EXHIBIT 10.7
RECORDING REQUESTED BY )
WHEN RECORDED MAIL TO: )
)
)
Triple Net Properties, LLC )
0000 X. Xxxxxx Xxxxxx )
Xxxxx 000 )
Xxxxx Xxx, XX 00000 )
Attention: Xxxxxxx X. X'Xxxxxxx )
________________________________________________________________________________
Above Space for Recorder's Use
TENANTS IN COMMON AGREEMENT
This Tenants in Common Agreement ("Agreement") is made and effective as of
the date of recordation hereof, by and among the parties listed on Exhibit "A"
attached hereto and incorporated herein (each sometimes referred to as a "Tenant
in Common" or collectively as the "Tenants in Common"), with reference to the
facts set forth below.
RECITALS
A. The Tenants in Common own real property and improvements thereon,
including an office building commonly known as the "Congress Center" located in
Chicago, Illinois, as more particularly described in Exhibit "B" attached hereto
and incorporated herein (the "Property").
B. The Tenants in Common desire to enter into this Agreement to provide
for the orderly administration of the Property and to delegate authority and
responsibility for the operation and management of the Property.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
set forth below.
1. Nature of Relationship Between Co-Tenants.
1.1 Tenants in Common Relationship; No Partnership. The Tenants in
Common shall each own their respective interests in the Property (the
"Interests") as tenants-in-common. The Tenants in Common do not intend by this
Agreement to create a partnership or joint venture among themselves, but merely
to set forth the terms and conditions upon which each of them shall hold their
respective Interests. In addition, the Tenants in Common do not intend to create
a partnership or joint venture with the Manager (as defined in Section 2).
Therefore, each Tenant in Common hereby elects to be excluded from the
provisions of Subchapter K of Chapter 1 of the Internal Revenue Code of 1986, as
amended (the "Code"), with respect to the tenant in common ownership of the
Property. The exclusion elected by the Tenants in Common hereunder shall
commence with the execution of this Agreement.
1.2 Reporting as Direct Owners and Not a Partnership. Each Tenant in
Common hereby covenants and agrees to report on his federal and state income tax
returns all items of income, deduction and credits which result from his
Interests. All such reporting shall be consistent with the exclusion of the
Tenants in Common from Subchapter K of Chapter 1 of the Code, commencing with
the first taxable year following the execution of this Agreement. Further, each
Tenant in Common covenants and agrees not to notify the Commissioner of Internal
Revenue that he desires that Subchapter K of Chapter 1 of the Code apply to the
Tenants in Common. Each Tenant in Common hereby agrees to indemnify, protect,
defend and hold the other Tenants in Common free and harmless from all costs,
liabilities, tax consequences and expenses (for example, taxes, interest and
penalties), including,
without limitation, attorneys' fees and costs, which may result from any Tenant
in Common so notifying the Commissioner in violation of this Agreement or
otherwise taking a contrary position on any tax return, report or other
document.
1.3 Voting - General. The Tenants in Common must unanimously approve
the following: (i) the Management Agreement (as defined in Section 2) and all
amendments and renewals thereof; (ii) all leases and amendments thereof in
accordance with Sections 2.5 and 2.6 of the Management Agreement; (iii) all
financings and refinancing of the Property; and (iv) sale of the Property (other
than a sale pursuant to the Purchase Option described in Section 11). All other
decisions regarding the Property will be made only with the approval of the
Tenants in Common who own more than 50% of the Property.
1.4 Voting - Manager and Affiliates. The Manager and any affiliates
who own Interests will not participate in any vote to terminate the Management
Agreement.
1.5 No Agency. No Tenant in Common is authorized to act as agent
for, to act on behalf of, or to do any act that will bind, any other Tenant in
Common, or to incur any obligations with respect to the Property.
2. Management. The Tenants in Common hereby unanimously consent to this
Agreement and the Management Agreement ("Management Agreement") with Triple Net
Properties Realty, Inc., a California corporation ("Property Manager"). Pursuant
to the Management Agreement, the Property Manager shall be the sole and
exclusive manager of the Property to act on behalf of the Tenants in Common with
respect to the management, operation, maintenance and leasing of the Property,
subject to the right of each Tenant in Common to terminate the Management
Agreement on an annual basis as set forth in Section 10.1 thereof. A copy of the
Management Agreement is attached hereto as Exhibit "C." All of the terms,
covenants and conditions of the Management Agreement are hereby incorporated
herein. Neither (a) the death, retirement, removal, withdrawal, termination or
resignation of the Property Manager, (b) any assignment for the benefit of
creditors by or the adjudication of bankruptcy or incompetency of the Property
Manager nor (c) the termination of the Management Agreement shall cause the
termination of this Agreement and this Agreement shall remain in full force and
effect notwithstanding any such events.
3. Income and Liabilities. Each of the Tenants in Common shall be entitled
to all benefits and obligations of ownership of the Property in accordance with
their Interests. Accordingly, each of the Tenants in Common shall (a) be
entitled to all benefits of ownership of the Property, on a gross and not a net
basis, including, without limitation, all items of income and proceeds from sale
or refinance or condemnation, in proportion to their respective Interests, and
(b) bear, and shall be liable for, payment of all expenses of ownership of the
Property, on a gross and not a net basis, including by way of illustration, but
not limitation, all operating expenses and expenses of sale or refinancing or
condemnation, in proportion to their respective Interests, except for such
amounts as may be reasonably determined by the Manager to be retained for
reserves or improvements in accordance with the Management Agreement.
4. Co-Tenant's Obligations. The Tenants in Common each agree to perform
such acts as may be reasonably necessary to carry out the terms and conditions
of this Agreement, including, without limitation:
4.1 Documents. Executing documents required in connection with a
sale or refinancing of the Property in accordance with Section 5 below and such
additional documents as may be required under this Agreement or may be
reasonably required to effect the intent of the Tenants in Common with respect
to the Property or any loans encumbering the Property, provided that such
actions have been properly approved by the Tenants in Common in accordance with
Section 1.3.
4.2 Additional Funds. Each Tenant in Common will be responsible for
a pro rata share (based on each Tenant in Common's respective Interests) of any
future cash needed in connection with the ownership, operation and maintenance
of the Property as determined by the Manager pursuant to the Management
Agreement. Without limiting the foregoing, each Tenant in Common agrees that in
the event any loan for the Property provides for recourse liability to NNN
Congress Center, LLC, a Delaware limited liability company (the "Company") or
any affiliate and non-recourse liability to one or more of the other Tenants in
Common, and if the Company or any affiliate pays more than its pro rata share of
the liability related to the loan (as compared to its
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ownership interest) as a result of such recourse liability ("Excess Payment"),
the Tenants in Common agree to reimburse the Company or any affiliate for the
Tenants in Common's pro rata share of such Excess Payment. To the extent any
Tenant in Common fails to pay any such funds within fifteen (15) days after the
Manager or Company delivers notice that such additional funds are required, the
Manager is hereby authorized and directed to withhold any and all sums from such
nonpaying Tenant(s) in Common until such funds have been reserved or paid in
full. Alternatively, in the Manager's discretion, any other Tenant(s) in Common
may loan such funds to the nonpaying Tenant(s) in Common, who shall be liable on
a fully recourse basis to repay the paying Tenant(s) in Common the amount of any
such loan plus interest thereon at the rate of twelve percent (12%) per annum
(but not more than the maximum rate allowed by law) within thirty-one (31) days
of funding the loan. If the nonpaying Tenant in Common is a single member
limited liability company, the owner of the limited liability company will be
personally liable to repay this loan. In addition, the Manager is hereby
authorized and directed to pay the Tenant(s) in Common entitled to be repaid the
sums loaned (with interest thereon as provided above) out of future cash from
operations or from sale or refinancing of the Property or other distributions
otherwise due the nonpaying Tenant(s) in Common. The remedies against a
nonpaying Tenant in Common provided for herein are in addition to any other
remedies that may otherwise be available, including by way of illustration, but
not limitation, the right to obtain a lien against the Interests of the
nonpaying Tenant(s) in Common to the extent allowed by law. By executing this
Agreement, each Tenant in Common agrees (i) that any such short-term loan will
be made on a fully recourse basis (ii) if such Tenant in Common is a single
member limited liability company, such loan shall be recourse to the single
member of the limited liability company, and (iii) to repay such loan within
thirty-one (31) days of funding.
5. Sale or Encumbrance of Property.
5.1 Sale. In accordance with the Management Agreement, Manager shall
be entitled to seek and negotiate the terms of (a) financing for the Property,
including loans secured by the Property, and (b) the sale of the Property (or
portions thereof) to third-party purchasers. In accordance with Section 1.3
hereof, any loan encumbering the Property and any sale of the Property shall be
subject to unanimous approval by the Tenants in Common, which approval shall be
communicated to the Manager by written response to a written request by the
Manager for approval. Any such written request of the Manager shall be
accompanied by summary thereof setting forth the material terms of the proposed
loan or sale.
5.2 Distribution of Loan or Sales Proceeds. Notwithstanding any
other provisions of this Agreement, proceeds of a loan or sale shall be
distributed at the closing of the loan or the sale as follows:
5.2.1 To the extent necessary, the proceeds shall first be
used to pay in full any loans encumbering title to the Property.
5.2.2 To the extent necessary, the proceeds shall first be
used to pay in full any unsecured loans made to the Tenants in Common with
respect to the Property.
5.2.3 The proceeds shall next be used to pay all outstanding
costs and expenses incurred in connection with the holding, marketing and sale
of the Property.
5.2.4 The proceeds shall next be used to pay all outstanding
fees and costs as set forth in the Management Agreement.
5.2.5 Any proceeds remaining shall be paid to each Tenant in
Common in accordance with their respective Interests as provided in Section 3
above.
6. Possession. The Tenants in Common intend to lease the Property at all
times. Accordingly, no Tenant in Common shall have the right to occupy or use
the Property at any time during the term of this Agreement.
7. Transfer or Encumbrance. Subject to compliance with the specific terms
of this Agreement, applicable securities laws and compliance with the terms of
any loan (and associated loan agreement and documents) secured by the Property,
each Tenant in Common may sell, transfer, convey, pledge, encumber or
hypothecate the Interests (or any part thereof). Any such transferee shall take
such Interests subject to this Agreement and the transferor and transferee shall
execute and cause to be recorded an assignment and assumption
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agreement whereby (i) transferor assigns to transferee all of his right, title
and interest in and to this Agreement and the Management Agreement; and (ii)
transferee assumes and agrees to perform faithfully and to be bound by all of
the terms, covenants, conditions, provisions and agreements of this Agreement
and the Management Agreement with respect to the Interests to be transferred.
Upon execution and recordation of such assumption agreement, the transferee
shall become a party to this Agreement without further action by the other
Tenants in Common.
8. Right of Partition.
8.1 General. The Tenants in Common agree generally that any Tenant
in Common (and any of his successors-in-interest) shall have the right, while
this Agreement remains in effect, to file a complaint or institute any
proceeding at law or in equity to have the Property partitioned in accordance
with and to the extent provided by applicable law. The Tenants in Common
acknowledge and agree that partition of the Property may result in a forced sale
by all of the Tenants in Common. To avoid the inequity of a forced sale and the
potential adverse effect on the investment by the other Tenants in Common, the
Tenants in Common agree that, as a condition precedent to filing a partition
action, the Tenant in Common filing such action shall follow the buy-sell
procedure set forth in Section 10.
8.2 Lender Mandate. Notwithstanding the general provisions of
Section 8.1, if required by a lender as a condition of making a loan to the
Tenants in Common to acquire the Property or refinance any loan secured by the
Property, the Tenants in Common shall be deemed to have waived their right to
file a complaint or institute any proceeding at law or in equity to have the
Property partitioned in accordance with local law.
9. Bankruptcy. The Tenants in Common agree that the following shall
constitute an Event of Bankruptcy with respect to any Tenant in Common (and his
Successors): (a) if a receiver, liquidator or trustee is appointed for any
Tenant in Common; (b) if any Tenant in Common becomes insolvent, makes an
assignment for the benefit of creditors or admits in writing its inability to
pay its debts generally as they become due; (c) if any petition for bankruptcy,
reorganization, liquidation or arrangement pursuant to federal bankruptcy law,
or similar federal or state law shall be filed by or against, consented to, or
acquiesced in by, any Tenant in Common; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
such Tenant in Common then, upon the same not being discharged, stayed or
dismissed within thirty (30) days thereof. To avoid the inequity of a forced
sale and the potential adverse effect on the investment of the other Tenants in
Common, the Tenants in Common agree that, as a condition precedent to entering
into this Agreement, the Tenant in Common causing such Event of Bankruptcy shall
follow the buy-sell procedure set forth in Section 10.
10. Buy-Sell Procedure. Upon the filing of a partition action in
accordance with Section 8.1 (to the extent such right has not been waived as
provided in Section 8.2) or the occurrence of an Event of Bankruptcy in
accordance with Section 9, the other Tenants in Common shall have the right to
purchase the interests of the Tenant in Common filing such action or the subject
of the Event of Bankruptcy (hereinafter, "Seller"). Seller shall make a written
offer ("Offer") to sell its Interests to the other Tenants in Common at a price
equal to (a) the Fair Market Value (as defined below) of the Seller's Interests
minus (b) (i) Seller's proportionate share of any fee or other amount that would
be payable to Manager or any affiliates (including any real estate commission)
under the Management Agreement upon the sale of the Property at a price equal to
the Fair Market Value and (ii) selling, prepayment or other costs that would
apply in the event the Property was sold on the date of the offer. The other
Tenants in Common shall be entitled to purchase a portion of the selling Tenant
in Xxxxxx's interest in proportion to their undivided interest in the Property.
In the event any Tenant in Common elects not to purchase its share of the
selling Tenant in Common's interest, the other Tenants in Common shall be
entitled to purchase additional interests based on their undivided interest in
the Property. "Fair Market Value" shall mean the fair market value of Seller's
undivided interest in the Property on the date the Offer is made as determined
in accordance with the procedures set forth below. The other Tenants in Common
shall have twenty (20) days after delivery of the Offer to accept the Offer. If
any or all of the other Tenants in Common ("Purchaser") accept the Offer, Seller
and Purchaser shall commence negotiation of the Fair Market Value within fifteen
(15) days after the Offer is accepted. If the parties do not agree, after good
faith negotiations, within ten (10) days, then each party shall submit to the
other a proposal containing the Fair Market Value the submitting party believes
to be correct ("Proposal"). If either party fails to timely submit a Proposal,
the other party's submitted proposal shall determine the Fair Market Value. If
both parties timely submit Proposals, then the Fair Market Value shall be
determined by final and binding arbitration in accordance with the procedures
set forth below. The parties shall meet within seven (7) days after delivery of
the
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last Proposal and make a good faith attempt to mutually appoint a certified MAI
real estate appraiser who shall have been active full-time over the previous
five (5) years in the appraisal of comparable properties located in the County
or City in which the Property is located to act as the arbitrator. If the
parties are unable to agree upon a single arbitrator, then the parties each
shall, within five (5) days after the meeting, each select an arbitrator that
meets the foregoing qualifications. The two (2) arbitrators so appointed shall,
within fifteen (15) days after their appointment, appoint a third arbitrator
meeting the foregoing qualifications. The determination of the arbitrator(s)
shall be limited solely to the issue of whether Seller's or Purchaser's Proposal
most closely approximates the fair market value. The decision of the single
arbitrator or of the arbitrator(s) shall be made within thirty (30) days after
the appointment of a single arbitrator or the third arbitrator, as applicable.
The arbitrator(s) shall have no authority to create an independent structure of
fair market value or prescribe or change any or several of the components or the
structure thereof; the sole decision to be made shall be which of the parties'
Proposals most closely corresponds to the fair market value of the Property. The
decision of the single arbitrator or majority of the three (3) arbitrators shall
be binding upon the parties. If either party fails to appoint an arbitrator
within the time period specified above, the arbitrator appointed by one of them
shall reach a decision which shall be binding upon the parties. The cost of the
arbitrators shall be paid equally by Seller and Purchaser. The arbitration shall
be conducted in Orange County, California, in accordance with Illinois Code of
Civil Procedure sections 1280 et seq., as modified by this Agreement. The
parties agree that Federal Arbitration Act, Title 9 of the United States Code
shall not apply to any arbitration hereunder. The parties shall have no
discovery rights in connection with the arbitration. The decision of the
arbitrator(s) may be submitted to any court of competent jurisdiction by the
party designated in the decision. Such party shall submit to the superior court
a form of judgment incorporating the decision of the arbitrator(s), and such
judgment, when signed by a judge of the superior court, shall become final for
all purposes and shall be entered by the clerk of the court on the judgment roll
of the court. If one party refuses to arbitrate an arbitrable dispute and the
party demanding arbitration obtains a court order directing the other party to
arbitrate, the party demanding arbitration shall be entitled to all of its
reasonable attorneys' fees and costs in obtaining such order, regardless of
which party ultimately prevails in the matter. BY EXECUTING THIS AGREEMENT YOU
ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
ARBITRATION OF DISPUTES PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
ILLINOIS LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY EXECUTING THIS AGREEMENT YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL. IF YOU REFUSE TO SUBMIT
TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE ILLINOIS CODE OF CIVIL PROCEDURE. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
11. Purchase Option. The Manager or its affiliates have the option to
purchase all or any portion of the Property at the Appraised Value (as defined
below) from one or more of the Tenants in Common (the "Purchase Option")
beginning 36 months after the date of this Memorandum. If the Manager or its
affiliates desire to exercise the Purchase Option, the Manager or its affiliates
(hereinafter, the "Buyer") shall determine the fair market value of the
Property, which shall be computed (the "Appraised Value") in the manner
described below by computing the net proceeds that would have been distributable
to the selling Tenants in Common had the Property been sold for its Appraised
Value and reducing this amount by the sum of (a) 1% for imputed costs of sale
that ordinarily would be associated with the sale of the Property to a third
party and (b) the Selling Commission (as defined in the Management Agreement).
The Buyer, in its sole discretion, will select an MAI certified appraiser with
at least 5 years of experience in the city or county where the Property is
located to perform an MAI appraisal of the Property (the "Qualified Appraiser").
The Qualified Appraiser shall not be an affiliate of the Buyer, the Property
Manager or any Tenant in Common, and will be paid by the Buyer. The Qualified
Appraiser shall notify the Buyer of its determination of the fair market value
of the entire Property without a discount for the tenant in common ownership
arrangement.
The Tenants in Common by unanimous vote shall have the right to approve or
reject the Appraised Value within 30 days of receiving the notification of
Appraised Value. If they reject the Appraised Value within 30 days of receiving
the notification, the selling Tenants in Common shall have the right to select
their own Qualified Appraiser who shall be required to satisfy the same
requirements as described above. The average of the two appraisals shall then be
deemed the Appraised Value unless there is more than a five percent (5%)
difference between the highest and lowest Appraised Value, in which case a third
Qualified Appraiser (with the qualification described above) shall be selected
by mutual agreement of the first two appraisers and the average of the three
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appraisals shall be deemed the Appraised Value. The Appraised Value will not be
less than 90% of the original purchase price for the Property, unless otherwise
approved by the Tenants in Common as provided above.
The Manager shall pay for the first appraisal and, if applicable, half of
the third appraisal. The Company and the Tenants in Common, on a pro rata basis
in accordance with their ownership of the Property, shall pay for the second
appraisal and, if applicable, half of the third appraisal.
If the Buyer is acquiring a portion of the Property, the purchase price
shall be the pro rata amount of the Appraised Value for the portion of the
Property being purchased. The Appraised Value as determined above shall be final
and binding on the parties if the Buyer elects, in its sole discretion, to close
the purchase.
Once the Appraised Value has been determined, the Buyer shall have up to
90 days in which to purchase the Property for all cash or such other terms as
may be approved by the selling Tenants in Common as described above. At the
closing pursuant to the Purchase Option, each of the parties shall bear their
share of all ordinary closing costs and expenses in accordance with local real
estate practice. If the Buyer does not complete the purchase of the Property
within the 90-day period described above, that option shall lapse unless
extended by the parties as described above. If the Manager or an affiliate
elects to exercise the Purchase Option in the future, they shall be required to
begin again the process of selecting the Qualified Appraiser to determine the
Appraised Value. There are no limits on the number of times the Manager or its
affiliates may seek to exercise the Purchase Option. The Manager will be
entitled to the Selling Commission upon a sale pursuant to the Purchase Option.
The Buyer shall cooperate, at no cost or expense, with any of the selling
Tenants in Common who wish to structure the sale of their Interests as a
tax-deferred exchange pursuant to Section 1031 of the Code. The Buyer shall,
upon direction of the Tenants in Common electing to exchange, consent to the
assignment of their interests in the Purchase Option to a qualified intermediary
of their choosing and the payment of their net proceeds into customary exchange
escrow accounts.
12. General Provisions.
12.1 Mutuality; Reciprocity; Runs With the Land. All provisions,
conditions, covenants, restrictions, obligations and agreements contained herein
or in the Management Agreement are made for the direct, mutual and reciprocal
benefit of each and every part of the Property; shall be binding upon and shall
inure to the benefit of each of the Tenants in Common and their respective
heirs, executors, administrators, successors, assigns, devisees,
representatives, lessees and all other persons acquiring any undivided interest
in the Property or any portion thereof whether by operation of law or any manner
whatsoever (collectively, "Successors"); shall create mutual, equitable
servitudes and burdens upon the undivided interest in the Property of each
Tenant in Common in favor of the interest of every other Tenant in Common; shall
create reciprocal rights and obligations between the respective Tenants in
Common, their interests in the Property, and their Successors; and shall, as to
each of the Tenants in Common and their Successors operate as covenants running
with the land, for the benefit of the other Tenants in Common pursuant to
applicable law, including, but not limited to, the laws of the State of
Illinois. It is expressly agreed that each covenant contained herein or in the
Management Agreement (a) is for the benefit of and is a burden upon the
undivided interests in the Property of each of the Tenants in Common, (b) runs
with the undivided interest in the Property of each Tenant in Common and (c)
benefits and is binding upon each Successor owner during its ownership of any
undivided interest in the Property, and each owner having any interest therein
derived in any manner through any Tenant in Common or Successor. Every person or
entity who now or hereafter owns or acquires any right, title or interest in or
to any portion of the Property is and shall be conclusively deemed to have
consented and agreed to every restriction, provision, covenant, right and
limitation contained herein or in the Management Agreement, whether or not such
person or entity expressly assumes such obligations or whether or not any
reference to this Agreement or the Management Agreement is contained in the
instrument conveying such interest in the Property to such person or entity. The
Tenants in Common agree that, subject to the restrictions on transfer contained
herein, any Successor shall become a party to this Agreement and the Management
Agreement upon acquisition of an undivided interest in the Property as if such
person was a Tenant in Common initially executing this Agreement.
12.2 Binding Arbitration. Any controversy arising out of or related
to this Agreement or the breach thereof or an investment in the interests shall
be settled by arbitration in Orange County, California, in
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accordance with the rules of The American Arbitration Association, and judgment
entered upon the award rendered may be enforced by appropriate judicial action
pursuant to the Illinois Code of Civil Procedure. The arbitration panel shall
consist of one member, which shall be the mediator if mediation has occurred or
shall be a person agreed to by each party to the dispute within 30 days
following notice by one party that he desires that a matter be arbitrated. If
there was no mediation and the parties are unable within such 30 day period to
agree upon an arbitrator, then the panel shall be one arbitrator selected by the
Orange County office of The American Arbitration Association, which arbitrator
shall be experienced in the area of real estate and limited liability companies
and who shall be knowledgeable with respect to the subject matter area of the
dispute. The losing party shall bear any fees and expenses of the arbitrator,
other tribunal fees and expenses, reasonable attorney's fees of both parties,
any costs of producing witnesses and any other reasonable costs or expenses
incurred by him or the prevailing party or such costs shall be allocated by the
arbitrator. The arbitration panel shall render a decision within 30 days
following the close of presentation by the parties of their cases and any
rebuttal. The parties shall agree within 30 days following selection of the
arbitrator to any prehearing procedures or further procedures necessary for the
arbitration to proceed, including interrogatories or other discovery.
12.3 Attorneys' Fees. If any action or proceeding is instituted
between all or any of the Tenants in Common arising from or related to or with
this Agreement, the Tenant in Common or Tenants in Common prevailing in such
action or arbitration shall be entitled to recover from the other Tenant in
Common or Tenants in Common all of his or their costs of action or arbitration,
including, without limitation, reasonable attorneys' fees and costs as fixed by
the court or arbitrator therein.
12.4 Entire Agreement. This Agreement, together with the Management
Agreement, constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and all prior and contemporaneous
agreements, representations, negotiations and understandings of the parties
hereto, oral or written, are hereby superseded and merged herein.
12.5 Governing Law. This Agreement shall be governed by and
construed under the internal laws of the State of Illinois without regard to
choice of law rules.
12.6 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and signed
by the party against which the enforcement of such modification, waiver,
amendment, discharge or change is or may be sought.
12.7 Notice and Payments. Any notice to be given or other document
or payment to be delivered by any party to any other party hereunder may be
delivered in person, or may be deposited in the United States mail, duly
certified or registered, return receipt requested, with postage prepaid, or by
Federal Express or other similar overnight delivery service, and addressed to
the Tenants in Common at the addresses specified in Exhibit "A" hereto. Any
party hereto may from time to time, by written notice to the others, designate a
different address which shall be substituted for the one above specified. Unless
otherwise specifically provided for herein, all notices, payments, demands or
other communications given hereunder shall be in writing and shall be deemed to
have been duly given and received (a) upon personal delivery, or (b) as of the
third business day after mailing by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth above, or (c)
the immediately succeeding business day after deposit with Federal Express or
other similar overnight delivery system.
12.8 Successors and Assigns. All provisions of this Agreement shall
inure to the benefit of and shall be binding upon the successors-in-interest,
assigns, and legal representatives of the parties hereto.
12.9 Term. This Agreement shall commence as of the date of
recordation and shall terminate at such time as the Tenants in Common or their
successors-in-interest or assigns no longer own the Property as
tenants-in-common. In no event shall this Agreement continue beyond December 31,
2032.
12.10 Waivers. No act of any Tenant in Common shall be construed to
be a waiver of any provision of this Agreement, unless such waiver is in writing
and signed by the Tenant in Common affected. Any Tenant in Common hereto may
specifically waive any breach of this Agreement by any other Tenant in Common,
but no such waiver shall constitute a continuing waiver of similar or other
breaches.
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12.11 Counterparts. This Agreement may be executed in counterparts,
each of which, when taken together, shall be deemed one fully executed original.
12.12 Severability. If any portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be held
by any court of competent jurisdiction to be illegal, null or void or against
public policy, the remaining portions of this Agreement shall not be affected
thereby and shall remain in full force and effect to the fullest extent
permissible by law.
12.13 Securities Laws. THE UNDIVIDED INTERESTS IN THE PROPERTY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, OR BY THE
SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR HAS ANY COMMISSION OR
AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR
ADEQUACY OF ANY DISCLOSURE MADE IN CONNECTION THEREWITH. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE. THE PROJECTS MAY NOT BE RESOLD WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES
LAWS OR EXEMPTION THEREFROM.
12.14 Time is of the Essence. Time is of the essence of each and
every provision of this Agreement.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
TENANTS IN COMMON:
NNN CONGRESS CENTER, LLC
a Delaware limited liability company
By: TRIPLE NET PROPERTIES, LLC, a Virginia
limited liability company, its Manager
By: ________________________________
NNN Congress Center [ ], LLC, a Delaware
limited liability company
By: NNN Congress Center Member [ ],
a Delaware limited liability company
Its: Sole Member
By: ________________________________
Its: Sole Member
9
STATE OF CALIFORNIA )
) ss:
COUNTY OF ORANGE )
On ______________________, before me, ____________________________________
, personally appeared _____________________________________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
__________________________________________
Notary Public
STATE OF ___________________ )
) ss:
CITY/COUNTY OF _____________ )
On ____________________________, before me, _____________________________,
personally appeared____________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his authorized
capacity, and that by his/her/their signature on the instrument the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________________
Notary Public
10
EXHIBITS
Exhibit "A" Tenants in Common and Percentage Interests
Exhibit "B" Description of the Property
Exhibit "C" Management Agreement
EXHIBIT "A"
Tenants in Common and Percentage Interests
Tenants in Common Percentage Interest
----------------- -------------------
NNN Congress Center, LLC __%
0000 X. Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxx, XX 00000
NNN Congress Center [ ], LLC __%
[address]
