Exhibit 10.15
CONTRIBUTION AGREEMENT
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THIS CONTRIBUTION AGREEMENT ("Agreement") is made this 8th day of July,
1997, in Chicago, Illinois, by and between the parties set forth on Schedule 1
attached hereto and made a part hereof (collectively, "Contributor"), and THE
PRIME GROUP, INC., an Illinois corporation ("Company").
R E C I T A L S:
A. The Land Trust (as hereinafter defined) is the fee owner of the Real
Property (as hereinafter defined) described on Schedule 1 attached hereto and
made a part hereof, and the Beneficiary (as hereinafter defined) is the owner of
the Personal Property, Contracts and Licenses (as such terms are hereinafter
defined and, together with the Business Assets (as hereinafter defined) and the
Real Property, collectively referred to herein as the "Property").
B. Prior to the Closing Date (as hereinafter defined), Company will
assign all of its right, title and interest in and to this Agreement to the
Partnership (as hereinafter defined).
C. Contributor desires to contribute the Property to the Partnership, and
the Company desires to cause Partnership to accept the contribution of the
Property from the Contributor upon and subject to the terms and conditions
hereinafter set forth.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, agreements, covenants and conditions
herein contained, and other good and valuable consideration, Contributor and
Company agree as follows:
ARTICLE 1
DEFINITIONS
1.01 Definitions. When used herein, the following terms shall have the
respective meanings set forth opposite each such term:
Agreement: This Agreement including the Exhibits and Schedules attached
hereto which are incorporated herein and made a part hereof.
Assignments of Partnership Interests: The assignments of one hundred
percent (100%) of the partnership interests in the Beneficiary described on
Schedule 1, which assignments shall be in the form of Schedule 4 attached hereto
and shall be executed and delivered by all of the partners of such Beneficiary.
Beneficiary: Each of the entities described as "Beneficiary" on Schedule 1
attached hereto.
Business Assets: The assets of IBD, including, but not limited to, items
described on Schedule 2 attached hereto and made a part hereof.
Closing Date: The date which is three (3) business days following Company's
written notice to Contributor that it has priced the IPO, provided, however,
that if Closing has not occurred by July 31, 1997, Company may extend the
Closing Date to the last day of August upon payment to Escrowee with such notice
on or before July 31, 1997 of an additional $100,000.00 to be held as an
additional Deposit, (iv) Company may extend the Closing Date to the last day of
September with notice to Contributor and upon payment of an additional
$100,000.00 to Escrowee on or before August 31, 1997, to be held as an
additional Deposit, (v) Company may extend the Closing Date to the last day of
October with notice of Contributor and upon payment to Escrowee of an additional
$300,000.00 to be held as an additional Deposit on or before September 30, 1997,
(v) Company may extend the Closing Date to the last day of November with notice
to Contributor and upon payment to Escrowee of an additional $300,000.00 to be
held as an additional Deposit on or before October 31, 1997, and (vi) Company
may extend the Closing Date to the last day of December with notice to
Contributor and upon payment to Escrowee of an additional $300,000.00 to be
held as an additional Deposit on or before November 30, 1997, or such earlier
date as Company may designate by at least ten (10) days' prior notice to
Contributor
Contracts: All written or oral: (i) insurance, service, maintenance,
operating, repair and other contracts and commitments (excluding the recorded
documents evidencing the Permitted Title Exceptions) in any way relating to the
Property or any part thereof which shall survive the closing hereunder; (ii)
equipment leases located on the Property; and (iii) guaranties and warranties in
effect with respect to the Property or any portion thereof, which shall survive
the closing hereunder. A true, correct and complete list of the foregoing are
attached as Exhibit D hereto.
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Contribution Price: $53,500,000.00, being the consideration payable by
the Partnership to Contributor for the contribution of the Property to the
Partnership and all other covenants and warranties contained herein, as further
described in Article 3.
Deed: Those certain Trustee's Deeds (in recordable form) delivered by the
fee simple owners of any of the other Real Property to the Partnership, subject
only to the permitted exceptions applicable to such Real Property.
Deposit: The sum of $137,500.00, which shall be delivered by the Company
to the Contributor within two (2) business days after this Agreement has been
executed by all parties as non-refundable (except as otherwise provided in this
Agreement) xxxxxxx money subject to the terms of this Agreement. The Deposit
shall also include additional deposits made to the Escrowee to extend the
Closing Date as provided in this Agreement.
Employee Benefit Plan: All written or oral employee benefit plans or
programs, welfare benefits plans, retirement plans, excess benefit plans, plans
maintained to provide workers' compensation or unemployment benefits and pay
practices which Contributor has funded or been obligated to fund for its past or
present employees, independent contractors or either of their beneficiaries or
dependents.
Environmental Laws: As defined in Section 12.01(u).
Environmental Study: As defined in Section 11.01(f).
Escrowee: Chicago Title & Trust Company.
Governmental Approvals: Certificates of occupancy, licenses, permits,
authorizations and approvals required by law or by any Governmental Authority
having jurisdiction thereover in respect of the Property, or any portion
thereof, occupancy thereof, or any present use thereof.
Government Authority: Any federal, state or local governmental body or
agency having jurisdiction in respect of the Property, or any portion thereof,
occupancy thereof, or any present use thereof.
Hazardous Materials: As defined in Section 12.01(u).
IBD: Industrial Building and Development Company, an Illinois
corporation.
Intangible Personal Property: All logos, designs, tradenames, trademarks,
service marks, copyrights and other intellectual property used by Contributor
(excluding the name of "Industrial Building and Development Company" and its
logo) in connection with the
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ownership and operation of the Property or any part thereof, together with the
goodwill of the business appurtenant thereto.
IPO: The initial public offering of the stock of Prime Group Realty Corp.
as contemplated by Form S-11 Registration Statement, a draft copy of which has
been delivered to Contributor, as same may be amended from time to time.
Land Trust: Each of the entities described as "Land Trust" on Schedule 1
attached hereto.
Leases: All leases and tenancies in the Real Property identified and
described in Exhibit F.
Legal Requirements: All laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements of all governments and governmental
authorities having jurisdiction of the Property (including, for purposes hereof,
any local Board of Fire Underwriters), and the operation thereof.
Libertyville Vacant Property: The real property legally described on
Exhibit A-1 attached hereto.
Licenses: All licenses, franchises, certifications, authorizations,
approvals and permits issued or approved by any governmental authority and
relating to the operation, ownership and maintenance of the Property or any part
thereof, including elevator permits, machinery permits, business licenses,
ingress and egress permits and the like, as identified and described in Exhibit
E.
Mortgages: Unless specifically set forth otherwise, collectively, the
mortgages encumbering the Real Property described on Schedule 3 attached hereto,
which are to be assumed by the Partnership and the mortgages described on
Schedule 3-A which are to be repaid by the Partnership.
Option Property: The real property legally describe on Exhibit A-2
attached hereto.
Partnership: Prime Group Realty, L. P., a Delaware limited partnership.
Permitted Title Exceptions: All of the items as listed and described on
Exhibit C (including the Leases and the Mortgages described on Schedule 3); acts
of Company; rights of persons claiming by, through or under Company; and any
other matters which Company shall approve in writing.
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Personal Property: Any and all machinery, equipment, fixtures, furnishings,
and other tangible personal property owned by Contributor situated in or upon or
used in connection with the operation or maintenance of the Real Property or any
part thereof and all replacements, additions or accessories thereto between the
date hereof and the Closing Date, including the items identified and described
on Exhibit B.
Property: Collectively, the Real Property, the Personal Property, the
Intangible Personal Property, the Business Assets, the Contracts, the Leases and
the Licenses.
Real Property: The Real Property legally described on Exhibit A, Xxxxxxx X-
0 and Exhibit A-2 together with all buildings and improvements thereon or
therein (including all replacements or additions thereto between the date hereof
and the Closing Date); to the extent owned by Contributor (and not a tenant
under a Lease) all systems, facilities, fixtures, machinery, equipment and
conduits to provide fire protection, security, heat, exhaust, ventilation, air
conditioning, electrical power, light, plumbing, refrigeration, gas, sewer and
water thereto (including all replacements or additions thereto between the date
hereof and the Closing Date); all privileges, rights, easements, hereditaments,
and appurtenances thereto belonging to Contributor; and all right, title and
interest of Contributor in and to all streets, alleys, passages and other
rights-of-way included therein or adjacent thereto (before or after the vacation
thereof).
Survey: Current as-built survey for the Real Property prepared by a
surveyor licensed by the State of Illinois and certified to the Company, the
Contributor, the Title Insurer and such other parties as Company shall designate
to be prepared in accordance with the standards for Land Title Surveys of the
American Land Title Association and the American Congress on Surveying and
Mapping Class A survey, setting forth the legal description and street address
of the Real Property and showing thereon all buildings and other improvements
(including fences), the number of stories in such buildings, easements (visible
or recorded), building lines, curb cuts, party walls (if any), the number and
location of parking spaces, sewage, water, electricity, gas and other utility
facilities (together with recording information concerning the documents
creating any such easements and building lines to the extent recorded), roads
and other rights-of-way and means of physical and record ingress and egress to
and from the Real Property by public roads (including the dimensions of abutting
streets) and the net (after deduction of land dedicated or used or subject to
public easements for roads and highways) and gross area of the land included in
the Real Property, and spotting improvements on adjoining property which are
within five (5) feet of the property lines of the Real Property, and certifying
whether any portion of the Real Property lies within a flood plain or wetlands
area.
Tangible Personal Property: All machinery, equipment, fixtures,
furnishings, and other tangible personal property situated in or upon or used in
connection with the operation or maintenance of the Real Property or any part
thereof, and all replacements,
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additions or accessories thereto between the date hereof and the Closing Date,
including the items identified and described on Exhibit B, but excluding
personal property owned by IBD which are not Business Assets, if any, described
on Schedule 2A or by tenants under the Leases and personal property demised by
any equipment leases (if any) described on Exhibit F.
Title Commitment: A separate commitment for an ALTA Form B Owner's Title
Insurance Policy for each real property comprising the Real Property issued by
the Title Insurer in the amount of the allocation of the Contribution Price as
provided in Schedule 10 attached hereto, covering title to the Real Property on
or after the date hereof, showing the respective owner of the Real Property in
fee simple, subject only to the Permitted Title Exceptions, and other exceptions
pertaining to liens or encumbrances of a definite or ascertainable amount (which
in the aggregate do not exceed that portion of the Contribution Price payable to
Contributor on the Closing Date) which may be removed by the payment of money at
closing and which Contributor shall so remove, and providing for full extended
coverage over all general title exceptions contained in such policies and the
following special endorsements at the Company's sole cost and expense: Zoning
Endorsement 3.1 (with parking); a contiguity endorsement; and such other
endorsements as may be requested by the Company. Contributor shall cause Title
Insurer to furnish a non-imputation endorsement and creditor's rights
endorsement at Contributor's sole cost and expense.
Title Insurer: Chicago Title Insurance Company.
ARTICLE 2
CONTRIBUTION AND RECEIPT
2.01 Contribution. Subject to the conditions and on the terms contained in
this Agreement:
(a) (i) Contributor agrees to execute and deliver the Assignments of
Partnership Interests, and the Partnership agrees to accept the Assignments of
Partnership Interests in the partnerships described on Schedule 1, or (ii)
Contributor agrees to execute and deliver Trustee's Deeds (in recordable form)
and otherwise in the form required pursuant to this Agreement to the Partnership
for the Real Property legally described on Exhibit A and as further described on
Schedule 1.
(b) Partnership agrees to acquire from Contributor, and Contributor
agrees to contribute to Partnership all of Contributor's right, title and
interest in the Contracts (all of which Contracts shall be with third parties
which are not affiliated with any
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party comprising Contributor and shall be at market rates or better), the
Leases, Intangible Personal Property and Licenses relating to the Real Property
described on Exhibit A.
(c) Partnership agrees to acquire from Contributor, and Contributor
agrees to contribute to Partnership the Personal Property relating to the Real
Property described on Exhibit A by good and sufficient xxxx of sale containing
full warranties of title free and clear of liens, claims, encumbrances and
restrictions of every kind and description except the Permitted Title Exceptions
to the extent applicable thereto.
ARTICLE 3
CONTRIBUTION PRICE
3.01 Contribution Price. The total gross fair market value attributable to
the Property (excluding the Real Property described on Exhibit A-1 and Exhibit
A-2 which are covered by the agreements attached hereto as Exhibit K and Exhibit
L) contributed by Contributor to the Partnership for such Property shall be
Fifty-Three Million Five Hundred Thousand and No/100 Dollars ($53,500,000.00).
3.02 Consideration Received by Contributor. Provided that all conditions
precedent to the Partnership's and Contributor's obligations to close as set
forth in this Agreement have been satisfied and fulfilled or waived in writing
by the parties hereto, the Partnership shall at Closing: (i) accept a
contribution of the Property subject to the Mortgages encumbering the Real
Property described on Schedule 3 attached hereto, which are to be assumed by the
Partnership and the Mortgages described on Schedule 3-A which are to be repaid
by the Partnership within one (1) business day of the IPO (as herein defined);
(ii) pay the sum of up to Five Hundred Thousand and No/100 Dollars ($500,000.00)
to IBD as a broker's commission and such other amounts required by Contributor
to pay the Closing expenses of Contributor in cash and to pay any amount
required to buy out limited partners in Sky Harbor Associates, and to pay an
amount not to exceed $300,000.00 to buy out HR Trust and Xxxxxx X. Xxxxxxx,
limited partners in The Grandvillle Road Property Limited Partnership (as
designated in writing by Contributor within a reasonable time prior to Closing);
plus (ii) admit the Contributor or the partners of the Contributor (as the case
may be) as a partner in the Partnership as evidenced by limited partnership
interests in the Partnership (the "OP Units") which shall have a net fair market
value equal to the balance of the Contribution Price (after deducting items (i)
and (ii) above, and after deducting that portion, if any, of the initial Deposit
of $137,500.00 which exceeds the prepayment fee payable to General American
Insurance pursuant to the payoff letter described in Section 15.02(xv), plus or
minus prorations and other adjustments required under this Agreement) shall be
paid in OP Units (the "OP Portion").
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For purposes of determining the number of OP Units to be delivered in
satisfaction of the OP Portion of the Contribution Price, the OP Units shall be
valued at the IPO price.
3.03 Delivery of Units. The Partnership's sole general partner will be
Prime Group Realty Corp., a Delaware corporation (the "REIT"). Currently, the
REIT is a private corporation that shall become a public entity through an
initial public offering of securities (the "IPO") which IPO the Partnership
expects shall occur on or before December 31, 1997. Provided that the REIT
does, in fact, consummate the IPO, the following shall be applicable: (i) the
Partnership shall provide Contributor with reasonable advance written notice
(the "Registration Notice") of the REIT's intent to file its initial S-11
Registration Statement (the "Initial S-11 Statement") with the Securities and
Exchange Commission (the "SEC"). Promptly upon filing, the Initial S-11
Statement with the SEC, the Partnership shall furnish a copy of the Initial S-11
Statement to Contributor. In the event that the REIT fails to file its initial
S-11 Statement with the SEC on or before the ninetieth (90th) day following the
date this Agreement is executed by all parties ("Initial Filing Date"),
Contributor may terminate this Agreement by written notice to the Partnership
delivered within three (3) business days after the Initial Filing Date
("Contributor's Termination Notice"). Upon delivery of the Contributor's
Termination Notice this Agreement shall automatically terminate, and neither the
Partnership nor the Contributor shall have any further liability to one another
with respect to this Agreement and the Property, except as otherwise
specifically provided in this Agreement; (ii) the Partnership shall satisfy this
OP Portion of the Contribution Price by delivery to Contributor at Closing of
the "OP Units," which OP Units shall be convertible or exchangeable into shares
of common stock of the REIT, which shares shall be registered and freely
tradeable on the New York Stock Exchange on a one-for-one basis. The
Contributor or the partners of the Contributor shall have voting and all other
rights as all other limited partners in the Partnership and shall entitle the
Contributor or the partners of the Contributor to its share of all distributions
in the Partnership which shall be based upon the ratio of OP Units held by the
Contributor or the partners of Contributor to all OP Units held by all partners
of the Partnership; and (iii) the Contributor or its assigns shall not be
restricted from selling its OP Units or shares in the REIT for a period in
excess of one (1) year following the Closing Date.
Notwithstanding any of the terms hereof (or the interpretation of any terms
hereof), no Contributor or partners of the Contributor shall receive any cash
payments in connection with its contribution to the Partnership, and any
provisions which in any way describe a payment of cash or consideration other
than OP Units shall be interpreted as reducing the number of OP Units the
Contributor or partners of the Contributor thereof are to receive. Any cash
actually paid by the Partnership to the Contributors shall be paid directly to
IBD or its designee; provided, however, any Deposit in excess of the initial
Deposit of $137,500.00 shall be proportioned among the Contributors based on the
ratio set forth in Schedule 10 hereof.
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3.04 The Exchange. The parties acknowledge that Contributor intends
that the delivery of the OP Units to Contributor will constitute a transfer of
an interest in the Property in exchange (the "Exchange") for OP Units in the
Partnership that will qualify as a contribution pursuant to Section 721 of the
Internal Revenue Code of 1986, as amended. Subject to applicable laws and
regulations, the Partnership shall cooperate in all reasonable respects with
Contributor to effectuate such exchange; provided, however, that: (i) the
Closing shall not be extended or delayed by reason of such Exchange unless the
Partnership has breached its obligations to Contributor under this Agreement; or
(ii) from and after the Closing Date, the Partnership agrees that neither the
Partnership or the REIT will take any tax return or financial statement
reporting position that is contrary to this Article 3.
3.05 Partnership Representations and Warranties. The Partnership hereby
represents and warrants to Contributor and will represent and warrant to the
Contributor on the date of the IPO and the truth of each said representation and
warranty shall be a condition precedent of Contributor's obligations hereunder
as follows:
(a) The Partnership will elect the "traditional method" set forth in
Treasury Regulation Section 1.704-3(b) (absent a Final Determination to the
contrary) to allocate tax attributes related to the Property as "Section 704(c)
Property" (as such term is defined in Treasury Regulation Section 1.704-3(a)(3))
or which are in any other way governed by the provisions of Section 704(c) of
the Internal Revenue Code of 1986, as amended ("Section 704(c) allocations") or
any successor section thereto.
(b) Contributor and its successors and assigns shall be able to
freely encumber, assign or pledge its OP Units or shares of stock in the REIT
immediately upon the IPO.
(c) The shares of the REIT shall be traded on the New York Stock
Exchange.
(d) Contributors will be allocated at the time of Closing, no less
than $20.6 million of non-recourse indebtedness for purposes of Section 752,
with such figure evidenced by a schedule prepared using the same methodology as
Exhibit M, with the amount apportioned under Treasury Regulation Section 1.752-
3(a)(3) determined using the "Indemnity Debt Allocation Method," as such term is
defined in the Tax Indemnification Agreement attached hereto as Exhibit I.
(e) The partnership agreement of the Partnership will provide that
commencing on or after the date that is one (1) year after the IPO, that upon
the request of a limited or general partner of Sky Harbor Associates, that
Partnership will admit said partner as a partner in the Partnership in order to
allow said partner to convert their newly
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received OP Units to registered and freely tradeable shares in the REIT (which
shares shall be tradeable on the New York Stock Exchange, as will all other
shares convertible into shares of the REIT).
(f) Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx, as the trustee of the HR
Trust, at their election, within 10 days before pricing of the IPO, may exchange
their interests in The Grandville Road Property Limited Partnership for limited
partnership interests in the Partnership.
(g) The Employment Agreements between the Partnership and Xxxxxxx
Xxxxx and the other officers of the Partnership shall contain the same
indemnification provisions contained in Sections 14 and 15 of the employment
agreements between (a) Xxxxxx X. Xxxxxxxx and the Partnership and (b) Xxxxxx X.
Xxxxx and the Partnership.
ARTICLE 4
SURVEY
4.01 Survey. Promptly after execution of this Agreement, Company shall
order the Survey and deliver a copy to Contributor. Company shall obtain the
Survey, and Contributor shall reimburse Company for the cost of the Survey at
Closing. The Survey shall show no encroachments onto the Real Property from any
adjacent property, no encroachments by or from the Real Property onto any
adjacent property and no violation of or encroachments upon any recorded
building lines, restrictions or easements affecting the Real Property. If the
Survey is dated more than ninety (90) days prior to the Closing Date,
Contributor shall furnish at closing a certificate of the surveyor to Company,
the Title Insurer and such other parties as Company shall designate dated within
ninety (90) days prior to closing certifying that there have been no changes or
additions to the Property since the date of the Survey.
ARTICLE 5
TITLE AND SEARCHES
5.01 Title. Promptly after execution of this Agreement, Company shall
order and deliver a copy to Contributor the Title Commitment. Company shall
obtain the Title Commitment, and Contributor shall reimburse Company for the
cost of the Title Policy at Closing. On the Closing Date, Contributor shall
cause the Title Insurer to issue an owner's title insurance policy or prepaid
"marked up" commitment therefor pursuant to and in accordance with the Title
Commitment insuring fee simple title to the Real Property in the
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Company as of the Closing Date, subject only to the Permitted Title Exceptions
and such other exceptions as Company may approve.
5.02 Searches. Promptly after execution of this Agreement, Company shall
order (and deliver a copy of same to Contributor) searches of the records of the
Recorder of Deeds of the County in which the real property comprising the Real
Property is located; the Secretary of State of Illinois and the U. S. District
Court for the Northern District of Illinois confirming the absence of security
interests, judgments, tax liens and bankruptcy proceedings which affect or could
affect Contributor or the Property or any interest therein to be transferred to
Company pursuant to this Agreement (other than Permitted Title Exceptions
[collectively, the "Initial UCC Searches"]). Contributor shall reimburse
Company for the cost of one set of initial searches at Closing. Said searches
shall be updated at Company's sole cost and expense as of the Closing Date
confirming the absence of such security interests, judgments, tax liens or
bankruptcy proceedings.
5.03 Defects and Cures. The items described in Sections 4.01, 5.01 and
5.02 are collectively referred to as the "Title Evidence." If the Title
Evidence discloses unpermitted claims, liens, exceptions, conditions or other
items unacceptable to the Company (the "Defects"), the Company shall so notify
Contributor in writing within the later to occur of: (I) the date which is the
last day of the due diligence period, and (ii) August 14, 1997 (failure to do so
shall be deemed approval of the Title Evidence by the Company), and said Defects
shall, as a condition precedent to Closing, be cured and removed by Contributor
from the Title Evidence prior to Closing, or within thirty (30) days after
delivery by the Company to Contributor of notice that a Defect exists, whichever
date is earlier. If Contributor fails to so cure all Defects, or if Contributor
fails to cause all Defects to be insured over by the Title Insurer in a manner
satisfactory to the Company, then the Company may: (1) terminate this Agreement
by written notice to the Contributor given within ten (10) days after expiration
of the cure period, in which event the Deposit shall be returned to Company and
neither party shall have any further liability to the other hereunder except as
otherwise provided herein; or (2) proceed to close by deducting from the OP
Units otherwise due at Closing or escrowing with the Title Insurer the amount
necessary (but only to the extent that such Defects are liens or encumbrances of
an ascertainable money amount which can be endorsed over by the Title Insurer by
the escrowing of an ascertainable amount) to cause the Title Insurer to insure
and/or endorse over such Defects in a manner satisfactory to Company.
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ARTICLE 6
POSSESSION, PRORATIONS AND CLOSING COSTS
6.01 Possession. Sole and exclusive possession of the Property, subject to
the rights of tenants in possession (as tenants only) pursuant to the Leases
shall be delivered to Company on the Closing Date.
6.02 Prorations. Current rents based upon scheduled rents per the Leases,
security deposits, if any (and any interest thereon, if any) and advance rentals
under the Leases; unused decorating allowances under the Leases; expenditures
required (under the Leases) to complete any tenant improvement work required of
the landlord under the Leases and incomplete on the Closing Date; Interest on
the Mortgages to be assumed by Company described on Schedule 3 and real estate
tax and insurance impounds (if any) held by the holder of the Mortgages to be
assumed by Company described on Schedule 3 will be assigned to Company and
Contributor will receive a credit at Closing for same; special and general real
estate taxes and other ad valorem taxes and assessments for the Property will
not be prorated, however, at Closing, Contributor shall assign to Purchaser any
and all monies being held for such real estate taxes and assessments with
respect to any tenants under the Leases which are paying monthly escrows to the
Contributor, state or city taxes, fees, charges and assessments affecting the
Property; utility charges and deposits; fuels; and all other items of accrued or
prepaid income and expenses customarily prorated on the transfer of industrial
properties in the Chicago, Illinois area shall be prorated on an accrual basis
as of the Closing Date on the basis of the most recent ascertainable amounts of
or other reliable information in respect to each such item of income and
expense, and the net credit to Company or Contributor shall increase or decrease
(as the case may be) the Contribution Price payable on the Closing Date. Real
estate taxes for the properties described on Schedule 5 attached hereto and made
a part hereof shall not be prorated since the tenants in occupancy are paying
such real estate taxes. Following closing, Company shall pay to Contributor all
rents which Company shall collect which are specifically allocated to periods
preceding the Closing Date, except that all such rents collected by Company
shall first be applied to satisfy all current rents due Company, and Contributor
shall pay to Company all rents received by Contributor from any tenant of the
Property before or after the Closing Date which are attributable to periods
succeeding the Closing Date. As of the Closing Date, the parties hereto agree
that there will be no proration with respect to any delinquent rents. In
addition and in lieu of a proration credit, on the Closing Date, Contributor
shall assign to Company any and all monies being held for real estate taxes with
respect to any tenants under the Leases which are paying monthly escrows to the
Contributor. Contributor agrees to cooperate at no cost to Contributor with
Company in the preparation of the financial statements and other financial data
respecting the ownership and operation of the Property for calendar year 1996
(if such statements have not been completed by the Closing Date) and subsequent
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periods for which such statements and data must be prepared in order to compute,
charge and prorate any tenant items. As soon as reasonably possible after the
preparation of the aforesaid financial statements and data, Company will render
statements for the tenant items to the tenants of the Real Property under their
respective Leases. From time to time as Company receives payment of the tenant
items from the tenants, Company will promptly remit to Contributor that portion
of the tenant items allocable to the Property prior to the Closing Date.
6.03 Closing Costs. At Closing, Contributor shall pay all charges
customarily attributable to sellers of Real Property, including, without
limitation, all title charges and premiums for the base title policy, extended
coverage and comprehensive endorsement no. 1, creditors rights endorsement and
non-imputation endorsement, survey charges and fees for the Initial UCC Searches
required by Section 5.02, and all state and county transfer taxes. Company
shall pay charges customarily attributable to purchasers, including, without
limitation, all recordation, title insurance and money lender's escrow charges
and other costs incurred in connection with any mortgage loans obtained by
Company. Company shall also pay an amount not to exceed one percent (1%) of the
outstanding balance of the Mortgages described on Schedule 3 imposed by the
holders of the Mortgages described on Schedule 3 in connection with the
assumption of such Mortgages, the charges for title endorsements requested by
Company other than those described above which Contributor has agreed to pay and
the cost of final UCC Searches required by the Company under Section 5.02. Any
municipal transfer tax shall be paid by the party on whom the ordinance imposes
responsibility for payment unless the ordinance does not specify the party
responsible for payment, in which case such tax shall be paid by Contributor.
The parties shall each be solely responsible for the fees and disbursements of
their respective counsel and other professional advisers. Contributor and
Company agree to split equally the cost of any escrows required under this
Agreement.
ARTICLE 7
ESCROW
7.01 Escrow. Within five (5) days following the date on which the
conditions precedent set forth in Article XIV have been satisfied or waived, the
parties, through their respective attorneys, shall establish an escrow with the
Escrowee through which the transaction contemplated hereby shall be closed.
Upon opening of said escrow, Company shall cause the Deposits (other than the
initial Deposit of $137,500.00) to be deposited in said escrow. The escrow
instructions shall be in the form customarily used by the Escrowee with such
special provisions added thereto as may be required to conform to the provisions
of this Agreement, including provisions with respect to a related money lender's
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escrow from which all or any part of the Contribution Price may be paid. Said
escrow shall be auxiliary to this Agreement, and this Agreement shall not be
merged into nor in any manner superseded by said escrow. The escrow costs and
fees shall be equally divided between Company and Contributor. If required by
applicable law, the Escrowee shall file with the Internal Revenue Service the
information return (Form 1099B) required by Section 6045(e) of the Internal
Revenue Code and any regulations issued pursuant thereto. Contributor shall be
responsible to give to the Escrowee such information of the Contributor that the
Escrowee needs in order to complete such form.
ARTICLE 8
BROKERAGE
8.01 Brokerage. Contributor and Company hereby represent and warrant
to the other that it has not dealt with any broker or finder in respect to the
transaction contemplated hereby except for Xxxxxx Xxx, whose commission shall be
paid if Closing occurs: fifty percent (50%) by Contributor from the Contribution
Price (not to exceed $100,000.00) and fifty percent (50%) by Company (not to
exceed $100,000.00) at Closing; and Contributor hereby agrees to indemnify
Company for any claim for brokerage commission or finder's fee asserted by a
person, firm or corporation other than Xxxxxx Xxx claiming to have been engaged
by Contributor. Company hereby agrees to indemnify Contributor for any claim
for brokerage commission or finder's fee asserted by a person, firm or
corporation other than Xxxxxx Xxx claiming to have been engaged by Company.
ARTICLE 9
DESTRUCTION OR DAMAGE
9.01 Destruction or Damage. If, subsequent to the date hereof and prior to
the Closing Date, all or any portion which will cost less than $500,000.00 to
repair or restore (in the reasonable judgment of Company or its lenders, if any)
the Property, and provided no leases are terminated by tenants as a result of
such event, the Company shall close and take the Property as diminished by such
events, and Contributor shall assign and/or to pay the Company at Closing all
insurance proceeds collected or claimed with respect to said loss or damage,
plus any deductible or self-insured amount. If, subsequent to the date hereof
and prior to the Closing Date, all or any portion which will cost more than
$500,000.00 to repair or restore (in the reasonable judgment of Company and
Contributor) the Property or in the event any of the Leases may be terminated as
a result of such event, or if any one or more improved parcels of the Property
shall be entirely destroyed or damaged by one or more incidents of vandalism,
fire and/or other casualty, whether or not
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covered by insurance, Contributor shall immediately give Company notice of such
occurrence, and Company may, within fifteen (15) days after receipt of such
notice, elect to (a) terminate this Agreement as to all properties comprising
the Property if the cost to repair the damage or destruction exceeds
$20,000,000.00; otherwise, to terminate this Agreement only as to such
properties which have been damaged or destroyed, in which event, in the case of
such termination as to all Properties, the Deposit (less $137,500.00, which sum
shall be retained by Contributor), and any earnings thereon, shall be returned
forthwith to Company, all obligations of the parties hereunder shall cease and
this Agreement shall have no further force and effect, and in the case of
termination as to such Property which has been damaged or destroyed, the
Purchase Price shall be reduced by the amount allocated to such property on
Schedule 10 and the parties shall make any other adjustments as agreed upon, or
(b) close the transaction contemplated hereby as scheduled (except that if the
Closing Date is less than fifteen (15) days following Company's receipt of such
notice, closing shall be delayed until Company makes such election), in which
event Company shall have the right to participate in the adjustment and
settlement of any insurance claim relating to said damage, and Contributor shall
assign and/or pay to Company at closing all insurance proceeds collected or
claimed with respect to said loss or damage plus any deductible or self-insured
amount.
ARTICLE 10
CONDEMNATION
10.01 Condemnation. If, subsequent to the date hereof and prior to the
Closing Date, any proceeding, judicial, administrative or otherwise, which shall
relate to the proposed taking of all or any substantial portion of the Real
Property by condemnation or eminent domain or any action in the nature of
eminent domain, or the taking or closing of any right of access to the Real
Property, is instituted or commenced, Company shall have the right and option to
terminate this Agreement as to all properties comprising the Property if the
cost to restore the Property exceeds $20,000,000.00; otherwise, to terminate
this Agreement only as to such properties which have been taken or condemned by
giving Contributor written notice to such effect within ten (10) days after
actual receipt of written notification of any such occurrence or occurrences.
Failure to give such notice within such time shall be conclusive evidence that
Company has waived the option to terminate by reason of the occurrence or
occurrences of which it has received notice, and Company shall be credited with
or be assigned all Contributor's right to any proceeds therefrom. Contributor
hereby agrees to furnish Company written notification in respect to any such
proceedings within five (5) days of Contributor's receipt of any such written
notification or commencement of the institution of such proceedings. Should
Company be entitled to elect to so terminate this Agreement and does, in fact,
so terminate this Agreement, in the case of such termination as to all
Properties the Deposit (less
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$137,500.00, which sum shall be retained by Contributor), and any earnings
thereon, shall be returned forthwith to Company, and the parties hereto shall be
released from any and all further obligations hereunder, and in the case of
termination as to such Property which has been taken or condemned, the Purchase
Price shall be reduced by the amount allocated to such property on Schedule 10,
and the parties shall make any other adjustments as agreed upon. If the Closing
Date is less than ten (10) days following the last day on which Company is
entitled to elect to terminate this Agreement, then the closing shall be delayed
until Company makes such election. Notwithstanding the foregoing, if such
proceeding by way of condemnation or eminent domain shall be "insubstantial"
Company shall not have the right to terminate this Agreement but shall be
credited with or be assigned all Contributor's right to any proceeds therefrom.
An "insubstantial" proceeding shall be one which (i) does not relate to the
taking or closing of any right of access to the Real Property, (ii) affects only
the perimeter of the Real Property and does not involve more than the equivalent
of $500,000.00 in value, (iii) does not give rise to the right to cause an
acceleration of the loan secured by the Mortgages, (iv) does not involve any
relocation of utility facilities serving the Real Property (providing this
latter condition shall be deemed deleted if Contributor shall agree to pay any
cost of relocation of any of the same and may use such part of the proceeds of
the award allocable thereto for such purpose), and (v) does not give rise to a
right to terminate any of the Leases by tenant.
ARTICLE 11
AFFIRMATIVE COVENANTS OF CONTRIBUTOR
11.01 Affirmative Covenants of Contributor.
(a) Contributor, at Contributor's sole cost and expense, shall
maintain or cause to be maintained the Property as required by the terms of the
Leases, and shall keep and perform or cause to be performed all obligations of
the Property owner or its agents under the Contracts and Licenses and under the
Legal Requirements, and all obligations of the holder of the Mortgages described
on Schedule 3 to and including the Closing Date or termination of this
Agreement. Subject to closing and Sections 9.01 and 10.01 hereof, on the Closing
Date, Contributor shall tender possession of the Property to Company in the same
condition the Property was in on the date hereof, except for ordinary wear and
tear, casualty loss and condemnation (provided Company shall not have elected to
terminate this Agreement pursuant to Sections 9.01 or 10.01 as a result of such
casualty loss or condemnation). Notwithstanding anything contained herein to the
contrary, in the event that Contributor receives written notice from any
Governmental Authority after the date hereof, but prior to the Closing that the
Property is not in compliance (the "Violation") with applicable municipal and
other governmental laws, ordinances, regulations, codes,
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licenses, permits and authorizations, Contributor shall provide written notice
to the Company of such event. In addition, Contributor shall have the
affirmative obligation to cure said Violation(s) prior to the Closing, provided,
that the cost to cure such Violation(s) do not exceed Seventy-Five Thousand and
No/100 Dollars ($75,000.00) (the "Cure Limitation"). If the cost to cure the
Violation(s) shall exceed the Cure Limitation and Contributor provides written
notice to the Company that it does not intend to pay amounts in excess of the
Cure Limitation, then in such event, the Company may elect (i) to terminate this
Agreement whereupon the entire Deposit shall be returned to Company and this
Agreement shall be null and void and except as otherwise expressly provided in
this Agreement, neither party shall have any further liability to the other
under this Agreement; or (ii) to take title to the Property subject to the
Violation(s), in which event Contributor will provide Company with a credit
against the Contribution Price due at the Closing in the amount of the Cure
Limitation.
(b) From the date of Contributor's acceptance hereof to the Closing
Date, Contributor shall maintain or cause to be maintained in full force and
effect liability, casualty and other insurance upon and with respect to the
Property against such hazards and in such amounts as shall be required by the
Mortgages.
(c) From the date of Contributor's acceptance hereof to the Closing
Date or earlier termination of this Agreement, Contributor shall operate and
maintain the Property in the same manner as it has been operated and maintained
heretofore, provided that during said period, without the prior written consent
of Company, Contributor shall not do, suffer or permit, or agree to do, any of
the following:
(i) Enter into any other transaction with respect to or
affecting the Property which would survive the Closing, except for seasonal or
other arms length contracts with third parties in the ordinary course of
Contributor's business;
(ii) Except as otherwise provided in the Libertyville Business
Park Agreement (and subject to the conditions set forth therein), sell (other
than transfers of partnership interests in entities comprising Contributor to or
among Xxxxxx Xxxxxxxx and his wife and children or trusts of any of said
individuals or Xxxxxx Xxxxx), encumber or grant any interest in the Property or
any part thereof in any form or manner whatsoever or allow any general partner
of Beneficiary to pledge his equity interests in any Beneficiary, or otherwise
perform or permit any act which will diminish or otherwise affect Company's
interest under this Agreement or in or to the Property or which will prevent
Contributor's full performance of its obligations hereunder;
(iii) Enter into, amend, waive any rights under, terminate or
extend any Contract (other than seasonal contracts or other arms length
contracts with third
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parties in the ordinary course of Contributor's business) which may be
terminated on no more than thirty (30) days' notice or any of the Leases.
(iv) Amend or waive any rights, or suffer or permit a default to
occur, under the Mortgages except for defaults attributable to the borrower's
failure to pay the loan by a maturity date which occurs prior to Closing (and in
connection with any such loan having a maturity date prior to Closing Seller
shall utilize its best efforts to extend the maturity date of such loan to
12/31/97), except in connection with obtaining an agreement relating to
prepayment of the Mortgages described on Schedule 3A; or
(v) Remove from the Property any of the fixtures thereon or any
of the Personal Property, unless such fixtures and Personal Property are
replaced with like-kind fixtures and personal property.
(d) From the date of Contributor's acceptance hereof to the Closing
Date, Contributor shall permit representatives, agents, employees, lenders,
contractors, appraisers, architects and engineers designated by Company access
to and entry upon the Real Property and the improvements thereon to examine,
inspect, measure and test the Property; provided, however, such entry shall be
upon written notice and during business hours and shall be subject to the rights
of the tenants under the Leases. Company shall furnish to Contributor
certificates of insurance naming Contributor as an additional insured and
otherwise reasonably satisfactory to Contributor from Company's environmental
consultants and engineer, and Company shall indemnify and hold Contributor
harmless from and against any and all cost, liability or expenses incurred by
Contributor as a result of injury or damage to the Property caused by such
access and entry and testing.
(e) Contributor shall deliver to Company (or make available to the
Company at the offices of IBD as provided below) not later than five (5) days
following Contributor's acceptance of this Agreement true, correct and complete
copies of the following:
(i) All Licenses, Contracts and Leases in Contributor's
possession or control, and all documents evidencing and securing the
indebtedness described in the Mortgages described on Schedule 3 and 3A;
(ii) Copies of all existing title policies or reports, surveys,
environmental reports, appraisals and physical inspection or engineering reports
in Contributor's possession or control;
(iii) The most recent real estate tax bills pertaining to the
Real Property;
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(iv) Make available to Company to the extent in Contributor's
possession or control, as-built plans and specifications for the improvements on
the Property including the plans and specifications for and a description of all
existing renovations to the Property;
(v) Make available to Company to the extent in Contributor's
possession or control, as-built drawings of underground utilities (including
gas, sewer, water, telephone and electrical service cables) located under the
Property, if available;
(vi) Make available to Company to the extent in Contributor's
possession or control, all essential data, correspondence, documents,
agreements, waivers, notices, applications and other records with respect to the
Property (including, without limitation, any records relating to transactions
with taxing authorities, governmental agencies, utilities, mortgagees, and
others with whom Company may be dealing subsequent to closing); and
(vii) All Exhibits not attached hereto but delivered in
accordance with Section 18.08 below; and
(viii) All items described on Schedule 6 attached hereto and made
a part hereof.
(f) Company may order an environmental report to be conducted by an
environmental engineering firm selected by Company (the "Environmental Study")
at any time from the date of Contributor's acceptance hereof to the Closing
Date. Company shall pay all costs of the Environmental Study, if any, and
Contributor agrees to cooperate with Company, or its agents, in arranging for
and conducting the Environmental Study and the Company shall provide copies of
such Environmental Study to Contributor. Notwithstanding the foregoing,
Contributor agrees to pay up to $5,000.00 of the cost of further investigation
costs associated with the property located at 0000 Xxxxxxxxxxxx/0000 Xxxxxxxxxx,
Xxxxxx, Xxxxxxxx ("Grandville property") within five (5) days after receipt of
an invoice for same.
(g) Contributor shall notify Company promptly if Contributor becomes
aware of any transaction or occurrence prior to the Closing Date which would
make any of the representations and warranties of Contributor contained in
Section 12.01 not true in any material respect.
(h) Contributor agrees to notify Company if any of the employees
listed on Exhibit H leave prior to the Closing Date, and if any of such
employees leave, Contributor may replace such employees; provided the salary and
other benefits for such new employees do not exceed the salary and other
benefits for the employees who
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terminated their employment. Contributor agrees to provide written notice to
the Company of any hiring of replacement employees.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES OF Contributor
12.01 Representations and Warranties of Contributor. To induce
Company to execute, deliver and perform this Agreement, Contributor hereby
represents and warrants to Company on and as of the date hereof and on and as of
the Closing Date to the extent same are true, and to the extent not true, then
describing the circumstances or manner in which such representations and
warranties are not true. (Contributor hereby agrees to give Company written
notice of any information which makes any representation or warranty untrue
within three (3) business days of obtaining such information as follows with
respect to the respective portions of the Property owned by it (and disclosure
of such information shall not be deemed a breach of a representation or warranty
by Contributor or default by Contributor under this Agreement in the absence of
willful or intentional acts or omissions or gross negligence by Contributor):
(a) To the best of such Contributor's knowledge, all representations
and warranties of Contributor appearing in other Sections of this Agreement are
true and correct in all material respects.
(b) Each Beneficiary and IBD is duly organized and in good standing
under the laws of the State of Illinois, and is duly qualified to do business in
the State of Illinois.
(c) Subject to obtaining consent of the holders of the Mortgages
described in Schedule 3 to the assumption and the consent of the holders of the
Mortgages described in Schedule 3A, each Beneficiary of Contributor and IBD has
full capacity, right, power and authority to execute, deliver and perform this
Agreement and all documents to be executed by such party pursuant hereto, and
all required action and approvals therefor have been duly taken and obtained.
The individuals signing this Agreement and all other documents executed or to be
executed pursuant hereto on behalf of such party are and shall be duly
authorized to sign the same on such party's behalf and to bind such party
thereto. This Agreement and all documents to be executed pursuant hereto by
such party are and shall be binding upon and enforceable against such party in
accordance with their respective terms, and the transaction contemplated hereby
will not result in a breach of or constitute a default or permit acceleration of
maturity under any mortgage, deed of trust, loan agreement or other agreement
(other than the Mortgages) to which Contributor or the Property is subject or by
which Contributor or the Property is bound.
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(d) To the best of such Contributor's knowledge, the information
included in the Exhibits hereto and the documents to be delivered to Company
pursuant to Section 11.01(e) is true, correct and complete in all material
respects, and the same shall not omit any material information.
(e) To the best of such Contributor's knowledge, Exhibit D includes a
true, correct and complete listing of all Contracts and amendments and
modifications thereof. To the best of such Contributor's knowledge, there are no
defaults under any of the Contracts, and the Contracts are in full force and
effect.
(f) To the best of such Contributor's knowledge, Exhibit E is an
accurate description of each of the Licenses, as amended and in effect. Each of
the Licenses is in full force and effect, and neither such Contributor nor any
agent or employee of Contributor has received written notice of any intention on
the part of the issuing authority to cancel, suspend or modify any of the
Licenses or to take any action or institute any proceedings to effect such a
cancellation, suspension or modification.
(g) Exhibit F is a true, correct and complete listing of all of the
Leases. Except as provided in the Leases, none of the Leases contain any option
or right of first refusal to purchase any property demised thereby, to extend
the Lease term, to lease additional space, to cancel or terminate the Lease
prior to the end of its term, or any other extraordinary provisions. To the
best of such Contributor's knowledge, (1) all tenants have accepted and are
occupying the respective leased premises described in such Leases; (2) all
Leases are in full force and effect, and no rights or interests of the landlord
thereunder have been waived or released; (3) all of landlord's obligations under
the Leases including the obligation to finish or refinish space to the
specifications provided in the Leases, have been satisfied; (4) neither the
landlord nor any tenant is in default under any Lease; and (5) such Contributor
has not received written notice of any circumstances affecting the financial
condition of any tenant of the Property, or otherwise, which would prevent such
tenant from fulfilling and complying with the obligations under its Lease.
(h) To the best of such Contributor's knowledge, the information to
be furnished by Contributor on which the computation of prorations is based
shall be true, correct and complete in all material respects.
(i) Each Land Trust owner of a portion of the Property owns fee
simple title to its respective portion of the Real Property described on
Schedule 1 free and clear of liens, encumbrances, options and restrictions of
every kind and description, except the Permitted Title Exceptions.
(j) Each Beneficiary has good and marketable title to the respective
portion of the Personal Property owned by it and each item thereof free and
clear of liens,
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security interests, encumbrances, leases and restrictions of every kind and
description, except the Permitted Title Exceptions.
(k) The interest of Contributor in the Contracts, the Leases and
Licenses is free and clear of all encumbrances and has not been assigned to any
other person, except as reflected in the Permitted Title Exceptions.
(l) Except for Contributor and tenants in possession under the Leases
(and subleases with respect to 306-310 Era Drive), there are no persons in
possession or occupancy of the Real Property or any part thereof, nor are there
any persons who have possessory rights in respect to the Real Property or any
part thereof.
(m) To the best of such Contributor's knowledge, the improvements on
the Real Property have been constructed and are presently used and operated in
compliance with all Licenses and all Legal Requirements, and with all covenants,
easements and restrictions affecting the Property, and all obligations of such
Contributor or the Property with regard to the Legal Requirements, covenants,
easements and restrictions have been and are being performed in a proper and
timely manner.
(n) To the best of such Contributor's knowledge, such Contributor has
not received any written notice from any tenant or Governmental Authority that
any of the improvements on the Real Property are not structurally sound and
weather-tight, nor that any of said improvements, the fixtures therein or
thereon and the Personal Property are not in good condition and working order.
(o) To the best of such Contributor's knowledge, there are no claims,
causes of action or other litigation or proceedings pending and no written
notice of any threatened proceeding with respect to the ownership or operation
of the Property or any part thereof (including disputes with the holder of the
Mortgages described on Schedule 3 or any other mortgagees, Governmental
Authority, utilities, contractors or adjoining land owners) except possible
claims for workers' compensation, personal injury or property damage which are
fully insured and as to which the insurer has accepted defense.
(p) Such Contributor has not received any written notice of any
violations of any Legal Requirements with respect to the Property which have not
been corrected.
(q) To the best of such Contributor's knowledge, such Contributor has
not received any written notice that there is any existing, pending,
contemplated, threatened or anticipated (i) condemnation of any part of the Real
Property, (ii) widening, change of grade (except for possible change in grade in
vacant property adjacent to 000-000 Xxx Xxxxx, Xxxxxxxxxx) or limitation on use
of streets abutting the Real Property, (iii) special
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tax or assessment to be levied against the Real Property, or (iv) change in the
zoning classification of the Real Property.
(r) To the best of such Contributor's knowledge, such Contributor has
not received any written notice from any insurance carrier that there are
defects or inadequacies in the Property which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums
therefor or create or be likely to create a hazard, excessive maintenance cost
or material operating deficiencies.
(s) Such Contributor has not received any written notice from any
tenant or Governmental Authority that all water, sewer, gas, electric, telephone
and drainage facilities and all other utilities and public or quasi-public
improvements upon or adjacent to the Real Property required by law or for the
normal operation of the Property are not installed, are not connected under
valid permits, are not in good working order, are not adequate to service the
Property and are not fully paid for.
(t) To the best of such Contributor's knowledge, such Contributor has
obtained all licenses, permits, easements and rights-of-way, including proof of
dedication, required from a Governmental Authority having jurisdiction over the
Property or from private parties to make use of utilities serving the Property
and to insure ingress and egress to and from the Property.
(u) To the best of such Contributor's knowledge, and other than as
disclosed in the Phase I Environmental Reports for 455 Academy and for
Grandville property prepared by Xxxxxxx Engineering, during Contributor's
ownership of the Property, (i) no Hazardous Materials (as defined below) have
been located on the Property or have been released into the environment, or
discharged, placed or disposed of at, on or under the Property; (ii) no
underground storage tanks have been located on the Property; (iii) the Property
has not been used as a dump for waste material during its ownership; and (iv)
such Contributor has not received any written notice from any Governmental
Authority or Tenant that the Property and its prior uses does not comply with
and at all times have complied with, any applicable governmental law, regulation
or requirement relating to environmental and occupational health and safety
matters and Hazardous Materials.
The term "Hazardous Materials" shall mean any substance, material,
waste, gas or particulate matter which is regulated by any local governmental
authority, the State of Illinois, or the United States Government, including,
but not limited to, any material or substance which is (i) defined as a
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," or "restricted hazardous waste" under any provision of
Illinois law, (ii) petroleum, (iii) asbestos, (iv) polychlorinated biphenyl, (v)
radioactive material, (vi) designated as a "hazardous substance" pursuant to
Section 311 of the Clean Water Act, 33 U.S.C. (S) 1251 et seq. (33 U.S.C. (S)
1317), (vii) defined as a
-23-
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. (S) 6901 et seq. (42 U.S.C. (S) 6903), or (viii) defined
as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. (S) 9601 et
seq. (42 U.S.C. (S) 9601). The term "Environmental Laws" shall mean all statutes
specifically described in the foregoing sentence and all federal, state and
local environmental health and safety statutes, ordinances, codes, rules,
regulations, orders and decrees regulating, relating to or imposing liability or
standards concerning or in connection with Hazardous Materials in effect as of
the date of this Agreement.
Additionally (except in connection with items disclosed in the Phase I
Environmental Report for the 455 Academy property), but not in lieu of
Contributor's affirmative undertakings set forth herein, Contributor agrees to
indemnify, defend and hold harmless Company and its grantees from and against
any and all debts, liens, claims, causes of action, administrative orders and
notices, costs (including, without limitation, response and/or remedial costs),
personal injuries, losses, damages, liabilities, demands, interest, fines,
penalties and expenses, including reasonable attorneys' fees and expenses,
consultants' fees and expenses, court costs and all other out-of-pocket
expenses, suffered or incurred by Company and its grantees as a result of (i)
any such representation which is in any manner inaccurate or any such warranty
which is in any manner breached, or (ii) any matter, condition or state of act
involving Environmental Laws or Hazardous Materials which existed on or arose
prior to the Closing Date and which failed to comply with the Environmental Laws
in effect as of the Closing Date or any existing common law theory based on
nuisance or strict liability in existence as of the Closing Date, whether or not
Contributor had knowledge of same as of the Closing Date. Notwithstanding the
foregoing exclusion, Company shall be entitled to seek contributions from
Contributor for Hazardous Materials at the 455 Academy property or at any other
portion of the Property pursuant to common law or under state or federal
contribution or strict liability statutes.
(v) To the best of such Contributor's knowledge, Schedule 3 includes a
true, correct and complete list of all documents evidencing and securing the
Mortgages to be assumed and all amendments and modifications thereto. To the
best of such Contributor's knowledge, there are no defaults by the mortgagor or
events which with notice, passage of time or both may become defaults under the
Mortgages described on Schedule 3 or any documents or instruments evidencing or
securing the loan secured thereby, and such Contributor has not received any
written notice of default with respect to or relating to such Mortgages, and
each such Contributor agrees to deliver to Company copies of any such notices of
default within five (5) business days of receipt of same. Such Contributor has
not waived any of its rights or interests under any of said documents, and such
Contributor has received no written notice of default or acceleration in respect
to the Mortgages described on Schedule 3. The Mortgages described on Schedule 3
-24-
secure no debt other than that which is explicitly set forth in such exhibit.
The amount of principal and accrued interest under the Mortgages described on
Schedule 3 as of the Closing Date shall not exceed the amount set forth in
Schedule 3 of this Agreement.
(w) To the best of such Contributor's knowledge and belief, such
Contributor is not in default with respect to any of its obligations under any
plan, agreement or trust, and such Contributor has filed or caused to be filed
all reports with respect to the foregoing required by, and is otherwise in
compliance with, the Employees Retirement Income Security Act of 1974, as
amended, and all rules and regulations thereunder with respect thereto.
(x) Schedule 2 is a true, correct and complete list of the Business
Assets of IBD, and such assets are owned by IBD free and clear of all liens and
encumbrances.
Notwithstanding anything contained herein to the contrary, in the
event that the Company gains knowledge prior to the Closing that any
representation or warranty contained in this Agreement is untrue or inaccurate,
Company shall, within five (5) business days of gaining such knowledge but in no
event subsequent to the Closing Date, provide Contributor with written notice of
such and in the event that the Company closes on the acquisition of the
Property, then the Company irrevocably waives any right to claim any damages
against Contributor for the breach of such representation or warranty and
Contributor shall have no liability to the Company resulting therefrom.
EXCEPT AS OTHERWISE SPECIFICALLY AND EXPLICITLY SET FORTH IN THIS
AGREEMENT OR IN ANY DOCUMENT WHICH MAY BE EXECUTED BY CONTRIBUTOR AND DELIVERED
TO THE COMPANY AT CLOSING: (1) THE CONTRIBUTION OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW ON AN "AS IS-
WHERE IS" CONDITION AND BASIS WITH ALL FAULTS, (2) THE COMPANY ACKNOWLEDGES THAT
CONTRIBUTOR HAS NOT MADE ANY REPRESENTATIONS TO THE COMPANY WITH RESPECT TO THE
PROPERTY WITH REGARD TO THE HABITABILITY, MERCHANTABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES OF COMPANY
13.01 Representations and Warranties of Company. To induce
Contributor to execute, deliver and perform this Agreement, Company hereby
represents and warrants to Contributor on and as of the date hereof and on and
as of the Closing Date as follows:
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(a) All representations and warranties of Company appearing in other
Sections of this Agreement are true and correct.
(b) Company is a corporation duly organized and in good standing
under the laws of the State of Illinois, and is duly qualified to do business in
and is in good standing under the laws of the State of Illinois.
(c) Company has full capacity, right, power and authority to execute,
deliver and perform this Agreement and all documents to be executed by Company
pursuant hereto, and all required action and approvals therefor have been duly
taken and claimed. The individuals signing this Agreement and all other
documents its executed or to be executed pursuant hereto on behalf of Company
are and shall be duly authorized to sign the same on Company's behalf and to
bind Company thereto. This Agreement and all documents to be executed pursuant
hereto by Company are and shall be binding upon and enforceable against Company
in accordance with their respective terms.
ARTICLE 14
CONDITIONS PRECEDENT AND TERMINATION
14.01 Consent Regarding Mortgage Documents. The consent of the
holder of the Mortgages described on Schedule 3 attached hereto to the
transaction contemplated hereby is required. The obligation of Company and
Contributor to close the transaction contemplated hereby is subject to
Contributor's and the Company's receipt of: (i) the consent to the sale to
Partnership contemplated by this Agreement, subject to the assumption of,
without payment of a service charge, premium or like fee or modification of the
Mortgages, other than an assumption fee to be paid by the Partnership in an
amount not to exceed one percent (1%) of the balance (as of the Closing Date) of
the Mortgages described on Schedule 3, and (ii) an estoppel letter addressed to
Partnership dated no more than ten (10) days prior to the Closing Date from the
holder of the Mortgages setting forth and confirming the following: (aa) the
outstanding indebtedness under the Note, the portions thereof allocable to
principal and interest, and the date through which debt service payments have
been made; (bb) the amounts of all reserves for payment of taxes, insurance
premiums and interest; (cc) that there are no defaults under said loan or any
document evidencing or securing same; (dd) that true, correct and complete
copies of all of Mortgages is attached to said letter; (ee) the consents of the
holder of the Mortgages to the transaction contemplated hereby; and (ff) such
other matters as shall be reasonably requested by Company or by its lenders or
otherwise in form acceptable to Company. If the conditions precedent set forth
above in this Section 14.01 have not been satisfied on or before the thirtieth
(30th) day following the date hereof, then at any time prior to the expiration
of such thirty (30) day period, Company may elect to terminate this Agreement
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by notice to the Contributor, in which event this Agreement shall become null
and void, and the Deposit and any earnings thereon shall forthwith be returned
to Company. The assumption of the Mortgages described on Schedule 3 attached
hereto by the Partnership is a condition precedent to Contributor's obligations
to close under this Agreement.
14.02 General Feasibility and Review. (a) The obligation of Company to
close the transaction contemplated hereby is, at Company's option, subject to
Company's review and approval of the physical condition of the Property,
including, without limitation, all electrical, mechanical, plumbing and other
systems which are a part of the Property, the Contracts, Leases, the
Environmental Study, all Exhibits and all documents and items to be delivered to
or made available to Company pursuant to Section 11.01(e). If, for any reason
whatsoever, Company, in its sole discretion, is not satisfied with the foregoing
on or before August 4, 1997, then at any time on or prior to August 4, 1997,
Company may, at its option, elect to terminate this Agreement by notice to
Contributor, in which event this Agreement shall become null and void, and the
Deposit (except the initial Deposit of $137,500.00 shall be retained by
Contributor unless Contributor fails to obtain the payoff letter described in
Section 15.02(xv), in which event the entire Deposit shall be returned to the
Company) and any earnings thereon shall forthwith be returned to Company.
Company may elect to have any or all of the Contracts which are not third party
arms length contracts terminated by Contributor at Closing, and the termination
of such Contracts at Contributor's expense and payment by Contributor of all
amounts due thereunder shall be a condition to the obligation of Company to
close the transaction contemplated hereby.
(b) The obligation of Contributor to close the transaction
contemplated hereby is, at Contributor's option, subject to Contributor's review
of information relating to the properties to be included in the IPO by 5:00 p.m.
on August 4, 1997. For any reason whatsoever, Contributor, in its sole
discretion by written notice delivered to Company prior to 5:00 p.m. on August
4, 1997, may terminate this Agreement, in which event this Agreement shall be
null and void and the Deposit and any earnings thereon shall be forthwith
returned to Company.
(c) On or before the thirtieth (30th) day following the date this
Agreement is fully executed, Contributor shall obtain an Environmental Indemnity
from the tenant at 455 Academy in the form of Schedule 9 attached hereto, and
Seller shall: (x) obtain either the consents of the limited partners of Sky
Harbor Associates to the transactions contemplated by this Agreement or
acceptable buyout agreements from such limited partners, and (y) remediate
conditions at the Grandville property in accordance with the recommendations of
Xxxxxxx Engineering (provided that Contributor is only obligated to pay up to
$50,000 to remediate such conditions) ("Additional Closing Conditions"). In the
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event the cost to remediate conditions at the Grandville property is expected to
exceed $50,000 and Contributor does not agree to pay such excess, and/or in the
event Contributor fails to commence remediation of the Grandville property as
described above within said thirty (30) day period, Company, at any time
thereafter, may terminate the Agreement as to the Grandville property, in which
event the Contribution Price shall be reduced (at Closing) by the amount
allocated to such property on Schedule 10 and such other adjustments shall be
made at Closing as agreed upon by the parties. In the event Contributor is
unable to satisfy the Additional Closing Conditions within such thirty (30) day
period, Closing of the 455 Academy property and/or the Grandville property, as
the case may be, shall be postponed until such time as and when Contributor
satisfies the Additional Closing Conditions (but in no event shall the
Partnership be obligated to close if the Additional Closing Conditions have not
been satisfied by the date which is one hundred eighty (180) days following the
Closing), and the Contribution Price (at Closing) shall be reduced by the amount
allocated to the 455 Academy property on Schedule 10 and such other adjustments
shall be made at Closing as agreed upon the parties. At such time that
Contributor satisfies the Additional Closing Conditions in accordance with this
Section (or if the Additional Closing Conditions are satisfied, except that the
Agreement relating to the [Grandville] property is terminated pursuant to this
Section), Contributor shall notify Partnership and deliver to Partnership
evidence reasonably satisfactory to Partnership that the Additional Closing
Conditions have been satisfied. Closing shall occur in accordance with and in
the manner specified in this Agreement, and Contributor shall receive OP Units
(calculated utilizing as the value of the 455 Academy property and/or the
Grandville property the amount set forth on Schedule 10 attached hereto, and the
stock price averaged over the three (3) trading days prior to such Closing).
14.03 Truth of Contributor's Representations and Warranties and
Performance of Contributor's Obligations. The obligation of Company to close the
transaction contemplated hereby is, at Company's option, and except as otherwise
provided herein, subject to all representations and warranties of Contributor
contained in this Agreement being true and correct in all material respects at
and as of the Closing Date and all obligations of Contributor to have been
performed on or before the Closing Date having been timely and duly performed
(or to the extent not true, same shall be disclosed to Company). Upon failure of
any condition precedent as set forth in this Section 14.03 Company may, by
written notice to Contributor and failure by Contributor to cure same within 10
days after such notice, elect at any time thereafter to terminate this Agreement
by written notice to Contributor in which event: (i) the Deposit and any
additional Deposit shall be returned to the Company, and (ii) this Agreement
shall be null and void, and except as otherwise provided in this Agreement, the
parties shall have no further obligations to the other hereunder.
14.04 Estoppel Letters. The obligation of Company to close the transaction
contemplated by this Agreement is subject to Company's receipt of: an estoppel
letter
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addressed to Company within thirty (30) days after Company's written request to
Contributor [and which request shall be made by Company at such time that
Company anticipates Closing to occur approximately thirty (30) days after such
request], which estoppel letters shall be in the form of Schedule 7 attached
hereto or other form satisfactory to Company for Motorola and tenants (including
Motorola) occupying eighty percent (80%) of the aggregate building square
footage contained in the Property. Contributor's failure to obtain such estoppel
letters shall not be a default of Contributor under this Agreement. In the event
Company does not receive estoppel certificates from tenants occupying one or
more properties comprising the Property, Company may terminate this Agreement.
14.05 Performance of Company's Obligations. The obligation of Contributor
to close the transaction contemplated hereby is, at Contributor's option,
subject to all obligations of Company which were to have been performed on or
before the Closing Date having been timely and duly performed. If any condition
precedent to closing of Contributor as set forth in this Agreement has not been
fulfilled and satisfied on or before the Closing Date, Contributor may, by
notice to Company, elect at any time thereafter to terminate this Agreement,
provided that Contributor is not itself in default under this Agreement, and (i)
if such termination is due to Company's fault and the IPO does not close on or
before December 31, 1997, Contributor shall be entitled to retain the Deposit
and any additional Deposit as full and complete liquidated damages (and not as a
penalty or forfeiture), and (ii) if such termination is due to the Company's
fault and the IPO closed on or before December 31, 1997, Contributor shall be
entitled to retain the Deposit and any additional Deposit and the Company shall
pay Contributor the sum of $700,000.00 as full and complete liquidated damages
(and not as a penalty or forfeiture), in either case in lieu of any and all
other legal and equitable rights which Contributor may have hereunder, and all
other funds and documents theretofore delivered hereunder or deposited in escrow
by either party shall be forthwith returned to such party. In addition, Company
shall deliver to Contributor upon request copies of any environmental reports
and physical inspection reports relating to the Property.
14.06 Performance of Contributor's Obligations. The obligation of the
Company to close the transaction contemplated hereby is, at the Company's
option, subject to all obligations of Contributor which were to have been
performed on or before the Closing Date having been timely and duly performed.
If any condition precedent to Closing of the Company set forth in this Agreement
has not been fulfilled and satisfied on or before the Closing Date, the Company
may, by notice to Contributor, elect either to: (i) terminate this Agreement,
provided that the Company is not itself in default under this Agreement, and if
such termination is due to Contributor's willful or intentional default
(including, but not limited to, Contributor's decision (or change of mind) such
that Contributor decides not to contribute and/or to be an officer of the
Partnership (or general partner of the Partnership) and not attributable to an
innocent misstatement, misrepresentation or breach of warranty
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or covenant, the Deposit and any additional Deposit shall be returned to Company
and Contributor shall pay the Company the sum of $1,000,000.00 as full and
complete liquidated damages (and not as a penalty or a forfeiture); and (ii)
except as otherwise provided in this Agreement, Company may file an action for
specific performance of this Agreement and compel Contributor to comply with
Contributor's obligations under this Agreement.
ARTICLE 15
CLOSING
15.01 Time and Place. The transaction contemplated hereby shall close at
9:00 A. M. on the Closing Date at the offices of the Escrowee, or on such other
date, time and place as the parties may mutually agree.
15.02 Contributor's Deliveries. On the Closing Date, Contributor shall
deposit in the escrow for each of the properties comprising the Real Estate the
following:
(i) The Deeds and/or Assignments of Partnership Interests;
(ii) Contributor's assignment of any and all impounds and reserves
held by the holder of the Mortgages, and Contributor's assignment of the
Contracts, Leases, Intangible Personal Property and Licenses, as provided in
Section 2.01(b);
(iii) Contributor's xxxx of sale as provided in Section 2.01(c);
(iv) [OMITTED.]
(v) Original executed counterparts of all Contracts, Leases and
Licenses assigned to Company pursuant to Section 15.02(ii) above (or, in
Company's sole discretion where originals are unavailable, copies duly certified
by Contributor as being true, correct and complete copies of the originals),
together with an Assignment of same;
(vi) [OMITTED.]
(vii) Contributor's certificate dated as of the Closing Date
confirming that the representations and warranties of Contributor are true and
correct as of the Closing Date, except as modified by prior written notice to
Company;
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(viii) An opinion of Contributor's counsel regarding authority and
enforceability of this Agreement and all Closing documents reasonably acceptable
to Company;
(ix) An ALTA Statement, GAP Undertaking, Broker's Affidavit and
Manager's Affidavit in the form required by the Title Insurer;
(x) Assignment of all Contracts and other agreements which Company
has elected to terminate by notice to Contributor as provided in Section 14.02;
(xi) Certificate(s) of occupancy issued by the appropriate
governmental authorities authorizing use of each property comprising the Real
Property as the same is presently used to the extent same are in such
Contributor's possession;
(xii) An executed Affidavit in the form attached hereto as Exhibit G
or a qualifying statement from the U.S. Treasury Department that the transaction
is exempt from the withholding tax requirement imposed by Section 1445A of the
Internal Revenue Code and the rules and regulations promulgated thereunder
("Section 1445A"). In the event that Contributor fails to deliver either the
Affidavit or the qualifying statement as aforesaid, Contributor agrees that
Company may, at closing, deduct and withhold from the proceeds that are due to
Contributor the amount necessary to comply with the withholding tax requirement
imposed by Section 1445A. Company shall deposit the amount so withheld in escrow
with the Escrowee pursuant to terms and conditions acceptable to Contributor,
Company and the Escrowee, but in any event, complying with Section 1445A;
(xiii) Certificates of the good standing of the Beneficiaries and IBD
issued by the Secretary of State of Illinois;
(xiv) Letters to tenants of the Property in the form of Schedule 8
attached hereto;
(xv) A payoff letter from General American Insurance confirming its
agreement to accept prepayment of loans at any time prior to the Closing Date
for a prepayment fee not to exceed one percent (1%) of the outstanding balance
of such loans as of the Closing Date, and if the prepayment fee shall exceed one
percent (1%) of the outstanding balance of such Loan, Contributor shall pay such
amount which exceeds $137,500.00, and if the prepayment fee shall be less than
$137,500.00, Company shall receive a credit against the Contribution Price at
Closing in an amount equal to the difference between $137,500.00 and the
prepayment fee and Company shall not be responsible to pay any default interest
or costs..
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(xvi) Such other documents, instruments, certifications and
confirmations as may be reasonably required and designated by Company to fully
effect and consummate the transactions contemplated hereby.
15.03 Company's Deliveries. On the Closing Date, Company shall deliver
the following to Contributor:
(i) An ALTA Statement, GAP Undertaking and Broker's Affidavit in
form required by the Title Insurer;
(ii) The Contribution Price as provided in Article 3 hereof;
(iii) Tax Indemnification Agreement in the form of Exhibit I
attached hereto and made a part hereof;
(iv) Assumption Agreement relating to Leases and Contracts;
(v) Opinion of Counsel regarding authority and enforceability of the
Tax Indemnification Agreement and the other Closing Documents in form reasonably
satisfactory to Contributor;
(vi) Such other documents, instruments, certifications and
confirmations as may be reasonably required and designated by Contributor to
fully effect and consummate the transaction contemplated hereby.
15.04 Concurrent Deliveries. Contributor and Company shall jointly deposit
in the escrow or deliver to each other at closing: (i) an agreed proration
statement, (ii) certificates complying with the provisions of state, county and
local law applicable to the determination of transfer taxes; and (iii)
employment agreements in the form of Exhibit J attached hereto and made a part
hereof.
15.05 Closing Documents; Form, Execution and Substance. All closing
documents to be furnished by Contributor pursuant hereto shall be in form,
execution and substance reasonably satisfactory to the parties and their
respective counsel.
15.06 New York Style Closing. At the request of either party, the
transaction shall be closed by means of a so-called New York Style Closing, with
the concurrent delivery of the documents of title, transfer of interests,
delivery of the title policy described in Section 5.01 and the payment of the
Contribution Price. The Contributor shall provide and pay for any undertaking
(the "Gap Undertaking") to the Title Company necessary for the New York Style
Closing to occur. Contributor and Company shall each pay fifty percent (50%) of
the charges of the Title Company for such New York Style Closing.
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15.07 Concurrent Transactions. All documents or other deliveries required
to be made by Company or Contributor at Closing, and all transactions required
to be consummated concurrently with Closing, shall be deemed to have been
delivered and to have been consummated simultaneously with all other
transactions and all other deliveries, and no delivery shall be deemed to have
been made, and no transaction shall be deemed to have been consummated, until
all deliveries required by Company, and Contributor shall have been made, and
all concurrent or other transactions shall have been consummated.
15.08 Leasing Commissions, Management Fees and Employees. On the Closing
Date, Contributor shall deliver evidence satisfactory to Company that the
current manager of the Property has been terminated and paid all commissions or
fees due him for all services rendered by him, and Contributor shall also
terminate and satisfy all obligations to all employees employed by Contributor
in the operation of the Property and provide Company with evidence thereof
satisfactory to Company on the Closing Date. Partnership agrees that it will
hire the employees identified on Exhibit H commencing as of the day following
the Closing at the salaries provided on Exhibit H attached hereto; Contributor
agrees that all obligations with respect to the termination of all such
employees of Contributor and IBD, including termination benefits, earned prior
to the Closing Date, and unfunded contributions or termination obligations with
respect to the plans, agreements and trusts described in this Agreement shall be
the sole responsibility and expense of Contributor, provided that Contributor
shall not be responsible for any such obligations attributable to the employment
of such employees by Company or its agents subsequent to the Closing Date.
Contributor represents and warrants that no unpaid leasing fee or commission is
due any party in connection with any Lease or for extension or renewal of such
Lease for any payment for services, commissions or fees in connection with the
Property performed or incurred prior to the Closing Date (other than commissions
or fees due brokers for extensions or modifications of the Motorola Lease or
commission in connection with Motorola's exercise of its purchase option), which
shall be paid by Company if and when same is required to be paid pursuant to the
Motorola Lease as detailed on Schedule 11 attached hereto). Contributor shall
deliver a waiver of lien executed by Manager waiving all rights for additional
fees with regard to the Property.
15.09 Other Agreements. At Closing, Contributor and Partnership shall
execute the 801/901 Technology Drive Option Agreement in the form of Exhibit K
attached hereto and the Libertyville Business Park Agreement in the form of
Exhibit L attached hereto.
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ARTICLE XVI
INDEMNIFICATION
16.01 Contributor's Indemnity. Contributor hereby agrees to indemnify,
defend and hold harmless Company and its officers, shareholders, directors,
employees and agents against any and all losses, liabilities, fines and
penalties and damages (including, without limitation, any damages or injury to
persons, property or the environment as provided hereunder), or actions or
claims in respect thereof, except for liabilities specifically assumed by the
Company pursuant to the terms of this Agreement (including, without limitation,
amounts paid in settlement and reasonable cost of investigation, reasonable
attorneys' fees and other legal expenses) resulting from claims (whether or not
ultimately successful) to which the Company or any of its officers,
shareholders, directors, employees and agents may become subject or which the
Company or any of its officers, shareholders, directors, employees and agents
may suffer or incur either directly or indirectly, insofar as such losses,
liabilities or damages (or actions or claims in respect thereto) arising out of,
are with respect to, or are based upon:
(i) the inaccuracy in any material respect of any representation or
warranty, or a breach of any covenant of the Contributor contained herein;
(ii) any obligations, liabilities or charges of the Contributor not
expressly assumed by the Partnership except to the extent that Partnership
receives a credit therefor on the closing statement;
(iii) any misrepresentation in, or omission of a material fact from,
any certificate or instrument of transfer or conveyance to be furnished to the
Company by or on behalf of the Contributor under this Agreement;
(iv) the ownership or operation of the Property on or prior to the
Closing Date;
(v) any claim by any person for any leasing fee or commission in
connection with any Lease (except for extensions or modifications of the
Motorola Lease or commission in connection with Motorola's exercise of its
purchase option);
(vi) any claim by said current manager of the Property for any
payment of commissions or fees for services rendered in connection with the
Property prior to the Closing Date; or
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(vii) any claim by any employee employed by Contributor in the
operation of the Property whose employment was terminated at closing at
Company's request, or whose claim arose prior to the Closing Date.
16.02 Company's Indemnity. Company hereby agrees to indemnify, defend and
hold harmless Contributor and its officers, shareholders, directors, employees
and agents against any and all losses, liabilities, fines and penalties and
damages (including, without limitation, any damages or injury to persons,
property or the environment as provided hereunder), or actions or claims with
respect thereto, except for liabilities specifically assumed by the Contributor
pursuant to the terms of this Agreement (including, without limitation, amounts
paid in settlement and reasonable cost of investigation, reasonable attorneys'
fees and other legal expenses) resulting from claims (whether or not ultimately
successful) to which the Contributor or any of its officers, shareholders,
directors, employees and agents may become subject or which the Contributor or
any of its officers, directors, employees and agents may suffer or incur either
directly or indirectly, insofar as such losses, liabilities or damages (or
actions or claims in respect thereto) arising out of, are with respect to, or
are based upon:
(i) the inaccuracy in any material respect of any representation or
warranty, or a breach of any covenant of Company contained herein;
(ii) any obligations, liabilities or charges of Contributor that are
expressly assumed by Company or which Company receives a credit therefor on the
Closing Statement;
(iii) any misrepresentation in, or omission of a material fact from,
any certificate or instrument of transfer or conveyance to be furnished to
Contributor by or on behalf of Company under this Agreement;
(iv) the ownership or operation of the Property by Company after the
Closing Date; or
(v) any damage done to the Property, any property of the tenants
under the Leases or personal injury arising out of the Company's investigation
of the Property.
(vi) any damages or liability incurred by Contributor and/or its
partners as a result of the Partnership's failure to pay off the Mortgages
described on Schedule 3A so long as: (i) no default by Contributor has occurred
and remains uncured under any of such Mortgages, and (ii) the lender which holds
such Mortgages has issued pay off letters for such Mortgages and has agreed to
accept pay off of such Mortgages pursuant to such payoff letters.
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ARTICLE XVII
NOTICES
17.01 Notices. Any notice, request, demand, instruction or other document
to be given or served hereunder or under any document or instrument executed
pursuant hereto shall be in writing and shall be delivered personally or sent by
United States registered or certified mail, return receipt requested, postage
prepaid or by overnight express courier, postage prepaid and addressed to the
parties at their respective addresses set forth below, and the same shall be
effective upon receipt if delivered personally, on the next business day if
delivered by overnight courier, or two business days after deposit in the mails
if mailed by certified or registered mail. A party may change its address for
receipt of notices by service of a notice of such change in accordance herewith.
If to Company, to: c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
With a copy to: c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
With a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
and Xxxxxxx X. Xxxxx, Esq.
If to Contributor, to: c/o Industrial Building and Development Company
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
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With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
ARTICLE XVIII
MISCELLANEOUS
18.01 Entire Agreement, Amendments and Waivers. This Agreement and the
Exhibits and Schedules attached hereto contain the entire agreement and
understanding of the parties in respect to the subject matter hereof, and the
same may not be amended, modified or discharged nor may any of its terms be
waived except by an instrument in writing signed by the party to be bound
thereby.
18.02 Further Assurances. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments and assurances and to
take all such further action before or after the closing at no cost to
Contributor as shall be necessary or desirable to fully carry out this Agreement
and to fully consummate and effect the transactions contemplated hereby.
18.03 Survival and Benefit. Except as otherwise provided herein, all
representations, warranties, agreements, obligations and indemnities of the
parties (including, but not limited to, Sections 3, 11, 12, 13, 14 and 16 of
this Agreement) shall, notwithstanding any investigation made by any party
hereto, survive Closing for a period of twelve (12) months and all agreements,
obligations and indemnities of the parties shall, notwithstanding any
investigation made by any party hereto, survive Closing for a period of twelve
(12) months and the same shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.
18.04 No Third Party Benefits. This Agreement is for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns, and no third party is intended to or shall have any rights hereunder.
18.05 Income Tax Withholding. At least thirty-five (35) days prior to
closing Contributor shall deliver to Company evidence reasonably satisfactory to
Company that the sale of the Property to Company hereunder is not subject to,
and does not subject Company to liability under, Section 902(d) ("Section
902(d)") of the Illinois Income Tax Act (the "Act"). If said evidence is not so
delivered to Company, as aforesaid, then Contributor shall, or Company may,
notify the Illinois Department of Revenue ("Department") of the
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intended sale and request the Department to make a determination as to whether
the Contributor has an assessed, but unpaid, amount of tax, penalties, or
interest under the Act. Contributor agrees that Company may, at closing, deduct
and withhold from the proceeds that are due Contributor the amount necessary to
comply with the withholding requirements imposed by Section 902(d). Company
shall deposit the amount so withheld in escrow with the Escrowee pursuant to
terms and conditions acceptable to Contributor and Company, but in any event,
complying with Section 902(d).
18.06 Interpretation.
(a) The headings and captions herein are inserted for convenient
reference only and the same shall not limit or construe the paragraphs or
sections to which they apply or otherwise affect the interpretation hereof.
(b) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other
legal entities, including public bodies, as well as natural persons.
(c) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
(d) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(e) Whenever under the terms of this Agreement the time for
performance of a covenant or condition falls upon a Saturday, Sunday or holiday,
such time for performance shall be extended to the next business day. Otherwise
all references herein to "days" shall mean calendar days.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.
(g) Time is of the essence of this Agreement.
18.07. [OMITTED.]
18.08 [OMITTED.]
18.09 Company's Investigation and Inspections. Except as otherwise
provided herein, any investigation or inspection conducted by Company, or any
agent or representative of Company, pursuant to this Agreement, in order to
verify independently
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Contributor's satisfaction of any conditions precedent to Company's obligations
hereunder or to determine whether Contributor's warranties are true and
accurate, shall not affect or constitute a waiver by Company on any of
Contributor's obligations hereunder or Company's reliance thereon. Company
agrees that to the extent it discovers, prior to Closing, information which
renders any of Contributor's representations or warranties untrue, Company will
notify Contributor of such information in writing within five (5) business days
of gaining knowledge and in all events prior to the Closing Date.
18.10 Assignment. Prior to the Closing Date, the Company shall assign all
of its right, title and interest in and to this Agreement to the Partnership.
Other than the foregoing assignments to the Partnership, the Company may not
assign this Agreement and its right, title and interest thereunder. Upon the
assignment of this Agreement to Partnership, the Company will not be released
from its obligations hereunder to the Contributor, which obligations,
indemnities, representations and warranties shall remain in favor of
Contributor. Notwithstanding anything contained herein to the contrary, any and
all references in this Agreement to the Property being contributed and/or
conveyed to the Company shall mean the Contributor contributing and/or conveying
to the Partnership simultaneously with the IPO on the Closing Date. In addition,
Contributor shall have no obligation to contribute and/or convey the Property to
the Company, all of Contributor's obligations hereunder being to contribute
and/or convey the Property to the Partnership.
18.11 Limitation on Liability. Notwithstanding anything to the contrary
set forth in this Agreement, the Company and/or the Partnership shall look
solely to the greater of: (i) the assets of the Beneficiary, the trust estates
of the title holding land trusts and the equity interests of the general
partners in the Beneficiaries, and (ii) the assets of Xxxxxx X. Xxxxxxxx up to
$1,000,000 (excluding his personal residence) for satisfaction of any monetary
claims against Contributor.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
-39-
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Contributor and Company on the respective dates set forth beneath each of their
signatures and is intended to be effective as of the latest such date.
CONTRIBUTOR:
LASALLE NATIONAL TRUST, N.A., not personally, but
solely as Trustee under Trust Agreement dated
June 15, 1982 and known as Trust No. 00-00000-00
By:
-----------------------------------------------
Its:
----------------------------------------
Dated:
--------------------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally, but
solely as Trustee under Trust Agreement dated
September 7, 1994 and known as Trust No. 11-9051
By:
-----------------------------------------------
Its:
----------------------------------------
Dated:
--------------------------------------------, 1997
-40-
LASALLE NATIONAL TRUST, N.A., not personally, but
solely as Trustee under Trust Agreement dated
March 30, 1984 and known as Trust No. 11-107825
By:
-----------------------------------------------
Its:
---------------------------------------
Dated:
--------------------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally, but
solely as Trustee under Trust Agreement dated
August 1, 1986 and known as Trust No. 11-1358
By:
-----------------------------------------------
Its:
---------------------------------------
Dated:
--------------------------------------------, 1997
-41-
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated August 1, 1986 and known as Trust No.
11-1357
By:
------------------------------------------
Its:
-----------------------------------
Dated:
_______________________________________, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated January 17, 1974 and known as Trust No.
286-34
By:
------------------------------------------
Its:
-----------------------------------
Dated:
_______________________________________, 1997
-42-
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated October 15, 1995 and known as Trust No.
11-9869
By:
------------------------------------------
Its:
-----------------------------------
Dated:
_______________________________________, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated December 1, 1987 and known as Trust No.
11-2868
By:
------------------------------------------
Its:
-----------------------------------
Dated:
_______________________________________, 1997
310 ERA LIMITED PARTNERSHIP, an Illinois
limited partnership
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
-00-
XXXXXXXXX XXXXX PROPERTIES, an Illinois
limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
CLE LIMITED PARTNERSHIP, an Illinois limited
partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
500 XXXXXXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
515 XXXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
-44-
555 XXXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
SKY HARBOR ASSOCIATES, an Illinois limited
partnership
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Managing General Partner
1001 TECHNOLOGY WAY, LLC, an Illinois
limited liability company
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Managing Member
-00-
XXX XXXXXXXXXX XXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
By: GRANDVILLE/NORTHWESTERN MANAGEMENT
CORPORATION, an Illinois corporation, its
General Partner
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: President
IBD:
INDUSTRIAL BUILDING AND DEVELOPMENT COMPANY
/s/ Xxxxxx X. Xxxxxxxx
By: Xxxxxx X. Xxxxxxxx
Its: President
Dated:
---------------------------------------, 1997
-46-
COMPANY:
THE PRIME GROUP, INC., an Illinois corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Its: EVP
------------------------------------
Dated:
July 8
---------------------------------------, 1997
-47-
LIST OF EXHIBITS & SCHEDULES
----------------------------
EXHIBIT A - LEGAL DESCRIPTION - REAL PROPERTY
EXHIBIT A-1 - LEGAL DESCRIPTION - LIBERTYVILLE VACANT REAL PROPERTY
EXHIBIT A-2 - LEGAL DESCRIPTION - OPTION PROPERTY
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PERMITTED TITLE EXCEPTIONS
EXHIBIT D - LISTING OF CONTRACTS
EXHIBIT E - SCHEDULE OF LICENSES
EXHIBIT F - SCHEDULE OF LEASES
EXHIBIT G - NON-FOREIGN AFFIDAVIT
EXHIBIT H - LIST OF EMPLOYEES (AND BENEFITS) TO BE HIRED BY
COMPANY
EXHIBIT I - TAX INDEMNIFICATION AGREEMENT
EXHIBIT J - EMPLOYMENT AGREEMENT
EXHIBIT K - 801/901 OPTION AGREEMENT
EXHIBIT L - LIBERTYVILLE BUSINESS PARK AGREEMENT
EXHIBIT M - NON RECOURSE DEBT METHODOLOGY
SCHEDULE 1 - LIST OF CONTRIBUTORS (INCLUDING PARTIES REQUIRED BY SEC) AND
PROPERTY LOCATIONS
SCHEDULE 2 - SCHEDULE OF BUSINESS ASSETS
SCHEDULE 2A - PERSONAL PROPERTY OWNED BY IBD WHICH ARE NOT BUSINESS ASSETS
SCHEDULE 3 - DESCRIPTION OF MORTGAGES TO BE ASSUMED
SCHEDULE 3A - DESCRIPTION OF MORTGAGE LOANS TO BE REPAID
-48-
SCHEDULE 4 - FORM OF PARTNERSHIP ASSIGNMENT
SCHEDULE 5 - REAL ESTATE PROPERTIES WITH NO TAX PRORATION
SCHEDULE 6 - DUE DILIGENCE ITEMS
SCHEDULE 7 - FORM OF TENANT ESTOPPELS
SCHEDULE 8 - FORM OF LETTERS TO TENANTS
SCHEDULE 9 - TENANT ENVIRONMENTAL INDEMNITY (455 ACADEMY)
SCHEDULE 10 - ALLOCATION OF CONTRIBUTION PRICE
SCHEDULE 11 - MOTOROLA LEASE COMMISSION
-49-
FIRST AMENDMENT TO CONTRIBUTION AGREEMENT
------------------------------------------
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT (this "First Amendment") is
made as of this 12th day of August, 1997, in Chicago, Illinois, by and between
the parties set forth in Schedule 1 attached hereto and made a part hereof
(collectively "Contributor"), and The Prime Group, Inc., an Illinois corporation
("Company").
R E C I T A L S :
A. Contributor and Company entered into a certain Contribution Agreement
("Contribution Agreement") dated as of the 8th day of July, 1997.
B. Contributor's counsel terminated the Contribution Agreement on behalf
of Contributor by a letter to the Company dated August 4, 1997.
C. Contributor and Company desire to reinstate the Contribution Agreement
and make certain modifications to the Contribution Agreement as further provided
in this First Amendment.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, agreements, covenants and conditions
herein contained, and other good and valuable consideration, Contributor and
Company agree as follows:
1. The foregoing Recitals are hereby incorporated as if fully re-written.
2. All terms capitalized herein and not otherwise defined herein shall
have the meaning ascribed to such terms in the Contribution Agreement.
3. Contributor and Company hereby agree to reinstate the Contribution
Agreement effective as of the date of this First Amendment.
4. Exhibit C, Exhibit E and Exhibit F of the Contribution Agreement are
hereby deleted and replaced with substitute Exhibit C, Exhibit E and Exhibit F
attached hereto and made a part hereof.
5. Notwithstanding anything contained in Section 14.01 of the Contribution
Agreement to the contrary, in the event of the assumption by the Partnership of
the Mortgages described on Schedule 3 of the Contribution Agreement such
assumption shall include a full release of the Contributors and any guarantors
of the Mortgages or the other loan documents evidencing the loans described on
Schedule 3 of the Contribution Agreement. At Company's written election to
Contributor delivered no later than September 1, 1997, one or more of the loans
evidenced by the Mortgages described on Schedule 3 of the Contribution Agreement
may
be repaid by the Partnership immediately following the Closing provided that (i)
replacement debt is simultaneously put of record, which replacement debt is to
be secured by new mortgages encumbering the Properties described on Schedule 3
being repaid, and (ii) the original principal amount of replacement debt shall
not be less than the outstanding principal balances of the Mortgages described
on Schedule 3 being repaid.
6. "On or before the thirtieth (30th) day following the date this
Agreement is fully executed" shall be deleted from the first two (2) lines of
Section 14.02(c) of the Contribution Agreement and is hereby replaced with "on
or before the date which is twenty-five (25) days following the date upon which
the Company files the Initial S-11 Statement with the Securities and Exchange
Commission".
7. "Within said thirty (30) day period" shall be deleted from the fourth
(4th) line of Page 28 of the Contribution Agreement and is hereby replaced with
"on or before the date which is twenty-five (25) days following the date upon
which the Company files the Initial S-11 Statement with the Securities and
Exchange Commission".
8. "Within such thirty (30) day period" shall be deleted from the eighth
(8th) and ninth (9th) lines of Page 28 of the Contribution Agreement and is
hereby replaced with "on or before the date which is twenty-five (25) days
following the date upon which the Company files the Initial S-11 Statement with
the Securities and Exchange Commission".
9. The following Section 3.06 is hereby added to the Contribution
Agreement as Section 3.06:
Section 3.06
(a) Any time on or before the date which is two (2) business days prior
to the printing of the "Red Xxxxxxx" for the REIT ("Printing Date"), Contributor
may elect, upon written notice to the Company, that any or all of its OP Units
which Contributor will receive at the Closing pursuant to this Contribution
Agreement, be subject to the provisions of this Section 3.06. The Company shall
provide Contributor with not less than the seven (7) days' written notice prior
to the Printing Date of its intention to print the Red Xxxxxxx for the REIT. If
the Company has not printed the Red Xxxxxxx for the REIT within five (5) days of
the designated Printing Date in Company's written notice, then Contributor's
election is withdrawn and Contributor must comply with the terms of this Section
as though no notice had previously been provided by Company. The written notice
from the Contributor to the Company of its election to have any or all of its OP
Units to be subject to the provisions of this Section 3.06 shall state the
percentage of the OP Units which Contributor elects to be subject to this
Section 3.06. The OP Units elected by Contributor to be subject to this Section
3.06 shall hereinafter be referred to as the "Subject OP Units."
(b) With regard to the Subject OP Units, Contributor and the Company
shall enter into an agreement at Closing which shall provide for the
reapportionment of OP Units between the
2
Company and the Contributor on the earlier to occur of: (i) the conversion by
Contributor of all of the Subject OP Units to Shares in the REIT and the sale of
such Shares (but in no event earlier than the second anniversary of the
Closing); or (ii) the third anniversary of the Closing (the earlier of such
dates shall hereinafter be referred to as the "Reapportionment Date"). Such
reapportionment of OP Units shall occur as follows: (i) the Company shall
reapportion OP Units to the Contributor on the Reapportionment Date in an
amount, if any, equal to the positive difference between (A) the pre-tax annual
compounded return of 16.8% on the Subject OP Units from the Closing to the
Reapportionment Date and (B) the actual return on the Subject OP Units for such
time period; and (ii) the OP Units shall be reapportioned from the Contributor
to the Company on the Reapportionment Date in an amount, if any, equal to the
positive difference between (A) the actual return on the Subject OP Units from
the Closing to the Reapportionment Date and (B) the pre-tax annual compounded
return of 19.8% on the Subject OP Units for such time period. The return
realized by the Contributor on the Subject OP Units shall be determined by
taking into account cash distributions received on the Subject OP Units and any
appreciation in the value of the Subject OP Units from the date of Closing until
the Reapportionment Date. In addition, at the election of the party obligated to
make the reapportionment, such party may make the reapportionment in cash in
lieu of OP Units under this Section 3.06(b).
(c) For purposes of making determinations under Section 3.06(b) hereof (i)
the value of the Subject OP Units at Closing will be based on the price set
forth in the REIT's final prospectus for its common stock; and (ii) the value of
the Subject OP Units on the Reapportionment Date will be based on the average
closing price for the REIT's common stock during the last ten (10) trading days
prior to the Reapportionment Date.
(d) Contributor and Company agree to use reasonable efforts to structure
the reapportionment of the OP Units as provided in this Section 3.06 so as to
minimize or eliminate adverse income tax consequences to the Contributor and the
Company.
(e) In the event Contributor elects to exchange for Shares in the REIT or
dispose of any OP Units on or before the third anniversary of the Closing, then,
in such event, Contributor shall provide Company with written notice in
accordance with the terms of the partnership agreement of the Partnership and
shall also at such time provide written notice to the Company whether any of
said OP Units being exchanged for Shares in the REIT or OP Units being disposed
of shall constitute Subject OP Units.
10. Notwithstanding anything contained in the Contribution Agreement to
the contrary and for purposes of further clarification of the Contribution
Agreement, the parties acknowledge and agree that, at the Closing, the partners
of the Contributors (with respect to other than the Property commonly known as
000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx) shall contribute their partnership
interests in the Beneficiaries to the Partnership pursuant to Assignments of
Partnership Interests executed by each of the partners of the Contributor with
respect to the applicable Property. Contributor and Company agree that the
Contributors will have no obligation to deliver Deeds to any Properties other
than the Property commonly known as 000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx.
The Beneficiaries shall be terminated at Closing and the Contributors, at
3
Contributors' sole cost and expense, shall be responsible for the preparation
and filing of the final tax returns for the Beneficiaries. In addition, the
Contributors indemnify and hold harmless the Partnership from liabilities of the
Beneficiaries (other than the Mortgages) accruing prior to the Closing.
11. In the twelfth (12th) line of Section 3.02 of the Contribution
Agreement, "$300,000.00" is hereby deleted and replaced with "$350,000.00."
12. Except as modified by this First Amendment, the Contribution Agreement
remains in full force and effect.
IN WITNESS WHEREOF, this First Amendment has been executed and delivered by
Contributor and Company on the respective date set forth beneath each of their
signatures and is intended to be effective as of the date first above written.
CONTRIBUTOR:
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated June 15, 1982 and known as Trust No.
00-00000-00
By:
------------------------------------------
Its:
----------------------------------
Dated:
-----------------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated September 7, 1994 and known as Trust No.
11-9051
By:
------------------------------------------
Its:
----------------------------------
Dated:
-----------------------------------------, 1997
4
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated March 30, 1984 and known as Trust
No. 11-107825
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated August 1, 1986 and known as Trust No.
11-1358
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated August 1, 1986 and known as Trust No.
11-1357
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
5
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated January 17, 1974 and known as Trust No.
286-34
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated October 15, 1995 and known as Trust No.
11-9869
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
LASALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement
dated December 1, 1987 and known as Trust No.
11-2868
By:
------------------------------------------
Its:
----------------------------------
Dated:
------------------------------, 1997
6
310 ERA LIMITED PARTNERSHIP, an Illinois
limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
MACARTHUR DRIVE PROPERTIES, an Illinois
limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
CLE LIMITED PARTNERSHIP, an Illinois
limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
500 XXXXXXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
515 XXXXX LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
7
555 HUEHL LIMITED PARTNERSHIP, an
Illinois limited partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: General Partner
SKY HARBOR ASSOCIATES, an Illinois limited
partnership
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Managing General Partner
1001 TECHNOLOGY WAY, LLC, an Illinois
limited liability company
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Managing Member
8
THE GRANDVILLE ROAD LIMITED
PARTNERSHIP, an Illinois limited partnership
By: GRANDVILLE/NORTHWESTERN
MANAGEMENT CORPORATION,
an Illinois corporation, its General Partner
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: President
IBD:
INDUSTRIAL BUILDING AND
DEVELOPMENT COMPANY
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: President
Dated:
August 12, 1997
------------------------------------
COMPANY:
THE PRIME GROUP, INC., an Illinois
corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Its: Executive Vice President
------------------------
Dated:
August 12, 1997
------------------------------------
9
EXHIBIT C
---------
PERMITTED TITLE EXCEPTIONS
--------------------------
[TO BE AGREED UPON BY CONTRIBUTOR AND COMPANY ON OR BEFORE 5:00 P.M. ON FRIDAY,
AUGUST 15, 1997]
C-1
EXHIBIT D
DESCRIPTION OF CONTRACTS
1. Package Insurance Policy - all locations
2. Tax Attorney
Xxxx County Triennial Reassessment (306-310 Era, 000 Xxxxxxx Xxxxx) Xxxx
Xxxxxx (0000 Technology)
3. Landscaping
Libertyville Business Park - Brickman Nurseries (1997 Season)
0000 Xxxxxxxxxx Xxx - Xxxxxxxx Nurseries (1997 Season)
801 & 000 Xxxxxxxxxx Xxx - Xxxxxxxx Nurseries (1997 Season)
000-000 Xxx Xxxxx - Xxxxxxxxx Landscaping (1997 Season)
4. Fire Alarm Monitoring
0000 Xxxxxxxxxx Xxx - Libertyville Fire Dept.
Ameritech Dedicated Phone Line
801 & 000 Xxxxxxxxxx Xxx - Xxxxxxxxxxxx Fire Dept.
Ameritech Dedicated Phone Line
306-310 Era Drive - Ameritech/Security Link $54/Qtr.
Ameritech Dedicated Phone Line
5. Roof-top Maintenance
000-000 Xxx Xxxxx - Xxxxxxxx Xxxxxxxx Roofing $ 100/mo.
6. Industrial Building and Development Company
Culligan Water Service
Phone System
Cleaning Service
Security Alarm and Monitoring
Cellular Phone Contracts
Copier Maintenance
Rubbish Removal
EXHIBIT E
---------
SCHEDULE OF LICENSES
--------------------
Being those certain Licenses of which copies have previously been delivered to
Company.
E-1
EXHIBIT F
---------
SCHEDULE OF LEASES
------------------
F-1
EXHIBIT K
---------
PURCHASE OPTION AGREEMENT
-------------------------
THIS PURCHASE OPTION AGREEMENT (the "Option Agreement") is made as of the
______ day of July, 1997, by and among LASALLE NATIONAL TRUST, N.A., not
personally but solely as Trustee under Trust Agreement dated 7/1/96 and known as
Trust No. 120321 ("Trustee") and ESH XXXXXXXX ROAD LIMITED PARTNERSHIP, an
Illinois limited partnership and ERA DRIVE LIMITED PARTNERSHIP, an Illinois
limited partnership which are the beneficiaries of the aforesaid land trust
(collectively, "Beneficiary"; Trustee and Beneficiary, collectively, are
hereinafter referred to as "Seller"), and PRIME GROUP REALTY, L.P., a Delaware
limited partnership ("Purchaser").
WITNESSETH:
----------
WHEREAS, Trustee is the fee owner of two (2) certain parcels of improved
real estate in the Village of Libertyville, County of Lake, and State of
Illinois, which parcels are legally described on Exhibit A attached hereto and
made a part hereof (the "Land"); and
WHEREAS, Beneficiary has developed each parcel as an office/industrial
building with related improvements (the Land, building and improvements which
are located on a parcel are hereinafter collectively referred to as the
"Property") and thereafter lease the Property to tenants; and
WHEREAS, Seller desires to grant, and Purchaser desires to acquire, an
option to purchase each Property upon and subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of Purchaser's acquisition of the Property
from Seller, the mutual covenants and agreements contained in this Option
Agreement, and for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:
1. Grant of Option. Seller hereby grants to Purchaser the exclusive
option (the "Option") to purchase each Property upon the terms and conditions
set forth herein, for a purchase price of calculated in accordance with the
following formula (the "Purchase Price"). "The Purchase Price" shall be an
amount equal to the Proforma Net Operating Income (defined hereinafter) for the
applicable Property multiplied by ten (10), except that in no event shall the
Purchase Price be: (i) less than the total verified direct out-of-pocket cost to
develop and construct the applicable Property; or (ii) more than one hundred
twenty percent (120%) of the Seller's total verified direct and out-of-pocket
cost (as defined hereinafter) to develop and construct the applicable Property.
Any and an prepayment fees or expenses charged by any lender to release its
security interests in the Property or any
part thereof as a result of Purchaser's purchase of the Property shall be paid
by Seller. For purposes of this Agreement, the following definitions shall
apply:
a. "Proforma Net Operating Income" shall mean the net operating income
projected to be generated from Qualified Lease(s) at the applicable Property
during the next twelve month period (determined by utilizing generally accepted
accounting principles consistently applied (unless the Qualified Lease is with
Xxxxxx Automation, in which event the calculation of net operating income shall
be made utilizing an assumed rent of $5.80 per square foot), after deducting all
real estate taxes and all projected operating expenses (unless the tenant is
obligated to pay same, in which event no deduction shall be made for such items)
and "Qualified Lease" shall mean a lease in which (i) the space in question is
occupied by a third party tenant who is not related to any Contributor (as
defined in the separate Contribution Agreement dated July 8, 1997 by and among
entities affiliated with Seller and Purchaser), directly or indirectly, or under
common control with any Contributor pursuant to arms length written leases and
under a valid certificate of occupancy; (ii) the tenant is open for business and
paying rent, and additional rent attributable to common area charges, taxes and
insurance in accordance with the lease (if the lease requires payment of such
items by such tenants); and (iii) the tenant shall have delivered an unqualified
tenant estoppel letter in the form of Exhibit D attached or other form
reasonably acceptable to Purchaser.
b. "Cost" shall mean the cost of the land of the applicable property
(calculated at $3.50 per net useable square foot as defined in that certain Real
Estate Sale Contract dated of even date herewith by and between Purchaser and
Seller), plus the direct, verified out-of-pocket hard and soft construction
costs; provided, however, soft costs shall include (i) actual interest carry
attributable to the Property which is covered by the Qualified Lease; (ii) a
development fee to Seller or its designee in an amount equal to four percent
(4%) of the hard construction costs, but shall not include any other fees,
commissions or payments to Seller, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx or their
families and/or entities owned or controlled by any of the foregoing.
The Purchase Price shall be paid in cash at Closing; provided,
however, Seller may, upon written notice to Purchaser given within 10 days after
Seller receives written notice of Purchaser's exercise of the option, elect to
contribute the Property to the Partnership and accept limited partnership
interests in Purchaser, which shall have a net fair market value equal to the
Purchase Price calculated utilizing the value of the limited partnership units
as of the Closing Date.
2. Exercise of the Option; Right of First Refusal. (a) Subject to the
provisions of this Agreement, hereof, Purchaser may exercise the Option, by the
delivery of written notice (the "Exercise Notice") to Seller of Purchaser's
intent so to exercise the Option, at any time after the date hereof and prior to
the "Expiration Date", being defined as the earlier of (i) the date which is the
third (3rd) anniversary of the date hereof, or (ii) the date sixteen (16) days
after the date that Seller delivers to Purchaser written notice that Seller has
obtained one or more Qualified Lease(s) for substantially all of the space
2
within a building located on the Property to one or more third parties in arms
length transactions ("Seller's Delivery Notice"). In the event that the Option
is not exercised by Purchaser in the manner provided herein on or before the
Expiration Date, then this Option Agreement and the Option shall, without
further action of any party, automatically terminate as to such Property, and be
null, void and of no further force or effect, and neither party shall have any
further rights or obligations hereunder or with respect to the Option as to such
Property. The Closing shall occur on a date no less than thirty (30) days and no
more than forty-five (45) days following the date of Purchaser's exercise of its
option, except as provided hereinafter. Seller may give Seller's Delivery Notice
at the time it enters into a Lease which Seller believes will become a Qualified
Lease with the passage of time, in which event Seller shall specify the date
which Seller believes the Lease will become a Qualified Lease in Seller's
Delivery Notice, and Seller shall further immediately notify Purchaser of any
change in the date that the Lease is expected to become a Qualified Lease. In
the event Seller gives a Seller's Delivery Notice which states that a Lease will
become a Qualified Lease in the future, the Closing Date shall be the sixteenth
(16th) day following the date that the Lease becomes a Qualified Lease.
(b) In the event Seller desires to sell any portion of the Property
described on Exhibit A on or before the fifth (5th) anniversary of the execution
of this Agreement, Purchaser shall have a right of first refusal regarding each
and any sale of any portion of the Property by Seller. In the event Seller has
received a bona fide third party offer or term sheet acceptable to Seller,
Seller shall deliver to Purchaser a copy of such offer or term sheet and
Purchaser shall have the right for a period of fifteen (15) days after its
receipt of such offer or term sheet to notify Seller that it will purchase such
portion of the Property on the same terms and conditions set forth in such offer
or term sheet. In the event that Purchaser does not notify Seller of its
intention to purchase such Property on such terms within such fifteen (15) day
period, Seller may sell such Property on the same terms (but not different
terms) as were presented to Purchaser. Purchaser shall again have the right of
first refusal on any subsequent offer (or such changed terms) in the manner set
forth in this Section.
3. Entry onto the Property. Purchaser and/or Purchaser's agents shall have
the right during the term of this Option Agreement, at reasonable times and on
reasonable advance notice to Seller, to enter onto each Property for purposes of
surveying the Land, inspecting the improvements and undertaking soil boring and
other tests; provided, however, that neither Purchaser nor Purchaser's agents
shall disturb any tenants or occupants of such Property or their respective
licenses and/or invitees or be entitled to access to any portions of the
Property which are subject to tenant leases (except to the extent such access is
permitted by such tenant leases). Purchaser shall deliver to Seller prior to
entry on the Property, evidence of insurance naming Seller as an insured party
and protecting Seller against any liability or claim arising in connection with
Purchaser's investigation or the presence of Purchaser's representatives on the
Property (including Purchaser's agents and consultants for environmental and
soil testing). All surveying, inspections and soil boring and other tests shall
be performed at Purchaser's sole cost and expense and Purchaser shall deliver
copies of all such surveys and the results of all such
3
tests to Seller at no cost or expense to Seller. Seller shall also provide
Purchaser and/or Purchaser's agents reasonable access to Seller's books and
records relating to such Property, and to copies of the leases, licenses,
contracts and all other documents and data relating to the Property, to examine
and copy the same.
Purchaser hereby indemnifies, protects and holds Seller harmless and
agrees to defend Seller from and against any and all claims, demands, loss,
cost, damage, expense and liability (including, without limitation, personal
injury and property damage claims and mechanics' or other liens), including
reasonable attorneys' fees and litigation costs, caused by or occurring in
connection with the presence of Purchaser or Purchaser's agents on such Property
or the exercise by Purchaser of any of its surveying, inspection and testing
rights under this Section. In addition, Purchaser shall keep such Property free
from any liens which could arise as a result of the exercise by Purchaser of any
of its surveying, inspection and testing rights under this Section. Purchaser,
at its sole cost and expense, shall restore such Property to the same condition
as existed prior to its entry onto the Property and shall be liable for any and
all damage in connection therewith. Notwithstanding anything to the contrary
contained herein, the provisions of this Section shall survive the term of this
Option Agreement (regardless of whether or not the Option is exercised), as well
as any closing of the sale of the Property pursuant hereto.
4. Closing. On the date of closing of the transfer of title, Seller shall
issue, or cause the issuance of, a recordable Trustee's Deed conveying
merchantable title, which Trustee's Deed shall convey the Property to Purchaser,
subject only to the matters set forth on Exhibit B attached hereto and made a
part hereof, and/or matters arising through, out of, or in connection with
Purchaser or any party claiming through Purchaser, or in the alternative,
contribute the Property to the Partnership and execute assignments of
Partnership Interests. Seller and Purchaser shall also execute and deliver such
other documents as are usual and customary in connection with the sale and
purchase of an office/industrial building, including without limitation, Xxxx of
Sale, ALTA Statements, Assignment of Leases, third party arm's length contracts
(but not management or leasing contracts), IRPTA Transfer Tax Declarations and
Closing Statements. At the request of Purchaser, Closing shall take place
through a standard form of deed and money escrow with such provisions as are
necessary to comply with the terms hereof, to be established by Seller and
Purchaser, and/or their respective attorneys. The parties shall split the cost
of the escrow.
5. Title and Survey. At least fifteen (15) days prior to the Closing
Date, Seller will deliver to Purchaser a then current commitment for a title
guaranty policy to be issued by Chicago Title Insurance Company, or other
national title company reasonably satisfactory to Purchaser, in the amount of
the Purchase Price showing title vested in Seller, and containing extended
coverage over any general exceptions, subject to: the matters set out on Exhibit
B attached hereto, general real estate taxes and matters arising through, out of
or in connection with Purchaser. Seller shall also deliver an updated As-Built
ALTA Plat of Survey of the Property or Affidavit of No Change, if no changes to
the Property have occurred since the date of the existing Plat of Survey. If any
defects in
4
title and/or survey appear, Seller shall have thirty (30) days to cure same,
although matters which may be removed by payment of cash at Closing shall be so
removed and paid by Seller. If such defects are not or cannot be so cured within
such thirty (30) days, within ten (10) days of being notified thereof, Purchaser
may:
a. accept title as it then is and deduct liens or encumbrances of a
definite or ascertainable amount from the Purchase Price; or
b. withdraw and cancel the exercise of the Purchase Option as to
such Property.
On the Closing Date, Seller will cause the issuance of the title policy
described above. Seller shall pay the cost of the above described policy.
Purchaser shall pay for title endorsements requested by Purchaser.
6. Prorations. There shall be no proration for real estate taxes,
operating expenses, assessments, service contracts, utilities or other
customarily proratable items so long as same are being paid by tenants pursuant
to Qualified Leases of the Property. If any or all of such items are not paid by
tenants pursuant to Qualified Leases, the parties shall prorate such items based
upon the most recent information available and otherwise in the manner
previously utilized by Purchaser and entities owned or controlled by Xxxxxx
Xxxxxxxx. Rent will be prorated as of the Closing Date, and Seller will deliver
to Purchaser all Security Deposits (and interest, if any) held by Seller. There
shall be no other prorations unless specifically set out in this Agreement. All
Leasing commissions due and payable in connection with the initial execution of
Qualified Leases shall be paid by Seller. Leasing commissions to third parties
(unrelated to Xxxxxx X. Xxxxxxxx, Xxxxxx Xxxxx and/or entities owned and
controlled by either of said individuals or their families) due and payable in
connection with any extension of the term of Qualified Leases, if any, shall be
paid by Purchaser when due. Purchaser shall not be required to pay any leasing
commissions except as provided in this paragraph.
7. Transfer Tax and Brokers Commissions. Seller shall pay the amount of
any stamp tax imposed by state and/or county law on the transfer of the title
and shall furnish a completed real estate transfer declaration signed by the
Seller or Seller's agent in the form required pursuant to the Real Estate
Transfer Act of the State of Illinois if then in effect. Any local transfer tax
obligation shall be paid by the party responsible therefore pursuant to the
terms of the local ordinance; provided, however, if such local ordinance does
not specify a responsible party, the local transfer tax shall be paid by
Purchaser. No brokers commissions are payable in connection with the sale of the
Property at Closing, except for commissions to Industrial Building and
Development Company which commissions shall be paid by Seller.
8. Restrictions on Assignment. Neither party shall assign this Agreement
without the other party's prior written consent. This Agreement shall be binding
upon and
5
shall inure to the benefit of the parties hereto and their respective successors
and/or assigns.
9. Zoning. During the term of this Option Agreement, Seller shall not
seek, permit, approve or consent to any zoning change, annexation or subdivision
with respect to the Property, which consent shall not be unreasonably withheld
or delayed by Purchaser.
10. Time of the Essence. Purchaser and Seller hereby acknowledge and agree
that time is and shall be of the essence hereof. Notwithstanding anything to the
contrary contained herein, in the event the due date for performance of any
obligation hereunder falls on a day other than a business day, the date for
performance of such obligation shall be extended to the next following business
day.
11. Seller's Covenants; Existing Mortgage. Seller hereby covenants and
agrees that during the term of this Option Agreement, Seller shall not commit,
approve, consent to or permit any Unpermitted Transfer (hereinafter defined)
without the prior written consent of Purchaser. Any Unpermitted Transfer which
is effected without the prior written consent of Purchaser shall be void,
invalid and ineffective and of no force or effect against Purchaser or
Purchaser's rights hereunder and in the Property. As used herein, an
"Unpermitted Transfer" shall mean any of the following:
(i) any grant, sale, transfer or other conveyance of all or any
portion of or interest in the Property; or
(ii) any mortgage, lien or other encumbrance of all or any portion of
the Property unless such mortgage, lien or encumbrance is able to be
released at the Closing using a portion of the Purchase Price in the event
that Purchaser exercises the Option, and unless the mortgagee under any
such mortgage acknowledges in writing Purchaser's rights under this Option
Agreement are superior to the mortgage.
12. Covenants Running with the Land; Specific Performance. The covenants
and agreements of Seller under this Option Agreement are intended to be and
shall be covenants running with the land with respect to the Property and shall
be binding upon the parties and their respective representatives, and permitted
successors and assigns. In the event Seller defaults, Purchaser may file an
action for specific performance to compel Seller to comply with its obligations
under this Option Agreement. In the event of a default by Purchaser, Purchaser
shall pay Seller the sum equal to ten percent (10%) of the Purchase Price as
full and complete liquidated damages (and not as a penalty or forfeiture) in
lieu of all other legal and equitable rights and remedies which Seller may have
on account of such default.
13. Notices. Any notice, request, demand, instruction or other document to
be given or served hereunder or under any document or instrument executed
pursuant hereto
6
shall be in writing and shall be delivered personally or sent by United States
registered or certified mail, return receipt requested, or by overnight express
courier, postage prepaid and addressed to the parties at their respective
addresses set forth below, and the same shall be effective upon receipt if
delivered personally or two (2) business days after deposit in the mails or
deposit with an overnight express courier. A party may change its address for
receipt of notices by service of a notice of such change in accordance herewith.
If to Purchaser: Prime Group Realty, L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
With a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
If to Seller: c/o Industrial Building and Development Company
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
14. Memorandum. The parties hereby agree that a fully executed and
acknowledged memorandum of this Option Agreement, in the form attached hereto
and made a part hereof as Exhibit C (the "Memorandum"), has been executed by
Purchaser and Seller and shall be recorded by Purchaser at Purchaser's sole
expense. In the event that this Option Agreement shall expire or terminate and
Purchaser shall not have exercised the Option pursuant hereto, then this Option
Agreement and the Option shall, without further action of any party,
automatically terminate and be null, void and of no further force or effect, and
neither party shall have any further rights or obligations hereunder or with
respect to the Option; in addition, however, in such event, Purchaser shall
execute, acknowledge and deliver to Seller a recordable quitclaim deed to the
Property or any other instrument reasonably requested by Seller for the release
of the Memorandum and otherwise indicating the termination of Purchaser's
rights hereunder and with respect to the Property.
7
15. Successors and Assigns: No Merger. All of the terms and conditions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
16. Severability. In the event that any term or provision of this Option
Agreement, or the application thereof to any particular party or circumstance,
is found by a court of competent jurisdiction to be invalid or unenforceable (in
whole or in its application to a particular party or circumstance), the
remaining terms and provisions of this Option Agreement or the application
thereof to different parties or circumstances, as the case may be, shall not be
affected thereby and this Option Agreement shall remain in full force and effect
in all other respects.
17. Governing Law: Counterparts. This Option Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois. This
Option Agreement and any document or instrument executed pursuant hereto may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
18. Due Authorization: Binding Agreement. Trustee hereby represents, and
Beneficiary and Purchaser each hereby represents and warrants, to the other
respective parties hereto that the execution, delivery and performance of this
Option Agreement has been duly and validly authorized by all necessary action of
such party, and constitutes a legal, valid and binding obligation of such party,
enforceable against such party in accordance with the terms hereof. Purchaser
represents and warrants to Seller that the execution, delivery, and performance
of this Option Agreement has been duly and validly authorized by all necessary
action of such party, and constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
19. Consents and Approvals. Trustee hereby represents, and Beneficiary and
Purchaser each hereby represents and warrants, to the other respective parties
hereto that no consent, waiver, approval or authorization of, or notice to, any
other person is required to be obtained or given by such party in connection
with the execution, delivery and performance of this Option Agreement, except
for such consents, approvals or authorizations which have been obtained.
20. Trustee's Exculpation. This Option Agreement is executed by Trustee,
not personally but solely as Trustee aforesaid, in the exercise of the power and
authority conferred upon and vested in it, as Trustee aforesaid (and Trustee
hereby represents that it possesses full power and authority to execute this
Option Agreement). It is expressly understood and agreed by every person, firm
or corporation hereafter claiming an interest pursuant to this Option Agreement
that Trustee has executed this Option Agreement solely for the purpose of
subjecting the title holding interest and the trust estate under the aforesaid
Trust to the terms of this Option Agreement; that no personal liability or
personal responsibility is assumed by nor shall, at any time, be asserted or
enforceable against Trustee personally, on account of this Option Agreement or
on account of any
8
representation, obligation, duty, covenant or agreement contained herein, either
express or implied, all such personal liability, if any, being expressly waived
and released; and further, that no duty shall rest upon Trustee either
personally or as Trustee, to sequester trust assets, rentals, avails or proceeds
of any kind, or otherwise to see to the fulfillment or discharge of any
obligation, express or implied, arising pursuant to the terms of this Option
Agreement. In the event of any conflict between the terms of this paragraph and
the remainder of this Option Agreement, or in the event of any question of
apparent liability or obligation resting upon Trustee, the exculpatory
provisions hereof shall be controlling.
21. Seller's Election of Tax-Deferred Exchange. Seller may elect a tax
deferred exchange under Section 1031 of the Internal Revenue Code of 1986, as
amended, by designating other real property (the "Exchange Property") to be
acquired by an intermediary selected by the Seller (the "Intermediary") in
exchange for the Property to be sold by Seller. In such event, Seller shall
enter into an exchange agreement with Intermediary prior to the Closing pursuant
to which the Intermediary shall receive the sale proceeds of the Property being
sold by Seller, and Seller may transfer Seller's right to receive proceeds under
this Agreement to the Intermediary for such purpose, but all transfer documents
shall be executed by Seller, and Seller shall remain responsible for its
obligations under this Agreement. Notwithstanding Seller's election to effect a
tax-deferred exchange, such an exchange by Seller shall not interfere with or
excuse Seller's obligations under this Agreement, and Seller shall be required
to sell the Property directly to Purchaser, and Purchaser shall be required to
purchase the Property directly from Seller for the price and on the terms set
forth in this Agreement. In no event shall Purchaser be required (a) to take
title to any property other than the Property, or (b) to pay funds or incur
expenses (including attorney's fees) in addition to those called for elsewhere
in this Agreement. Purchaser shall not be required to be involved in such
exchange other than as specified herein. Further, in no event shall Seller's
election to effect a tax-deferred exchange delay the Closing.
22. Limitation on Liability. Notwithstanding anything to the contrary set
forth in this Agreement, the Purchaser shall look solely to the assets of the
Beneficiary, the trust estates of the title holding land trusts and the equity
interests of the general partners in the Property (and not the personal
residence or personal assets of any partner in the Beneficiary) for satisfaction
of any monetary claim against Seller.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
9
IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement
as of the day and year first above written.
PURCHASER:
PRIME GROUP REALTY, L.P., a Delaware
limited partnership
By: Prime Group Realty Corp., a Delaware
corporation, its sole General Partner
By: _________________________________
Name: _______________________________
Title: ______________________________
SELLER:
ESH XXXXXXXX ROAD LIMITED
PARTNERSHIP, an Illinois limited
partnership
By: _____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: General Partner
ERA DRIVE LIMITED PARTNERSHIP, an Illinois
limited partnership
By: _____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: General Partner
10
and
LASALLE NATIONAL TRUST, N.A., as Trustee
aforesaid
By: ________________________
Name: ________________________
Title: ________________________
11
EXHIBIT A
LEGAL DESCRIPTIONS
000 XXXXXXXXXX XXX
LOT D, BEING A CONSOLIDATION OF LOTS 58 THRU 62 (INCLUSIVE), IN LIBERTYVILLE
BUSINESS PARK, BEING A SUBDIVISION OF PART OF THE NORTHWEST 1/4 OF SECTION 18,
TOWNSHIP 44 NORTH, RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO
THE PLAT THEREOF RECORDED MARCH 21, 1995 AS DOCUMENT 3655524, IN LAKE COUNTY,
ILLINOIS.
000 XXXXXXXXXX XXX
LOT C, BEING A CONSOLIDATION OF LOTS 63 THRU 68 (INCLUSIVE), IN LIBERTYVILLE
BUSINESS PARK, BEING A SUBDIVISION OF PART OF THE NORTHWEST 1/4 OF SECTION 18,
TOWNSHIP 44 NORTH, RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO
THE PLAT THEREOF RECORDED MARCH 21, 1995 AS DOCUMENT 3655524, IN LAKE COUNTY,
ILLINOIS.
EXHIBIT B
PERMITTED EXCEPTIONS
[To be agreed upon by Seller and Purchaser on or before August 4, 1997]
EXHIBIT C
---------
MEMORANDUM OF PURCHASE OPTION AGREEMENT
---------------------------------------
THIS MEMORANDUM OF PURCHASE OPTION AGREEMENT (the "Memorandum") is made as
of the _____ day of _________________, 1997, by and among _____________________
______, as Trustee under Trust Agreement dated _________________ and known as
Trust No. _________ ("Trustee") and _____________________, a __________________,
that is the sole beneficiary of the aforesaid land trust ("Beneficiary"; Trustee
and Beneficiary, collectively, "Seller"), and PRIME GROUP REALTY, L.P., a
Delaware limited partnership ("Purchaser").
WITNESSETH:
----------
WHEREAS, pursuant to that certain Purchase Option Agreement of even date
herewith by and between Seller and Purchaser (the "Option Agreement"), Seller
has granted to Purchaser, and Purchaser has acquired from Seller, an exclusive
option (the "Option") to acquire the real estate described on Schedule 1
attached hereto and made a part hereof (collectively, the "Property"), upon the
terms and subject to the conditions set forth in the Option Agreement; and
WHEREAS, the covenants and agreements of Seller under the Option Agreement
are covenants running with the land and shall be binding upon Seller and
Seller's heirs, representatives, successors and assigns; and
WHEREAS, this Memorandum is executed and recorded in accordance with the
terms of the Option Agreement solely for the purpose of giving notice of the
existence thereof and shall not supersede or in any way modify the terms or
conditions of the Option Agreement.
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller has granted, and does hereby grant, to Purchaser the Option to purchase
the Property, upon and subject to all the terms and conditions of the Option
Agreement, which is incorporated herein as fully as if set out herein in full,
and the parties further state as follows:
1. Termination of Option. Pursuant to and upon the terms and conditions
set forth in the Option Agreement, if not earlier terminated in accordance with
the terms of the Option Agreement, the Option shall, without further action of
any party, automatically expire and terminate on the earlier of (i) [third
anniversary of the date hereof], or (ii) the date sixteen (16) days after the
date, if any, that Seller delivers to Purchaser written notice
-C1-
that Seller has leased all or substantially all of the space within a building
on a Property (as defined in the Option Agreement) to one or more third parties
in arms-length transactions.
2. Trustee's Exculpation. This Memorandum is executed by Trustee, not
personally but solely as Trustee aforesaid, in the exercise of the power and
authority conferred upon and vested in it, as Trustee aforesaid (and Trustee
hereby represents that it possesses full power and authority to execute this
Memorandum). It is expressly understood and agreed by every person, firm or
corporation hereafter claiming an interest pursuant to this Memorandum that
Trustee has executed this Memorandum solely for the purpose of subjecting the
title holding interest and the trust estate under the aforesaid Trust to the
terms of this Memorandum; that no personal liability or personal responsibility
is assumed by nor shall, at any time, be asserted or enforceable against Trustee
personally, on account of this Memorandum or on account of any representation,
obligation, duty, covenant or agreement contained herein, either express or
implied, all such personal liability, if any, being expressly waived and
released; and further, that no duty shall rest upon Trustee either personally or
as Trustee, to sequester trust assets, rentals, avails or proceeds of any kind,
or otherwise to see to the fulfillment or discharge of any obligation, express
or implied, arising pursuant to the terms of this Memorandum. In the event of
any conflict between the terms of this paragraph and the remainder of this
Memorandum, or in the event of any question of apparent liability or obligation
resting upon Trustee, the exculpatory provisions hereof shall be controlling.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
-C2-
IN WITNESS WHEREOF, Seller and Purchaser have caused this Memorandum to be
executed as of the date first above written.
PURCHASER:
PRIME GROUP REALTY, L.P., a Delaware limited
partnership
By: Prime Group Realty Corp., a Delaware
corporation, its sole General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SELLER:
------------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
------------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
THIS DOCUMENT WAS PREPARED BY,
AND AFTER RECORDING SHOULD BE
RETURNED TO:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
- C3 -
STATE OF ILLINOIS )
)SS.
COUNTY OF XXXX )
I HEREBY CERTIFY that on this ______ day of _______________, 1997,
before me personally appeared _______________, the __________ of PRIME REALTY
CORP., a Delaware corporation, as General Partner of PRIME GROUP REALTY, L.P., a
Delaware limited partnership, to me known to be the same person who signed the
foregoing instrument as his free act and deed for the use and purpose therein
mentioned, and that the said instrument is the act and deed of said corporation
as aforesaid and the act and deed of said corporation as aforesaid.
WITNESS my signature and official seal the day and year last
aforesaid.
(NOTARY SEAL)
__________________________________
Notary Public
Commission Expires:_______________
- C4 -
STATE OF ILLINOIS )
)SS.
COUNTY OF XXXX )
I HEREBY CERTIFY that on this ______ day of _______________, 1997,
before me personally appeared _______________, the _______________________ of
_______________________, a ________________________, to me known to be the same
person who signed the foregoing instrument as his free act and deed for the use
and purpose therein mentioned, and that the said instrument is the act and deed
of said corporation as aforesaid and the act and deed of said corporation as
aforesaid.
WITNESS my signature and official seal the day and year last
aforesaid.
(NOTARY SEAL)
__________________________________
Notary Public
Commission Expires:_______________
- C5 -
STATE OF ILLINOIS )
)SS.
COUNTY OF XXXX )
I HEREBY CERTIFY that on this ______ day of _______________, 1997,
before me personally appeared _______________________, the ______________ of
_______________________, a ________________________, to me known to be the same
person who signed the foregoing instrument as his free act and deed for the use
and purpose therein mentioned, and that the said instrument is the act and deed
of said corporation as aforesaid and the act and deed of said corporation as
aforesaid.
WITNESS my signature and official seal the day and year last
aforesaid.
(NOTARY SEAL)
__________________________________
Notary Public
Commission Expires:_______________
EXHIBIT D
---------
TENANT ESTOPPEL CERTIFICATE
_______________, 1997
Prime Group Realty, L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn:__________________
Re: Lease Dated: _______________________
Landlord: _______________________
Tenant: _______________________, a(n) _______________________
Premises: ____ square feet in the building located at
_______________________, _______, Illinois
Gentlemen:
The undersigned, __________, a(n) ____________ ("Tenant"), the tenant under
the above-described lease, a copy of which is attached hereto as Exhibit A,
("Lease") provides this Tenant Estoppel Certificate to you as conclusive
evidence of the matters set forth herein concerning the above-referenced Lease
and the Premises.
As of the date hereof, the undersigned hereby certifies the following:
1. That the Lease supersedes, in all respects, all prior written or oral
agreements between Landlord and Tenant with respect to the Premises
and there are no agreements, understandings, warranties, or
representations between Landlord and Tenant with respect to the Lease
or the Premises except as expressly set forth in the copy of the Lease
(including all amendments thereto, if any) attached hereto as Exhibit
A.
2. That, as of the date hereof, the Lease has not been changed, amended,
modified, supplemented or superseded except as set forth in the copy
of the Lease (including all amendments thereto, if any) attached
hereto as Exhibit A.
3. That the Lease remains in full force and effect and there are no known
existing defaults by Tenant under the Lease.
4. That the improvements and space required by the Lease to be delivered
to Tenant have been satisfactorily completed and delivered by Landlord,
and have been accepted by the Tenant.
5. That the Premises are currently occupied and open for the use by
Tenant, its customers, employees and invitees.
6. That Tenant's interest in the Lease and the Premises demised therein,
or any part thereof, has not been sublet, transferred or assigned.
7. That all duties of an inducement nature required of the Landlord under
the Lease, as of the date of this certificate, have been fulfilled by
Landlord and Tenant is fully obligated to pay rent and all other
charges coming due under the Lease.
8. That the Commencement Date of the Lease was _________,19__ and the
Expiration Date of the Lease is __________, _____.
9. That the monthly base rent under the Lease of $ _________commenced on
________, 19__ and the last monthly payment of rent in the amount of
$_____________ was made by Tenant on _________, 1997. No monthly rental
has been prepaid nor has Tenant been given any free rent, partial rent,
rebates, rent rebates or concessions except as provided in Lease.
Tenant has no claims, defenses or offsets against any rents payable
under the Lease.
10. That a security deposit in the amount of $ _______ has been deposited
with Landlord. Tenant agrees to look solely to the Landlord for return
of the security deposit unless the Landlord has deposited the security
deposit with you.
11. That Landlord, to the best of our knowledge, has fully performed all of
its obligations under the Lease, as of the date of this certificate,
and there are no known circumstances existing under which Landlord may
be deemed in default merely upon the service of notice or passage of
time, or both.
12. That Landlord has not given its consent to Tenant (for example, to
sublease or to alter the Premises) to take any action which, pursuant
to the Lease, requires Landlord's consent, except _________________.
13. That Tenant has not received any notice of a prior sale, transfer,
assignment, pledge or other hypothecation of the Premises or the Lease
or of the rents provided for therein.
14. That Tenant has not filed, and is not currently the subject of any
filing, voluntary or involuntary, for bankruptcy or reorganization
under any applicable bankruptcy or creditors rights laws.
15. That Tenant is a ___________ [corporation] organized, validly existing
and in good standing under the law of __________.
In issuing this Estoppel Certificate, Tenant understands that you will rely
thereon in your acquiring that certain real estate which includes the Premises.
_________________________, a(n)
_______________________________
By: __________________________
Name:_____________________
Title:____________________
SCHEDULE 1
----------
[Legal Description]
EXHIBIT L
---------
CHICAGO TITLE INSURANCE COMPANY - ILLINOIS FORM B*
Real Estate Sales Contract
1. PRIME GROUP REALTY, L.P., a Delaware limited partnership (Purchaser) agrees
to purchase at a price of $ See Rider Attached Hereto on the terms set forth
herein, the following described real estate in Lake County, Illinois:
SEE EXHIBIT "A" ATTACHED HERETO
commonly known as SEE EXHIBIT "A" ATTACHED HERETO, and with approximate lot
dimensions of ________ x ________, together with the following property
presently located thereon:
__________________________________________________________________(Beneficiary),
2. LASALLE NATIONAL TRUST, N. A., not personally, but solely as Trustee under
Trust Agreement dated November 15, 1994 and known as Trust No. 119196
(collectively "Seller") agrees to sell the real estate at the price and terms
set forth herein, and to convey or cause to be conveyed to Purchaser or nominee
title thereto by a recordable Trustee's deed, with release of homestead rights,
if any, subject only to: the Permitted Exceptions (hereinafter defined).
3. Purchaser will pay $10.00 and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, has paid $________, as
xxxxxxx money to be applied on the purchase price, and agrees to pay or satisfy
the balance of the purchase price, plus or minus prorations, at the time of
closing by cashier's check or wire transfer of funds.
5. The time of closing shall be on as set forth in/the Rider, unless
subsequently mutually agreed otherwise, at the/office of Chicago Title and Trust
Company provided title is shown to be good or is accepted by Purchaser.
8. Seller warrants that Seller, its beneficiaries or agents of Seller or of its
beneficiaries have received no notices from any city, village or other
governmental authority of zoning, building, fire or health code violations in
respect to the real estate that have not been heretofore corrected.
9. A duplicate original of this contract, duly executed by the Seller and his
spouse, if any, shall be delivered to the Purchaser within ____ days from the
date hereof, otherwise, at the Purchaser's option, this contract shall become
null and void and the xxxxxxx money shall be refunded to the Purchaser.
This contract is subject to the Conditions and Stipulations set forth on the
back page hereof, which Conditions and Stipulations are made a part of this
contract. SEE RIDER ATTACHED HERETO AND MADE A PART HEREOF.
Dated
---------------------
Purchaser SEE ATTACHED SIGNATURE PAGE (Address) SEE ATTACHED SIGNATURE PAGE
----------------------------- -----------------------------
Purchaser (Address)
----------------------------- -----------------------------
Seller SEE ATTACHED SIGNATURE PAGE (Address) SEE ATTACHED SIGNATURE PAGE
----------------------------- -----------------------------
Seller (Address)
----------------------------- -----------------------------
*Form normally used for sale of property improved with multi-family structures
of five or more units or of commercial or industrial properties.
CONDITIONS AND STIPULATIONS
3. Water and other utility charges, fuels, general taxes, if any, and other
similar items shall be adjusted ratably as of the time of closing. The amount
of the current general taxes not then ascertainable shall be adjusted on the
basis of (a), (b).
(a) 100% of the most recent ascertainable taxes: Real Estate Taxes shall
be reprorated upon issuance of the final tax bills for the applicable year of
Closing.
Seller shall pay the amount of any stamp tax imposed by State and County law on
the transfer of the title, and shall furnish a completed Real Estate Transfer
Declaration signed by the Seller or the Seller's agent in the form required
pursuant to the Real Estate Transfer Tax Act of the State of Illinois and shall
furnish any declaration signed by the Seller or the Seller's agent or meet other
requirements as established by any local ordinance with regard to a transfer or
transaction tax: such tax required by local ordinance shall be paid by the party
upon whom such ordinance places responsibility therefor. If such ordinance does
not so place responsibility, the tax shall be paid by the (Seller). (Strike
one.)
4. The provisions of the Uniform Vendor and Purchaser Risk Act of the State of
Illinois shall be applicable to this contract.
5. If this contract is terminated without Purchaser's fault, the xxxxxxx money
shall be returned to the Purchaser, but if the termination is caused by the
Purchaser's fault, and upon notice to the Purchaser as Seller's sole and
exclusive remedy, Seller shall receive, and Purchaser shall pay liquidated
damages in an amount equal to 15% of the Purchase Price.
6. This sale shall be closed through an escrow with Chicago Title and Trust
Company, in accordance with the general provisions of the usual form of Deed and
Money Escrow Agreement then in use by Chicago Title and Trust Company, with such
special provisions inserted in the escrow agreement as may be required to
conform with this contract. Upon the creation of such an escrow, anything herein
to the contrary notwithstanding, payment of purchase price and delivery of deed
shall be made through the escrow and this contract and the xxxxxxx money shall
be deposited in the escrow. The cost of the escrow shall be divided equally
between Seller and Purchaser. (Strike paragraph if inapplicable.)
7. Time is of the essence of this contract.
8. All notices herein required shall be in writing and shall be served on the
parties at the addresses following their signatures. The personal delivery, or
mailing of a notice by registered or certified mail, return receipt requested,
shall be sufficient service, and a notice shall be deemed given when the same
has been delivered or if mailed as aforesaid, deposited with the U.S. Postal
Service.
10. (B) Seller agrees to execute and deliver to Purchaser and each mortgage
lender of Purchaser such disclosure documents as may be required by the Illinois
Responsible Property Transfer Act.
SCHEDULE 1
LIST OF CONTRIBUTORS AND PROPERTY LOCATIONS
-------------------------------------------
Property Fee Ownership Beneficiary(ies)
-------- ------------- ----------------
1. 000-000 Xxx Xxxxx XxXxxxx National Trust, NA, 310 Era Limited
t/u/t 00-00000-00 dated June Partnership
15, 1982
2. 0000 Xxxxxxxxx XxXxxxx National Trust, NA, MacArthur Drive
t/u/t 11-9051 dated September Properties,
7, 1994 CLE Limited Partnership
3. 000 Xxxxxxxx Xxxx XxXxxxx National Trust, NA, 500 Xxxxxxxx Limited
t/u/t 11-107825 dated March Partnership
30, 1984
4. 000 Xxxxx Xxxx XxXxxxx National Trust, NA, 515 Xxxxx Limited
t/u/t 11-1358 dated August 1, Partnership
1986
5. 000 Xxxxx Xxxx XxXxxxx National Trust, NA, 555 Xxxxx Limited
t/u/t 11-1357 dated August 1, Partnership
1986
6. 000 Xxxxxxx Xxxxx XxXxxxx National Trust, NA, Sky Harbor Associates
t/u/t 286-34 dated January 17,
1974
7. 0000 Xxxxxxxxxx Xxx XxXxxxx National Trust, NA, 1001 Technology Way,
t/u/t 11-9869 dated October 15, LLC
1995
8. 0000 Xxxxxxxxxx Xxxx/ XxXxxxx National Trust, NA, The Grandville Road
0000 Xxxxxxxxxxxx Xxx t/u/t ll-2868 dated December Limited Partnership Properties
1, 1987
SCHEDULE 2
SCHEDULE OF BUSINESS ASSETS
---------------------------
1. Micron computer Pentium 200 MHZ and Monitor
2. XxXxxx computer 486 50 MHZ and Monitor
3. IBM notebook computer and Monitor
4. Ditto Tape Back-up
5. HP LaserJet 4 printer
6. HP DeskJet 870cse color printer
7. HP ScanJet 4P color flatbed scanner
8. HP plain paper fax machine
9. Laminated Wood Desk
10. Secretarial Desk
11. Steelcase Desk
12. Plan Table
13. Office Cabinetry
14. Five (5) 4 drawer file cabinets
15. Ten (10) 2 drawer file cabinets
16. One (1) 2 drawer vertical file cabinet
17. Three (3) overhead wall cabinets
18. Two (2) work tables
19. Conference table and six (6) black conference chairs
20. Six (6) xxxx swivel chairs
21. Binding Machine and supplies
22. Refrigerator
23. Microwave Oven
24. Miscellaneous office equipment
25. Miscellaneous office supplies
26. Glass meeting table
27. Rolling computer cart
28. One (1) desk chair
29. Two (2) file cabinet tops
30. Phone System Lease/Purchase Agreement
SCHEDULE 2A
PERSONAL PROPERTY OWNED BY IBD
------------------------------
WHICH ARE NOT BUSINESS ASSETS
-----------------------------
1. Industrial Building and Development Company Logo
2. Wooden Desk with Metal Legs (currently in Xxxxxx'x Office)
3. Personal Item in attic
4. Oriental Rugs
5. Photographs by Xxxxxx X. Xxxxxxxx
6. Leather Sofa
7. Paintings and Artwork
8. Miscellaneous Nautical Equipment
9. "Drexal" armoire and headboard
10. Xxxx reclining lounge chair
SCHEDULE 3
DESCRIPTION OF MORTGAGES TO BE ASSUMED
--------------------------------------
1. 0000 Xxxxxxxxxx Xxx
-------------------
Lender: State Farm Life Insurance Company
Loan Number: 13108
Start Date: 11/01/96
Term: 15 years
Original Loan Amount: $6,500,000
Interest Rate: 8.30%
Monthly Payment: $51,467.00
Loan Balance 5/30/97: $6,425,877
Maturity Date: 10/01/2011
2. 0000 Xxxxxxxxxx/0000 Xxxxxxxxxxxx Xxxxxx
----------------------------------------
Lender: Nationwide Life Insurance Company/West Coast Life
Loan Number(s): 00-0000000/00-0000000
Start Date: 12/01/91
Term: 10 Year
Original Loan Amount: $7,750,000
Interest Rate: 9.875%
Monthly Payment: $79,141.83
Loan Balance 9/30/97: $6,303,277
Maturity Date: 11/01/2001
SCHEDULE 3A
DESCRIPTION OF MORTGAGES TO BE REPAID
1. 0000 Xxxxxxxx Xxxxx
Lender: XxXxxxx State Bank
Loan Number: 345936
Original Loan Amount: $7,900,000
Interest Rate: 8.58%
Loan Balance 9/30/97: $7,694,011
Maturity Date: 09/01/2002
2. 000-000 Xxx Xxxxx
Xxxxxx: General American
Loan Number: 8120
Original Loan Amount: $1,900,000
Interest Rate: 10.25%
Loan Balance 9/30/97: $1,745,207
Maturity Date: 02/01/98
3. 000 Xxxxxxxx Xxxx/000 Xxxxx Xxxx
Lender: General American
Loan Number: 8031
Original Loan Amount: $5,925,000
Interest Rate: 9.875%
Loan Balance 9/30/97: $5,391,737
Maturity Date: 11/01/97
4. 000 Xxxxx Xxxx
Lender: General American
Loan Number: 8163
Original Loan Amount: $4,360,000
Interest Rate: 9.875%
Loan Balance 9/30/97: $3,982,968
Maturity Date: 02/01/98
5. 000 Xxxxxxx Xxxxx
Lender: General American
Loan Number: 7961
Original Loan Amount: $2,700,000
Interest Rate: 10.25%
Loan Balance 9/30/97: $2,467,832
Maturity Date: 09/01/97
SCHEDULE 4
----------
ASSIGNMENT AND ASSUMPTION
-------------------------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, ________________________, a _________________ ("Assignor"),
does hereby assign, transfer and convey to _______________________________, a
____________ ("Assignee"), the partnership interest represented by _____________
held by Assignee as a ______________ partner in _______________________________,
a _________________________ (the "Units"), standing in the name of Assignee on
the books and records of ________________________________ (the "Partnership"),
together with any and all right, title and interest in any property, both real
and personal, to which the Units relate, and any other rights, privileges and
benefits appertaining thereto.
This Assignment is made subject to all of the terms and conditions of
the partnership agreement of the Partnership, as amended (the "Agreement").
Assignor hereby certifies that it has full power to make this
Assignment under the Agreement, that this Assignment is being made in compliance
with said Agreement, that it has good and valid title to the Units, free and
clear of all liens, and that the Units have not otherwise been conveyed, sold,
transferred, encumbered, pledged, hypothecated or assigned. Except as expressly
set forth herein, this Assignment is made without representation or warranty.
IN WITNESS WHEREOF, Assignors and Assignee have executed this
Assignment as of the _____ day of _________________, 1997.
ASSIGNOR: ASSIGNEE:
_______________________________ __________________________________
By:____________________________ By:_______________________________
Name:__________________________ Name:_____________________________
Title:_________________________ Title:____________________________
SCHEDULE 11
-----------
[LOGO OF IBD]
July 20, 1995
Xx. Xxxxxx X. Xxxxxxx, SIOR
Xx. Xxxx X. Xxxx, SIOR
000 Xxxxxxx
Xxxx Xxxxxx, XX 00000
Re: Motorola Build to Suit for Lease in the McHenry Corporate Center
Dear Ed and Xxxx:
The objective of this letter is to document our commission agreement pertaining
to the above referenced transaction. Xxxxxx Xxxxxxx and Xxxx Xxxx are to receive
a lease commission from ownership equivalent to 3.5% of the total rental amount
in the initial lease term payable to the brokerage company that they are
employed with at the time the commission becomes due and payable.
In addition, lease renewals under the Lease shall cause ownership to pay a
commission equivalent to 2.25% of the total rental amount. This commission shall
be due 1/2 upon renewal and 1/2 upon the commencement date.
In addition, a lease expansion under the Lease shall cause ownership to pay a
commission equivalent to 3.5% of the total rental amount and shall be treated as
a soft cost in the rental calculation. This commission shall be due 1/2 upon
execution of the expansion document and 1/2 upon the commencement date.
Finally, the brokers are to receive a 3% sale commission paid by ownership in
the event that ownership sells the property to Motorola. This fee shall be due
upon the closing of the sale.
Please confirm your acceptance of these terms in the appropriate area provided
below and return a copy to us.
Sincerely Yours,
Industrial Building and Development Company
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
President Vice President
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
/s/ Xxxx X. Xxxx 8-5-95
---------------------------------- ------
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxx Date
