FIRST REFUSAL RIGHTS AGREEMENT
Pan American Associates, a Pennsylvania
limited partnership, and constituents in
favor of PREIT Associates, L.P.,
a Delaware limited partnership
The parties to this Agreement, effective as of the 30th day of
September, 1997, are Pan American Associates, a Pennsylvania limited
partnership ("Pan American"), its partners, and all persons having an interest
in such partners (Pan American and such partners and persons, sometimes
hereinafter collectively referred to as the "Undersigned"), with and for the
benefit of PREIT Associates, L.P., a Delaware limited partnership ("PREIT
Associates").
Background
The Undersigned are affiliated with PREIT-RUBIN, Inc., a Pennsylvania
corporation formerly known as The Rubin Organization, Inc., ("TRO"), or
certain of its principals. This Agreement is part of a larger transaction
described in the TRO Contribution Agreement dated as of July 30, 1997 (the
"TRO Contribution Agreement") among the Pennsylvania Real Estate Investment
Trust, PREIT Associates, TRO, The Rubin Organization-Illinois, Inc. and the
shareholders of TRO.
Pan American has interests in certain partnerships that own various
real estate investments as expressly set forth on Exhibit A hereto attached
and made a part hereof (such partnerships, individually, an "Investment
Partnership" and, collectively, the "Investment Partnerships"). As part of the
larger transaction described above, the Undersigned have agreed to grant to
PREIT Associates a first refusal option to acquire their respective interests
in the Investment Partnerships as herein provided.
NOW, THEREFORE, in consideration of the execution of the TRO
Contribution Agreement and the other documents to be executed in respect of
the larger transaction described above, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
1. Warranties. The Undersigned do hereby warrant and represent that,
(a) all of the general and limited partners of Pan American,
and all persons having an interest in such partners, are designated as
signatories to this Agreement;
(b) the information set forth in Exhibit A is true, correct
and complete; and
(c) The copies of the governing documents of each of the
Investment Partnerships designated on Exhibit "A", which have been delivered
to PREIT Associates, have not been further amended or modified and are true
and correct copies of the documents now in force among the partners of the
Investment Partnerships constituting the respective partnership agreements of
the Investment Partnerships.
2. Definition of Investment Partnership Interest. The term
"Investment Partnership Interest" when used herein shall refer to
(a) All or any part of any partnership interest (beneficial or
otherwise, direct or indirect) now owned or hereafter
acquired by Pan American in any Investment Partnership;
and
(b) All or part of any partnership interest hereinafter
acquired (beneficial or otherwise, direct or indirect) by
any of the Undersigned in any Investment Partnership.
3. Grant of First Refusal Rights. Except for the dispositions
referred to in paragraph 6 below, each of the Undersigned hereby grants to
PREIT Associates the right of first refusal with respect to the disposition of
any Investment Partnership Interest. Each of the Undersigned shall not sell,
assign, transfer, convey or otherwise dispose of any Investment Partnership
Interest except in compliance with this Agreement.
4. Procedures.
(a) Advance Notice. If any Undersigned shall commence the
negotiation for the sale, assignment or transfer of an Investment Partnership
Interest to a third party (the "Third Party"), then the applicable Undersigned
shall give PREIT Associates as much advance written notification and
information as practicable with respect to such negotiations; however, the
proposed price so disclosed may not necessarily be the final price.
(b) Offer. Except as provided in paragraph 6 below, none of
the Undersigned shall transfer, assign or sell an Investment Partnership
Interest to a Third Party without first offering the same to PREIT Associates
in accordance with this subparagraph (b). If any of the Undersigned (the
"Offering Undersigned") desire to sell, assign or transfer an Investment
Partnership Interest to a Third Party who or which have made a bona fide offer
in writing for the purchase of such interest (any
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such offer, the "Third Party Offer"), the Offering Undersigned shall first
identify the Third Party and shall offer in writing to sell, assign or
transfer such Investment Partnership Interest to PREIT Associates (the
"Offer") at the same price and on the same terms set forth in the Third Party
Offer, which Offer shall include a machine reproduction copy of the executed
Third Party Offer.
(c) Acceptance. PREIT Associates shall have the right to
accept the Offer by giving written notice thereof within fourteen (14) days
after receipt of the Offer. If the Offer is not accepted in writing within
such fourteen (14) day period, the Offer shall expire and the Offering
Undersigned may then proceed with the sale or other transfer to the Third
Party, provided, however, that such sale or other transfer is consummated (a)
within one hundred twenty (120) days after the expiration of such fourteen
(14) day period, and (b) without any change in the original price or material
change in the other terms of the Third Party Offer.
5. Violative Transfers Ineffective. No transfer of any Investment
Partnership Interest subject to the First Refusal Rights set forth herein
shall be effective if in violation of the rights of PREIT Associates under this
Agreement.
6. Exceptions to First Refusal Rights. The First Refusal Rights
granted pursuant to Paragraph 3 above shall not apply to the disposition of
any Investment Partnership Interest by any of the Undersigned to:
(a) Any of the Undersigned or to any adult member of the
immediate family of any of the Undersigned, or in trust
for any member of the immediate family of any of the
Undersigned. "Member of the immediate family" as used
herein shall mean any parent, or any ancestor of a parent,
a spouse and any descendants (which shall include adopted
children), any spouse of such descendants, any brothers
and sisters and any descendants of such brothers or
sisters.
(b) Any corporation, business trust, limited liability
company, partnership (general or limited) or any other
entity in which the Undersigned, or any of them, or any of
the persons referred to in subsection (a) above shall hold
a 100% interest.
(c) Prior to the transfer of any Investment Partnership
Interest to any transferee described in subparagraphs (a)
or (b) above (individually, a "Permitted Transferee" and,
collectively, "Permitted Transferees"), written notice of
such
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transfer shall be given to PREIT Associates
together with an agreement in form reasonably
satisfactory to counsel for PREIT Associates
executed by the Permitted Transferee(s) agreeing to
be bound by the provisions of this Agreement with
like force and effect as if the Permitted
Transferee(s) had been an original signatory
hereto.
7. Prior First Refusal Rights. The First Refusal Rights granted in
this Agreement shall be subject to such first refusal rights in favor of the
Investment Partnerships or the other partners therein previously granted by
the terms of organizational documents of the Investment Partnerships.
8. Individual Responsibility. Each of the Undersigned shall not be
responsible or liable by reason of violation or breach of the terms of this
Agreement by any other Undersigned.
9. Term. This Agreement shall remain in full force and effect until
the date which is twenty-one (21) years from the date of death of the last
survivor of the present Trustees of the Pennsylvania Real Estate Investment
Trust, Scott Richard Silberman and Darious James Copeland, upon which this
Agreement shall terminate and be at an end, and of no further force and
effect, unless sooner terminated by PREIT Associates.
10. Notices. All notices or other communications permitted or
required under this Agreement shall be in writing and shall be sufficiently
given if and when hand delivered to the persons set forth on Exhibit B, or if
sent by documented overnight delivery service or registered or certified mail,
postage prepaid, return receipt requested, or by telegram, telex or telecopy,
confirmation acknowledged, addressed as set forth on Exhibit B, or to such
other person or persons and/or at such other address or addresses as shall be
furnished in writing by any party hereof to the others, provided, however,
that if such communication is given via telecopier or facsimile transmission,
an original counterpart of such communication shall concurrently be sent by
first class mail. Any such notice or communication shall be deemed to have
been given as of the date received, in the case of personal delivery, or on
the date shown on the receipt or confirmation therefor in all other cases.
11. Future Opportunity. Should any of the Undersigned be offered an
Investment Partnership Interest, then written notice thereof shall be given to
PREIT Associates, and PREIT Associates shall have the right, by written notice
to the applicable Undersigned within fourteen (14) days after receipt of
written notice of such offer, to cause the applicable Undersigned to accept
said offer on behalf of PREIT Associates at PREIT Associates' sole cost and
expense. If PREIT Associates notifies
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the applicable Undersigned to accept said offer, said Undersigned shall
promptly thereafter execute and deliver an assignment of such Investment
Partnership Interest in favor of PREIT Associates or its designee; and PREIT
Associates shall assume all of the obligations set forth in the offer and
shall indemnify, defend, and hold harmless the applicable Undersigned for any
loss, cost, liability or expense paid or incurred by such Undersigned arising
out of the failure of PREIT Associates to comply with the terms of the offer.
12. Interference. The Undersigned shall not perform any act or do
anything or omit to perform any act with the intent to interfere with or
defeat the First Refusal Rights granted pursuant to this agreement.
13. Miscellaneous.
(a) Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed,
acknowledged and delivered shall be an original, but all such counterparts
together shall constitute but one and the same instrument.
(b) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provisions in any other jurisdiction.
(c) Successors and Assigns. All covenants and agreements
contained herein shall be binding upon the Undersigned, their respective
heirs, successors and assigns, and inure to the benefit of PREIT Associates
and its successors and assigns.
(d) Headings. The headings of the various paragraphs and
sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
(e) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania
without reference to conflict of laws principles.
(f) Gender, etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number singular or plural, any other gender, masculine, feminine or
neuter, as the context requires.
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IN WITNESS WHEREOF, the Undersigned have executed this
Agreement as of the date first above written.
Pan American Associates, a PA
limited partnership
By: Pan American Office Investments, Inc., a PA
corporation, its sole general partner
Attest:/s/ Cynthia Wong By:/s/ Ronald Rubin
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The following are all of the limited partners
of Pan American Associates, and are individually
bound by the terms of the within Agreement:
*/s/ Lewis M. Stone */s/ Leonard B. Shore
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Lewis M. Stone Leonard B. Shore
Richard I Rubin & Co., a PA general
partnership
/s/ Ronald Rubin */s/ George F. Rubin
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Ronald Rubin, Partner George F. Rubin, Partner
Ronald Rubin, George F. Rubin and the Estate of
Richard I. Rubin, deceased are the sole shareholders
of Pan American Office Investments, Inc.
and together with Judith Garfinkle are the
sole partners of Richard I. Rubin & Co. Each
of said parties are individually bound by the terms
of the within Agreement.
/s/ Ronald Rubin */s/ George F. Rubin
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Ronald Rubin George F. Rubin
*/s/ Judith Garfinkle Estate of Richard I. Rubin,
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Judith Garfinkle
By:/s/ Ronald Rubin
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Ronald Rubin, Executor
* By:/s/ Ronald Rubin
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Attorney-in-Fact
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