be
considered as never having been exercised to the extent that the Registrable
Securities are not so included.
SECTION 5. SUSPENSION PERIOD; BLACKOUT PERIOD.
(a) Commission Stop Order. MART shall promptly give notice to all
Participating Holders of the issuance by the Commission of any stop order
suspending the effectiveness of any registration statement filed pursuant to
this Agreement or the initiation of any proceedings for that purpose. MART shall
use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of any such registration statement at the earliest possible time.
(b) Suspension Events. Notwithstanding anything to the contrary set
forth in this Agreement, MART's obligation under this Agreement to register any
Registrable Securities shall be suspended upon notice by MART to all
Participating Holders of the occurrence of any one or more of the following
events ("Suspension Events"):
(i) a determination by MART, evidenced by a certificate signed by the
President or Chief Executive Officer of MART, stating that in the good
faith judgment of the Board of Trustees of MART it would be seriously
detrimental to MART and its stockholders for such registration
statement to be filed and it is therefore essential to defer the
filing of such registration statement;
(ii) a determination by MART to effect an underwritten Primary
Offering, if MART is advised by the managing underwriter that the
offer or sale of Registrable Securities hereunder would have a
material adverse effect on the proposed offering;
(iii) pending negotiations relating to, or consummation of, a
transaction or the occurrence of an event that would require
additional disclosure of material information by MART in the
registration statement or which renders MART
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unable to comply with applicable disclosure requirements in connection
with the registration or sale of the Registrable Securities; or
(iv) the issuance of a stop order.
(c) Duration of Suspension Period. Any suspension pursuant to
Subsection (b) shall commence on the date notice ("Suspension Notice") is given
by MART to all Participating Holders of such Suspension Event, and shall
continue in effect until such time that (i) notice is given by MART that such
Suspension Event or its effect no longer exists, or (ii) the passage of 120 days
after the Suspension Notice was given (the "Suspension Period"), whichever is
earlier.
(d) Blackout Period. Following the effectiveness of any registration
statement hereunder, each Participating Holder agrees that no offers or sales of
any Registrable Securities owned or held by such Person will be effected after
MART shall have given notice ("Blackout Notice") of any Suspension Event which
states that no offers or sales shall be made, until such time that (i) notice is
given by MART that offers and sales may recommence, or (ii) the passage of 120
days after the Blackout Notice has been given (the "Blackout Period"), whichever
is earlier.
(e) Limit on No Sale Period. In no event will the combined duration of
all Suspension Periods and Blackout Periods during any calendar year exceed 150
days, and the combined duration of all Suspension Periods, Blackout Periods and
Market Stand-Off Periods during any calendar year exceed 180 days. If in
connection with any Put the combined duration of all Suspension Periods,
Blackout Periods and Market Stand-Off Periods during any calendar year exceeds
180 days, then MART shall be required to honor the Put by payment of cash to the
Putting Participating Holders promptly following such 180th day.
SECTION 6. EXPENSES OF REGISTRATION. All expenses incurred in connection
with a registration pursuant to this Agreement, including, without limitation,
all federal and "blue sky" registration and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for MART shall be borne by
MART. Each Participating Holder shall bear a proportionate share of all
discounts, commissions or other amounts payable to underwriters or brokers in
connection with such offering and of the expenses of counsel for Participating
Holders. MART shall not be required to pay for expenses of any registration
request pursuant to Section 3 if the registration request is subsequently
withdrawn at the request of the Participating Holders of a majority of all of
the Registrable Securities to be registered unless such withdrawal is pursuant
to a right of withdrawal provided for in this Agreement.
SECTION 7. REGISTRATION PROCEDURES.
(a) Whenever required to effect a registration of any Registrable
Securities under this Agreement, MART shall, as expeditiously as reasonably
possible:
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(i) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement.
(ii) Furnish to the Participating Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirement of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by them that are included in such
registration.
(iii) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering.
Each Participating Holder in such underwriting shall also enter into
and perform its obligations under such an agreement.
(iv) Notify each Participating Holder of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.
(v) Furnish, at the request of any Participating Holder requesting
registration of Registrable Securities, on the date that such
Registrable Securities are delivered to the underwriters for sale, if
such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes
effective, (x) an opinion, dated as of such date, of the counsel
representing MART for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest
of the Participating Holders requesting registration of Registrable
Securities and (y) a "comfort" letter dated as of such date, from the
independent certified public accountants of MART, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Participating
Holders requesting registration, addressed to the underwriters, if
any, and to the Participating Holders requesting registration of the
Registrable Securities.
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SECTION 8. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of MART to take any action pursuant to Sections 2, 3 and 4 that the
Participating Holders shall furnish such complete and accurate information
regarding themselves, the Registrable Securities held by them, the intended
method of disposition of such securities and such other information as MART (or
any underwriter) shall reasonably require to effect the registration of their
Registrable Securities.
SECTION 9. SALES PURSUANT TO RULE 144. MART shall have no obligations to
register any Common Shares hereunder to the extent that, in the opinion of
counsel to MART, such Common Shares may be sold in a three-month period without
registration under the Securities Act pursuant to Rule 144 under the Securities
Act.
SECTION 10. LIMITATION ON CERTAIN REGISTRATION RIGHTS. MART will not grant
to any person other than a Qualified Holder, the right to include or piggyback
their Common Shares or other securities in any demand registration or shelf
registration filed pursuant to this Agreement. Anything in this Agreement to the
contrary notwithstanding, Qualified Holders shall have no right to register
their Registrable Securities in any registration statement filed by MART
pursuant to demand registration rights granted to any Person other than the
Qualified Holders.
SECTION 11. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) Indemnification by MART. To the extent permitted by law, MART
shall indemnify and hold harmless each Participating Holder, the partners,
officers and directors of each Participating Holder, any underwriter (as defined
in the Securities Act) for such Participating Holder and each Person, if any,
who controls such Participating Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively, a "Violation"):
(i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements
therein not misleading, or
(iii) any violation or alleged violation by MART of the Securities
Act, the Exchange Act, any federal or state securities law or any rule
or regulation promulgated under the Securities Act, the Exchange Act
or any federal or state
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securities law in connection with the offering covered by such
registration statement,
and MART shall reimburse each such Participating Holder, partner, officer, or
director, underwriter or controlling Person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending such loss, claim, damage, liability or action; provided however, that
the indemnity agreement contained in this Section shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of MART (which consent shall not be
unreasonably withheld), nor shall MART be liable in any case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by such Participating Holder, partner, officer, director,
underwriter or controlling Person of such Participating Holder.
(b) Indemnification by Participating Holders of Registrable
Securities. To the extent permitted by law, each Participating Holder shall
indemnify and hold harmless MART, each of its directors, each of its officers
who have signed the registration statement, each Person, if any, who controls
MART within the meaning of the Securities Act, any underwriter and any other
Participating Holder selling securities under such registration statement or any
of such other Participating Holder's partners, directors or officers or any
Person who controls such Participating Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which MART or any such director, officer,
controlling Person, underwriter or other such Participating Holder, partner or
director, officer or controlling Person of such other Participating Holder may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Participating
Holder expressly for use in connection with such registration; and each such
Participating Holder shall reimburse any legal or other expenses reasonably
incurred by MART or any such director, officer, controlling Person, underwriter
or other Participating Holder, partner, officer, director or controlling Person
of such other Participating Holder in connection with investigating or defending
any such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Participating Holder, which
consent shall not be unreasonably withheld; and provided further, that the total
amounts payable in indemnity by a Participating Holder under this Section in
respect of any Violation shall not exceed the net proceeds received by such
Participating Holder in the registered offering out of which such Violation
arises.
(c) Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party under this Section of notice of the commencement of any
action (including any governmental action), such indemnified party shall, if a
claim in respect thereof is to be made
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against any indemnifying party under this Section deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by indemnifying
party would be inappropriate due to actual or potential differing interest
between such indemnified party and any other party represented by such counsel
in the proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section,
but the omission so to deliver written notice to the indemnifying party shall
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section.
(d) Applicable to Preliminary Prospectus. The foregoing indemnity
agreements of MART and Participating Holders are subject to the condition that,
insofar as they related to any Violation made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the Commission at
the time the registration statement in question becomes effective or the amended
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act (the "Final Prospectus"), such indemnity agreement shall not
inure to the benefit of any Person if a copy of the Final Prospectus was
furnished to the indemnified party and was not furnished to the Person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(e) Contribution. If the indemnification provided for in this Section
11 is unavailable to a party that would have been an indemnified party under
this Section 11 in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to herein, then each party
that would have been an indemnifying party hereunder shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative fault of such indemnifying party on the
one hand and such indemnified party on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof). The relative fault
shall be determined by reference to, among other things, whether the Violation
relates to information supplied by such indemnifying party or such indemnified
party and the parties, relative intent, knowledge, access to information and
opportunity to correct or prevent such Violation. The parties agree that it
would not be just and equitable if contribution pursuant to this Section 11(e)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
preceding sentence. The amount paid or payable by a contributing party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 11(e) shall include any
legal or other expenses reasonably incurred by such indemnified party in
connection with
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investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The liability of any Participating Holder in
respect of any contribution obligation of such Holder (after deduction of all
underwriters' discounts and commissions paid by such Participating Holder in
connection with the registration in question) arising under this Section 11(e)
shall not in any event exceed an amount equal to the net proceeds to such
Participating Holder from the disposition of the Registrable Securities disposed
of by such Participating Holder pursuant to such registration.
(f) Survival. The obligations of MART and Participating Holders under
this Section shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
SECTION 12. MARKET STAND-OFF AGREEMENT. Each Participating Holder agrees
that he, she or it shall not, to the extent required by MART or an underwriter
of securities of MART, sell or otherwise transfer or dispose of any Registrable
Securities for up to that period of time following the effective date of a
registration statement of MART as is reasonably requested by MART or by the
managing underwriter of such offering, such period not to exceed 30 days
("Market Stand-Off Period").
SECTION 13. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland.
SECTION 14. BENEFITS OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto but shall not be assignable without
the prior written consent of all parties.
SECTION 15. NOTICES. All notices and other communications hereunder to any
party shall be in writing and sent to the other parties by personal delivery or
by overnight courier or by first class registered or certified mail, return
receipt requested, postage prepaid, and addressed, if to MART, at 170 West
Ridgely Road, Suite 300, Lutherville, Maryland 21093, if to any other party
hereto, at the address set forth on Schedule 1 hereto or such other address as
may hereafter be designated by notice to MART. All notices and communications
hereunder shall be deemed given on the date sent in accordance with this
Agreement.
SECTION 16. CHANGES. The terms and provisions of this Agreement may not be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, except pursuant to the prior written consent of MART and the
parties hereto holding a majority of the Registrable Securities.
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SECTION 17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
SECTION 18. ENTIRE AGREEMENT. This Agreement, together with the relevant
provisions of the Contribution Agreement and the Partnership Agreement, is
intended by the parties as a final expression of their agreement and intended to
be the complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no restrictions, warranties or undertakings, other than those set forth or
referred to herein, with respect to such subject matter. This Agreement,
together with the relevant provisions of the Contribution Agreement and the
Partnership Agreement, supersedes all prior agreements and understanding between
the parties with respect to such subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Registration Rights Agreement has been executed on
the day and year first above written by MART and the Contributors named on
Schedule 1 hereto.
MID-ATLANTIC REALTY TRUST
By:_______________________________
CONTRIBUTOR
_________________________________
Signature
_________________________________
Print name
_________________________________
Address
_________________________________
Tel. #: _________________________
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Schedule 1
Jack H. Pechter
40 York Road
Towson, Maryland 21204
Martin H. Pechter
11 Merry Hill Court
Baltimore, Maryland 21208
Jeffrey S. Pechter
8612 Keller Avenue
Stevenson, Maryland 21153
Shelly Pechter Himmelrich
8408 Park Heights Avenue
Baltimore, Maryland 21208
Trust F/B/O Melissa Pechter
c/o Jack H. Pechter
40 York Road
Towson, Maryland 21204
Marilyn Pechter
6 Talton Court
Baltimore, Maryland 21208
Pechter Family Limited Partnership
40 York Road
Towson, Maryland 21204
Tripec Associates Limited Partnership
40 York Road
Towson, Maryland 21204
Radcliffe Properties, Inc.
40 York Road
Towson, Maryland 21204
Victor Cohen Irrevocable Trust
5125 Rolling Avenue
Baltimore, Maryland 21210
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Emmanuel Glasser
2402 Velvet Valley Way
Owings Mills, Maryland 21117
Nancy Cohen
5125 Rolling Avenue
Baltimore, Maryland 21210
TSC Associates
c/o Jean Schreibman
1 Gristmill Court, Apt. 501
Baltimore, Maryland 21208
Albert Perlow and Sonia Barbara Perlow
7930 Winterset Avenue
Baltimore, Maryland 21208
Morton Greenberg
19572 Planters Point Drive
Boca Raton, Florida 33434
Ronald Weitzman
3309 Terrapin Road
Baltimore, Maryland 21208
TSFP Associates
c/o I. Gerald Sidle
1 Roland Brook Court
Lutherville, Maryland 21093
Dora Schwartz
14 Tavo Court
New City, New York 10956
Stuart Weitzman
11906 Ridge Valley Road
Owings Mills, Maryland 21117
Robert Meyers
12757 Folly Quarter Road
Ellicott City, Maryland 21042
Darrell Friedman
3508 Bonfield Road
Baltimore, Maryland 21208
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Ben Schreibman
1 Gristmill Court, Apt. 501
Baltimore, Maryland 21208
Saul Offit
12 Talton Court
Baltimore, Maryland 21208
Non-Exempt Marital Trust u/w Albert Weitzman
c/o Sidney Weiman, Esquire
Levin & Gann, P.A.
900 Mercantile Bank & Trust Building
2 Hopkins Plaza, Suite 900
Baltimore, Maryland 21201
<PAGE>
SURVEYOR'S CERTIFICATE
Re: _____________________
(the "PROPERTY")
The undersigned, with the understanding that the certifications
contained herein will be relied upon, hereby certifies to
_______________________________________________________________________________
and ____________________________:
1. The survey entitled "ALTA/ACSM Land Title Survey of
____________________________________________________" (the "SURVEY"), to which
this Certificate is attached, was prepared by the undersigned, a professional
registered engineer or registered land surveyor of the State of Maryland, was
actually made by instrument survey upon the ground pursuant to the record
description of the PROPERTY, and was prepared in accordance with the "Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys" jointly
established and adopted by ALTA and ACSM in 1992.
2. The undersigned has examined a copy of ___________ Title Insurance
Company's Commitment For Title Insurance No. __________ dated ____________ (the
"COMMITMENT"), and of each instrument described therein, and the location of
each easement and right of way (with recording reference) is shown on the
SURVEY.
3. The SURVEY and the information, courses and distances shown thereon,
including, without limitation, all building restriction, setback and yard lines,
are correct.
4. The title lines described in the COMMITMENT, and shown on the
SURVEY, are the same as the lines of actual possession.
5. There are no buildings, structures and improvements located on the
PROPERTY, except as shown on the SURVEY.
6. The buildings, structures and improvements shown on the SURVEY
constitute all of the improvements on said premises and all are within the
boundary lines of the PROPERTY.
7. To the best of the knowledge of the undersigned, all zoning, use,
height and density classifications are properly shown on the SURVEY, and there
are no violations of zoning ordinances, restrictions or other rules and
regulations with reference to the location of said buildings, structures, and
improvements.
8. To the best of the knowledge of the undersigned, based upon a
careful physical inspection of the PROPERTY, there are no easements or rights of
way over, encroachments by improvements located on adjacent property onto, or
uses affecting, the PROPERTY or easement areas existing for the benefit of land
appurtenant to the PROPERTY, other than those shown and depicted on the SURVEY.
<PAGE>
9. There are no encroachments by any of the improvements located on the
PROPERTY onto adjacent property or onto easement areas of others, other than as
shown and depicted on the SURVEY.
10. All utility services required for the operation of the PROPERTY
either enter the PROPERTY through adjoining public streets, or the SURVEY shows
the point of entry and location of any utilities which pass through or are
located on adjoining private land.
11. The PROPERTY has direct access to , a completed and dedicated
public way which has been accepted for public maintenance and use by the public
subdivision having jurisdiction over the same.
12. The SURVEY shows the location and direction of all storm drainage
systems for the collection and disposal of all roof and surface drainage.
13. Any discharge into streams, rivers or other conveyance systems is
shown on the SURVEY.
14. The PROPERTY does not lie within any flood hazard area as
determined by the document entitled "Department of Housing And Urban
Development, Federal Insurance Administration - Special Flood Hazard Area Maps"
(flood map no. ).
15. The PROPERTY (and only the PROPERTY) constitutes one tax lot except
as otherwise shown on the SURVEY.
16. Any storage tanks or utility transformers located on the PROPERTY
are depicted on the SURVEY and those storage tanks or transformers labelled as
containing hazardous materials or PCBs are specifically noted.
__________________________(SEAL)
Name:_____________________
Title:____________________
Date:__________________, 1997
R18891.138
3:2/2l/97
- 2 -
<PAGE>
SUBSCRIPTION AGREEMENT
MART Limited Partnership
1302 Concourse Drive, Suite 204
Linthicum, Maryland 21090
Gentlemen:
The undersigned (the "Subscriber") is a party to the Agreement for
Contribution of Partnership Interests dated ________________, 1997 (the
"Contribution Agreement") among Mid- Atlantic Realty Trust, a Maryland real
estate investment trust ("MART"), MART Limited Partnership, a Maryland limited
partnership (the "Partnership"), and the persons named on Schedule I to the
Contribution Agreement, including the Subscriber.
Pursuant to the Contribution Agreement, the Subscriber is to contribute
to the Partnership the general and/or limited partnership interests set forth on
Schedule II to the Contribution Agreement (the "Contribution") in exchange for
that number of units of partnership interest of the Partnership set forth on
Schedule IV to the Contribution Agreement (the "Units").
The purpose of this Subscription Agreement is to set forth the terms of
my subscription for the Units.
1. Subscription. The Subscriber hereby subscribes for the Units and
agrees, in consideration thereof, to contribute to the capital of the
Partnership the Contribution by assignments of the general and/or limited
partnership interests constituting the Contribution (as set forth on Schedule II
to the Contribution Agreement) in form satisfactory to the Partnership.
2. Representations and Warranties of the Subscriber. The Subscriber
represents and warrants to the Partnership that:
(a) The Subscriber's Units are being acquired by the Subscriber
for the Subscriber's own account, for investment purposes only, and not with a
view to a public distribution thereof, either in whole or in part.
(b) Prior to the date hereof, the Subscriber has carefully
reviewed the documents relative to the transactions contemplated by the
Contribution Agreement and such other documents relative to the Partnership and
to MART as the Subscriber deems appropriate, including but not limited to the
following documents and exhibits and schedules thereto: Contribution Agreement;
Partnership Agreement; Registration Rights Agreement; Form 10-K of MART for the
fiscal year ended December 31, 1996; Forms 10-Q for MART for any interim
periods; proxy statement of MART for the 1997 Annual Meeting of Shareholders.
(c) The Subscriber has had the opportunity to ask questions and
receive answers concerning the Partnership, MART and the Units and to obtain any
additional information which the Partnership and MART possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of the information provided in the documents listed above.
<PAGE>
MART Limited Partnership
Page 2
(d) The Subscriber understands that there is not a market for the
Units, that none may develop, and that limited rights exist to transfer the
Units.
(e) The Subscriber has the financial means to make an investment
in the Partnership and MART; the Subscriber is able to bear the economic risk of
an investment in the Partnership and MART; and the Subscriber's present
financial condition is such that the Subscriber is under no present or
contemplated future need to dispose of any portion of the Units to satisfy any
existing or contemplated undertaking, need or indebtedness.
(f) The Subscriber has such knowledge and experience in business
and financial matters as will enable the Subscriber to utilize the information
made available to the Subscriber to evaluate the merits and risks of the
prospective investment in the Units and to make an informed investment decision;
OR, alternatively, the Subscriber has designated Jack Pechter as his/her
Purchaser Representative to provide such knowledge and experience to the
Subscriber.
(g) The Subscriber is an "accredited investor," as defined below,
by virtue of satisfaction of the terms of the definition of "accredited
investor" contained in the boxes checked below by the Subscriber:
_
|_| Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
_
|_| A trustee or executive officer of MART;
_
|_| Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of purchase exceeds $1,000,000;
_
|_| Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
_
|_| Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a person who either alone or with such person's
Purchaser Representative(s) has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of the prospective investment, or the issuer reasonably believes immediately
prior to making any sale that such purchases comes within this description;
<PAGE>
MART Limited Partnership
Page 3
_
|_| Any entity in which all of the equity owners are accredited
investors.
(h) If the Subscriber is a natural person, the Subscriber's
principal residence is the state set forth on the signature page hereof, and the
Subscriber has no present intention of changing such residence; and if the
Subscriber is an entity, its principal office is in the state set forth on the
signature page hereof, and it has no present intention of changing its principal
office;
(i) The Subscriber confirms that all of the foregoing
representations and warranties and all other information provided to the
Partnership and MART (including information in the Subscriber Confidential
Investor Suitability Questionnaire attached hereto) are true and correct as of
the date hereof. Subscriber agrees to indemnify and save harmless the
Partnership and MART and its successors and assigns, from any loss, claim,
damage or expense arising out of a breach by the Subscriber of any of the
foregoing representations, and warranties or the falsity or inaccuracy of any
response of the Subscriber to any question posed herein and in the Confidential
Investor Suitability Questionnaire.
3. Covenants of the Subscriber. The Subscriber hereby covenants and
agrees that: (a) the Subscriber will not take or cause to be taken, any action
with respect the Subscriber's Units that would cause the Subscriber to be
"deemed" an underwriter, as defined in Section 2(11) of the Securities Act of
1933, as amended (the "Act"); and (b) the certificates representing the Units
received by the Subscriber will contain a legend prohibiting transfer unless
effected in compliance with applicable federal and state securities laws.
4. Transferability and Resale of Units.
(a) The Subscriber acknowledges that the transferability of the
Units is limited by the terms and provisions of the Partnership Agreement.
(b) The Subscriber acknowledges that the Units have not been
registered under the Act or applicable state blue sky laws (the "State Acts")
and shall not be sold, pledged, hypothecated, or otherwise transferred (whether
or not for consideration) by the Subscriber unless registered pursuant to the
Act and the State Acts, or upon the issuance to the Partnership or MART, as the
case may be, of a favorable opinion of its counsel, satisfactory to the
Partnership or MART, as the case may be, to the effect that any such transfer
shall not be in violation of the Act and the State Acts.
(c) The Subscriber acknowledges that the Partnership is not
expected to file periodic reports with the Securities and Exchange Commission
pursuant to the requirements of Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934, as amended. The Subscriber also understands that the
Partnership has not agreed to register the Units for distribution in
<PAGE>
MART Limited Partnership
Page 4
accordance with the provisions of the Act and the State Acts, or to comply with
any exemption under the Act and the State Acts for the transfer of the Units.
5. Binding Effect; Successors and Assigns. This Subscription Agreement
shall be binding upon the parties hereto, and their respective successors,
assigns heirs and personal representatives. This Subscription Agreement shall
not be assignable by the Subscriber, in whole or in part.
6. Governing Law. This Subscription Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland,
and to the extent it involves any United States statute, in accordance with the
laws of the United States.
7. Severability. If for any reason any provision or any portion of this
Subscription Agreement shall be determined to be invalid or contrary to
applicable laws, such invalidity shall not impair the operation or effect of the
remaining provisions hereof.
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement this ____ day of _____________, 1997.
______________________________(SEAL)
Name:_______________________________
Address:____________________________
____________________________________
____________________________________
Telephone No._______________________
Social Security No._________________
ACCEPTED THIS ____ DAY OF _____________, 1997
MART LIMITED PARTNERSHIP
By: Mid-Atlantic Realty Trust,
General Partner
By: _________________________________
C67821b.108 C:7
<PAGE>
ACKNOWLEDGMENT AND CONSENT OF LENDER
THIS ACKNOWLEDGMENT AND CONSENT OF LENDER is made by ________________
("Lender") as of this ______ day of ________________, 1997.
INTRODUCTORY STATEMENT
A. Lender is the current holder of a Promissory Note dated
________________, 19___, made by ________________ ("Debtor") to the order of
________________ (the "Note"), which Note is secured by a Deed of Trust dated
________________, 19___, from Debtor, as grantor, to ________________ and
________________, Trustees, and recorded among the Land Records of
________________ County, Maryland, in Liber ________ No. ________, folio
________ (the "Deed of Trust"). The Note and/or Deed of Trust have been
previously amended as follows: ________________________________________________
_______________________________________________________________________________.
B. The Deed of Trust provides, inter alia, that (i) the sale and
conveyance of the property therein described (the "Trust Property"), and (ii)
certain transfers of partnership or other ownership interests in the Debtor
shall constitute events of default unless the beneficiary of the Deed of Trust
shall have given its prior consents thereto.
C. Debtor has contracted to sell the Trust Property described in the
Deed of Trust to Mid-Atlantic Realty Trust and/or its affiliate, MART Limited
Partnership ("Buyer"), pursuant to a Contribution Agreement dated
________________, 1997 (the "Contribution Agreement"), a copy of which has
heretofore been delivered to Lender.
D. The sale of the Trust Property shall be effected either by a
conveyance by a deed of the Trust Property to Buyer or by a transfer to the
Buyer of 100% of the partnership or other ownership interests in the Debtor.
E. Lender, as the current beneficiary under the Deed of Trust, has
agreed to consent to the sale and transfer to the Buyer of the Trust Property or
of the partnership or other ownership interests in the Debtor as provided for in
and contemplated by the Contribution Agreement.
NOW, THEREFORE, THIS ACKNOWLEDGMENT AND CONSENT OF LENDER, WITNESSETH,
that for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged the Lender does hereby agree, acknowledge and stipulate as follows:
1. Lender has received and reviewed a copy of the Contribution
Agreement.
2. The Lender hereby consents (a) to the sale and transfer to the Buyer
of the Trust Property and/or of the partnership or other ownership interests in
the Debtor, and (b) to the assignment by Debtor to Buyer of all funds escrowed
pursuant to the Deed of Trust (if any), all in the manner provided for in and
contemplated by the Contribution Agreement.
1
<PAGE>
3. Lender acknowledges and agrees that neither the transactions
contemplated by Section 2 hereof, nor any other transaction otherwise provided
for or contemplated by the Contribution Agreement, shall constitute or otherwise
cause a default under the Note or the Deed of Trust, or cause or otherwise give
rise to an acceleration of the debt evidenced by the Note and secured by the
Deed of Trust.
4. Lender hereby certifies to Debtor and Buyer that (a) Lender has good
title to the Note and is the sole owner of the Note with full power and
authority to execute and deliver this Acknowledgment and Consent; (b) the person
executing this Acknowledgment and Consent on behalf of Lender is fully
authorized to do so; (c) the Note has a current principal balance of $________
Dollars, with unpaid accrued interest at the rate of ________% per annum from
the day of ________________, 1997; (d) the Note requires monthly payments of
$________ each on the first day of each month; (e) there are no defaults under
the Deed of Trust or Note; (f) interest thereon has been paid through
________________, 1997; (g) the Note matures on ________________, at which time
a balloon payment of $________ will be due; (h) the undersigned presently holds
a real estate tax escrow account of $________, and requires monthly escrow
payments of $________ to such account; and (i) there have been no amendments to
the Note or Deed of Trust except as set forth above.
WITNESS the following duly authorized signature on behalf of Lender
under seal as of the day and year first above written.
WITNESS: LENDER:
By: (SEAL)
- ------------------------- -----------------------------
, Vice President
STATE OF MARYLAND, CITY/COUNTY OF BALTIMORE, TO WIT:
I HEREBY CERTIFY that on this ________ day of
________________, 1997, before me, a Notary Public of the State of Maryland,
personally appeared President of ________________, who, on behalf of said
corporation, acknowledged the foregoing Agreement to be its act and deed.
WITNESS my hand and Notarial Seal.
----------------------------------
Notary Public
My Commission Expires:
-----------
2
<PAGE>
[OPINION OF CONTRIBUTORS' COUNSEL]
___________, 1997
Mid-Atlantic Realty Trust, and
MART Limited Partnership
1302 Concourse Drive, Suite 204
Linthicum, Maryland 21090
Re: Agreement for Contribution of Limited Liability
Company Interests (the "Contribution Agreement")
Gentlemen:
This firm has represented the Contributors, as that term is defined in
the Contribution Agreement dated ___________, 1997, among the Contributors,
Mid-Atlantic Realty Trust, a Maryland real estate investment trust ("MART"), and
MART Limited Partnership, a Maryland limited partnership (the "Partnership").
Capitalized terms used herein which are not defined herein shall have the
meanings set forth in the Contribution Agreement.
The Contributors initially owned interests in the eight limited
partnerships (the "Limited Partnerships") and the one general partnership (the
"General Partnership") listed on Schedule A hereto. The Limited Partnerships and
the General Partnership are referred to herein collectively as the "Contributing
Partnerships". Each of the Contributing Partnerships, other than Tripec
Associates Limited Partnership ("Tripec"), has transferred and conveyed all of
its properties to a corresponding limited liability company, and Tripec
transferred certain specified properties to a corresponding limited liability
company, (all of such limited liability companies being listed on Schedule B
hereto and referred to collectively herein as the "Limited Liability Companies")
in exchange for limited liability company interests comparable to the
Contributors' partnership interests, listed on Schedule C hereto and
collectively referred to herein as the "Limited Liability Company Interests".
The properties transferred by the Contributing Partnerships to the Limited
Liability Companies are referred to herein individually as a "Property" and
collectively as the "Properties." Finally, each of the Contributors contributed
each of their respectively owned Limited Liability Company Interests to the
Partnership in exchange for Units in the Partnership.
<PAGE>
Mid-Atlantic Realty Trust, and
MART Limited Partnership
___________, 1997
Page 2
The Contributors include the Pechter Family Limited Partnership, a
________________ limited partnership (the "Family Partnership"), which initially
owned Limited Partnership Interests listed in Schedule A hereto but no
properties and now owns only the Limited Liability Company Interests listed in
Schedule C hereto.
In our capacity as counsel to the Contributors, we have examined and
relied upon the following documents:
In reaching our opinions, we have assumed, and to our knowledge there
are no facts inconsistent with, the following:
Based on our review of the foregoing and subject to the assumptions
and qualifications set forth herein, it is our opinion that, as of the date of
this letter:
1. Each Limited Partnership is validly existing and in good standing
under the laws of the State of Maryland and has all requisite limited
partnership power and authority to own, lease and operate its properties and to
carry on its business as conducted prior hereto.
2. The General Partnership is a validly formed and existing general
partnership under the laws of the State of Maryland and has all requisite
general partnership power and authority to own, lease and operate its properties
and to carry on its business as prior hereto.
3. The transfer and conveyance of the Properties from each of the
Contributing Partnerships to each of the Limited Liability Companies was duly
and validly authorized by all necessary limited partnership or general
partnership action as required under applicable Maryland law.
4. Each of the Limited Liability Companies is validly existing and in
good standing under the laws of the State of Maryland and has all requisite
limited liability company power and authority to own, lease and operate its
properties and to carry on the business of the Partnerships.
<PAGE>
Mid-Atlantic Realty Trust, and
MART Limited Partnership
___________, 1997
Page 3
5. Each of the Contributors has full power, capacity and authority to
execute and deliver the Contribution Agreement, the Agreement of Limited
Partnership, the Subscription Agreement, the Registration Rights Agreement,
(collectively the "Agreements"), to perform their respective obligations under
each of the Agreements, and to consummate the transactions by each of the
Contributors as contemplated therein, including the transfer of the Limited
Liability Company Interests to the Partnership in exchange for Partnership
Units.
6. In each instance in which a Contributor is not a natural person,
the Agreements have been executed by a person or persons duly authorized to
execute the Agreements for an on behalf of the Contributor in a valid and lawful
manner. The Family Partnership is validly existing and in good standing under
the laws of the State of Georgia with full power capacity and authority to own
and transfer the Limited Partnership Interests and the Limited Liability Company
Interests as described herein.
7. Upon transfer of the Limited Liability Company Interests to the
Partnership, the Partnership will become the sole owner of 100% of the
outstanding limited liability company interests of each of the Limited Liability
Companies, free and clear of all liens, claims, security interests and
encumbrances.
8. Each of the Agreements constitutes the valid and binding agreement
of each of the Contributors enforceable against each of the Contributors in
accordance with the respective terms of each Agreement, subject to (i)
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws affecting the rights of creditors generally, and (ii)
the exercise of judicial discretion in accordance with general principles of
equity.
9. Except with respect to compliance with applicable federal and state
securities laws, no consent, approval, order, authorization or other action by,
or filing with, any governmental authority is required for the transfer and
conveyance of the Properties from each of the Partnerships to each of the
Limited Liability Companies or the execution and delivery of the Agreements by
the Contributors, or if required, the requisite consent, approval, order or
authorization has been obtained, the requisite filing has been accomplished, or
the requisite action has been taken.
<PAGE>
Mid-Atlantic Realty Trust, and
MART Limited Partnership
___________, 1997
Page 4
10. The transfer and conveyance of the Properties from each of the
Partnerships to each of the Limited Liability Companies and the consummation of
the transactions contemplated by the Agreements do not and will not, with the
passage of time or the giving of notice, or both, violate or conflict with,
constitute a breach of or default under, result in the loss of any material
benefit under or permit the acceleration of any obligation under (a) any term or
provision of the Articles of Limited Partnership of any Limited Partnership, the
Partnership Agreement of the General Partnership, or the Articles of
Organization or Operating Agreement of any Limited Liability Company, (b) to our
knowledge, any judgment, decree or order of any court or governmental authority
or agency to which any Contributor, or any Limited Partnership, General
Partnership or Limited Liability Company (collectively, the "Entities") is a
party or by which any properties of any Entity is bound, (c) to our knowledge,
any statute, law, regulation or rule applicable to any of the Contributors or
any of the Entities, or (d) to our knowledge, any mortgage, indenture, deed of
trust, lease, contract or other agreement to which any of the Contributors or
any of the Entities is a party or by which any properties of any Entity is
bound.
11. To our knowledge, except as set forth in Schedule C hereto, there
is no litigation or governmental proceeding or investigation (a) pending or
threatened against any of the Properties, or (b) pending or threatened against
any Contributor, any Entity or any partner, member, officer or employee of any
Contributor or Entity, at law or in equity, which might result in any material
adverse change in the assets, business, operations, properties or condition of
any of the Entities or which might call into question or adversely impact on the
validity of any of the Agreements.
12. We have received letters from the zoning office of each county in
which each Property is located (the "Zoning Letters"), copies of which are
attached as Schedule D to this letter, stating the zoning classification of each
Property and that, under the zoning ordinance of such county, retail shopping
center use is a permitted use under such zoning classification.
Accordingly, in reliance upon the Zoning Letters and the zoning
ordinance of each county in which each Property is located, we are of the
opinion that the improvements which presently exist upon each Property
constitute a permitted use of
<PAGE>
Mid-Atlantic Realty Trust, and
MART Limited Partnership
___________, 1997
Page 5
such Property, subject to compliance with the other requirements of the zoning
ordinance and the continued exclusive use of such Property as a retail shopping
center. No further subdivision is necessary for the conveyance of each Property
because each such Property is a properly subdivided parcel. Each Property is
carried on the tax rolls as a separate lot or lots.
C68024.108 S
<PAGE>
June 30, 1997
To the Contributors named in
Schedule A attached hereto
Re: Agreement for Contribution of Limited Liability
Company Interests (the "Contribution Agreement")
Gentlemen:
This office has represented Mid-Atlantic Realty Trust, a Maryland real
estate investment trust ("MART"), and MART Limited Partnership, a Maryland
limited partnership (the "Partnership") in connection with the Contribution
Agreement dated April 1, 1997 among them and the Contributors named in Schedule
A attached hereto (the "Contributors"). Capitalized terms used herein which are
not defined herein shall have the meanings set forth in the Contribution
Agreement.
In our capacity as counsel to the Contributors, we have examined and
relied upon the following documents:
1. the Contribution Agreement,
2. the Subscription Agreement and Registration Rights Agreement,
3. the Declaration of Trust and bylaws of MART,
4. the Certificate and Agreement of Limited Partnership,
5. a Certificate of the Maryland State Department of Assessments and
Taxation dated June , 1997, to the effect that MART is duly formed and existing
as a real estate investment trust under the laws of the State of Maryland and is
in good standing and authorized to transact business in the State of Maryland,
6. a Certificate of the Maryland State Department of Assessments and
Taxation dated June , 1997, to the effect that the Partnership is duly formed
and existing as a limited partnership under the laws of the State of Maryland
and is in
<PAGE>
June 30, 1997
Page 2
good standing and authorized to transact business in the State of
Maryland,
7. the records of the proceedings and actions of the Board of Trustees
of MART with respect to the Contribution Agreement, and
8. such other documents and matters as we have deemed necessary and
appropriate to render the opinions hereinafter set forth, subject to the
limitations, assumptions and qualifications noted below.
In basing the opinions and other matters set forth herein on "our
knowledge," the words "our knowledge" signify that, in the course of our
representation of MART and the Partnership in matters with respect to which we
have been engaged by them as counsel, no information has come to our attention
that would give us actual knowledge or actual notice that any such opinions or
other matters are not accurate or that any of the foregoing documents,
certificates, reports, and information on which we have relied are not accurate
and complete. Except as otherwise stated herein, we have undertaken no
independent investigation or verification of such matters. The words "our
knowledge" and similar language used herein are intended to be limited to the
knowledge of the lawyers within our firm who have recently worked on matters on
behalf of MART and the Partnership.
In reaching our opinions, we have assumed, and to our knowledge there
are no facts inconsistent with, the following:
(a) each of the parties thereto (other than MART and the
Partnership) has duly and validly executed and delivered each instrument,
document, and agreement executed in connection with the Contribution Agreement
to which such party is a signatory, and such party's obligations set forth
therein are its legal, valid, and binding obligations, enforceable in accordance
with their respective terms:
(b) each person executing any such instrument, document, or
agreement on behalf of any such party (other than MART and the Partnership) is
duly authorized to do so;
(c) each natural person executing any such instrument, document,
or agreement is legally competent to do so;
(d) there are no oral or written modifications of or amendments to
the Contribution Agreement and there has been no
<PAGE>
June 30, 1997
Page 3
waiver of any of the provisions of the Contribution Agreement, by
actions or conduct of the parties or otherwise;
(e) all documents submitted to us as originals are authentic, all
documents submitted to us as certified or photostatic copies conform to the
original document, all signatures on all documents submitted to us for
examination are genuine, and all public records reviewed are accurate and
complete;
Based on our review of the foregoing and subject to the assumptions and
qualifications set forth herein, it is our opinion that, as of the date of this
letter:
1. MART is a real estate investment trust validly existing and in good
standing under the laws of the State of Maryland and has all requisite real
estate investment trust powers and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
2. The Partnership is a validly formed and existing limited partnership
under the laws of the State of Maryland and has all requisite limited
partnership power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
3. MART has full power, capacity and authority to execute and deliver
the Contribution Agreement, the Agreement of Limited Partnership, the
Subscription Agreement and the Registration Rights Agreement (collectively, the
"Agreements"), to perform its obligations under each of the Agreements, and to
consummate the transactions by it as contemplated therein.
4. The Partnership has full power and capacity to execute and deliver
the Agreements (other than the Registration Rights Agreement), to perform its
obligations under each of such Agreements and to consummate the transactions by
it contemplated in such Agreements.
5. The execution and delivery of the Agreements by MART has been duly
authorized by all real estate investment trust action required by MART under
Maryland law.
6. The execution and delivery of the Agreements (other than the
Registration Rights Agreement) by the Partnership has been duly authorized by
all limited partnership action required under Maryland law.
<PAGE>
June 30, 1997
Page 4
7. The issuance of the Units to the Contributors in exchange for (i)
the limited liability company interests and (ii) real property of Tripec
Associates Limited Partnership pursuant to the terms of the Contribution
Agreement has been duly and validly authorized by all action required by the
Partnership under Maryland law and the Units to be received by the Contributors
in exchange therefore will be duly and validly issued, fully paid and
non-assessable.
8. Each of the Agreements constitutes the valid and binding agreement
of MART enforceable against MART in accordance with the respective terms of each
Agreement, subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws affecting the rights of
creditors generally, and (ii) the exercise of judicial discretion in accordance
with general principles of equity.
9. Each of the Agreements (other than the Registration Rights
Agreement) constitutes the valid and binding agreement of the Partnership
enforceable against the Partnership in accordance with the respective terms of
each such Agreement, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other laws affecting the
rights of creditors generally, and (ii) the exercise of judicial discretion in
accordance with general principles of equity.
10. No consent, approval, order, authorization or other action by, or
filing with, any governmental authority by MART or the Partnership is required
for the execution and delivery of the Agreements by MART or the Partnership, or
if required, the requisite consent, approval, order or authorization has been
obtained, the requisite filing has been accomplished, or the requisite action
has been taken.
11. The consummation of the transactions contemplated by the Agreements
do not and will not, with the passage of time or the giving of notice, or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under or permit the acceleration of any obligation
under (a) any term or provision of the Declaration of Trust of MART or the
Agreement of Limited Partnership of the Partnership, (b) to our knowledge, any
judgment, decree or order of any court or governmental authority or agency to
which MART or the Partnership is a party or by which any properties of MART or
the Partnership are bound, (c) to our knowledge, any statute, law, regulation or
rule applicable to MART or the Partnership or (d) to our knowledge, any
mortgage, indenture, deed of trust,
<PAGE>
June 30, 1997
Page 5
lease, contract or other agreement to which MART or the Partnership is a party
or by which any of their properties is bound, other than the documents listed on
Schedule A attached hereto.
12. To our knowledge, there is no litigation or governmental proceeding
or investigation pending or threatened against MART or the Partnership at law or
in equity, which is likely to result in any material adverse change in the
assets, business, operations, properties or financial condition of MART or the
Partnership or which is likely to adversely affect the validity of any of the
Agreements.
We express no opinion as to the laws of any jurisdiction other than the
laws of the State of Maryland. The opinions expressed herein concern only the
effect of the laws (excluding the principles of conflict of laws) of the State
of Maryland as currently in effect. We assume no obligation to supplement this
opinion if any applicable laws change after the date hereof or if we become
aware of any facts that might change the opinions expressed herein after the
date hereof.
The opinions expressed in this letter are solely for the use of the
Contributors and their counsel, and these opinions may not be relied on by any
other persons without our prior written approval. The opinions expressed in this
letter are limited to the matters set forth in this letter, and no other
opinions such be inferred beyond the matters expressly stated.
This letter is to be interpreted in accordance with the Report of the
Special Joint Committee on Lawyers' Opinions in Commercial Transactions of the
Maryland State Bar Association, Inc. and The Bar Association of Baltimore City
dated January 18, 1989.
Very truly yours,
GORDON, FEINBLATT, ROTHMAN,
HOFFBERGER & HOLLANDER, LLC
By ____________________________________
Member
C68046a.108
<PAGE>
TENANT ESTOPPEL LETTER
The undersigned (the "Tenant"), as Tenant under a certain lease dated
_________________ as amended by Amendments dated ___________________
(collectively, the "Lease") made with ________________________________ a
Maryland ____________________ (the "Landlord") hereby ratifies such Lease and
certifies to Landlord and its successors and assigns, the following information
as true and correct as of the date of the execution of this Agreement:
As of ________________________, 1997:
1. Tenant is in full and complete possession of the premises described
in the Lease (the "Leased Premises"), such possession having been delivered by
the Landlord under the Lease and accepted by the Tenant as complying with the
term or the Lease.
2. The Lease is in force and effect.
3. The Lease has not been modified or amended, except as indicated
above, and constitutes the entire rental agreement between the Landlord and
Tenant for the Leased Premises.
4. There are no existing defaults on the part of either the Landlord or
Tenant under the Lease.
5. The improvements and space in the Leased Premises required to be
furnished by the terms and provisions of the Lease have been completed and
accepted by Tenant as being in accordance with the terms of the Lease.
6. All required allowances, if any, payable by Landlord to Tenant on
account of Tenant's improvements have been received.
7. Tenant is not entitled to receive any concession (rental or
otherwise) or other compensation in connection with renting the Leased Premises.
8. The amount of the current base monthly rent due and payable by the
Tenant, the date on which rental payments commenced under the Lease, the date on
which such monthly rent has been paid through, and the amount of any security
deposit, is as follows:
Amount of Current Base Monthly Rent _______________ ______________
Base Rent paid through _______________ ______________
Rental Payment Commencement Date _______________ ______________
Security Deposit _______________ ______________
9. Tenant does not currently have or hold any claim against the
Landlord which might be offset or credited against future accruing rents.
<PAGE>
10. Tenant will not offset or withhold rent on account of any claims
against the Landlord, except as specifically set forth in the Lease, and has not
paid the rent more than thirty (30) days in advance.
11. The term of the Lease commenced on ______________ and expires on
_______________________, unless sooner terminated pursuant to the terms and
conditions thereof or renewed pursuant to the terms and conditions of the Lease
or other terms acceptable to the parties.
12. Tenant currently has __________ remaining unexercised options of
_____________ years each. Such options may be exercised per the terms of the
Lease.
13. That none of the following has occurred: (a) the filing by or
against the undersigned of a petition in bankruptcy, insolvency, reorganization,
or an action for the appointment Of a receiver or trustee, or (b) the making of
an assignment for the benefit of creditors.
TENANT:
Dated: ___________________ By: ______________________________
GUARANTOR:
Dated: ____________________ By: _______________________________
C68579.171 D:1
- 2 -
<PAGE>
Exhibit (c)2
<PAGE>
AGREEMENT OF LIMITED PARTNERSHIP
MART LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP ("Agreement") dated as of the 1st day
of July, 1997, by MID-ATLANTIC REALTY TRUST ("MART" or the "General Partner"), a
Maryland real estate investment trust, and those persons and entities who have
executed this Agreement and are identified on Schedule A hereto (the "Limited
Partners") (the Limited Partners and the General Partner are hereinafter
referred to collectively as the "Partners").
RECITALS
A. MART desires to reorganize into an umbrella partnership real estate
investment trust ("UPREIT"). In furtherance thereof, MART and the Limited
Partners hereby form a limited partnership under the Maryland Revised Uniform
Limited Partnership Act in accordance with the terms of this Agreement (the
"Partnership"). (All capitalized terms used herein shall have the meanings set
forth in Section 2 hereof or elsewhere in this Agreement.)
B. MART and/or its subsidiaries will assign to the Partnership the
beneficial interest in and to all real property owned by it and by any of its
subsidiaries in exchange for units of partnership interest in the Partnership
("Units").
C. The Limited Partners will contribute to the Partnership certain
real property and/or interests in entities having an interest in real property,
all as described in this Agreement in exchange for Units.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:
1. THE PARTNERSHIP.
1.1 Formation of Partnership. The General Partner and the Limited
Partners do hereby organize the Partnership as a Maryland limited partnership in
accordance with all of the terms and provisions of this Agreement and in
accordance with the Act.
1.2 Name. The Partnership name shall be "MART Limited
Partnership", but the General Partner may from time to time change the name of
the Partnership or may adopt such trade or fictitious names as it may determine.
1.3 Principal Office. The principal office of the Partnership
shall be located at 170 West Ridgely Road, Suite 300, Lutherville, MD 21093, or
at such other place as the General Partner may designate after giving written
notice of such designation to the other Partners.
1.4 Resident Agent. The Resident Agent of the Partnership shall
be Abba David Poliakoff, Esq., 233 East Redwood Street, Baltimore, Maryland
21202.
<PAGE>
1.5 Term. The term of the Partnership shall continue until
December 31, 5757 ("Expiration Date") or earlier upon the occurrence of any of
the events described in Section 12.
1.6 Purpose and Powers of Partnership. The purposes of the
Partnership shall be to acquire, purchase, own, operate, manage, develop,
redevelop, invest in, finance, refinance, sell, lease and otherwise deal with
real properties and assets related thereto and interests therein, whether
directly or indirectly or in association with others, and to engage in such
other business and take such other action as may be permitted by law.
1.7 Admission and Withdrawals of Limited Partners. Persons and/or
entities may be admitted to the Partnership as Limited Partners upon the prior
written consent of the General Partner in accordance with the provisions of this
Agreement. Except as expressly provided in this Agreement, no Partner may
withdraw from the Partnership without the prior written consent of the General
Partner.
1.8 Name and Address of Partners. The names and addresses of the
Partners, their respective Capital Contributions to the Partnership, and the
number of Units owned by each of them are as set forth in Schedule A hereto and
incorporated herein by reference.
2. DEFINITIONS.
2.1 As used in this Agreement, the following terms shall have the
meanings set forth respectively after each:
"Act" shall mean the Maryland Revised Uniform Limited Partnership
Act, as amended from time to time, and any successor statute.
"Adjusted Capital Account Deficit" shall mean, with respect to
any partner, the then deficit balance, if any, in the Capital Account of such
Partner, after giving effect to the following adjustments:
(a) credit to such Capital Account any amounts that such
Partner is deemed obligated to restore as described in the penultimate sentences
of Regulations Section 1.704-2(g)(1) and Regulations Section 1.704-2(i)(5), or
any successor provisions; and
(b) debit to such Capital Account the items described in
Regulations Sections 1.704-1 (b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
"Agreement" shall mean this Agreement of Limited Partnership, as
it may be amended from time to time.
"Available Cash" shall have the meaning provided in Section 8.1
below.
2
<PAGE>
"Bankruptcy" of a Partner shall mean (a) the filing by a Partner
of a voluntary petition in bankruptcy; (b) being adjudged bankrupt or insolvent
or having entered against him an order of relief in any bankruptcy or insolvency
proceeding; (c) the filing by a Partner of a petition or answer seeking for
himself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation; or (d)
seeking, consenting to, or acquiescing in, the appointment of a trustee,
receiver, or liquidation of the General Partner or of all or substantially all
of his properties.
"Capital Account" shall mean the capital account maintained by
the Partnership for each Partner as described in Section 4 below.
"Capital Contribution" shall have the meaning set forth in
Section 3.1 hereto.
"Code" shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time, and any successor statute.
"Common Share" shall mean a common share of beneficial interest,
par value $.01 per share, of MART.
"Contributing Partner" shall have the meaning provided in Section
5.2(e) below.
"Depreciation" shall mean for any fiscal year or portion thereof,
an amount equal to the depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for such period for Federal income
tax purposes, except that if the Gross Asset Value of an asset differs from its
adjusted basis for Federal income tax purposes at the beginning of such period,
Depreciation shall be an amount that bears the same relationship to such
beginning Gross Asset Value as the depreciation, amortization or cost recovery
deduction in such period for Federal income tax purposes bears to the beginning
adjusted tax basis; provided, however, that if the adjusted basis for Federal
income tax purposes of an asset at the beginning of such period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.
"Determination Date" shall mean the date on which the General
Partner makes a determination as to the value of the OP Units, which date shall
be as close as practicable, in the sole and absolute discretion of the General
Partner, to the date of the event or transaction for which the OP Units are
being valued.
"General Partner" shall mean Mid-Atlantic Realty Trust, a
Maryland real estate investment trust, sometimes also referred to in this
Agreement as "MART".
"Gross Asset Value" shall mean, with respect to any Partnership
asset, the asset's adjusted basis for Federal income tax purposes, except as
follows:
(a) The initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be the gross fair market value of such
asset, as determined by the General Partner;
3
<PAGE>
(b) The Gross Asset Value of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as determined by
the General Partner, as of the following times: (i) the acquisition of an
additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis capital contribution; (ii) the distribution
by the Partnership to a Partner of more than a de minimis amount of Partnership
property as consideration for an interest in the Partnership; and (iii) the
liquidation of the Partnership within the meaning of Regulations Section 1.704-1
(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i) and
(ii) above shall be made only if the General Partner reasonably determines that
such adjustments are necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(c) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the gross fair market
value of such asset on the date of distribution as determined by the General
Partner and
(d) The Gross Asset Value of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and paragraph (f)
of the definition of Profits and Losses and Section 7.3(h) below; provided,
however, that Gross Asset Value shall not be adjusted pursuant to this paragraph
(d) to the extent the General Partner determines that an adjustment pursuant to
paragraph (b) above is necessary or appropriate in connection with a transaction
that would otherwise result in an adjustment pursuant to this paragraph (d).
(e) If the Gross Asset Value of an asset has been determined
or adjusted pursuant to paragraphs (a), (b) or (d) above, such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Profits and Losses.
"Initial Unrelated Limited Partners" shall mean the individuals
identified as Initial Unrelated Limited Partners on Schedule A hereto.
"Limited Partner" shall have the meaning set forth in the opening
paragraph hereto.
"Market Price" shall mean the average of the last reported sale
price per Common Share on the American Stock Exchange (or such other principal
national securities exchange on which the Common Shares are listed), at the
close of trading on each of the most recent 20 trading days for the Common
Shares preceding the "Determination Date."
"Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(b).
"OP Units" are a type of interest in the Partnership, as more
particularly described in Section 5.1(a) below.
4
<PAGE>
"OP Unit Value" shall mean, as of any given time, the number of
OP Units into which a Preference Unit is convertible (whether or not the
conversion can then be effected), or the value of the Preference Unit expressed
in OP Units if the Preference Unit is not convertible into OP Units, as provided
for in the applicable Preference Unit Certificate or Other Securities
Certificate.
"Other Securities" shall mean securities of the Partnership other
than OP Units and Preference Units.
"Other Securities Certificate" shall have the meaning provided in
Section 5.2(a)(iii) below.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning
set forth in Regulations Section 1.704-2(i).
"Partner Nonrecourse Deductions" shall have the meaning set forth
in Regulations Section 1.704-2(i).
"Partners" shall have the meaning set forth in the opening
paragraph hereto.
"Partnership Interest" shall mean the ownership interest of a
Partner in the Partnership at any particular time, including the right of such
Partner to any and all benefits to which such Partner may be entitled as
provided in this Agreement, together with the obligations of such Partner to
comply with all of the terms and provisions of this Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
"Percentage Interest" shall mean, as to each Partner, the
quotient (expressed as a percentage) arrived at by dividing (a) the sum of the
OP Unit Value of any Preference Units held by that Partner and the number of OP
Units held by that Partner, by (b) the sum of the OP Unit Value of all
Preference Units issued and outstanding at the time and the total number of OP
Units issued and outstanding at the time.
"Person" shall mean any individual, entity or group.
"Preference Units" are types of interests in the Partnership, as
more particularly described in Section 5.1(b) below.
"Profits" and "Losses" shall mean for each fiscal year or portion
thereof, an amount equal to the Partnership's items of taxable income or loss
for such year or period, determined in accordance with Section 703(a) of the
Code with the following adjustments:
5
<PAGE>
(a) any income which is exempt from Federal income tax and
not otherwise taken into account in computing Net Profits or Net Losses shall be
added to taxable income or loss;
(b) any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Section 705(a)(2)(B) expenditures under
Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in
computing Profits or Losses, will be subtracted from taxable income or loss;
(c) in the event that the Gross Asset Value of any
Partnership asset is adjusted pursuant to the definition of Gross Asset Value
contained in this Section, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Profits and Losses;
(d) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to the Gross Asset Value of
the property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(e) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period;
(f) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1 (b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in complete liquidation of a Partner's Partnership Interest, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses: and
(g) any items specially allocated pursuant to Section 7.3,
Section 7.4 or 12.2(c) below shall not be considered in determining Profits or
Losses.
"Regulations" shall mean the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Units" shall have the meaning set forth in Section 5 below.
3. CAPITAL CONTRIBUTIONS AND CAPITAL CONTRIBUTIONS; LOANS.
3.1 Capital Contributions. The General Partner and the Limited
Partners have each contributed to the capital of the Partnership an amount of
cash or property having a gross fair market value and net fair market value in
the amounts set forth opposite their names on Schedule A hereto. Except as
otherwise provided in this Agreement or as otherwise provided
6
<PAGE>
by the Act, no Limited Partner shall be required to make any additional capital
contributions to the Partnership. The amounts contributed by the Partners as
provided in this Section shall be and become the capital of the Partnership, and
are hereinafter referred to as the "Capital Contribution" of a Partner. The
General Partner shall contribute to the Partnership the net proceeds of any
offering of common shares or other securities which the General Partner
undertakes after the date hereof in exchange for additional OP Units or
Preference Units in accordance with the provisions of Section 5.2 hereof.
3.2 Additional Capital Contributions. Any additional funds or
other property required by the Partnership, as determined by the General Partner
in its sole and absolute discretion, may, at the option of the General Partner
and without an obligation to do so, be contributed by the General Partner or any
other Partner (provided such other Partner is willing to do so and the General
Partner consents thereto, each in its sole and absolute discretion) as
additional Capital Contributions. If and as the General Partner or any other
Partner makes additional Capital Contributions to the Partnership, each such
Partner shall receive additional Units as provided for in this Agreement.
3.3 Return of Capital. Except as expressly provided for in this
Agreement or in a Preference Schedule hereto, no Partner shall have the right to
demand or to receive the return of all or any part of his Capital Contributions
to the Partnership and no Partner shall have priority over any other Partner as
to the return of its Capital Contributions. No Partner shall have the right to
demand or receive property other than cash in return for such Partner's Capital
Contribution. No interest shall be paid on the Capital Contributions of the
Partners.
3.4 Loans. If any Partner shall, with the consent of the General
Partner, advance any monies or property to the Partnership other than as
provided in Section 3.1 or 3.2 hereof, the amount of such advance shall not be
an increase in its Capital Contribution, or entitle it to any increase in his
share of the Profits of the Partnership, or subject it to any greater proportion
of the Losses which it may sustain, but the amount of any such advance shall be
a loan from the Partner to the Partnership and such loan shall be repaid to him
out of the Available Cash, or earlier upon such Partner's withdrawal from, or
the termination of, the Partnership, together with interest at the prime rate
from time to time in effect or at such other rate of interest agreed to in
writing by the General Partner. The Partnership shall be deemed to have waived
the statute of limitations in any action which may be brought for the collection
of any loan by a Partner to the Partnership.
4. CAPITAL ACCOUNTS.
4.1 Separate Accounts. A separate capital account ("Capital
Account") shall be maintained for each Partner in accordance with the following
rules:
(a) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such Partner's distributive share
of Profits and any items in the nature of income or gain which are specially
allocated pursuant to Section 7.3, Section 7.4 or Section 12.2(c) hereof, and
the amount of any Partnership liabilities assumed by such Partner or which are
secured by any Partnership property distributed to such Partner.
7
<PAGE>
(b) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Partnership, property
distributed to such Partner pursuant to any provision of this Agreement, such
Partners distributive share of Losses and any items in the nature of expenses or
losses which are specially allocated pursuant to Section 7.3, Section 7.4 or
Section 12.2(c) hereof, and the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.
(c) In the event all or a portion of a Partnership Interest
is transferred in accordance with the terms of this Agreement (including a
transfer of OP Units in exchange for Common Shares), the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred Partnership Interest.
(d) In determining the amount of any liability for purposes
of Sections 4.1(a) and 4.1(b) above, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.
(e) This Section and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1 (b), and shall be interpreted and applied in a
manner consistent with such Regulations. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Partnership or one or more Partners) are
computed in order to comply with such Regulations, the General Partner may make
such modification, provided that it is not likely to have a material effect on
the amounts distributed to any Partner pursuant to Section 12 below upon the
dissolution of the Partnership. The General Partner also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate
modifications in the event unanticipated events (for example, the acquisition by
the Partnership of oil or gas properties) might otherwise cause this Agreement
not to comply with Regulations Section 1.704-1(b).
4.2 Negative Capital Accounts. No Limited Partner shall be
required to pay to the Partnership any deficit or negative balance which may
exist in its Capital Account.
5. UNITS AND OTHER SECURITIES.
5.1 OP Units, Preference Units and Other Securities. The
Partnership Interest of a Partner in the Partnership is referred to as being
evidenced by one or more "Units" of Partnership Interest. Units may be either
"OP Units" or "Preference Units," as follows:
(a) An "OP Unit" is a Unit of Partnership Interest that
entitles its holder to share ratably, with all other OP Unit holders, in the
Profits and Losses and other benefits of the Partnership, subject to the
holder's obligations under this Agreement.
8
<PAGE>
(b) A "Preference Unit" is a Unit of Partnership Interest
having such rights, preferences and other privileges, variations and
designations as may be determined by the General Partner in its sole and
absolute discretion, but not in violation of the provisions of this Agreement,
the Act or of any other Preference Unit(s), such rights, preferences and other
privileges, variations and designations to be as described in a "Preference
Certificate" which shall be appended to this Agreement as Schedule B and
distributed to all Partners. There may be more than one series or class of
Preference Units having differing terms and conditions, but all Preference Units
within a given series or class shall have the same rights, preferences and other
privileges, variations and designations. A Preference Unit may be convertible
into one or more OP Units or be capable of being valued in OP Units. With
respect to each series or class of Preference Units, the General Partner may
also, in its discretion, determine and fix, among other terms and conditions,
any of the following: (i) the series to which such Preference Units shall
belong, (ii) the distribution rate therefore, (iii) the price at and the terms
and conditions on which such Preference Units may be redeemed, (iv) the amount
payable in respect of such Preference Units in the event of involuntary or
voluntary liquidation, (v) the terms and conditions on which such Preference
Units may be converted, if such Preference Units are issued with the privilege
of conversion, and (vi) the number of such Preference Units to be issued as a
part of such series. Once determined and fixed as herein provided, however, the
terms and conditions of a particular series or class of Preference Units may not
be changed without the written consent of the holders of at least two-thirds of
the Preference Units within the class or series (or such greater percentage as
may be provided for in the applicable Preference Certificate).
(c) In addition, the General Partner may cause the
Partnership from time to time to issue such Other Securities, as the General
Partner deems necessary.
5.2 Issuance of Units. From time to time hereafter, subject to
and in accordance with the provisions of this Section, the General Partner shall
cause the Partnership to issue additional Units as follows:
(a)(i) OP Units to MART upon the issuance by MART of
additional Common Shares and the contribution of the net proceeds thereof as an
additional Capital Contribution to the Partnership as provided for in Section
3.1 herein; it being understood, however, that MART may issue Common Shares in
connection with option plans, restricted share plans or other benefit or
compensation plans and arrangements (for example, shares issued in lieu of fees
or compensation), and that MART may issue Common Shares in payment of the
Redemption Price of any OP Units as provided in Section 6.4 hereof, without
receiving any proceeds and that the issuance of such Common Shares shall
nonetheless entitle MART to additional OP Units pursuant to this clause. In such
event, the General Partner shall cause the Partnership to issue a number of OP
Units equal to the number of Common Shares being issued by MART.
(ii) Preference Units to MART upon the issuance by MART
of equity securities other than Common Shares, and the contribution of the net
proceeds thereof as a Capital Contribution to the Partnership. Preference Units
issued pursuant to this subsection shall have economic terms substantially
identical to those of the securities issued by MART.
9
<PAGE>
(iii) Other Securities to MART upon the issuance by MART
of securities other than Common Shares or equity securities described in Section
5.2(a)(ii) hereof, and the contribution of the net proceeds thereof to the
Partnership. Other Securities issued pursuant to this subsection shall have
economic terms substantially identical to those of the securities issued by MART
all of which shall be specified in a certificate (an "Other Securities
Certificate") executed on behalf of the Partnership which shall thereupon become
a part of this Agreement.
(iv) In the event of any stock split, stock dividend,
reclassification, recapitalization or other adjustment in respect of the
outstanding Common Shares, the number of OP Units will be proportionately
adjusted so that the OP Units will equate to the Common Shares on a one-to-one
basis.
(v) It is intended by this subsection that the
capitalization and capital structure of the Partnership shall mirror the
capitalization and the capital structure of MART.
(b) OP Units to Partners (including itself) that hold
Preference Units or Other Securities that are convertible into or exchangeable
for OP Units, upon the exercise of such conversion or exchange in accordance
with the terms, conditions and provisions of the Preference Unit Certificate or
Other Securities Certificate applicable thereto; provided, however, that MART
will convert Preference Units or Other Securities that are convertible into or
exchangeable for OP Units, if, and only if, and only to the extent that, the
holders of the corresponding securities issued by MART elect to convert such
securities into Common Shares.
(c) If the General Partner creates and administers a
reinvestment program in substantial conformance with a dividend reinvestment
program which may be available from time to time to holders of Common Shares,
each Limited Partner holding OP Units shall have the right to reinvest any or
all cash distributions payable to it from time to time pursuant to this
Agreement by having some or all (as the Limited Partner elects) of such
distributions contributed to the Partnership as additional Capital
Contributions, and in such event the Partnership shall issue to each such
Limited Partner additional OP Units, or the General Partner may elect to cause
distributions with respect to which a Limited Partner has elected reinvestment
to be contributed to MART in exchange for the issuance of Common Shares. At the
option of the General Partner, such a program may also be made available with
respect to Preference Units and Other Securities if and to the extent of each
such Partner's participation in any such reinvestment program.
(d) In the event that MART assumes any debt of the
Partnership as provided in Section 6.4 hereof, the Partnership shall issue to
MART additional Units in an amount equal to the quotient (rounded to the nearest
whole number) arrived at by dividing (i) the total debt assumed by MART
(including any interest obligation) by (ii) the Market Price.
(e) In all other cases, OP Units, Preference Units, and/or
Other Securities as determined by the General Partner, in its sole and absolute
discretion, to existing or newly-admitted Partners (including itself) in
exchange for Capital Contributions or additional Capital Contributions by a
Partner (the "Contributing Partner") to the Partnership.
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5.3 Redemption and Repurchase of Units. Notwithstanding any other
provision of this Agreement, in the event of the repurchase or redemption for
cash by MART of issued and outstanding (a) Common Shares or (b) other securities
with respect to which the Partnership had previously issued Preference Units or
Other Securities to MART, then, in such event, the Partnership shall
concurrently therewith provide to MART cash in an amount equal to the funds
required by MART to effect such redemption and/or distribution (including all
costs and other charges related thereto), and cancel a number of OP Units,
Preference Units and/or Other Securities equal to the number of Common Shares,
Preferred Shares or other securities redeemed or repurchased by MART.
5.4 Debentures. In partial consideration of MART's Capital
Contribution, the Partnership hereby absolutely, unconditionally and irrevocably
expressly assumes and agrees to pay, as and when due, all amounts required to be
paid by MART under MART's outstanding Convertible Debentures (the "Debentures")
including all principal, interest, and other charges payable thereunder. Upon
the exercise by any Debenture holder of the right to convert its Debentures into
Common Shares, the Partnership will issue to MART a number of OP Units equal to
the number of Common Shares issued by MART to each such Debenture holder.
5.5 Loans by General Partner. The General Partner may loan to the
Partnership the net proceeds of any loans obtained or debt securities issued by
MART, provided that the terms of such loans to the Partnership are substantially
equivalent to the corresponding loan obtained or debt securities issued by MART.
6. REDEMPTION RIGHTS. Unless otherwise specified in writing by the
General Partner, the following provisions shall apply:
6.1 Partner Put. Commencing from and after the second anniversary
of the date that a Limited Partner shall have been admitted as a Partner of the
Partnership (the "Admission Date"), such Partner (the "Putting Partner") shall
have the right (a "Partner Put") to require the Partnership to repurchase during
any two-year period up to 20% of the number of OP Units issued to such Partner.
The Partner Put may be exercised upon not less than 60 days prior written notice
to the Partnership (a "Put Notice") setting forth the number of OP Units to be
repurchased by the Partnership pursuant to the Partner Put.
6.2 Partnership Call. The Partnership will have the right (a
"Partnership Call") upon the death of an individual Partner or upon the
termination, dissolution, liquidation or other termination of existence of any
Partner that is an entity, upon not less than 30 days prior written notice (a
"Call Notice") to the heirs, personal representatives or estate of an OP Unit
holder, to repurchase all or part of the OP Units held by such Partner (the
"Call Partner") at any time within one year after the later of the occurrence of
such event or the date that the Partnership is notified of such occurrence by or
on behalf of such Partner. A Call Notice shall set forth the number of OP Units
the Partnership will repurchase pursuant to the Partnership Call.
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6.3 Settlement.
(a) Settlement for the repurchase of any OP Units by the
Partnership pursuant to a Partner Put or a Partnership Call shall take place at
the principal offices of the Partnership on the 60th day after the Put Notice is
given or on the 30th day after the Call Notice is given, as the case may be.
(b) The purchase of any OP Unit pursuant to a Partner Put or a
Partnership Call shall be at a price (the "Redemption Price") equal to the
Market Price per Common Share on the date the Put Notice or the Call Notice, as
the case may be, is given.
(c) At the settlement of any Partner Put or Partnership Call, the
Partnership shall pay to the OP Unit holder in cash an amount equal to 10% of
the Redemption Price and shall deliver to the OP Unit holder a promissory note
of the Partnership in the principal amount equal to the balance of the
Redemption Price (the "Redemption Note"). The Redemption Note shall provide
among other things, that (i) payments shall be made in ten equal consecutive
annual installments, together with interest on the unpaid balance at an interest
rate per annum equal to the rate of interest in effect from time to time under
MART's line of credit with its principal lender; (ii) the Partnership shall have
an unlimited right of prepayment without penalty; (iii) at the option of the
holder, in the event of default in the payment of any installment of principal
or interest, the holder may accelerate all amounts payable under the Redemption
Note; (iv) the Redemption Note may be assumed by MART; and the Redemption Note
shall otherwise be in the form attached hereto as Exhibit A.
6.4 Assumption by MART. Anything in this Agreement to the contrary
notwithstanding, MART shall have the right at its option at any time to assume
all or any part of the Partnership's obligation to repurchase Units under this
Section 6, to pay all or any part of the Redemption Price, or to pay all or any
part of any Redemption Note. If MART elects to assume any such obligation, MART
shall have the right, upon notice to the Putting Partner or the Call Partner, as
the case may be, to pay all or part of the Redemption Price by issuance to such
Partner of a number of Common Shares equal to the amount to be so paid divided
by the Market Price per Common Share on the date such notice is given. If MART
elects to pay such obligation in cash, the Partnership shall loan to MART an
amount in cash equal to the obligation to be paid by MART; in such event, MART
shall discharge such loan by surrender to the Partnership of OP Units acquired
in connection therewith.
6.5 Limit on Redemptions. Notwithstanding the provisions of Section
6.4, if MART assumes the obligation to pay all or any part of the Redemption
Price and elects to make such payment in Common Shares, then, to the extent that
the delivery of Common Shares in payment of the redemption price would result in
any person, entity, or group being the Beneficial Owner of Common Shares in
excess of the applicable Ownership Limit or otherwise cause such Common Shares
to be Excess Shares, such portion of the Partner Put shall be deemed to be
canceled and neither MART nor the Partnership shall be obligated to repurchase
OP Units or to deliver Common Shares in connection with such canceled portion of
the Partner Put. For the purposes of this Agreement, the terms "Beneficial Owner
of Common Shares", "Common Shares", "Ownership Limit", and "Excess Shares" shall
have the meanings set forth in MART's Declaration of Trust.
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7. ALLOCATIONS.
7.1 Profits. After giving effect to the allocations set forth in
Sections 7.3, 7.4 and 12.2(c) below, Profits for any fiscal year shall be
allocated:
(a) First to the Partners owning Preference Units in such
amounts as may be required to carry out the terms of each such Preference Unit;
and
(b) The balance shall be allocated to the Partners owning OP
Units, pro rata, in accordance with the respective number of OP Units held by
each such Partner.
7.2 Losses. After giving effect to the special allocations set
forth in Sections 7.3, 7.4 and 12.2(c) below, Losses for any fiscal year shall
be allocated:
(a) First to the Partners owning Preference Units in such
amounts as may be required to carry out the terms of each such Preference Unit;
and
(b) The balance shall be allocated to the Partners owning OP
Units, pro rata, in accordance with the respective number of OP Units held by
each such Partner.
(c) Provided, however, that the Losses so allocated shall
not exceed the maximum amount of Losses that can be so allocated without causing
any Limited Partner to have an Adjusted Capital Account Deficit at the end of
any fiscal year; and provided further that all Losses in excess of the
limitations set forth in this Section shall be allocated to the General Partner.
7.3 Special Allocations. The following special allocations shall
be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding any other provision of this
Section 7, if there is a net decrease in Partnership Minimum Gain during any
fiscal year, each Partner shall be specially allocated items of Partnership
income and gain for such fiscal year (and, if necessary, subsequent fiscal
years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). The items to be so allocated shall be determined in accordance with
Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section is intended
to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of
the Regulations and shall be interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(i)(4), notwithstanding any other
provision of this Section 7, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership fiscal year, each Partner who has a share of the Partner Nonrecourse
Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated
items of Partnership income and gain for such fiscal year (and, if necessary,
subsequent fiscal
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years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4). The items
to be so allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(i)(2). This Section is intended to comply with the
minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations, or distributions described
in Regulations Section 1.704-1 (b)(2)(ii)(d)(4), Section 1.704-1
(b)(2)(ii)(d)(5), or Section 1.704-1 (b)(2)(ii)(d)(6), items of Partnership
income and gain shall be specially allocated to each such Partner in an amount
and manner sufficient to eliminate, to the extent required by the Regulations,
the Adjusted Capital Account Deficit of such Partner as quickly as possible,
provided that an allocation pursuant to this Section shall be made only if and
to the extent that such Partner would have an Adjusted Capital Account Deficit
after all other allocations provided for this Section 7 have been tentatively
made, as if this Subsection were not in the Agreement.
(d) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any Partnership fiscal year which is in
excess of the sum of (i) the amount such Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the amount such Partner is
deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704 2(g)(1 ) and 1 .704-2(i)(5), each such Partner shall
be specifically allocated items of Partnership income and gain in the amount of
such excess as quickly as possible, provided that an allocation pursuant to this
Subsection shall be made only if and to the extent that such Partner would have
a deficit Capital Account in excess of such sum after all other allocations
provided for in this Section 7 have been made as if Section 7.3(c) hereof and
this Subsection were not in the Agreement.
(e) Preferential Gross Income Allocations. If and to the
extent Partners receive distributions with respect to Preferred Units from the
Partnership (other than distributions pursuant to Section 12.2(c) in final
liquidation of the Partnership), each such Partner shall be allocated an equal
amount of Partnership gross income prior to any allocations of Profit and Loss
pursuant to Sections 7.1 and 7.2 above. For purposes of this Subsection, any
payment with respect to a Preference Unit that, under the applicable Preference
Unit Certificate or Other Securities Certificate, as the case may be,
constitutes a payment in redemption of such Preference Unit shall not be
considered a distribution except to the extent such payment is specifically
attributable to accrued and unpaid preferred distributions with respect to such
Preference Unit provided for in such Certificate.
(f) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year shall be allocated among the Partners in accordance with their
respective Percentage Interests.
(g) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any fiscal year shall be specially allocated to the Partner who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable, in accordance with
Regulations Section 1.704-2(i)(1).
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(h) Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to- Regulations Section 1.704-
1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1 (b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as the result of a distribution to
a Partner in complete liquidation of his interest in the Partnership, the amount
of such adjustment to Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specifically allocated to
the Partners in accordance with their respective Partnership Interest in the
event that Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or the Partner
to whom such distribution was made in the event that Regulations Section 1.704-1
(b)(2)(iv)(m)(4) applies.
7.4 Curative Allocations. The allocations set forth in Sections
7.2(c), 7.3(a), 7.3(b), 7.3(c), 7.3(d), 7.3(f), 7.3(g) and 7.3(h) above (the
"Regulatory Allocations") are intended to comply with certain requirements of
the Regulations under Sections 704(b) and 514(c)(9)(E) of the Code. It is the
intent of the Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss, or deduction
pursuant to this Subsection. Therefore, notwithstanding any other provision of
this Section 7 (other than the Regulatory Allocations), the General Partner
shall make such offsetting special allocations of Partnership income, gain,
loss, or deduction in whatever manner it determines appropriate so that, after
such offsetting allocations are made, each Partner's Capital Account balance is,
to the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations were not part of the Agreement and all
Partnership items were allocated pursuant to Sections 7.1, 7.2(a), 7.2(b) and
Section 7.3(e), and so that, to the greatest extent possible, such allocations
comply with the Regulations under Code Section 514(c)(9)(E). In exercising its
discretion under this Subsection, the General Partner shall take into account
future Regulatory Allocations under Sections 7.3(a) and 7.3(b) that, although
not yet made, are likely to offset other Regulatory Allocations previously made
under Sections 7.3(f) and 7.3(g) and/or distributions of the Partnership which
are included in a Partner's share of the Partnership's Partnership minimum gain
or Partner nonrecourse minimum gain.
7.5 Tax Allocations: Code Section 704(c).
(a) Income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for Federal
income tax purposes and its initial Gross Asset Value in accordance with any
permissible manner or manners under Code Section 704(c) and the Regulations
thereunder.
(b) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to the definition of "Gross Asset Value" contained in
Section 2 above, subsequent allocations of income, gain, loss, and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset for Federal income tax purposes and its Gross Asset
Value in the same manner or manners permitted under Code Section 704(c) and the
Regulations thereunder.
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(c) Any elections or other decisions relating to such
allocations shall be made by the General Partner in any permissible manner under
the Code or the Regulations that the General Partner may elect in its sole
discretion. Allocations pursuant to this Section are solely for purposes of
Federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, other items, or distributions pursuant to any provision in this
Agreement.
8. DISTRIBUTIONS; GUARANTEED PAYMENTS.
8.1 Available Cash. As used in this Agreement, "Available Cash"
shall mean all cash receipts of the Partnership from whatever source during the
period in question in excess of all cash obligations of the Partnership,
including, without limitation, repayment by the Partnership of principal on
debts and advances, capital expenditures, and the establishment or increase of
any reserves for any purpose including but not limited to capital improvements
and future acquisitions.
8.2 Distributions. The General Partner shall make distributions
of cash to the Partners not less frequently than quarterly to the extent such
funds are available therefor from the Available Cash of the Partnership. Except
as required by the provisions of any Preference Units, all such distributions
shall be paid to all OP Unit holders on a pro rata basis.
8.3 Limitation on Distributions. The right of any Partner to
receive distributions of any nature pursuant to the terms of this Agreement
shall be subject to the terms of any agreement between such Partner and the
Partnership limiting, restricting or providing rights of set-off with respect to
such distributions.
8.4 Certain Guaranteed Payments. Notwithstanding Section 8.2,
subject to the second sentence of this Section 8.4, for each calendar quarter
until the first quarter in which the distribution per OP Unit equals twenty-six
cents ($0.26), the Partnership shall make a guaranteed payment to each Initial
Unrelated Limited Partner, in an amount equal to the least amount necessary to
assure that the total of distributions for such quarter and the guaranteed
payment described herein for such quarter is not less than the mathematical
product of: (a) the number of OP Units issued to such Partner in exchange for
such Partner's contribution referred to in Section 3.1; and (b) twenty-six cents
($0.26). For purposes of the preceding sentence: (x) each successor (other than
MART or any affiliate of MART) to any OP Unit so issued shall be considered an
Initial Unrelated Limited Partner, and (Y) in the case of the calendar quarter
during which the OP Units are issued to the Initial Unrelated Limited Partners,
the reference to "twenty-six cents" shall be replaced with a reference to the
mathematical product of such figure and the fraction having: (i) as numerator,
the number of days in such quarter which include or follow the date of such
issuance; and (ii) as denominator, the total number of days in such quarter.
9. MANAGEMENT OF PARTNERSHIP.
9.1 General Partner. Except as otherwise expressly provided
herein, the General Partner shall have the exclusive right to manage the
Partnership business, to make, in its sole and absolute discretion, all
decisions and determinations to be made by the Partnership,
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to transact all business on behalf of the Partnership, to execute all
instruments in the Partnership name, and, except as may be specifically limited
by this Agreement or by law, to exercise all rights and powers of the
Partnership in the conduct of the Partnership's business. All actions taken by a
person in his capacity as a trustee, director, officer, shareholder or employee
of the General Partner shall be the action of the General Partner. The General
Partner is specifically authorized to take any and all of the actions set forth
in Section 9-301(c) of the Corporations and Associations Article of the Maryland
Annotated Code.
9.2 Limited Partners. Except for the right of the Limited
Partners to vote on certain matters as specifically provided for in the Act or
this Agreement, the Limited Partners shall take no part in the conduct or
control of the Partnership's business and shall have no right or authority to
act for or bind the Partnership.
9.3 Liability of General Partner. The General Partner shall not
be liable or accountable, in damages or otherwise, to the Partnership or to any
Partner for any error of judgment or for any mistakes of fact or law or for
anything which it may do or refrain from doing in connection with the business
and affairs of the Partnership except in the case of fraud, breach of fiduciary
duty or breach of this Agreement. The General Partner shall not have any
personal liability for the return of any Limited Partner's Capital Contribution.
9.4 Indemnity. The Partnership shall indemnify and shall hold the
General Partner (which includes its trustees, directors, officers, shareholders
and employees) harmless from and against, and shall advance sums to the General
Partner in respect to any and all claims, actions, proceedings losses,
liabilities, damages or expenses (the "Losses"), including without limitation
legal fees, costs of investigation and defense, and sums expended in settlement
of any claim incurred by it by reason of any action taken or not taken by the
General Partner; provided, however, that the Partnership shall not be required
to indemnify the General Partner with respect to any Losses resulting from the
General Partner's fraud, breach of fiduciary duty or breach of this Agreement.
The General Partner shall be entitled to reimbursement from the Partnership for
any amounts paid by it in satisfaction of indemnification obligations owed by
the General Partner to present or former trustees or directors of the General
Partner, as provided for in or pursuant to the Declaration of Trust and By-Laws
of the General Partner. The right of indemnification set forth in this Section
shall be in addition to (but not duplicative of) any rights to which the person
or entity seeking indemnification may otherwise be entitled and shall inure to
the benefit of the successors and assigns of any such person or entity. No
Partner shall be personally liable with respect to any claim for indemnification
pursuant to this Section, but such claim shall be satisfied solely out of assets
of the Partnership.
9.5 Other Activities of Partners and Agreements with Related
Parties. The General Partner shall devote its full-time efforts in furtherance
of the Partnership business. The fact that a Partner, or a director, officer, or
stockholder of a Partner, is directly or indirectly interested in or connected
with any person or entity employed by the Partnership or from which the
Partnership may buy merchandise or other property, obtain services, lease
property or otherwise contract, shall not prohibit the General Partner and/or
the Partnership from employing such person or entity or from otherwise dealing
with him or it, provided that amounts charged are fair and reasonable to the
Partnership and reflect the fair charge therefor,
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and neither the Partnership nor the Partners shall have any rights in or to any
income or profits derived therefrom. In the event any such Partner or firm of
the Partner is employed by the Partnership, such Partner shall not be deemed to
be acting in his or its capacity as a Partner in connection with such
employment.
9.6 Other Matters Concerning the General Partner. The General
Partner may exercise any of the powers granted or perform any of the duties
imposed by this Agreement either directly or through agents. The General Partner
may consult with counsel, accountants, appraisers, management consultants,
investment bankers and other consultants selected by it, each of whom may serve
as consultants for the Partnership. An opinion by any consultant on a matter
which the General Partner believes to be within its professional or expert
competence shall be full and complete protection as to any action taken or
omitted by the General Partner based on the opinion and taken or omitted in good
faith. The General Partner shall not be responsible for the misconduct,
negligence, acts or omissions of any consultant or contractor of the Partnership
or of the General Partner, and shall assume no obligations other than to use due
care in the selection of all consultants and contractors.
9.7 Management Contract.
(a) The General Partner may engage and retain one or more
persons or entities to render special services, including, but not limited to,
leasing, brokerage and property management services, to the Partnership. Such
persons or entities may be a General or Limited Partner in the Partnership, and
if such person be a Partner, his right to any salary or other compensation for
said services and the amount thereof shall be subject to the determination of
the General Partner and shall be not less favorable to the Partnership than the
amount which would be payable for such services to an unrelated third party for
comparable services.
(b) The General Partner, on behalf of the Partnership, shall
enter into a contract with MART or a subsidiary of MART for management and
brokerage services relating to the properties of the Partnership. Such contract
shall provide that the Manager shall be paid with respect to each Property
management fees which may be based on a percentage of gross rentals and
customary brokerage commissions, provided, however, that the management and
brokerage services shall be provided by MART to the Partnership at MART's cost.
MART shall also be entitled to compensation for the general and administrative
expenses of MART.
9.8 General Partner Expenses and Liabilities. All costs and
expenses incurred by MART in connection with its activities as the General
Partner hereunder, all costs and expenses incurred by MART in connection with
its continued corporate existence, qualification as a real estate investment
trust under the Code and otherwise, and all other liabilities incurred or
suffered by the General Partner in connection with the pursuit of its business
and affairs as contemplated hereunder and in connection herewith, which are not
otherwise paid for by management contracts entered into between MART and any
other entity, shall be paid (or reimbursed to MART, if paid by MART) by the
Partnership.
9.9 General Partner Assets. The General Partner shall not
directly or indirectly enter into or conduct any business other than in
connection with the ownership, acquisition and disposition of interests in the
Partnership and the management of the business
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of the Partnership, and such activities as are incidental thereto. Except for
(i) its ownership of a one percent (1%) or smaller interest in certain
partnerships, interests in which are included in the contributions referred to
in Section 3.1, or in subsequent contributions to the Partnership, and (ii) all
of the outstanding equity interests in subsidiaries or partnerships which
themselves have no assets or liabilities other than (A) OP Units, and (B) assets
and liabilities, the beneficial interest in which have been assigned to the
Partnership, the assets of the General Partner shall be limited to interests in
the Partnership and such bank accounts or similar instruments or accounts as it
deems necessary to carry out its responsibilities contemplated under this
Agreement and its organizational documents.
10. ACCOUNTING.
10.1 Fiscal Year. The fiscal year and taxable year of the
Partnership (the "fiscal year") shall end on the last day of December of each
year, unless another fiscal year end is selected by the General Partner.
10.2 Books of Account. The Partnership books of account shall be
maintained at the principal office designated in Section 1 above or at such
other locations and by such person or persons as may be designated by the
General Partner. The Partnership shall pay the expense of maintaining its books
of account. Each Partner shall have, during reasonable business hours and upon
reasonable prior notice, access to the books of the Partnership and in addition,
at its expense, shall have the right to copy such books. The General Partner, at
the expense of the Partnership, shall cause to be prepared and distributed to
the Partners annual financial data sufficient to reflect the status and
operations of the Partnership and its assets and to enable each Partner to file
its federal income tax return, including, but not limited to, audited financial
statements of the Partnership and copies of all federal and state tax and
information returns filed by the Partnership.
10.3 Banking. The funds of the Partnership shall be kept in
accounts designated by the General Partner and all withdrawals therefrom shall
be made on such signature or signatures as shall be designated by the General
Partner.
10.4 Method of Accounting. The Partnership books of account shall
be maintained and kept, and its income, gains, losses and deductions shall be
accounted for, in accordance with sound principles of accounting consistently
applied, or such other method of accounting as may be adopted hereafter by the
General Partner. All elections and options available to the Partnership for
Federal or state income tax purposes shall be taken or rejected by the
Partnership in the sole discretion of the General Partner.
10.5 Section 754 Election. In case of a distribution of property
made in the manner provided in Section 734 of the Code (or any similar provision
enacted in lieu thereof, or in the case of a transfer of any interest in the
Partnership permitted by this Agreement made in the manner provided in Section
743 of the Code (or any similar provision enacted in lieu thereof), the General
Partner, on behalf of the Partnership, will file an election under Section 754
of the Code (or any similar provision enacted in lieu thereof) in accordance
with the procedures set forth in the applicable Regulations.
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10.6 Tax Matters Partner. The General Partner is hereby
designated the Tax Matters Partner (hereinafter referred to as the "TMP") of the
Partnership and shall have all the rights and obligations of the TMP under the
Code.
10.7 Administrative Adjustments. If the TMP receives notice of a
Final Partnership Administrative Adjustment (the "FPAA") or if a request for an
administrative adjustment made by the TMP is not allowed by the United States
Internal Revenue Service (the "IRS") and the IRS does not notify the TMP of the
beginning of an administrative proceeding with respect to the Partnership's
taxable year to which such request relates (or if the IRS so notifies the TMP
but fails to mail a timely notice of an FPAA), the TMP may, but shall not be
obligated to, petition a Court for readjustment of partnership items. In the
case of notice of an FPAA, if the TMP determines that the United States District
Court or Claims Court is the most appropriate forum for such a petition, the TMP
shall notify each person who was a Partner at any time during the Partnership's
taxable year to which the IRS notice relates of the approximate amount by which
its tax liability would be increased (based on such assumptions as the TMP may
in good faith make) if the treatment of partnership items on his return was made
consistent with the treatment of partnership items on the Partnership's return,
as adjusted by the FPAA. Unless each such person deposits with the TMP, for
deposit with IRS, the approximate amount of his increased tax liability,
together with a written agreement to make additional deposits if required to
satisfy the jurisdictional requirements of the Court, within thirty days after
the TMP's notice to such person, the TMP shall not file a petition in such
Court. Instead, the TMP may, but shall not be obligated to, file a petition in
the United States Tax Court.
11. TRANSFERS OF PARTNERSHIP INTERESTS.
11.1 General Partner. In no event may the General Partner at any
time assign, mortgage, sell, transfer, pledge, grant a security interest in,
hypothecate or otherwise encumber of all or any portion of its Units except by
operation of law or to a subsidiary or affiliate of the General Partner.
11.2 Limited Partners.
(a) The Limited Partners may not at any time assign,
mortgage, sell, transfer, pledge, grant a security interest in, hypothecate or
otherwise encumber (a "transfer") all or any portion of Units except in the
manner specifically provided in this Section 11.
(b) Anything in this Agreement to the contrary
notwithstanding, a Limited Partner may not transfer Units for a period of two
years after such Units are acquired (the "Holding Period"), without the consent
of the General Partner, which may be unreasonably withheld.
11.3 Family Transfers. After the expiration of the Holding
Period, a Limited Partner may, without the consent of the General Partner,
transfer all or some of its Units to members of the Limited Partner's immediate
family or to a trust established for such purpose for estate planning purposes.
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11.4 Assignments. No assignee or Fiduciary (as defined in Section
11.7) of the whole or any portion of a Limited Partner's Partnership Interest
shall have the right to become a Limited Partner unless and until it complies
with all of the conditions described in Section 11.5 hereof. No assignee of a
Limited Partner's Partnership Interest shall have the right to participate in
the Partnership, inspect the books of account of the Partnership or exercise any
other rights of a Limited Partner until admitted as a Limited Partner.
Notwithstanding the General Partner's failure or refusal to admit an assignee as
a Limited Partner, such assignee shall be entitled to receive the assigning
Limited Partner's share of Profits and Losses, distributions of Available Cash
and distributions upon winding up, and, upon demand, may receive copies of all
reports thereafter delivered by the General Partner to the Limited Partners,
provided that the Partnership shall have first received notice of such
assignment in form and content acceptable to the General Partner, all required
consents thereto shall have been obtained, and all conditions precedent thereto
shall have been satisfied.
11.5 Permitted Transfers. Except as provided in Section 11.3
hereof, a Limited Partner may not transfer its Units, in whole or in part, to a
third party without the prior written consent of the General Partner. Any
transfer of the Partnership Interest, in whole or in part, of a Limited Partner
shall not be effective unless: (a) an executed or authenticated copy of the
instrument of assignment is delivered to the General Partner and the General
Partner's consent is indicated thereon in writing and on signed on behalf of the
General Partner; (b) the transfer of the Partnership Interest will not violate
the Securities Act of 1933, as amended, or applicable state securities laws;
(c) after such transfer, the Partnership will continue to be classified as a
partnership for Federal income tax purposes and not as an association taxable as
a corporation; (d) such transfer, when taken together with other prior
transfers, if any, will not result in a "termination" of the Partnership for
Federal income tax purposes; (e) the transferee shall pay all of the
Partnership's reasonable costs and expenses in connection with such transfer,
including the fees and expenses of counsel to the Partnership; and (f) the
transferee executes and agrees to be bound by all the terms and conditions of
this Agreement. The General Partner, in its sole and absolute discretion, may
require, as a condition of any such transfer, that the Partnership receive a
favorable opinion of its counsel, at the sole cost and expense of the
transferor, as to the matters described in clauses (b), (c), and (d) of this
Section. Upon satisfaction of the requirements of this Section 11.5, the
assignee shall be admitted as a Limited Partner in the Partnership.
11.6 Effect of Transfers. No transfer of a Partnership Interest
shall be effective unless and until such transfer is recorded in the books of
the Partnership. Any transfer effected in accordance with the terms hereof shall
become effective as of the last day of the month set forth on the written
instrument of transfer or such other date consented to in writing by the General
Partner (the "Effective Date"). The Partnership and the General Partner shall be
entitled to treat the transferor of such Partnership Interest as the absolute
owner thereof in all respects, and shall incur no liability for the allocation
of Profits and Losses and distributions to such transferor, until all conditions
for a transfer have been satisfied in a manner acceptable to the General Partner
and until the "effective date" of the transfer.
11.7 Transfer upon Death or Determination of Incompetency. In the
event that a Limited Partner dies or is determined to be incompetent, his or her
Partnership Interest may be transferred as follows:
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(a) If a Limited Partner shall die, his or her executor,
personal representative, administrator, or if a Limited Partner shall be
adjudicated incompetent by a court of competent jurisdiction, his or her
guardian, conservator or other validly appointed legal representative (in each
of the preceding examples, the representative is referred to as the
"Fiduciary"), the Fiduciary shall become an "assignee" of the Limited Partner.
If such assignee satisfies the requirements of 11.5(b) through (f) such assignee
shall be admitted as a Limited Partner in the Partnership.
(b) Anything in this Agreement to the contrary
notwithstanding, each Limited Partner shall have the right to designate in his
Last Will and Testament his successor (or successors) to his Partnership
Interest in accordance with the provisions of Section 1.706- 1(c)(3)(iii) of the
Regulations, and each such successor shall, upon the death of such Limited
Partner, be substituted for and have all the rights and all of the obligations
of the Limited Partner, provided that such successor complies with all of the
provisions set forth in Section 11.5(b) through (f).
11.8 Ownership Limit. In no event will the Partnership be
required to recognize any transfer of a Limited Partner's Partnership Interest
if upon such a transfer the transferee would be deemed to be the beneficial
owner of Common Shares in excess of the Ownership Limit contained in Article VI
of MART's Declaration of Trust.
12. TERMINATION, LIQUIDATION AND DISSOLUTION OF PARTNERSHIP.
12.1 Termination Events. The Partnership shall be dissolved and
its affairs wound up in the manner hereinafter provided only upon the earliest
to occur of the Expiration Date; or the agreement to dissolve by Partners owning
at least 80% of the Percentage Interests.
12.2 Method of Liquidation. Upon the happening of any of the
events specified in Section 12.1 above, the General Partner (or if there be no
General Partner, a liquidating trustee selected by those Limited Partners
holding in the aggregate more than 50% of the Percentage Interests held by all
Limited Partners) shall immediately commence to wind up the Partnership's
affairs and shall liquidate the assets of the Partnership as promptly as
possible, unless the General Partner, or the liquidating trustee, shall
determine that an immediate sale of Partnership assets would cause undue loss to
the Partnership, in which event the liquidation may be deferred for a reasonable
time. The Partners shall continue to share in the Profits and Losses during the
period of liquidation in the same proportions as before dissolution (subject to
Section 12.2(c) below). The proceeds from liquidation of the Partnership,
including repayment of any debts of Partners to the Partnership, shall be
applied in the order of priority as follows:
(a) First to the debts and other obligations of the
Partnership, including repayment of principal and interest on loans and advances
made by the General Partner pursuant to Section 5.5 above;
(b) then to the establishment of any reserves deemed
necessary or appropriate by the General Partner, or by the person(s) winding up
the affairs of the Part- nership in the event there is no remaining General
Partner of the Partnership, for any
22
<PAGE>
contingent or unforeseen liabilities or obligations of the Partnership. Such
reserves established hereunder shall be held for the purpose of paying any such
contingent or unforeseen liabilities or obligations and, at the expiration of
such period as the General Partner, or such person(s) deems advisable, the
balance of such reserves shall be distributed in the manner provided hereinafter
in this Section as though such reserves had been distributed contemporaneously
with the other funds distributed hereunder; and
(c) then to the Partners in accordance with their respective
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods. In connection therewith, income,
gain and loss of the Partnership (and to the extent necessary to achieve the
purposes hereof, items of gross income and deduction) with respect to the sale
or other disposition of all or substantially all of the Partnership's assets
and/or the Partnership's operations in connection therewith (whether or not
attributable to the taxable year in which the distribution pursuant to this
subsection is to be made or a preceding taxable year) shall be allocated among
the Partners so that each Partner's Capital Account shall equal, after taking
into account the prior balance (positive or negative) in such Partner's Capital
Account and the effect of such allocation, the amount that such Partner would be
entitled to receive if the Partnership were to make a distribution to the
Partners pursuant to the provisions of Section 8 hereof in an amount equal to
the remaining liquidation proceeds to be distributed under this Section.
12.3 Date of Termination. The Partnership shall be terminated
when all notes received in connection with such disposition have been paid and
all of the cash or property available for application and distribution under
Section 12.2 above (including reserves) shall have been applied and distributed
in accordance therewith.
12.4 Continuation of Business upon Dissolution. If the
Partnership is dissolved for any reason, a successor general partner may be
admitted as General Partner hereunder within 90 days after such dissolution,
effective as of the date of such dissolution, with the written consent of all of
the remaining Partners. In such event, the business of the Partnership shall be
continued and the Partnership's assets shall not be liquidated. The Partners
hereby agree that if the holders of a majority of the Percentage Interests elect
to continue the business pursuant to this Section 12.4, the remaining Partners
will hereby be deemed to have consented to continue the business pursuant to
this Section 12.4.
12.5 Death, Legal Incompetency, Etc. of a Limited Partner. The
death, legal incompetency, insolvency, dissolution or bankruptcy of an
individual Limited Partner shall not dissolve or terminate the Partnership.
13. POWER OF ATTORNEY.
Each Limited Partner hereby irrevocably constitutes and appoints
the President of the General Partner with full power of substitution, its true
and lawful attorney, for him and in his name, place and stead and for his use
and benefit, to sign, swear to, acknowledge, file and record: (a) this
Agreement, and subject to Section 14 below, amendments to this Agreement; (b)
any certificates, instruments and documents (including assumed and fictitious
name certificates) as may be required by, or may be appropriate under, the laws
of the State
23
<PAGE>
of Maryland or any other State or jurisdiction in which the Partnership is
doing or intends to do business, in order to discharge the purposes of the
Partnership or otherwise in connection with the use of the name or names used by
the Partnership; (c) any other instrument which may be required to be filed or
recorded by the Partnership on behalf of the Partners under the laws of any
State or by any governmental agency in order for the Partnership to conduct its
business; (d) any documents which may be required to effect the continuation of
the Partnership, the admission of a substitute or additional Partner, or the
dissolution and termination of the Partnership, provided such continuation,
admission or dissolution and termination is not in violation of any provision of
this Agreement; and (e) any documents which may be required or desirable to have
the General Partner appointed, and act as, the "Tax Matters Partner" as
described in the Code; provided, however, that the foregoing shall not authorize
any action which would increase the obligation of a Limited Partner to
contribute to the Partnership or the responsibility of a Limited Partner for any
liabilities of the Partnership unless it is specifically authorized by each
Limited Partner whose such obligation or responsibility would be so increased.
The foregoing grant of authority is a special power of attorney coupled with an
interest, is irrevocable and shall survive the death or incapacity of any
individual Limited Partner, and shall survive the delivery of any assignment by
a Limited Partner of the whole or any portion of his interest in the
Partnership.
14. AMENDMENT OF AGREEMENT.
14.1 This Agreement may be amended from time to time by the
General Partner without the consent of any of the Limited Partners: (a) to add
to the representations, duties or obligations of the General Partner or
surrender any right or power granted to the General Partner herein, for the
benefit of the Limited Partners; (b) to cure any ambiguity, to correct or
supplement any provision herein, or to make any other provision with respect to
matters or questions arising under this Agreement which will not be inconsistent
with the provisions of this Agreement; and (c) to admit any person as a Limited
Partner, or to permit the withdrawal of a Limited Partner, pursuant to this
Agreement; provided, however, that, except as otherwise provided herein, no such
amendment shall affect the limited liability of the Limited Partners, the
obligation of a Limited Partner to contribute to the Partnership, the status of
the Partnership as a partnership for federal income tax purposes, or otherwise
materially adversely affect the Limited Partners.
14.2 Except as provided in Section 14.1 hereof, this Agreement
may be amended only in writing and with the prior written consent of the General
Partner and the prior written consent of Partners owning a majority of the
Percentage Interests, except that any amendment to this Agreement which (a)
increases the obligation of any Limited Partner to contribute to the
Partnership, (b) increases the responsibility of any Limited Partner as such for
liabilities of the Partnership, (c) materially alters the guaranteed payments or
redemption payments to which a Partner is entitled, (d) materially alters the
rights of the holders of OP Units to receive distributions with respect to the
OP Units on a pro rata basis (other than amendments to make guaranteed payments
to Partners in connection with contributions of property to the Partnership), or
(e) materially alters the allocation to a Partner of items of income, gain,
loss, deduction or credit to which a Partner is entitled, shall require the
written consent of a majority in interest of the Partners who would be similarly
affected by such amendment. Notwithstanding the foregoing, the Partners
acknowledge that factors such as the
24
distributions and allocations may be adversely affected by such actions as,
among other things, authorized Partnership transactions, admissions of new
Partners, contributions of property to the Partnership, issuances of new OP
Units and/or Preference Units, and redemptions of OP Units and Preference Units
(whether or not required by Section 6); the Partners agree that notwithstanding
any other provision of this Agreement, but subject to the General Partner's
performance of its fiduciary duties, any such amendment to the Partnership
Agreement necessary to accomplish any such action shall not require the consent
of any Limited Partner.
15. MISCELLANEOUS.
15.1 Notices. Any notice or other communication provided for or
required by this Agreement shall be in writing and shall be deemed to have been
given when delivered by hand or by facsimile transmission, and on the first
business day after sent by overnight courier (such as Federal Express), or after
deposit in the United States Mail, certified or registered, return receipt
requested, postage prepaid, properly addressed to the Partner to whom such
notice is intended to be given at the address for the Partner set forth on
Schedule A to this Agreement, or at such other address as such person shall have
previously furnished in writing to the Partnership and each Partner, and to the
General Partner at its principal office.
15.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Partnership, the Partners and their respective
successors, assigns, heirs, legal representatives, executors and administrators.
15.3 Duplicate Originals For the convenience of the Partners, any
number of counterparts hereof may be executed, and each such counterpart shall
be deemed to be an original instrument, and all of which taken together shall
constitute one Agreement.
15.4 Construction. The titles of the Sections and the subsections
herein have been inserted as a manner of convenience of reference only and shall
not control or affect the meaning or construction of any of the terms of the
provisions herein.
15.5 Governing Law. The Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
15.6 Other Instruments. The parties hereto covenant and agree
that they will execute such other and further instruments and documents as, in
the opinion of the General Partner, are of may become necessary or desirable to
effectuate and carry out the Partnership as provided for by this Agreement.
15.7 General Partner as Limited Partner. If the General Partner
has an interest as a Limited Partner in the Partnership, the General Partner
shall, with respect to such interest, enjoy all of the rights and be subject to
all of the obligations and duties of a Limited Partner.
15.8 Legal Construction. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and such provision
shall be construed in such manner as to avoid such effect.
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<PAGE>
15.9 Gender. Whenever the context shall so require, all words
herein in any gender shall be deemed to include the masculine, feminine or
neuter gender, all singular words shall include the plural, and all plural words
shall include the singular.
15.10 No Third Party Beneficiary. The terms and provisions of
this Agreement are for the exclusive use and benefit of General Partner and the
Limited Partners and shall not inure to the benefit of any other person or
entity.
15.11 Purchase for Investment. Each Partner represents, warrants
and agrees that it has acquired and continues to hold its interest in the
Partnership for its own account for investment only and not for the purpose of,
or with a view toward, the resale or distribution of all or any part thereof,
nor with a view toward selling or otherwise distributing such interest or any
part thereof at any particular time or under any predetermined circumstances.
Each Partner further represents and warrants that it is a sophisticated
investor, able and accustomed to handling sophisticated financial matters for
itself, particularly real estate investments, and that it has a sufficiently
high net worth that it does not anticipate a need for the funds it has invested
in the Partnership in what it understands to be a highly speculative and
illiquid investment.
15.12 Waiver. No consent to or waiver of any breach or default
hereunder shall be deemed or construed to be a consent to or waiver of any other
breach or default hereunder.
15.13 Time of Essence. Time is hereby expressly made of the
essence with respect to the performance by the parties of their respective
obligations under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
26
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate and
Agreement of Limited Partnership, under seal, on the day and year first above
written.
WITNESS: GENERAL PARTNER:
MID-ATLANTIC REALTY TRUST
________________________ By:_________________________(SEAL)
F. Patrick Hughes, President
________________________
Date
LIMITED PARTNER:
_________________________ ____________________________(SEAL)
Number of Units
_________________________ __________________________________
Social Security or TIN Print Name
_________________________ __________________________________
Telephone Number Address
_________________________ __________________________________
Date
C66394k.607 R:1
27
<PAGE>
Schedule 1
CAPITAL OP
NAME CONTRIBUTION UNITS
Jack H. Pechter
40 York Road
Towson, Maryland 21204
SS#: ###-##-####
Martin H. Pechter
11 Merry Hill Court
Baltimore, Maryland 21208
SS#: ###-##-####
Jeffrey S. Pechter
8612 Keller Avenue
Stevenson, Maryland 21153
SS#: ###-##-####
Shelly Pechter Himmelrich
8408 Park Heights Avenue
Baltimore, Maryland 21208
SS#: ###-##-####
Trust F/B/O Melissa Pechter
c/o Jack H. Pechter
40 York Road
Towson, Maryland 21204
ID#:
Marilyn Pechter
6 Talton Court
Baltimore, Maryland 21208
SS#: ###-##-####
Pechter Family
Limited Partnership
40 York Road
Towson, Maryland 21204
ID#:
Tripec Associates
Limited Partnership
40 York Road
Towson, Maryland 21204
ID#:
<PAGE>
CAPITAL OP
NAME CONTRIBUTION UNITS
Radcliffe Properties, Inc.
40 York Road
Towson, Maryland 21204
ID#:
Victor Cohen
Irrevocable Trust
5125 Rolling Avenue
Baltimore, Maryland 21210
ID#:
Emmanuel Glasser
2402 Velvet Valley Way
Owings Mills, Maryland 21117
SS#: ###-##-####
Nancy Cohen
5125 Rolling Avenue
Baltimore, Maryland 21210
SS#:
TSC Associates
c/o Jean Schreibman
1 Gristmill Court, Apt. 501
Baltimore, Maryland 21208
ID#:
Albert Perlow and
Sonia Barbara Perlow
7930 Winterset Avenue
Baltimore, Maryland 21208
SS#: ###-##-####
SS#: ###-##-####
Morton Greenberg
19572 Planters Point Drive
Boca Raton, Florida 33434
SS#: ###-##-####
Ronald Weitzman
3309 Terrapin Road
Baltimore, Maryland 21208
SS#: ###-##-####
<PAGE>
CAPITAL OP
NAME CONTRIBUTION UNITS
TSFP Associates
c/o I. Gerald Sidle
1 Roland Brook Court
Lutherville, Maryland 21093
ID#:
Dora Schwartz
14 Tavo Court
New City, New York 10956
SS#: ###-##-####
Stuart Weitzman
11906 Ridge Valley Road
Owings Mills, Maryland 21117
SS#: ###-##-####
Robert Meyers
12757 Folly Quarter Road
Ellicott City, Maryland 21042
SS#: ###-##-####
Darrell Friedman
3508 Bonfield Road
Baltimore, Maryland 21208
SS#: ###-##-####
Ben Schreibman
1 Gristmill Court, Apt. 501
Baltimore, Maryland 21208
SS#: ###-##-####
Saul Offit
12 Talton Court
Baltimore, Maryland 21208
SS#: ###-##-####
Non-Exempt Marital Trust u/w Albert Weitzman
c/o Sidney Weiman, Esquire
Levin & Gann, P.A.
900 Mercantile Bank & Trust Building
2 Hopkins Plaza, Suite 900
Baltimore, Maryland 21201
ID#:
<PAGE>
CAPITAL OP
NAME CONTRIBUTION UNITS
Mid-Atlantic Realty Trust
170 W. Ridgely Road, Suite 300
Lutherville, Maryland 21093
ID#:
<PAGE>
Exhibit (c)3
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Partners
JHP Commercial Properties:
We consent to the incorporation by reference in the registration
statements on Form S-3 (Nos. 33-66386 and 333-20813) and registration statements
on Form S-8 (Nos. 33-58465 and 333-12161) of Mid-Atlantic Realty Trust of our
report dated February 14, 1997, relating to the combined balanced sheets of JHP
Commercial Properties as of December 31, 1996, 1995 and 1994, and the related
consolidated statements of income, partners' capital and cash flows for each of
the years in the three-year period ended December 31, 1996, which report appears
in the Form 8-K of Mid-Atlantic Realty Trust dated July 14, 1997.
SCHEINER, MISTER & GRANDIZIO, P.A.
Lutherville, Maryland
July 14, 1997
