SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 1999
JMB INCOME PROPERTIES, LTD. - X
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(Exact name of registrant as specified in its charter)
Illinois 0-12140 36-3235999
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(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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<PAGE>
NORTH HILLS MALL
NORTH RICHLAND HILLS, TEXAS
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On November 19, 1999 (the
"Closing Date") (pursuant to an agreement to purchase dated June 22, 1999
and amended on July 30, 1999, August 11, 1999 and November 16, 1999), JMB
Income Properties, Ltd. - X (the "Partnership"), an Illinois limited
partnership, sold the land and related improvements known as the North
Hills Mall (the "Property") located in North Richland Hills, Texas. The
purchaser, North Hills Creek Mall, L.P., a Texas limited partnership
("Purchaser"), is not affiliated with the Partnership or its General
Partners and the sale price was determined by arm's-length negotiations.
The sale price of the Property was $8,500,000 and net cash proceeds
received from the sale, net of closing costs, broker commissions and the
assumption by the Purchaser of the outstanding mortgage note of
approximately $7,490,000 was approximately $750,000. The Property was
approximately 72% occupied at the date of sale. The Property was
classified as held for sale as of September 30, 1997, and therefore, has
not been subject to continued depreciation as of that date for financial
reporting purposes. The sale is expected to result in a gain to the
Partnership in 1999 of approximately $700,000 for financial reporting
purposes primarily as a result of value provisions totaling $10,737,000
recorded by the Partnership in 1998 and 1996. In addition, the Partnership
expects to report a loss on sale of approximately $800,000 for Federal
income tax reporting purposes in 1999.
In connection with the assumption of the outstanding mortgage note by
the Purchaser, the Purchaser together with Burk Collins and Robert S. Manns
(collectively, the "Indemnitors"), pursuant to an Indemnity Agreement
("Indemnity"), delivered at the date of sale agreed (i) to indemnify the
Partnership against all cost, expense, liability and loss relating to and
arising from the continued existence and the Purchaser's assumption of the
existing mortgage note made to the Partnership and the related financing
documents encumbering the Property, including, without limitation, all
documents executed by the Partnership in connection with the mortgage note
and the Purchaser's assumption thereof, (ii) to indemnify the Partnership
against all cost, expense, liability and loss relating to or arising from
Property tenants' real estate tax obligations.
<PAGE>
In connection with this sale and is customary in such transactions,
the Partnership agreed to certain representations and warranties with a
stipulated survival period which expired November 30, 1999 and which, in no
event, was to exceed $250,000. The Partnership is not aware of any
liability under such representations and warranties as of the date of this
report.
The North Hills Mall was the Partnership's only remaining asset and
due to its sale, it is expected that the Partnership will make its final
distributions and wind up its affairs and liquidate by year-end barring
unforseen circumstances.
The Partnership Agreement provides that the General Partners shall
receive as a distribution from the sale of a real property by the
Partnership 3% of the selling price and any cumulative deferrals of their
10% distribution of disbursable cash, subject to certain limitations. Any
remaining proceeds (net after expenses and retained working capital) will
be distributed 85% to the Limited Partners and 15% to the General
Partners. However, the Limited Partners shall receive 100% of such net
sale proceeds until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership,
and (ii) have received cumulative cash distributions from the Partnership's
operations which, when combined with sale or refinancing proceeds
previously distributed, equal a 10% annual return on the Limited Partners'
average capital investment for each year (their initial capital investment
as reduced by sale or refinancing proceeds previously distributed)
commencing with the first fiscal quarter of 1984. As the above levels of
return are not expected to be achieved, the General Partners have waved
their right to receive any portion of the proceeds from the sale of the
property by the Partnership by virtue of the distribution provisions of the
Partnership Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not applicable.
(b) Proforma Financial Information. Not applicable.
As a result of the sale of the Property, beyond the date of
sale there will be no further rental and other income, property operating
expenses, mortgage interest, amortization of deferred expenses and
provision for value impairment recorded for the Property in the
consolidated financial statements of the Partnership, which for the
Partnership's most recent fiscal year (the year ended December 31, 1998)
were $5,687,545, $3,189,269, $547,802, $49,936 and $5,037,000,
respectively. Rental and other income, property operating expenses,
mortgage interest and amortization recorded for the Property were
$3,173,754, $2,294,519, $404,205 and $35,818, respectively, for the nine
months ended September 30, 1999. Also, as a result of the sale of the
Property, there are no further assets and liabilities related to the
Property, which at September 30, 1999 consisted of land and building and
improvements (net of accumulated depreciation) of approximately $7,222,600;
interest, rents and other receivables, net of accumulated depreciation, of
approximately $53,000; prepaid expenses of approximately $46,000; escrow
deposits of approximately $693,000; deferred expenses of approximately
$64,000, accrued rents receivable of approximately $242,000; long-term debt
of approximately $7,359,000; current liabilities of approximately $642,000;
and security deposits of approximately $16,000.
(c) Exhibits
10.1 Purchase Agreement between North Hills Mall Associates,
North Hills, Ltd. and The Kest Children's Trust dated June 22, 1999, and
exhibits thereto.
10.2 First Amendment to Purchase Agreement between North Mills
Mall Associates and North Hills, Ltd. and The Kest Children's Trust dated
June 29, 1999.
10.3 Second Amendment to Purchase Agreement between North
Hills Mall Associates and North Hills, Ltd. and The Kest Children's Trust
dated July 30, 1999.
10.4 Third Amendment to Purchase Agreement between North Hills
Mall Associates and North Hills, Ltd. and The Kest Children's Trust dated
August 11, 1999.
10.5 Agreement and Fourth Amendment to Purchase Agreement and
Exhibit "A" Form of Indemnity Agreement between North Hills Mall Associates
and North Hills Creek Mall, L.P., The Kest Children's Trust, Burk Collins,
and Robert S. Manns, dated November 16, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - X
By: JMB Realty Corporation
Managing General Partner
By: GAILEN J. HULL
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Gailen J. Hull
Senior Vice President
Dated: December 3, 1999
EXHIBIT 10.1
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PURCHASE AGREEMENT
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(North Hills Mall; North Richland Hills, Texas)
THIS AGREEMENT is made and entered into as of the 22nd day of June,
1999, by and among NORTH HILLS MALL ASSOCIATES, an Illinois general
partnership ("Seller"), NORTH HILLS, LTD., a Texas limited partnership
("NHL"), and THE KEST CHILDREN'S TRUST (the "Kest Trust") or its assignee
in accordance with subparagraph 9G of this Agreement. NHL and the Kest
Trust are hereinafter individually and collectively called "Buyer".
R E C I T A L S
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A. Seller is the owner of that certain real property located in
the City of North Richland Hills, County of Tarrant, State of Texas,
consisting primarily of a shopping center sometimes known as "North Hills
Mall".
B. Buyer desires to purchase such shopping center property on the
terms and conditions hereinafter documented.
NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed as follows:
1. Purchase and Sale. Seller shall sell to Buyer, and Buyer shall
purchase from Seller, the land (the "Land") described in Exhibit "A"
attached hereto and made a part hereof, together with all improvements,
structures, supplies and fixtures located upon the Land (subject to the
rights and interest of tenants of the Property and their respective
creditors), those items of personal property (the "Personal Property")
described in Exhibit "B" attached hereto and made a part hereof, all right,
title and interest of Seller in and to the name "North Hills Mall", all
right, title and interest of Seller in and to all leases with tenants of
the Property ("Tenant Leases"), and, to the extent assignable without the
consent of third parties, all right, title and interest of Seller in and to
all contract rights, permits, guaranties, warranties, agreements, tenant
lists, advertising material and telephone exchange numbers held solely for
use in connection with the foregoing (hereinafter, collectively, the
"Property"), all upon the terms, covenants and conditions hereinafter set
forth.
2. Purchase Price. The purchase price (the "Purchase Price") for
the Property shall be the sum of $8,500,000.
3. Payment of Purchase Price. The Purchase Price shall be paid to
Seller by Buyer as follows:
A. Escrow Deposit. Concurrently herewith, Buyer shall deliver the
sum of Two Hundred Thousand Dollars ($200,000) (together with all interest
thereon, the "Escrow Deposit") to Chicago Title Insurance Company, 171
North Clark Street, 4th Floor, Chicago, Illinois 60601, Escrow No.
____________, Attention: Mr. Terry Hendrickson, (which company, in its
capacity as escrow holder hereunder, is called "Escrow Holder"). The
Escrow Deposit hereunder shall be made by Buyer to Escrow Holder pursuant
to wire transfer of immediately available federal funds and the amounts so
deposited shall be held by Escrow Holder as a deposit against the Purchase
Price in accordance with the terms and provisions of this Agreement. At
all times in which the Escrow Deposit is being held by the Escrow Holder,
the Escrow Deposit shall be invested by Escrow Holder in the following
investments ("Approved Investments"): (i) United States Treasury
obligations, (ii) United States Treasury-backed repurchase agreements
issued by a major national money center banking institution reasonably
acceptable to Seller and Buyer, or (iii) such other reasonable manner as
may be reasonably directed by Buyer. The Escrow Deposit shall be disposed
of by Escrow Holder only as provided in this Agreement.
B. Closing Payment. The Purchase Price, as adjusted by the
application of the Escrow Deposit (as a credit to Buyer) and by the
prorations and credits specified herein, shall be paid in cash on the
"Closing Date", as hereinafter defined (the amount to be paid under this
subparagraph B being herein called the "Closing Payment").
4. Conditions Precedent
A. Title Matters.
(1) Title Report. Seller shall order from "Title Company" (as
hereinafter defined) a preliminary title report (together with legible
copies of all underlying documents thereto) for delivery to Buyer within
three (3) business days after the "Effective Date" (as hereinafter
defined). Seller has delivered to Buyer a copy of the most current survey
of the Land in Seller's possession, and such may be updated by Buyer, at
Buyer's sole cost and expense, prior to the expiration of the "Title Review
Period" (as hereinafter defined) (the "Survey"). Buyer shall promptly
order a current title insurance commitment (the "Title Commitment") from
Chicago Title Insurance Company or such other nationally recognized title
company agreed upon by Buyer and Seller (which company, in its capacity as
title insurer hereunder, is herein called the "Title Company"). If Buyer
shall fail to deliver a "Title Objection Notice" (as hereinafter defined)
setting forth those title and survey matters to which Seller objects on or
before the date which is five (5) business days prior to the end of the
"Due Diligence Period", as hereinafter defined (the "Title Review Period"),
Buyer shall be deemed to have approved the status of title and survey
respecting the Property (including the exceptions to title shown on any
title commitment or any matters disclosed on any survey update obtained by
Buyer, but specifically excluding any additional title matters objected to
by Buyer pursuant to subparagraph 4A(2) of this Agreement).
(2) Additional Title Matters. Approval by Buyer of any additional
exceptions to title or survey matters first disclosed after the expiration
of the Title Review Period shall be a condition precedent to Buyer's
obligation to purchase the Property; provided, however, (i) such approval
shall not be unreasonably withheld and (ii) any survey objections (either
with respect to the survey itself or any title exceptions based thereon)
may only be made if Buyer shall have obtained an update of the Survey
during the Title Review Period. Unless Buyer gives a Title Objection
Notice setting forth any such additional exceptions to title or survey
matters to which Buyer disapproves (to the extent permitted hereunder) on
or before the sooner to occur of five (5) business days after receipt of
written notice thereof and the Closing Date, Buyer shall be deemed to have
approved said additional title exception matters.
(3) Title Objections. If Buyer shall disapprove any title or
survey matters which Buyer is permitted to disapprove hereunder, Buyer
shall give written notice thereof ("Title Objection Notice") to Seller
within the time periods provided for in subparagraphs 4A(1) or (2), as
applicable. Upon receipt by Seller of a Title Objection Notice given in a
timely manner, then Seller shall have until the sooner to occur of (1) five
(5) business days from receipt of such Title Objection Notice and (2) the
Closing Date, within which to notify Buyer as to each properly disapproved
matter either that (i) Seller elects not to cause such disapproved matter
to be removed as of the Closing Date (or otherwise take any action with
respect thereto), or (ii) Seller intends to either (a) use commercially
reasonable efforts to cause such disapproved matter to be removed on the
Closing Date, or (b) obtain a title endorsement (if available) insuring
over such disapproved matter; provided, however, Seller shall have no
liability if for any reason, after electing under (ii) above, such
additional disapproved matters are not removed or insured over as of the
Closing Date. Failure to deliver any written notification by Seller of its
<PAGE>
election within such period shall be deemed to be an election not to cause
any such additional disapproved matters to be removed. If Seller elects
not to cause any or all such additional disapproved matters to be removed
or insured over as aforesaid, Buyer shall have until the sooner to occur of
(1) five (5) business days from receipt of written notice thereof (or from
the date of Seller's deemed election as aforesaid) and (2) the Closing
Date, within which to notify Seller in writing either that (x) Buyer
revokes its disapproval and will proceed with the purchase of the Property,
subject to the satisfaction of any remaining conditions precedent to
Buyer's obligation to close the transaction which is the subject of this
Agreement, without any reduction in the Purchase Price and will take
subject to such matters, or (y) Buyer terminates this Agreement (and
thereupon the Escrow Deposit shall be delivered to Buyer). Failure to
deliver any written notification by Buyer of its election within such
period shall be deemed to be an election to terminate this Agreement.
Notwithstanding anything to the contrary contained herein, Seller shall be
obligated to cause the removal of any exceptions evidencing any mortgages,
deeds of trust or other loan documents securing any financing obtained or
assumed by Seller and to cause the removal (or to obtain title insurance
over) any tax or judgment liens against Seller and any mechanic's or
materialmen's liens against the Property for work performed by or on behalf
of Seller.
(4) Permitted Exceptions. All matters set forth on the Title
Commitment or the Survey which are not timely objected to by Buyer are
herein called the "Permitted Exceptions". The term "Permitted Exceptions"
shall additionally include any title matters objected to by Buyer, which
objections are either (i) subsequently waived by Buyer, or (ii) removed or
otherwise cured to Buyer's reasonable satisfaction. Buyer shall have the
option to waive the condition precedent set forth in this subparagraph
4A(4) by written notice to Seller. In the event of such waiver, such
condition shall be deemed satisfied.
(5) Exceptions to Title. Buyer shall be obligated to accept title
to the Property, subject to the following exceptions to title:
(a) Real estate taxes and assessments not yet due and payable;
(b) The printed "exclusions from coverage" which appear in the
standard T-1 form owner's policy of title insurance issued by Title Company
in the State of Texas;
(c) Such exceptions to title as may be approved by Buyer pursuant
to the provisions of subparagraph A(1) above, including the Permitted
Exceptions.
Conclusive evidence of the availability of such title shall be the
willingness of Title Company to issue to Buyer on the Closing Date an
owner's title insurance policy issued by the Title Company in the standard
T-1 form ("Owner's Policy"), in the face amount of the Purchase Price,
which policy shows (i) title to the Property to be vested of record in
Buyer, and (ii) the above exceptions to be the only exceptions to title.
B. Due Diligence Reviews. Buyer shall have until 5:00 p.m.
(Central time) on Thursday, July 15, 1999 (the "Due Diligence Period")
within which to perform and complete all of Buyer's due diligence
examinations, reviews and inspections of all matters pertaining to the
purchase of the Property, including all leases and service contracts, and
all physical, environmental and compliance matters and conditions
respecting the Property (other than title and survey matters which shall be
governed by the provisions of subparagraph 4A above). During the Due
Diligence Period, Seller shall provide Buyer with reasonable access to the
Property upon at least forty-eight (48) hours advance notice and shall also
<PAGE>
make available to Buyer such leases, contracts and other agreements with
third parties which will remain in effect following the Closing Date, to
the extent the same are in Seller's possession. Buyer shall promptly
commence, and shall diligently and in good faith pursue, its due diligence
review hereunder. During the Due Diligence Period, Buyer and its agents
and consultants shall obtain and keep in effect commercial general
liability insurance naming Seller as an additional insured, with limits of
not less than $1,000,000.00 for property damage, bodily injury or death.
Prior to entering the Property, Buyer shall deliver to Seller certificates
of insurance evidencing such coverage, and further evidencing that such
coverage may only be terminated or modified upon not less than thirty (30)
days prior written notice to Seller. Buyer shall at all times conduct its
due diligence review, inspections and examinations in a manner so as to not
cause damage, loss, cost or expense to Seller or the Property and so as to
not interfere with or disturb any tenant at the Property, and Buyer will
indemnify, defend, and hold the Property and Seller, its constituent
partners and each of their officers, directors, employees, shareholders,
partners, members, affiliates and agents harmless from and against any such
damage, loss, cost or expense (the foregoing obligation surviving closing
or any earlier termination of this Agreement). Without limitation on the
foregoing, in no event shall Buyer (a) make any intrusive physical testing
(environmental, structural or otherwise) at the Property (such as soil
borings, water samplings or the like) without Seller's express written
consent (and shall in all events promptly restore the Property to its prior
condition and repair thereafter); (b) contact any tenant of the Property
without Seller's express written consent; and (c) contact any governmental
authority having jurisdiction over the Property without Seller's express
written consent (which consent as to governmental authorities shall not be
unreasonably withheld). Buyer agrees that any environmental reports
obtained by Buyer shall be kept in draft form until either Buyer has
delivered the Approval Notice (as defined below) or Seller has had the
opportunity to review and comment upon such report. Seller shall have the
right, at its option, to cause a representative of Seller to be present at
all inspections, reviews and examinations conducted hereunder. Buyer shall
promptly deliver to Seller true, accurate and complete copies of any
written environmental or structural reports relating to the Property
prepared for or on behalf of Buyer by any third party and in the event of
termination hereunder, shall return all documents and other materials
furnished by Seller hereunder. Buyer shall keep and cause to be kept all
information or data received or discovered in connection with any of the
inspections, reviews or examinations strictly confidential. If, on or
before the expiration of the Due Diligence Period, Buyer shall determine
that it intends to proceed with the acquisition of the Property, then Buyer
shall promptly notify Seller and Escrow Holder of such determination in
writing (such notice being herein called the "Approval Notice") and
thereafter, Buyer shall have no further right to terminate this Agreement
pursuant to this subparagraph 4B. If, however, on or before the expiration
of the Due Diligence Period, Buyer shall determine in its sole and absolute
discretion that it does not wish to acquire the Property, then Buyer shall
promptly notify Seller of such determination in writing (such notice being
herein called the "Termination Notice"), whereupon the Escrow Deposit (less
any title or escrow cancellation fees incurred in connection with this
Agreement) shall be returned to Buyer and except for those provisions
hereof which survive termination, this Agreement shall terminate. In the
event that, on or before the expiration of the Due Diligence Period, Buyer
shall fail to have delivered the Approval Notice to Seller, Buyer shall be
deemed to have elected not to proceed with the acquisition of the Property
and terminate this Agreement as set forth above. If the approval of
Buyer's investment (or any other) committee is required in order for Buyer
to proceed with and culminate the transaction contemplated by the parties
to this Agreement, Buyer shall obtain such approval or disapproval prior to
the expiration of the Due Diligence Period. Notwithstanding anything in
this subparagraph 4B to the contrary, The Kest Children's Trust, Michael
Kest as trustee, shall have the absolute right prior to the expiration of
the Due Diligence Period to terminate this Agreement (subject to the
provisions hereof which expressly survive termination) by deliver of a
Termination Notice to Seller pursuant to the terms of this Agreement.
<PAGE>
C. Performance by Seller. The performance and observance, in all
material respects, by Seller of all covenants and agreements of this
Agreement to be performed or observed by Seller prior to or on the Closing
Date shall be a condition precedent to Buyer's obligation to purchase the
Property. In addition, in the event that the "Seller Closing Certificate"
(as hereinafter defined) shall disclose any material adverse changes in the
representations and warranties of Seller contained in subparagraph 7B below
which are not otherwise permitted or contemplated by the terms of this
Agreement, then Buyer shall have the right to terminate this Agreement.
Buyer shall have the option to waive the condition precedent set forth in
this subparagraph 4C by written notice to Seller. In the event of such
waiver, such condition shall be deemed satisfied.
D. Performance by Buyer. The performance and observance, in all
material respects, by Buyer of all covenants and agreements of this
Agreement to be performed or observed by it prior to or on the Closing Date
shall be a condition precedent to Seller's obligation to sell the Property.
In addition, in the event that the "Buyer Closing Certificate" (as
hereinafter defined) shall disclose any material adverse changes in the
representations and warranties of Buyer contained in subparagraph 7C below
which are not permitted or contemplated by the terms of this Agreement,
then Seller shall have the right to terminate this Agreement. Seller shall
have the option to waive the condition precedent set forth in this
subparagraph 4D by written notice to Buyer. In the event of such waiver,
such condition shall be deemed satisfied.
E. Tenant Estoppel Certificates. Receipt of estoppel certificates
dated not more than 60 days prior to the Closing Date, or not more than 90
days prior to the Closing Date if the same is extended pursuant to
Paragraph 5 of this Agreement, from a sufficient number those certain
tenants in the mall shop premises at the Property having lease terms equal
to or in excess of one year so that estoppel certificates from such tenants
shall be received with respect to not less than 80% of the gross leased
area, in the aggregate (which shall include estoppel certificates from all
such tenants individually occupying over 10,000 square feet of space in the
Property), covered by such leases respecting the mall shop premises at the
Property in effect as of the date hereof, is a condition precedent to
Buyer's obligation to purchase the Property hereunder. Estoppel
certificate from each such tenant shall be substantially in the form of
Exhibit "E-1" attached hereto and made a part hereof; provided, however,
with respect to the any major national tenant, the applicable estoppel
certificate may be in the standard form otherwise required by such entity
or, if applicable tenant lease prescribes the content or required form of
estoppel certificate, then such content or required form shall be deemed
acceptable. In addition, those provisions of the applicable estoppel
certificates respecting defaults, defenses, disputes, claims, offsets,
abatements, concessions and recaptures against rent or other charges may be
limited to the knowledge of the applicable tenant. Seller's shall be
obligated to utilize reasonable efforts to obtain such estoppel
certificates (such reasonable efforts obligation not including any
obligation to institute legal proceedings or to expend any monies therefor,
other than for minor administrative charges, whether imposed by tenants or
incurred by Seller or imposed on Seller pursuant to an applicable lease).
Buyer shall have the option to waive the condition precedent set forth
herein by notice to Seller (whereupon such condition will be deemed
satisfied). In the event that prior to the Closing Date such condition is
not satisfied (or waived as aforesaid), the obligations of Seller to sell,
and Buyer to purchase, the Property hereunder shall terminate.
Notwithstanding anything to the contrary in this Agreement, in the event
Seller is unable to obtain an estoppel certificate from any particular
tenant of the Property, Seller shall have the right (but not the
obligation) to deliver to Buyer on the Closing Date a certificate (the
"Seller Tenant Certificate") in the applicable form attached as Exhibit "E-
2" executed by Seller, certifying that the information set forth in the
estoppel certificate prepared for such tenant, to "Seller's knowledge" (as
<PAGE>
defined in subparagraph 7B), is correct in all material respects, and in
such event, Seller shall be deemed to have delivered an estoppel
certificate with respect to such tenant for purposes of satisfying the
condition under this subparagraph 4E, provided that Buyer shall not be
obligated to accept Seller Tenant Certificates covering, in the aggregate,
more than forty percent (40%) of the of the gross leased area of the
Property. Any Seller Tenant Certificate shall be subject to the
limitations set forth in subparagraph 7C and subparagraph 9B of this
Agreement. In addition, Seller shall be released from any liability with
respect to any Seller Tenant Certificate upon the delivery to Buyer of a
estoppel certificate from the tenant for which Seller has delivered such
Seller Tenant Certificate (but only to the extent such estoppel certificate
is consistent with such Seller Tenant Certificate).
F. REA Estoppel Certificates. Receipt of estoppel certificates
(the "REA Estoppels") dated not more than 60 days prior to the Closing
Date, or not more than 90 days prior to the Closing Date if the same is
extended pursuant to Paragraph 5 of this Agreement, from Mervyn's
("Mervyn's"), Stripling & Cox ("Stripling") and Foley's ("Foley's") with
respect to that certain Reciprocal Easement Agreement (the "REA") dated
July 11, 1978, as amended, is a condition precedent to Buyer's obligation
to purchase the Property hereunder. The estoppel certificate from
Mervyn's, Stripling and Foley's shall be substantially in the form of
Exhibit "E-3" attached hereto and made a part hereof. Seller's shall be
obligated to utilize reasonable efforts to obtain the REA Estoppels (such
reasonable efforts obligation not including any obligation to institute
legal proceedings or to expend any monies therefor). Buyer shall have the
option to waive the condition precedent set forth herein by notice to
Seller (whereupon such condition will be deemed satisfied). In the event
that prior to the Closing Date such condition is not satisfied (or waived
as aforesaid), the obligations of Seller to sell, and Buyer to purchase,
the Property hereunder shall terminate.
5. Closing Procedure. The closing ("Closing") of sale and
purchase herein provided shall be consummated through escrow ("Escrow")
with Escrow Holder or, at the election of both Seller and Buyer, through a
closing conference held at a site mutually agreeable to the parties. As
used herein, "Closing Date" means Monday, August 16, 1999, or such earlier
date as may be agreed upon by Buyer and Seller. Notwithstanding anything
to the contrary in this Agreement, Buyer shall have the right to extend the
Closing Date until Wednesday, September 15, 1999, by delivering an
additional NON-REFUNDABLE sum of Two Hundred Thousand Dollars ($200,000)
(the "Extension Deposit") to Escrow Holder on or before 11:00 AM (Central
Time) Thursday, August 12, 1999. Upon Seller's delivery of the "Deed" (as
hereinafter defined) to Escrow Holder and after Buyer has deposited the
Extension Deposit as set forth above, Escrow Holder shall immediately
release the Extension Deposit and the Escrow Deposit (collectively, the
"Deposited Funds") to Seller in accordance with wiring instructions to be
provided to Escrow Holder by Seller, without any requirement that Escrow
Holder first notify or obtain any approval or consent of Buyer. In
furtherance of the foregoing, in the event Seller so instructs Escrow
Holder to release the Deposited Funds, Escrow Holder agrees that it shall
not be permitted to, and shall not, follow any conflicting instructions
given by Buyer or any third party as to the disposition of the Deposited
Funds, but shall instead follow only the instructions of Seller in
connection therewith. Buyer agrees in such instance not to deliver any
conflicting instructions to Escrow Holder for any reason.
<PAGE>
A. Escrow. On or before 11:00 AM (Central time) on the Closing
Date, the parties shall deliver to Escrow Holder the following: (1) by
Seller, a duly executed and acknowledged original special warranty deed
("Deed") in the form of Exhibit "F" attached hereto and made a part hereof,
subject to all matters of record other than those matters created by or
through Seller which are not Permitted Exceptions, and (2) by Buyer, the
Closing Payment in immediately available federal funds. Such deliveries
and the "Additional Deliveries" listed below shall be made through Escrow
pursuant to escrow instructions ("Escrow Instructions") to be executed
among Buyer, Seller and Escrow Holder in form reasonably acceptable to such
parties in order to effectuate the intent hereof. The conditions to the
closing of such escrow shall include the Escrow Holder's receipt of the
Deed, the Closing Payment and a notice from each of Buyer and Seller
authorizing Escrow Holder to close the transactions as contemplated herein
(each of Buyer and Seller being obligated to deliver such authorization
notice as soon as it is reasonably satisfied that the other party is in a
position to deliver the items to be delivered by such other party under
subparagraph 5B below).
B. Delivery to Parties. Upon the satisfaction of the conditions
set forth in the Escrow Instructions, then (x) the Deed shall be delivered
to Buyer by Escrow Holder's depositing the same for recordation, (y) the
Closing Payment (and the Escrow Deposit) shall be delivered by Escrow
Holder to Seller and (z) the following items shall be delivered:
(1) Seller - Additional Deliveries. Seller shall deliver the
following (together with the Additional Deliveries set forth in
subparagraph 5B(3) below, the "Additional Deliveries") to Escrow to be
delivered to Buyer upon the Closing:
(a) A duly executed and acknowledged bill of sale, assignment and
assumption agreement ("Assignment and Assumption Agreement") in the form of
Exhibit "G" attached hereto and made a part hereof;
(b) A certificate of Seller ("Seller Closing Certificate") updating
the representations and warranties contained in subparagraph 7B hereof to
the Closing Date (and including an updated list of leases) and noting any
changes thereto;
(c) Duly executed and acknowledged certificates regarding the "non-
foreign" status of Seller;
(d) A duly executed form notice to tenant of the Property ("Notice
to Tenant") in the form of Exhibit "D" attached hereto and made a part
hereof;
(e) A duly executed copy of the closing statement prepared by
Escrow Holder ("Closing Statement") reasonably acceptable to Seller;
(f) Evidence reasonably satisfactory to Buyer and Title Company
respecting the due organization of Seller and the due authorization and
execution of this Agreement and the documents required to be delivered
hereunder; and
(g) Such additional documents as may be reasonably required by
Buyer and Title Company in order to consummate the transactions hereunder
(provided the same do not materially increase the costs to, or liability or
obligations of, Seller in a manner not otherwise provided for herein).
(2) Seller - Property Deliveries. To the extent in Seller's or
Seller's property manager's possession and control, and to the extent not
previously delivered to Buyer, Seller shall deliver to Buyer the following
at the Property (through delivery of ownership and possession of the
Property to Buyer) upon the Closing:
<PAGE>
(a) original, fully executed counterpart copies of all tenant
leases and Service Agreements directly relating to the Property;
(b) the original certificate or certificates of occupancy and fire
underwriter certificates for the Property and the originals of the other
certificates, licenses and permits (including all amendments,
modifications, supplements and extensions thereof), and variances issued by
any municipal, state or federal agency or authority relating to the
ownership, use, occupancy, operation or maintenance of the Property;
(c) copies of all guaranties or warranties then in effect and
directly relating to the Property;
(d) to the extent not prorated pursuant to subparagraph 5D of this
Agreement, all unapplied tenant security deposits and any prepaid rents and
other sums held by Seller as landlord under the leases on the Property;
(e) all building plans, specification and drawings maintained by or
on behalf of Seller for the improvements on the Property;
(f) a complete set of keys for the Property; and
(g) copies of all engineering reports, surveys, soil tests and
environmental reports directly concerning the Property.
(3) Buyer - Additional Deliveries. Buyer shall deliver the
following (together with the Additional Deliveries set forth in
subparagraph 5B(1) above, the "Additional Deliveries") to Escrow to be
delivered to Seller upon the Closing:
(a) A duly executed and acknowledged Assignment and Assumption
Agreement;
(b) A certificate of Buyer ("Buyer Closing Certificate") updating
the representations and warranties contained in subparagraph 7C hereof to
the Closing Date and noting any changes thereto;
(c) A duly executed Notice to Tenant (which shall be collated by
Escrow Holder with the Seller executed counterpart of such notice and
delivered, in its fully executed form, to Buyer upon the Closing, and Buyer
represents and warrants to Seller that a copy of the Notice to Tenant shall
be either (i) hand delivered or (ii) delivered via certified mail to each
tenant of the Property within two (2) business days following the Closing);
(d) A duly executed copy of the Closing Statement reasonably
acceptable to Buyer;
(e) Evidence reasonably satisfactory to Seller and Title Company
respecting the due organization of Buyer and the due authorization and
execution of this Agreement and the documents required to be delivered
hereunder; and
(f) Such additional documents as may be reasonably required by
Seller and Title Company in order to consummate the transactions hereunder
(provided the same do not materially increase the costs to, or liability or
obligations of, Buyer in a manner not otherwise provided for herein).
C. Closing Costs. Buyer shall pay (i) all costs and expenses,
including premiums and survey costs, of any title work or coverage beyond
the premium attributable to the standard coverage portion of the Owner's
Policy, including any extended coverage and any endorsements (including
survey endorsements) required by Buyer, if any, to supplement or modify the
Owner's Policy, (ii) the cost of any updates to the Survey, (iii) one half
of the escrow closing costs of the Title Company, (iv) all transfer and
recordation taxes, if any, payable in connection with the Deed, and (v) one
<PAGE>
half of the sales tax in connection with the sale of the Personal Property.
Buyer shall pay all fees, costs or expenses in connection with Buyer's due
diligence reviews hereunder. Seller shall pay (a) the premium attributable
to the standard coverage portion of the Owner's Policy (b) one half of the
escrow closing costs of the Title Company, and (c) one half of the sales
tax in connection with the sale of the Personal Property. Seller and Buyer
shall each be responsible for the fees of its own legal counsel and shall
pay their respective shares of prorations as hereinafter provided.
D. Prorations.
(1) Items to be Prorated. The following shall be prorated between
Seller and Buyer as of the Closing Date:
(a) All real estate taxes and assessments on the Property payable
in respect to the current fiscal year of the applicable taxing authority in
which the Closing Date occurs (the "Current Tax Year"). Such real estate
taxes and assessments shall be prorated on a per diem basis based upon the
number of days in the Current Tax Year prior to the Closing Date (which
shall be allocated to Seller) and the number of days in the Current Tax
Year on and after the Closing Date (which shall be allocated to Buyer).
Upon the Closing Date and subject to the adjustment provided for above,
Buyer shall be responsible for real estate taxes and assessments on the
Property payable in respect to the Current Tax Year and all periods after
the Current Tax Year. However, in no event shall Seller be charged with or
be responsible for any increase in the taxes or assessments on the Property
resulting from the sale of the Property or from any improvements made or
leases entered into at any time or for any reason. In the event that any
assessments on the Property are payable in installments, then the
installment for the Current Tax Year shall be prorated in the manner set
forth above (with Buyer assuming the obligation to pay any installments due
after the Closing Date). With respect to the Current Tax Year and all
prior periods, Seller hereby reserves the right to institute or continue
any proceeding or proceedings for the reduction of the assessed valuation
of the Property, and, in its sole discretion, to settle the same. Seller
shall have sole authority to control the progress of, and to make all
decisions with respect to, such proceedings. All net tax refunds and
credits attributable to any period prior to the Current Tax Year shall
belong to and be the property of Seller. All net tax refunds and credits
attributable to any period subsequent to the Current Tax Year shall belong
to and be the property of Buyer. All net tax refunds and credits
attributable to the Current Tax Year shall be apportioned in the same
manner as provided above for taxes and assessments for such Current Tax
Year, after deducting all expenses, including attorneys' and consultants'
fees and costs and disbursements, incurred in obtaining such refund, and if
applicable, all amounts payable in connection therewith to tenants pursuant
to Tenant Leases. Buyer agrees to cooperate with Seller in connection with
the prosecution of any such proceedings and to take all steps, whether
before or after the Closing Date, as may be necessary to carry out the
intention of this subparagraph, including the delivery to Seller, upon
demand, of any relevant books and records, including receipted tax bills
and cancelled checks used in payment of such taxes, the execution of any
and all consent or other documents, and the undertaking of any acts
necessary for the collection of such refund by Seller. Buyer agrees that,
as a condition to the transfer of the Property by Buyer, Buyer will cause
any transferee to assume the obligations set forth herein.
(b) All rentals and other tenant charges and reimbursements
received in respect to the month in which the Closing Date occurs (the
"Current Month"). Such rentals and other tenant charges and "Additional
Rents" (as defined below) for the Current Month which have been received as
of the Closing Date shall be prorated on a per diem basis based upon the
number of days in the Current Month prior to the Closing Date (which shall
be allocated to Seller) and the number of days in the Current Month on and
<PAGE>
after the Closing Date (which shall be allocated to Buyer). In addition,
Seller shall be credited on the Closing Date with its share of (i) rents
and other tenant charges and Additional Rents for the Current Month which
have not been received as of the Closing Date and (ii) any "percentage-in-
lieu" rent for the month of July (estimated to be $25,000) which has not
been received as of the Closing Date (not customarily paid until the
following month). All rentals and other tenant charges and Additional
Rents received by Buyer from a tenant after the Closing Date shall first be
applied to the most recently accrued obligation of such tenant. After
application as set forth above, Buyer shall promptly remit to Seller that
portion of rentals and other tenant charges and Additional Rents received
after the Closing Date attributable to periods prior to the Current Month.
Seller hereby reserves its right to institute an action against any tenant
for delinquent rentals and other tenant charges and Additional Rents
attributable to periods prior to the Current Month, and Buyer shall
cooperate in such proceedings at no cost or expense to Buyer. Tenants of
the Property may be obligated to pay, as additional rent, certain
percentage rent, escalations in base rent and pass-throughs of operating
and similar expenses pursuant to the terms of the Tenant Leases
(collectively, "Additional Rents").
(c) All operating expenses (including all charges under all
contracts and agreements assumed by Buyer under the Assignment and
Assumption Agreement). As to each service provider, operating expenses
payable or paid to such service provider in respect to the billing period
of such service provider in which the Closing Date occurs (the "Current
Billing Period"), shall be prorated on a per diem basis based upon the
number of days in the Current Billing Period prior to the Closing Date
(which shall be allocated to Seller) and the number of days in the Current
Billing Period on and after the Closing Date (which shall be allocated to
Buyer), and assuming that all charges are incurred uniformly during the
Current Billing Period. If actual bills for the Current Billing Period are
unavailable as of the Closing Date, then such proration shall be made on an
estimated basis based upon the most recently issued bills.
(2) Security Deposits; Prepaid Rents. Prepaid rentals and other
tenant charges and Additional Rents for periods after the Current Month,
and the current balance of the security deposits (including any portion
thereof which may be designated as prepaid rent) under Tenant Leases, if
and to the extent that such deposits are in Seller's actual possession and
have not been otherwise applied by Seller to any obligations of any tenants
under the Tenant Leases, shall be credited against the Purchase Price, and
upon the closing of the transaction contemplated hereby, Buyer shall assume
full responsibility for all security deposits to be refunded to the tenants
under the Tenant Leases (to the extent the same are required to be refunded
by the terms of such Tenant Leases or applicable law, whether or not Buyer
received credit for the same pursuant to this subparagraph). Seller shall
not apply or take for its own account any security deposit of any tenants
under the Tenant Leases unless such application or taking is authorized by
the terms of such Tenant Lease.
(3) Calculation. The prorations and payments shall be made on the
basis of a written statement submitted by Title Company to Buyer and Seller
prior to the Closing Date and approved by Buyer and Seller, provided that
real estate taxes and assessments on the Property payable in respect to the
current fiscal year shall be deemed to be 100% of the 1998 tax year amount.
Any item which cannot be finally prorated because of the unavailability of
information shall be tentatively prorated on the basis of the best data
then available and re-prorated when the information is available.
<PAGE>
(4) Items Not Prorated. Seller and Buyer agree that (a) none of
the insurance policies relating to the Property will be assigned to Buyer
and Buyer shall responsible for arranging for its own insurance as of the
Closing Date; (b) utilities, including telephone, electricity, water and
gas, shall be read on the Closing Date and Buyer shall be responsible for
all the necessary actions needed to arrange for utilities to the name of
Buyer on the Closing Date, including the posting of any required deposits
(it being understood that Seller shall be entitled to recover and retain
from the providers of such utilities (i) any utility deposits which it or
its predecessors have made prior to the Closing Date, and (ii) any refunds
or overpayments to the extent applicable to the period prior to the Closing
Date); (c) no employee of Seller performing services at or related to the
Property shall become the employee of Buyer; and (d) on the Closing Date,
it is contemplated that the Property will not be subject to any financing
obtained by Seller or its predecessors. Accordingly, there will be no
prorations for insurance, utilities, payroll or debt service. In the event
a meter reading is unavailable for any particular utility, such utility
shall be prorated in the manner provided in subparagraph 5D(1)(c) above.
(5) Indemnification. Buyer shall indemnify, protect, defend and
hold Seller harmless from and against any obligation, liability, claim
(including any claim for damage to property or injury to or death of any
persons), lien or encumbrance, loss, damage, cost or expense, including
attorney's fees, whether or not legal proceedings are instituted
(individually, a "Claim"), in any way arising from the matters for which
Buyer receives a credit or otherwise assumes responsibility pursuant to
this Paragraph 5D or the Assignment and Assumption.
(6) Survival. This Paragraph 5D shall survive the Closing Date and
delivery and recordation of the Deed. Notwithstanding the foregoing, any
re-proration made pursuant to subparagraph 5D(3) above shall be made, if at
all, on or before November 15, 1999.
6. Condemnation or Destruction of Property. In the event that,
after the date hereof but prior to the Closing Date, either any portion of
the Property is taken pursuant to eminent domain proceedings or any of the
improvements on the Property are damaged or destroyed by any casualty,
Seller shall have no obligation to repair or replace any such damage or
destruction. Seller shall, upon consummation of the transaction herein
provided, assign to Buyer all claims of Seller respecting any condemnation
or casualty insurance coverage, as applicable, and all condemnation
proceeds or proceeds from any such casualty insurance received by Seller on
account of any casualty (the damage from which shall not have been repaired
by Seller prior to the Closing Date), as applicable, and Seller shall pay
to Buyer any unpaid deductible amounts payable by Seller pursuant to such
insurance coverage assigned to Buyer. Notwithstanding anything to the
contrary herein, Seller shall retain any proceeds received from (and the
right to receive any proceeds of) rental income insurance or a temporary
taking award that are attributable to a period prior to the Closing Date.
In the event the condemnation award or the cost of repair of damage to the
Property on account of a casualty, as applicable, shall exceed $500,000,
Buyer may, at its option, terminate this Agreement by notice to Seller,
given on or before the Closing Date (whereupon the Escrow Deposit shall be
returned to Buyer and, except for those provisions hereof which survive
termination, this Agreement shall terminate).
7. Representations, Warranties and Covenants.
A. General Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH IN
SUBPARAGRAPHS 7B AND 9A BELOW, THE SALE OF THE PROPERTY HEREUNDER IS AND
WILL BE MADE ON AN "AS IS" BASIS, WITHOUT REPRESENTATIONS AND WARRANTIES OF
ANY KIND OR NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING, BUT NOT
LIMITED TO, ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE
PROPERTY, THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING, BUT NOT
LIMITED TO, THE CONDITION OF THE SOIL OR THE IMPROVEMENTS), THE
ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING, BUT NOT LIMITED TO, THE
<PAGE>
PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR RESPECTING THE PROPERTY),
THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS
(INCLUDING, BUT NOT LIMITED TO, ZONING AND BUILDING CODES OR THE STATUS OF
DEVELOPMENT OR USE RIGHTS RESPECTING THE PROPERTY), THE FINANCIAL CONDITION
OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY
INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS OR CLAIMS ON,
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF. Buyer
acknowledges that, during the Due Diligence Period, Buyer will examine,
review and inspect all matters which in Buyer's judgment bear upon the
Property and its value and suitability for Buyer's purposes. Except as to
matters specifically set forth in subparagraph 7A(2) below, Buyer will
acquire the Property solely on the basis of its own physical and financial
examinations, reviews and inspections and the title insurance protection
afforded by the Owner's Policy. WITHOUT LIMITATION THEREON, BUYER HEREBY
WAIVES AND DISCLAIMS (1) ANY WARRANTY, EXPRESS, IMPLIED OR ARISING BY
OPERATION OF LAW, INCLUDING ANY WARRANTY OF HABITABILITY, MERCHANTABILITY,
SUITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE AND (2) ANY AND ALL
RIGHTS OF CONTRIBUTION OR OTHER RIGHTS OR REMEDIES AGAINST SELLER UNDER THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF
1980 (AS AMENDED) OR ANY OTHER APPLICABLE ENVIRONMENTAL LAWS, RULES OR
REGULATIONS, WHETHER FEDERAL, STATE OR LOCAL.
B. Limited Representations and Warranties of Seller. Seller
hereby represents and warrants that to Seller's knowledge and except as set
forth in Exhibit "H" attached hereto and made a part hereof:
(1) List of Leases. Attached as Exhibit "I" and made a part hereof
is a true, complete and accurate list, as of the date thereof, of all
tenant leases respecting the Property.
(2) Litigation. Except as set forth in Exhibit "C" attached hereto
and made a part hereof, there is no pending action, litigation,
condemnation or other proceeding (and Seller has received no written notice
of threatened actions) against the Property or against Seller with respect
to the Property.
(3) Service Agreements. Other than those which are cancelable on
not more than 30 days' notice without premium or penalty, Seller has not
entered into any service agreements or contracts ("Service Agreements") or
other agreements (other than as set forth in this Agreement) relating to
the Property which will be in force on the Closing Date or any time
thereafter, except as described in Exhibit "J" attached hereto.
(4) Due Authority. This Agreement and all agreements, instruments
and documents herein provided to be executed or to be caused to be executed
by Seller are and on the Closing Date will be duly authorized, executed and
delivered by and are binding upon Seller. Seller is a general partnership,
duly organized and validly existing under the laws of the State of
Illinois, and is duly authorized and qualified to do all things required of
it under this Agreement. Seller has the capacity and authority to enter
into this Agreement and consummate the transactions herein provided.
(5) Environmental Matters. The environmental reports described in
Exhibit "K" attached hereto and made a part hereof (collectively, the
"Environmental Reports") constitute all third party environmental reports
concerning the Property in Seller's possession or control.
For the purposes of this subparagraph 7B, "Seller's knowledge" shall mean
only the present actual knowledge (without duty of investigation or
inquiry) of Tom Bennett, Vice President of JMB Realty Corporation and
partnership coordinator overseeing the investment of Seller in the
Property.
<PAGE>
C. Survival. Any cause of action of a party for a breach of the
foregoing representations and warranties shall survive until November 30,
1999 (the "Survival Period"), at which time such representations and
warranties (and any cause of action resulting from a breach thereof not
then in litigation) shall terminate. Notwithstanding the foregoing, if
Buyer shall have actual knowledge as of the Closing Date that any of the
representations or warranties of Seller contained herein are false or
inaccurate or that Seller is in breach or default of any of its obligations
under this Agreement, and Buyer nonetheless closes the transactions
hereunder and acquires the Property, then Seller shall have no liability or
obligation respecting such false or inaccurate representations or
warranties or other breach or default (and any cause of action resulting
therefrom shall terminate upon such closing hereunder).
D. Interim Covenants of Seller. Until the Closing Date or the
sooner termination of this Agreement:
(1) Seller shall maintain the Property in the same manner as prior
hereto (including the maintenance of any existing insurance policies)
pursuant to its normal course of business (such maintenance obligations not
including extraordinary capital expenditures), subject to reasonable wear
and tear and further subject to destruction by casualty or other events
beyond the control of Seller.
(2) Seller shall not enter into any additional service contracts or
other similar agreements without the prior consent of Buyer, except those
deemed reasonably necessary by Seller which are cancelable on 30 days'
notice without premium or penalty.
(3) Prior to the expiration of the Due Diligence Period, Seller
shall continue to offer the Property for lease in the same manner as prior
hereto pursuant to its normal course of business and shall notify Buyer of
all leases entered into from and after the date hereof. Upon the
expiration of the Due Diligence Period and until the Closing or the sooner
termination of this Agreement (and provided that Buyer has timely delivered
the Approval Notice to Seller), Seller shall not enter into any new leases
or modifications of existing leases without the prior consent of Buyer
(which consent may not be unreasonably withheld or materially delayed).
7.5. TEXAS WAIVERS. WITHOUT LIMITATION ON ANY OTHER LIMITATION OF
SELLER'S LIABILITY HEREUNDER, IT IS THE INTENT OF SELLER AND BUYER TO WAIVE
ALL OF THE PROVISIONS (OTHER THAN SECTION 17.555) OF THE TEXAS DECEPTIVE
TRADE PRACTICES -- CONSUMER PROTECTION ACT, SUBCHAPTER E OF CHAPTER 17 OF
THE TEXAS BUSINESS AND COMMERCE CODE (THE "DTPA") AS SUCH PROVISIONS ARE OR
MAY BE APPLICABLE TO THIS AGREEMENT AND THE TRANSACTION EVIDENCED HEREBY.
ACCORDINGLY, SELLER AND BUYER HEREBY REPRESENT AND AGREE AS FOLLOWS:
(1) BUYER REPRESENTS TO SELLER THAT, WITH RESPECT TO THIS AGREEMENT,
BUYER IS A BUSINESS CONSUMER AS THAT TERM IS USED IN THE DTPA (I.E., BUYER
IS AN INDIVIDUAL, PARTNERSHIP OR CORPORATION WHO SEEKS OR ACQUIRES BY
PURCHASE OR LEASE, ANY GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS USE),
THAT BUYER HAS ASSETS OF $5 MILLION OR MORE ACCORDING TO THE MOST RECENT
FINANCIAL STATEMENT OF BUYER PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, THAT BUYER HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL
AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF A
TRANSACTION AND THAT BUYER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTION EVIDENCED
HEREBY.
(2) SELLER AND BUYER HEREBY AGREE, FOR THEMSELVES AND THEIR RESPECTIVE
HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, THAT ALL OF THE
PROVISIONS OF THE DTPA (EXCEPT FOR SECTION 17.555 THEREOF) WHICH ARE OR MAY
BE APPLICABLE TO THIS AGREEMENT AND THE TRANSACTION EVIDENCED HEREBY ARE
HEREBY WAIVED, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, ALL RIGHTS AND
REMEDIES RESULTING FROM OR ARISING OUT OF ANY AND ALL ACTS OR PRACTICES OF
<PAGE>
THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTION
EVIDENCED HEREBY, REGARDLESS OF WHETHER SUCH ACTS OR PRACTICES OCCURRED
BEFORE OR AFTER THE EXECUTION OF THIS AGREEMENT. THE PROVISIONS OF THIS
PARAGRAPH 7.5 SHALL SURVIVE THE CLOSING OR ANY TERMINATION OF THIS
AGREEMENT.
_______ ________
Buyer's Initials
8. DISPOSITION OF DEPOSIT. IF THE TRANSACTION HEREIN PROVIDED
SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER THIS AGREEMENT OR
THE FAILURE OF SATISFACTION OF THE CONDITIONS DESCRIBED IN PARAGRAPH 4
HEREOF OR THE TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH PARAGRAPH 6
HEREOF, THEN THE ESCROW DEPOSIT SHALL BE RETURNED TO BUYER, AND NEITHER
PARTY SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER;
PROVIDED, HOWEVER, IF THE TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE SOLELY
BY REASON OF SELLER'S DEFAULT, AND BUYER IS NOT IN DEFAULT UNDER THIS
AGREEMENT AND SHALL BE READY, WILLING AND ABLE TO CLOSE, THEN BUYER SHALL
BE ENTITLED TO SPECIFICALLY ENFORCE THIS AGREEMENT (BUT NO OTHER ACTION,
FOR DAMAGES OR OTHERWISE, SHALL BE PERMITTED). IN THE EVENT THE
TRANSACTION HEREIN PROVIDED SHALL NOT CLOSE BY REASON OF BUYER'S DEFAULT
UNDER THIS AGREEMENT, THEN THE ESCROW DEPOSIT SHALL BE DELIVERED TO SELLER
AS FULL COMPENSATION AND LIQUIDATED DAMAGES UNDER AND IN CONNECTION WITH
THIS AGREEMENT. IN THE EVENT THE TRANSACTION HEREIN PROVIDED SHALL CLOSE,
THE ESCROW DEPOSIT SHALL BE APPLIED AS A PARTIAL PAYMENT OF THE PURCHASE
PRICE. IN CONNECTION WITH THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER
WILL INCUR EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT AND THAT THE PROPERTY WILL BE REMOVED FROM THE MARKET; FURTHER,
THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN THE EXTENT OF
DETRIMENT TO SELLER CAUSED BY THE BREACH BY BUYER UNDER THIS AGREEMENT AND
THE FAILURE OF THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT OR THE AMOUNT OF COMPENSATION SELLER SHOULD RECEIVE AS A RESULT
OF BUYER'S BREACH OR DEFAULT. IN THE EVENT THE SALE OF THE PROPERTY SHALL
NOT BE CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, THEN THE RETENTION OF THE
ESCROW DEPOSIT SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS
AGREEMENT BY REASON OF SUCH DEFAULT, SUBJECT TO THE PROVISIONS OF
SUBPARAGRAPH 9I HEREOF AND SELLER'S RIGHT TO PURSUE AND RECOVER ON A CLAIM
WITH RESPECT TO ANY OF ITS RIGHTS UNDER SUBPARAGRAPH 4B HEREOF.
_____________ _______ ________
Seller's Initials Buyer's Initials
9. Miscellaneous.
A. Brokers.
(1) Except as provided in subparagraph 9A(2) below, Seller
represents and warrants to Buyer, and Buyer represents and warrants to
Seller, that no broker or finder has been engaged by it, respectively, in
connection with any of the transactions contemplated by this Agreement or
to its knowledge is in any way connected with any of such transactions. In
the event of a claim for broker's or finder's fee or commissions in
connection herewith, then Seller shall indemnify and defend Buyer from the
same if it shall be based upon any statement or agreement alleged to have
been made by Seller, and Buyer shall indemnify and defend Seller from the
same if it shall be based upon any statement or agreement alleged to have
been made by Buyer. The indemnification obligations under this
subparagraph 9A(1) shall survive the closing of the transactions hereunder
or the earlier termination of this Agreement.
<PAGE>
(2) If and only if the sale contemplated herein closes, Seller
agrees to pay a brokerage commission to Hamptons International ("Broker")
pursuant to a separate written agreement with Broker.
B. Limitation of Liability.
(1) Notwithstanding anything to the contrary contained herein, if
the closing of the transactions hereunder shall have occurred (and Buyer
shall not have waived, relinquished or released any applicable rights in
further limitation), the aggregate liability of Seller arising pursuant to
or in connection with the representations, warranties, indemnifications,
covenants or other obligations (whether express or implied) of Seller under
this Agreement (or any document executed or delivered in connection
herewith) shall not exceed $250,000.
(2) In no event shall Seller have any liability pursuant to or in
connection with the representations, warranties, indemnifications,
covenants or other obligations (whether express or implied under this
Agreement or any document executed or delivered in connection therewith),
if any, unless and until such liabilities shall exceed $10,000 in the
aggregate; provided, however, nothing contained in the foregoing shall
limit Seller's liability for any proration amounts provided for in this
Agreement.
(3) No direct or indirect partner in or agent of Seller, nor any
partner, member, trustee, director, officer, employee, beneficiary,
shareholder, participant, representative, advisor or agent of any entity
that is or becomes a direct or indirect partner in Seller shall have any
personal liability, directly or indirectly, under or in connection with
this Agreement or any agreement made or entered into under or pursuant to
the provisions of this Agreement, or any amendment or amendments to any of
the foregoing made at any time or times, heretofore or hereafter, and Buyer
and its successors and assigns and, without limitation, all other persons
and entities, shall look solely to Seller's assets for the payment of any
claim or for any performance, and Buyer, on behalf of itself and its
successors and assigns, hereby waives any and all such personal liability.
Notwithstanding anything to the contrary contained in this Agreement,
neither the negative capital account of any direct or indirect partner in
Seller (or in any other direct or indirect partner of Seller), nor any
obligation of any direct or indirect partner in Seller (or in any other
direct or indirect partner of Seller) to restore a negative capital account
or to contribute capital to Seller (or to any other direct or indirect
partner of Seller), shall at any time be deemed to be the property or an
asset of Seller or any such other direct or indirect partner (and neither
Buyer nor any of its successors or assigns shall have any right to collect,
enforce or proceed against or with respect to any such negative capital
account of partner's obligation to restore or contribute).
C. Entire Agreement. This Agreement contains the entire agreement
between the parties respecting the matters herein set forth and supersedes
all prior agreements between the parties hereto respecting such matters.
This Agreement may not be modified or amended except by written agreement
signed by both parties.
D. Time of the Essence. Time is of the essence of this Agreement.
E. Interpretation. Paragraph headings shall not be used in
construing this Agreement. Each party acknowledges that such party and its
counsel, after negotiation and consultation, have reviewed and revised this
Agreement. As such, the terms of this Agreement shall be fairly construed
and the usual rule of construction, to the effect that any ambiguities
herein should be resolved against the drafting party, shall not be employed
in the interpretation of this Agreement or any amendments, modifications or
exhibits hereto or thereto.
<PAGE>
F. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Texas.
G. Successors and Assigns. Buyer may not assign or transfer its
rights or obligations under this Agreement without the prior written
consent of Seller (in which event such transferee shall assume in writing
all of the transferor's obligations hereunder, but such transferor shall
not be released from its obligations hereunder); provided, however, Buyer
may assign its interest in this Agreement to a limited partnership or
limited liability company in which Buyer or Buyer's principals is (are) the
managing general partner or managing member, as applicable, and has (have)
not less than a 51% interest in capital and profits in such entity. No
consent given by Seller to any transfer or assignment of Buyer's rights or
obligations hereunder shall be construed as a consent to any other transfer
or assignment of Buyer's rights or obligations hereunder. No transfer or
assignment in violation of the provisions hereof shall be valid or
enforceable. Subject to the foregoing, this Agreement and the terms and
provisions hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
H. Notices. Any notice which a party is required or may desire to
give the other shall be in writing and shall be sent by personal delivery
or by mail (either [i] by United States registered or certified mail,
return receipt requested, postage prepaid, or [ii] by Federal Express or
similar generally recognized overnight carrier regularly providing proof of
delivery), addressed as follows (subject to the right of a party to
designate a different address for itself by notice similarly given):
To Buyer:
North Hills, Ltd.
c/o Burk Collins & Co., Inc.
1848 Norwood Plaza, Suite 214
Hurst, Texas 76054
Attention: Mr. Burk Collins
FAX: (817) 268-2240
TEL: (817) 268-5498
And to:
The Kest Children's Trust
c/o RSM Investments, Inc.
9665 Wilshire Blvd., Suite 410
Beverly Hills, California 90212
FAX: (310) 271-9229
TEL: (310) 285-7400
To Seller:
North Hills Mall Associates
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Tom Bennett & Ms. Julia Stibolt
FAX: (312) 915-2502
TEL: (312) 915-2361 (Mr. Bennett)
TEL: (312) 915-2377 (Ms. Stibolt)
<PAGE>
With copy to:
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (WHJ/CSH)
FAX: (310) 201-8922
TEL: (310) 201-8900
And to:
Hamptons International
55 West Monroe
Suite 3200 West
Chicago, Illinois 60603
Attention: Ms. Anne Brettingen
FAX: (312) 899-0923
TEL: (312) 899-7720
Any notice so given by mail shall be deemed to have been given as of the
date of delivery (whether accepted or refused) established by U.S. Post
Office return receipt or the overnight carrier's proof of delivery, as the
case may be. Any such notice not so given shall be deemed given upon
receipt of the same by the party to whom the same is to be given. Notice
may be given by facsimile transmission and shall be deemed given upon
actual receipt of the same by the party to whom the same is to be given (as
evidenced by electronic confirmation thereof).
I. Legal Costs. The parties hereto agree that they shall pay
directly any and all legal costs which they have incurred on their own
behalf in the preparation of this Agreement, all deeds and other agreements
pertaining to this transaction and that such legal costs shall not be part
of the closing costs. In addition, if either Buyer or Seller brings any
suit or other proceeding with respect to the subject matter or the
enforcement of this Agreement, the prevailing party (as determined by the
court, agency or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded, shall be
entitled to recover reasonable attorneys' fees, expenses and costs of
investigation actually incurred. The foregoing includes, but is not
limited to, attorneys' fees, expenses and costs of investigation
(including, without limitation, those incurred in appellate proceedings),
costs incurred in establishing the right to indemnification, or in any
action or participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code
Sections 101 et seq.), or any successor statutes.
J. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.
THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION IS NOT INTENDED TO
NOR SHALL CONSTITUTE AN OFFER TO SELL, OR A RESERVATION OF, OR OPTION OR
PROPOSAL OF ANY KIND FOR THE PURCHASE OF THE PROPERTY. IN NO EVENT SHALL
ANY DRAFT OF THIS AGREEMENT CREATE ANY OBLIGATION OR LIABILITY, IT BEING
UNDERSTOOD THAT THIS AGREEMENT SHALL BE EFFECTIVE AND BINDING ONLY WHEN A
COUNTERPART HEREOF HAS BEEN EXECUTED AND DELIVERED BY EACH PARTY HERETO TO
ESCROW HOLDER. ESCROW HOLDER SHALL DATE THIS AGREEMENT WITH THE DATE ON
WHICH ESCROW HOLDER SHALL HAVE RECEIVED THIS AGREEMENT EXECUTED BY BOTH
BUYER AND SELLER (AND SUCH DATE SHALL BE THE "EFFECTIVE DATE" FOR PURPOSES
HEREOF).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By:
--------------------
Name:
--------------------
Title:
--------------------
BUYER:
NORTH HILLS, LTD.,
a Texas limited partnership
BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By:
--------------------
Name:
--------------------
Title:
--------------------
THE KEST CHILDREN'S TRUST
By:
---------------------
Michael Kest, Trustee
<PAGE>
ESCROW HOLDER'S ACKNOWLEDGEMENT
-------------------------------
The undersigned hereby executes this Agreement to evidence its
agreement to act as Escrow Holder in accordance with the terms of this
Agreement.
Effective Date: June ___, 1999
CHICAGO TITLE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
"Escrow Holder"
<PAGE>
EXHIBIT LIST
------------
"A" - Property Description
"B" - Personal Property
"C" - Pending Litigation
"D" - Notice to Tenant
"E-1" - Form of Estoppel Certificate
"E-2" - Form of Seller Tenant Certificate
"E-3" - Form of REA Estoppel Certificate
"F" - Form of Deed
"G" - Assignment and Assumption Agreement
"H" - Exceptions to Seller's Representations and
Warranties
"I" - List of Leases
"J" - Service Agreements
"K" Environmental Reports
<PAGE>
EXHIBIT "A"
PROPERTY DESCRIPTION
[Attach Title Company Legal Description]
<PAGE>
EXHIBIT "B"
PERSONAL PROPERTY
Tool box with tools: 2
[one 9-drawer rollaway & one 6-drawer top]
1/2 hp drill 1
7 1/4" circular saw 1
1/3 hip jigsaw 1
3" belt sander 1
Soldering gun 1
Multi Meter 1
Clamp on Ampmeter 1
Personnel Lift 1
5 Foot Ladder 1
8 Foot Ladder 1
10 Foot Ladder 2
2 Wheel Dolly 2
4 Wheel Cart 3
32 Foot Exterior Ladder 1
20 Foot Exterior Ladder 1
Tile Cutter 1
Bolt Cutters 2
Tray Wash Machine 1
Hand Drain Cleaning Machine 1
Tool Box for Small Drain Cleaning Machine 1
3/4 H.P. Air Compressor 1
Welding Torch Set 1
6 Foot Ladder 1
Sheetrock Dolly 1
Wheel Barrow 1
Grey Metal Utility Cabinet with Doors 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
Light Oak Wooden High Chairs - Patio 1
General Sewer Machine 1
Gasoline Utility Pump 1
3/8 Cordless drill 1
Gasoline Welder/Generator 1
Bench Grinder 1
Paint Shaker 1
4" Side Grinder 1
Wood and Metal benches - Used Outside 6
Yellow Caution Signs 3
Swivel Stools - Patio 12
Umbrella - Patio 9
Tables 36" x 36" - Patio 20
Tables 36" Round - Patio 17
Tables 60" Round - Patio 8
Tables 24" X 30" - Patio 84
Chairs - Patio 348
Trash Receptacles 28
Benches - w/back 28
Benches w/o back 10
Planters 26" Dia. 16" 10
Planters 36" Dia. 30
Planters 48" Dia 2
Hammer Drill 1
Sawzall 1
Sewer Machine K375 1
Brown Folding Chairs with Beige Seals 16
Stanchions 44
Stereo Cassette Deck 1
Wooden Easels 11
Black & White Microphone 1
Bruched Aluminum Condenser Microphone 1
Black & Silver Microphone Stands 2
Wooden Podium 1
6" Folding Tables 11
Portable TV-VCR Center 1
Control Unit
VCR
Monitor
35mm Camera Body 1
35-70 mm Lens 1
Automatic Flash 1
Portable Audio Center 1
Control Unit
Satellite Unit
Mixer
Tape Deck
Display Cases 6
Video Camera 1
AC Adapter 1
Video Cam Tripod 1
Monitor #1 1
Computer Hard Drive 1
Printer 1
Keyboard 1
Monitor #2 1
Keyboard 1
Computer Hard Drive 1
Printer 1
Silver Signholders 11
Silver Shopping Bag Holders 2
Gift Certificate Booth 1
Gift Certificate File Cabinet 1
Black Ropes 31
3mm Camera 1
Acrylic Entry Form Box 1
Metal Leaflet Racks 3
Black Leather Handcuff Cases 16
Blue & Gray Wheel Chair 2
Black Metal Flashlight 6
Black Leather Belt Velcro 20
Silver Smith & Wesson Handcuffs 5
Handcuffs 5
Alert Weather Radio 1
Black Land Camera With Strap 1
Black Leather Belt Velcro 12
Tan Metal employee Lockers 2
Supply Locker - Tan 1
Green & White Wheel Chair 1
Dry Board 1
Speaker Microphone 6
Audio Hailer - Megaphone 1
M-100 Control Station 1
Mobile Unit Radio 1
R-100 repeater 1
Telephone Interconnect w/ Speed Dial 1
Black Land Camera w/strap 1
Alpha Safety Hard Hats (Marked A-F) 2
Binoculars 1
Battery Tester 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
SP-50 1
SP-50 1
SP-50 1
SP-50 1
Binoculars 2
Light Bar 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Radius P-110 1
Brown 2-Drawer File Cabinet 1
72" x 38" Wooden Credenza 1
72" x 38" Wooden Credenza 1
Round Wood & Brass Table Lamp with Shade 1
96" x 42" Wooden Conference Table/Glass Top 1
Wooden 4 Drawer Office Module 1
52" x 36" Brown 4' Drawer File Cabinet 1
Wooden Desk 60" x 30" 1
Brown 2-Drawer File Cabinet 1
30" x 48" Table with Hutch 1
52" x 36" Beige 4-Drawer File Cabinet 1
18" x 52" Beige 4-Drawer File Cabinet 1
Sunrise Print 1
4 drawer file cabinet - brown 1
Sunrise Print 1
24" Square Wooden End Table 1
Wood & Metal Roll Away Drop-leaf table 1
64" Long wooden Parsons Table 1
Wooden Credenza 1
52" x 36" Brown 4-Drawer File Cabinet 2
30" Square Wooden End Table 1
20" x 27" 2-Drawer Fire Proof Cabinet 1
72" x 36" Wooden Desk 1
60" x 30" Wood & Metal Desk 1
72" x 36" Wooden Desk 1
17" x 77" Wooden Credenza 1
L-Shaped Wooden Desk 1
72" x 36" Wooden Desk 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric Swivel Chair 1
Gray Fabric Swivel Chair w/Arms 1
IBM Wheelwriter 5 1
IBM Wheelwriter System Writer 1
Gray Fabric & Wood Chair 1
Gray Fabric & Wood Chair 1
Calculator 1
Security Director's Desk 1
IBM Wheelwriter System Writer 1
Gray Fabric Swivel Chair w/Arms 1
Cash Drawer 1
Gift Certificate Machine 1
Gray Fabric & Wood Chair 1
Gray Fabric Swivel Chair w/ Arms 1
Black Swivel Armless Chair 1
Microwave 1
Gray Fabric & Wood Chair 1
Wooden Desk 1
Gray Fabric & Wood Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric & Wood Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric & Wood Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric Swivel Chair w/Arms 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric & Wood Chair 1
Gray Fabric Swivel Chair w/Arms 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric/Wood Swivel Chair 1
Gray Fabric & Wood Chair 1
Map 1
Postage System 1
Postage Machine 1
Postage Scale 5 Lb 1
Scale Stand 1
Aerial Mall Print 1
Hearing Impaired Phone 1
27 1/2" x 40" Wall Print 1
35" x 25" Seascape Print 1
32" x 34" Wall Print 1
34" x 24" Grand Canyon Print 1
24" x 30" Wall Print 1
27 1/2" x 40" Wall Print 1
27 1/2" x 40" Wall Print 1
33" x 27" Wall Print 1
5 drawer file cabinet - gray 3
Gray 4-drawer File Cabinet 1
Black Long Arm Desk Lamp 3
Gray 4-Drawer file cabinet 1
Gray 4-Drawer file cabinet 1
Gray 4-Drawer file cabinet 1
3 drawer file cabinet-gray (under fax machine) 1
Calculator 1
Coffee Maker 1
Electric Labeler 1
Laser Jet Printer 1
Coke Machine 1
Paper Shredder 1
Laser Printer 1
Chair 2
Gray Wall Hang - 48" x 72" 1
Blue & White Calculator 1
Ram Telephone System 1
Module Furniture 1
42" x 52" Russell print 1
Calculator 1
Gray Table 24" x 60" 1
Computer System 1
Gray/Black Swivel Chair w/Arms 1
Chair 1
Computer System 1
Laser Printer 1
Module Furniture
Black Swivel Chair 1
Module Furniture
4 Drawer Gray Filing Cabinet - legal 1
Computer System
Computer hard Drive 1
Monitor 1
Keyboard 1
HP Laser jet Printer 1
Secretarial Chairs 2
Used Ford Motor Security Truck 1
Used Xerox Copy Machine 1
<PAGE>
EXHIBIT "C"
PENDING LITIGATION
Tenant Related
Huggy Stuff: Declared bankruptcy. Under the reorganization plan they will
pay back approximately 14% of their total debt. We are receiving payment
on a monthly basis.
Athens Potato Pizazz: Placed in default for nonpayment of rent (January
through April, 1998. They were locked out of their space on April 8, 1998.
Their leasing company removed the last of their equipment on September 25,
1998.
Frullati Cafe: They are still in default for not paying the correct amount
of rent each month and nonpayment of the 1996 lump sum billings.
Pictures Plus: We placed a Landlord's Lien on the inventory and fixtures
for nonpayment of rent. The inventory was auctioned off November 4th. We
received $167.75.
CUSTOMER RELATED
Bessie Batch: Alleges she fell into the pit and hurt her head. Insurance
has paid $3,981 to date with an additional $3,519 in reserve.
Joseph Spooner: Claimant walked through mall main glass door cutting
chest, knees and elbow. Insurance has not paid anything to date but has
$4,210 in reserve.
<PAGE>
EXHIBIT "D"
FORM OF NOTICE TO TENANT
As of _______ ____, 1999
_________________________
_________________________
_________________________
Attention: _____________
Re: Your lease ("Lease") in North Hills Mall;
located in North Richland Hills, Texas (the "Property")
-------------------------------------------------------
Dear Tenant:
We are pleased to announce that, as of the date of this letter, NORTH
HILLS MALL ASSOCIATES, an Illinois general partnership ("Former Owner"),
has sold its interest in the Property, the landlord's interest in the Lease
and your current security deposit balance under the Lease to NORTH HILLS,
LTD., a Texas limited partnership, and THE KEST CHILDREN'S TRUST
(collectively, "New Owner"); and New Owner has assumed and agreed to
perform all of the landlord's obligations under the Lease on and after such
date. Accordingly, all of your obligations under the Lease on and after
such date (including your obligation to pay rent) shall be performable to
and for the benefit of New Owner, and its successors and assigns; and all
of the obligations of the landlord under the Lease on and after such date
shall be the binding obligations of New Owner, and its successors and
assigns.
Unless and until you are otherwise notified in writing by New Owner,
the address of New Owner for all purposes under your Lease (including the
giving of any notices provided for in your Lease) is as follows:
North Hills, Ltd.
c/o Burk Collins & Co., Inc.
1848 Norwood Plaza, Suite 214
Hurst, Texas 76054
Attention: North Hills Malls/Manager
Until you are notified to the contrary by New Owner, the Property
will be managed by __________________ ("Manager") which may be contacted at
(____________________, and as in the past, your rental payment is due and
payable on the first of each month. Except as otherwise notified by New
Owner, rent should be made payable to "___________________" and sent to
Manager at the following address: ______________________________.
<PAGE>
Please feel free to call _______________, ________________ of New
Owner at (________________________ if you have any questions.
Very truly yours,
FORMER OWNER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By:_________________________
Name:_______________________
Title:________________________
NEW OWNER:
NORTH HILLS, LTD.,
a Texas limited partnership
BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By:_________________________
Name:_______________________
Title:________________________
THE KEST CHILDREN'S TRUST
By: _________________________
Michael Kest, Trustee
<PAGE>
EXHIBIT "E-1"
FORM OF TENANT ESTOPPEL CERTIFICATE
North Hills Mall Associates
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Tom Bennett
North Hills, Ltd., and
The Kest Children's Trust
1848 Norwood Plaza, Suite 214
Hurst, Texas 76054
Attention: Mr. Burk Collins
Re: North Hills Mall;
North Richland Hills, Texas
Ladies and Gentlemen:
We hereby certify that with respect to our lease, as amended (the
"Lease"), and as the Lease is more particularly described in the attached
Schedule "A" which is hereby incorporated (the "Schedule"):
1. The Lease constitutes the entire agreement between the
undersigned and the landlord thereunder with respect to the subject matter
thereof and the Lease has not been modified, amended or supplemented in any
way except by the amendments or other agreements described in the Schedule
and attached on Exhibit "A".
2. The summary of the terms of the Lease contained in the Schedule
is true and correct.
3. The undersigned has not assigned or entered into a sublease for
any portion of the premises covered by the Lease and no person or firm
other than the undersigned or its employees is in possession of such
premises or any portion thereof.
4. To the knowledge of the undersigned, (a) the undersigned has no
claim, off-set or counterclaim against the landlord thereunder, and (b) the
landlord thereunder is not in default.
5. The undersigned has no option, right of first refusal or
otherwise to purchase the Property or any portion thereof or any interest
therein and the only interest of the undersigned in the Property is that of
a tenant pursuant to the terms of the Lease.
6. The undersigned is not the subject of any bankruptcy,
insolvency, debtor's relief, reorganization, receivership or other similar
proceedings.
7. The person(s) executing this Certificate has (have) the power
and authority to execute and deliver this Certificate on behalf of the
tenant under the Lease.
8. The undersigned hereby ratifies and confirms the Lease and the
tenancy created pursuant to the terms thereof and upon consummation of sale
and notice thereof, agrees to accept the buyer or its assignee as the
landlord thereunder.
<PAGE>
We understand that the landlord under the Lease, its lenders, buyers
and their lenders and their respective successors and assigns will rely on
this Certificate.
Very truly yours,
________________________________________
Name of Tenant
________________________________________
Signature
________________________________________
Date
<PAGE>
SCHEDULE "A"
Summary of Lease Terms
Name of Tenant: ________________________________________________________
Lease Date: ____________________________________________________________
Amendment Dates, Separate Agreements, if any: __________________________
Suite/Space No. _______________; Rentable Square Footage: __________
Lease Expiration: _____________
Option(s) to Extend: _____________________________________________________
Option(s) to Expand: ______________________________________________________
Option to Terminate: ______________________________________________________
Monthly Base Rent: $_______________;
perating Costs/Real Property Taxes: $_______________;
Total Monthly Rent: $_______________
Tenant's Percentage Share: ___________%;
Additional Rent: ___________
Percentage Rent: __________%
Breakpoint: __________
(10) Security Deposit: __________
(11) Rent Paid Through Date: __________
Lease Guarantor(s): ____________________________________________________
Tenant Improvements or other allowances (i.e., rent reduction, free rent)
due Tenant: ___________________________________________________________
Comments: _____________________________________________________________
<PAGE>
EXHIBIT "E-2"
FORM OF SELLER TENANT CERTIFICATE
________________, 1999
TO:North Hills, Ltd., and The Kest Children's Trust
1848 Norwood Plaza, Suite 214
Hurst, Texas 76054
Attention: Mr. Burk Collins
Re: North Hills Mall;
North Richland Hills, Texas
Ladies and Gentlemen:
This Certificate is being delivered to you pursuant to
subparagraph 4E of that certain agreement (the "Purchase Agreement")
captioned "PURCHASE AGREEMENT", dated as of June __, 1999, between NORTH
HILLS MALL ASSOCIATES, an Illinois general partnership ("Seller"), and
NORTH HILLS, LTD., a Texas limited partnership, and THE KEST CHILDREN'S
TRUST (collectively, "Buyer").
Seller hereby certifies to you, your lenders and your respective
successors and assigns, that, "to Seller's knowledge" (as defined in the
Purchase Agreement), none of the following statements is inaccurate in any
material respect, except as provided in the lease, as amended (the "Lease")
more particularly described in the attached Schedule "A" which is hereby
incorporated (the "Schedule"):
The Lease constitutes the entire agreement between __________, a
_______ ("Tenant") and the landlord thereunder with respect to the subject
matter thereof and the Lease has not been modified, amended or supplemented
in any way except by the amendments or other agreements described in the
Schedule.
The summary of the terms of the Lease contained in the Schedule is
true and correct.
Except as provided in the Schedule, Tenant has not assigned or
entered into a sublease for any portion of the premises covered by the
Lease and no person or firm other than Tenant or its employees is in
possession of such premises or any portion thereof.
(a) The Tenant is not in default under the Lease, (b) Tenant has no
claim, off-set or counterclaim against the landlord thereunder, and (c) the
landlord thereunder is not in default.
Tenant has no option, right of first refusal or otherwise to purchase
the Property or any portion thereof or any interest therein and the only
interest of the undersigned in the Property is that of a tenant pursuant to
the terms of the Lease.
Tenant is not the subject of any bankruptcy, insolvency, debtor's
relief, reorganization, receivership or other similar proceedings.
This Certificate is subject to the limitations set forth in the
Purchase Agreement, including the limitations set forth in subparagraph 7C
and subparagraph 9B thereof. Notwithstanding anything to the contrary
herein, this Certificate shall not be effective unless and until the
"Closing" (as defined in the Purchase Agreement) occurs.
<PAGE>
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: _________________________
Name:_________________________
Title:_________________________
<PAGE>
SCHEDULE "A"
Summary of Lease Terms
Name of Tenant: ________________________________________________________
Lease Date: ____________________________________________________________
Amendment Dates, Separate Agreements, if any: __________________________
Suite/Space No. ________________;Rentable Square Footage: __________
Lease Expiration: _____________
Option(s) to Extend: _____________________________________________________
Option(s) to Expand: _____________________________________________________
Option to Terminate:______________________________________________________
Monthly Base Rent: $_______________;
Operating Costs/Real Property Taxes: $_______________;
Total Monthly Rent: $_______________
Tenant's Percentage Share: ___________%;
Additional Rent: ___________
Percentage Rent: __________%
Breakpoint: __________
(10) Security Deposit: __________
(11) Rent Paid Through Date: __________
(12) Lease Guarantor(s): ________________________________________________
(13) Tenant Improvements or other allowances (i.e., rent reduction,
free rent) due Tenant:
_____________________________________________________________________
(14) Comments: __________________________________________________________
<PAGE>
EXHIBIT "E-3"
FORM OF REA ESTOPPEL CERTIFICATE
REA ESTOPPEL CERTIFICATE
______________ __, 1999
North Hills Mall Associates
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Tom Bennett
Re: North Hills Mall;
North Richland Hills, Texas (the "Property")
--------------------------------------------
Ladies and Gentlemen:
The undersigned hereby certifies to you, your lender(s), any
prospective purchaser of all of part of your interest in the Property, and
your successors and assigns that, except as listed on Schedule "A" attached
hereto and made a part hereof:
1. That certain "Operating Agreement" dated July 11, 1978,
originally by and among Federated Stores Realty, Inc., Federated Department
Stores, Inc. and R. E. Cox & Company and Berry Street Realty Company, and
recorded in Volume 6526 at Page 745 of the Deed Records of Tarrant County,
Texas, as amended (collectively, the "REA") constitute the only agreement
or understanding between North Hills Mall Associates, an Illinois general
partnership, and the undersigned with respect to the matters contained
therein, and the REA has not been modified, changed, altered or amended in
any respect, except as described in this Paragraph 1.
2. The REA is in full force and effect and constitute a legally
valid instrument, binding and enforceable against the undersigned in
accordance with its terms.
3. To the best knowledge of the undersigned, no other party
subject to the REA is in default in any manner in the performance of any of
the terms, covenants, conditions or provisions of the REA.
4. The undersigned has not made advance payment of any charges
payable under the REA.
The individual executing this certificate on behalf of the
undersigned has been duly authorized to make the statements herein
contained and to execute and deliver this certificate.
The undersigned agrees that this letter shall inure to the benefit of
and is being relied upon by you, your lender(s), any prospective purchaser
of all of part of your interest in the Property, and your successors and
assigns.
Very truly yours,
_________________________________,
a ________________________________
By: __________________________
Name: __________________________
Title:__________________________
<PAGE>
SCHEDULE "A"
Exceptions to REA Estoppel Certificate
<PAGE>
EXHIBIT "F"
FORM OF SPECIAL WARRANTY DEED
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS
COUNTY OF TARRANT THAT:
NORTH HILLS MALL ASSOCIATES, an Illinois general partnership ("Grantor"),
for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00), and
other good and valuable consideration paid by ___________________,
a _________________________ ("Grantee"), the receipt and sufficiency of
which are hereby acknowledged and confessed, subject to the exceptions,
liens, encumbrances, terms and provisions hereinafter set forth and
described, has GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents
does hereby GRANT, BARGAIN, SELL and CONVEY, unto Grantee all of that
certain lot, tract or parcel of land situated in the City of North Richland
Hills, Tarrant County, Texas, and being more particularly described in
Exhibit "A" attached hereto and incorporated herein by reference, together
with all improvements located on such land (such land and improvements
being collectively referred to as the "Property").
This conveyance is made by Grantor and accepted by Grantee subject to all
covenants, conditions, easements, encumbrances and all other matters of
record and all other matters that can be determined by a visual inspection
or a complete and accurate survey of the Property (the "Permitted
Exceptions").
TO HAVE AND TO HOLD the Property, subject to the Permitted Exceptions, unto
Grantee, and its successors and assigns forever, and Grantor does hereby
bind itself, and its successors and assigns, to WARRANT and FOREVER DEFEND
all and singular the Property unto Grantee, and its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or
any part thereof, by, through or under Grantor, but not otherwise.
GRANTEE ACKNOWLEDGES THAT THE CONVEYANCE OF THE PROPERTY IS SPECIFICALLY
MADE "AS-IS" AND "WHERE-IS," WITHOUT ANY REPRESENTATIONS OR WARRANTIES
EXPRESS OR IMPLIED (EXCEPT FOR THE SPECIAL WARRANTY OF TITLE CONTAINED IN
THIS DEED), INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF FITNESS
FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY OR ANY OTHER WARRANTIES
WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM COMMERCIAL CODE OR
OTHERWISE.
<PAGE>
EXECUTED on ___________________, 1999.
GRANTOR:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: _________________________
Name: _________________________
Title:_________________________
<PAGE>
STATE OF )
S.S. )
COUNTY OF )
On _____________, before me, __________, a Notary Public in and for
said County and State, personally appeared __________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity and that by
his/her signature on the instrument the person, or the entity upon behalf
of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature:
SPACE FOR NOTARY SEAL OR STAMP
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
<PAGE>
EXHIBIT "G"
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
BILL OF SALE, ASSIGNMENT AND ASSUMPTION
(North Hills Mall; North Richland Hills, Texas)
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
the undersigned, NORTH HILLS MALL ASSOCIATES, an Illinois general
partnership ("Seller"), hereby sells, transfers, assigns and conveys to
NORTH HILLS, LTD., a Texas limited partnership and THE KEST CHILDREN'S
TRUST (collectively, "Buyer"), the following:
1. Personal Property. All right, title and interest of Seller in
and to those items of tangible personal property ("Personal Property")
described in Exhibit "A" attached hereto and made a part hereof and
relating to the "Property", as hereinafter defined.
2. Leases. All right, title and interest of Seller in and to all
leases ("Leases") relating to the Property and described in Exhibit "B"
attached.
3. Service Contracts. All right, title and interest of Seller in
and to all contracts, service agreements and other operating agreements
("Service Contracts") relating to the Property and described in Exhibit "C"
attached hereto.
4. Intangible Property. All right, title and interest of Seller,
to the extent assignable, in and to all contract rights, agreements, tenant
lists, governmental permits, licenses and approvals, advertising material,
telephone exchange numbers and the name "North Hills Mall" (collectively,
the "Intangible Property") directly relating to the Property.
This Bill of Sale, Assignment and Assumption is given pursuant to
that certain Purchase Agreement ("Agreement") dated as of June ____, 1999,
between the Seller and Buyer, respecting the purchase and sale of that
certain shopping center commonly known as the "North Hills Mall" located in
the North Richland Hills, Texas (the "Property"). The Agreement provides
for, among other things, the assignment provided for herein. The
covenants, agreements, and limitations (including, but not limited to, the
limitations of liability provided in subparagraph 9B of the Agreement)
provided in the Agreement with respect to the property conveyed hereunder
are hereby incorporated herein by this reference as if herein set out in
full and shall inure to the benefit of and shall be binding upon Seller and
Buyer, and their respective successors and assigns.
The property and rights conveyed hereunder are is conveyed "as is",
without warranty or representation, except as expressly provided in (and
subject to the limitations of) the Agreement.
DATED: As of _______________, 1999.
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By:___________________________
Name:_________________________
Title:________________________
"Seller"
<PAGE>
BUYER'S ASSUMPTION
(North Hills Mall; North Richland Hills, Texas)
As of this ____ day of _______________, 1999, Buyer hereby accepts
the foregoing assignment of Leases, Service Agreements and other contracts
and agreements assigned hereby and agrees to assume and discharge, in
accordance with the terms thereof, all of the burdens and obligations of
Seller thereunder, to the extent the same arise or accrue from and after
the date hereof.
BUYER:
NORTH HILLS, LTD.,
a Texas limited partnership
BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By: _________________________
Name: _________________________
Title:_________________________
THE KEST CHILDREN'S TRUST
By:_________________________
Michael Kest, Trustee
<PAGE>
Exhibit "A"
To Bill of Sale, Assignment and Assumption
Attach List of Personal Property
<PAGE>
Exhibit "B"
To Bill of Sale, Assignment and Assumption
Attach List of Leases
<PAGE>
Exhibit "C"
To Bill of Sale, Assignment and Assumption
Attach List of Service Contracts
<PAGE>
EXHIBIT "H"
EXCEPTIONS TO SELLER'S REPRESENTATIONS AND WARRANTIES
None.
<PAGE>
EXHIBIT "I"
LIST OF LEASES
Accents & Gifts
Lease Agreement between JMB Income Properties and Siebes Enterprises, Inc.
dated August 17, 1992
Assignment of Lease between Siebes Enterprises, Inc. and JMB Income
Properties, Ltd. dated December 29, 1997
Guaranty of Lease between James Welborn and JMB Income Properties, Ltd.
dated December 29, 1997
Alladin Jewelers
Lease Agreement between North Hills Mall Associates and Prince & Princess
Jewelers, Inc. dated May 5, 1997
The Arcadium
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and The Arcadium dated April 23, 1999.
AT&T Tridom
Roof License Agreement between JMB Income Properties, Ltd. and AT&T Tridom,
Inc. dated January 16, 1995
Dalton Bookseller
Lease Agreement between JMB Income Properties and B. Dalton Booksellers
dated May 4, 1990
Addendum to Lease between JMB Income Properties, Ltd. and B. Dalton
Booksellers, Inc., dated 5/4/96
Bath & Body Works
Lease Agreement between JMB Income Properties, Ltd. and Bath & Body Works,
Inc. dated June 20, 1996
Bag'n Baggage
Lease Agreement between JMB Income Properties, Ltd. and Bag'n Baggage dated
June 14, 1995
Beauty/Hair Concepts
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Beauty/Hair Concepts dated May 25, 1999.
Butterfields Etc.
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Butterfields Etc. dated December 15, 1998
Candy Barrel
Lease Agreement between JMB Income Properties, Ltd. and Candy Barrel dated
February 15, 1996
<PAGE>
Car-Lene Research
Lease Agreement between JMB Income Properties and Carlene Research of
Texas, Inc. dated January 12, 1996
Chinese Gourmet Express
Lease Agreement between North Hills Mall Associates and Chinese Gourmet
Express, Inc. dated February 24, 1997
Chick-Fil-A
Lease Agreement between JMB Income Properties and Chick-Fil-A, Inc. dated
February 20, 1992
Amendment No. One To Lease between North Hills Mall Associates and Chick-
Fil-A, Inc. dated December 3, 1996
Claire's Boutique
Lease Agreement between JMB Income Properties, Ltd. and Claire's Boutiques,
Inc. dated March 2, 1995
Contempo Casuals
Lease Agreement between Federated Stores Realty and Contempo Casuals, Inc.
dated April 5, 1983
Lease Extension and Amendment Agreement between JMB Income Properties, Ltd.
and Contempo Casuals, Inc. dated October 3, 1995
Second Amendment to Lease between JMB Income Properties and Contempo
Casuals, Inc. dated April 11, 1996
Third Lease Extension Agreement between North Hills Mall Associates and The
Wet Seal, Inc. (successor in interest of Contempo Casuals, Inc. dated
August 13, 1997
Assignment and Assumption Agreement between Ermine Trading Corporation and
Contempo Casuals c/o The Wet Seal, Inc., dated 6/29/95.
Fourth Lease Extension Agreement between North Hills Mall Associates and
The Wet Seal, Inc. dated June 26, 1998
Convecash (ATM)
Lease Agreement between JMB Income and Convecash, Inc., dated February 7,
1996
Critter Connection
Short Term Lease For Kiosk, Pushcart or In-Line Space between North Hills
Mall Associates and Critter Connection dated June 10, 1998
Deck the Walls
Lease Agreement between North Hills Mall Associates and Mr. Michael
Tanvaviriya & Mrs. Elizabeth Marshall (Deck the Walls) dated October 15,
1996
Partial Rent Abatement Agreement between North Hills Mall and Michael
Tanyaviriya & Elizabeth Marshall dated September 1997
Extension of Rent Abatement Agreement dated September 9, 1998.
<PAGE>
Eight Ball Billiards
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Eight Ball Billiards dated May 27, 1999. (location #1)
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Eight Ball Billiards dated May 28, 1999. (location #2)
Embroid It
Short-term Lease for Kiosk, Pushcart or In-Line Space between North Hills
Mall and The Embroid It Company dated January 3, 1997
European Nook
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and European Nook dated December 8, 1998.
Fancy Lady
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Fancy Lady dated November 30, 1998.
Fantasy Entertainment
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Fantasy Entertainment dated June 11, 1999.
It's Fix
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and It's Fix December 1, 1998
Fieldhouse Sports
Lease Agreement between JMB Income Properties, Ltd. and PRO-MAC1
(Fieldhouse) dated August 5, 1991
Partial Rent Abatement Agreement between North Hills Mall Associates and
PRO-MAC1 d/b/a Fieldhouse dated June 19, 1996
Partial Rent Abatement Agreement between North Hills Mall Associates and
PRO-MAC1 d/b/a Fieldhouse dated July 3, 1997
Partial Rent Agreement dated 7/24/98.
Extension of Rent Abatement Agreement between North Hills Mall Associates
and Fieldhouse Sports dated January 28, 1999
<PAGE>
Foot Locker
Lease Agreement between JMB Income Properties and Kinney Shoe Corporation
dated June 12, 1989
Frullati
Lease Agreement between North Hills Mall Associates and Frullati NHM, Inc.
dated August 1, 1996
Fun Gum Machine Company
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Fun Gum Machine Company dated January 21, 1999.
(location #1)
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Fun Gum Machine Company dated January 21, 1999.
(location #2)
Gadzooks
Lease Agreement between JMB Income Properties, Ltd. and Titan Enterprises,
Inc. (Gadzooks) dated July 1, 1992
The Gap
Lease Agreement between JMB Income Properties, Ltd. and The Gap, Inc. dated
August 17, 1992
Amendment No. One to Lease between North Hills Mall Associates and The Gap,
Inc. dated May 28, 1997
Lease Amendment between The Gap and North Hills Mall Associates dated June
24, 1998
Termination Letter from GAP terminating their lease
Glamour Shots
Lease Agreement between North Hills Mall Associates and Dallas Glamour
Shots dated September 16, 1996
Lease Extension Agreement between North Hills Mall Associates and Dallas
G.S. dated April 1, 1999.
Gordon Jewelers
Lease Agreement between North Hills Mall Associates and Zale Delaware
(Gordon Jewelers) dated May 24, 1996
General Nutrition Center
Lease Agreement between JMB Income Properties and General Nutrition
Corporation dated September 21, 1993
<PAGE>
Amy's Hallmark / Evenson Card Shops / Hallmark Specialty Retail Group
Lease Agreement between JMB Income Properties and Evenson's Card Shop dated
May 18, 1992
Sublease Agreement between Evenson Card Shops, Inc. and Edward R. Lee and
Jennifer M. Lee d/b/a Lee's Hallmark Shop dated March 10, 1993
Letter evidencing that Evenson Card Shops has changed its name to Hallmark
Specialty Retail Group dated August 6, 1998
House of Cards
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and House of Cards dated February 22, 1999.
Hughes Network System
Roof License Agreement between JMB Income Properties, Ltd. and Hughes
Network Systems, Inc. dated March 20, 1996
Image Dynamics (Photo Booth)
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Image Dynamics dated September 3, 1998.
Kay Bee Toys
Lease Agreement between JMB Income Properties and Kay-Bee Toys dated
February 16, 1990
Lease Amendment between Toy & Hobby and JMB Income Properties dated April
14, 1994
Lease Extension Agreement between North Hills Mall Associates and K B Toy
of Texas dated April 20, 1998
Lease Extension Agreement between North Hills Mall Associates and KB Toy of
Texas, Inc. dated January 31, 1999.
Kiddie Koncepts
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Kiddie Koncepts dated January 26, 1999.
The Limited
Lease Agreement between JMB Income Properties and The Limited Stores, Inc.
dated January 29, 1992
Luby's Cafeteria
Lease Agreement between JMB Income Properties and Luby's Cafeterias, Inc.
dated August 30, 1994
Metabolife 356
Short-term Lease for Kiosk, Pushcart or In-Line Space between North Hill
Mall Associates and Metabolife 356 dated August 27, 1998
Nails Etc.
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Nails Etc. dated November 3, 1998.
<PAGE>
New Gold Palace
Short-term Lease for Kiosk, Pushcart or In-Line Space between North Hill
Mall Associates and New Gold Palace dated May 24, 1999.
Part of Texas
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Part of Texas dated January 29, 1999.
Payless ShoeSource
Lease Agreement between JMB Income Properties and Volume Shoe Corporation
dated February 27, 1987
Lease Extension Agreement between North Hills Mall Associates and Payless
ShoeSource dated September 4, 1997
Lease Extension Agreement between North Hills Mall Associates and Payless
ShoeSource dated February 22, 1999.
Pearle Vision
Lease Agreement between JMB Income Properties and Pearle Vision dated July
12, 1995
Pretzels Etc.
Short-term Lease for Kiosk, Pushcart or In-Line Space between North Hills
Mall Associates and Pretzels Etc. dated July 27, 1998
Radio Shack
Lease Agreement between JMB Income Properties and Tandy Corporation (Radio
Shack) dated May 28, 1992
Regis Hairstylists
Lease Agreement between JMB Income Properties and Regis Corporation dated
January 13, 1992
Sam Goody (Musicland)
Lease Agreement between JMB Income Properties and The Musicland Group dated
April 6, 1987
Sbarro
Lease Agreement between JMB Income Properties, Ltd. and Sbarro dated
February 11, 1992
Assignment and Assumption of Lease dated January 3, 1994
<PAGE>
Shoe Box
Lease Agreement between JMB Income Properties, ltd. and S & J Shoes dated
June 22, 1993
Assignment and Assumption of Lease dated 1/15/98
Summit Stationers
Lease Agreement between JMB Income Properties and American Greetings
Corporation dated April 30, 1985
Lease Amendment between JMB Income and American Greetings Corporation dated
June 30, 1989
Amendment No. Four to Lease between north Hills mall Associates and
American Greeting corporation dated February 4, 1997
Lease Amendment No. One to Lease between JMB Income Properties and American
Greetings Corporation dated June 21, 1995
Lease Extension Agreement between JMB Income Properties and American
Greetings Corporation dated February 29, 1996
Lease Extension Agreement between North Hills Mall Associates and American
Greetings dated February 18, 1998
Lease extension Agreement between North Hills Mall Associates and American
Greeting corporation dated February 28, 1999.
Sunbeam Creations
Short-term Lease For Kiosk, Pushcart or In-Line Space between North Hills
Mall Associates and Sunbeam Creations dated February 17, 1998
Extension of Term of Short Term Lease between North Hills Mall Associates
and Robert Waheed d/b/a Sunbeam Creations dated December 30, 1998.
Sunglass Hut
Lease Agreement between JMB Income Properties, Ltd. and Sunglass Hut
Trading Corporation dated April 24, 1995
Things Remembered
Lease Agreement between JMB Income Properties and Things Remembered dated
February 20, 1996
Tis the Season
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Tis The Season dated January 14, 1999.
Trade Secret
Lease Agreement between North Hills Mall Associates and Trade Secret dated
June 19, 1996
Victoria's Secret Stores
Lease Agreement between JMB Income Properties, Ltd. and Victoria's Secret
Stores dated February 27, 1992
<PAGE>
Walden Books
Lease Agreement between North Hills Mall Associates and Walden Book Company
dated August 2, 1996
Wemakit
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and Wemakit dated January 29, 1999.
What's New
Short Term Lease For Kiosk, Pushcart or In-Line Space between North Hills
Mall Associates and Ed Lee dated May 13, 1998
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and What's New dated May 21, 1999.
World Chiropractic Group
Short Term Lease for Kiosk, Pushcart or In-Line Spaced between North Hills
Mall Associates and World Chiropractic dated June 10, 1999.
Zales
Lease Agreement between JMB Income Properties and Zales dated April 1, 1992
<PAGE>
EXHIBIT "J"
SERVICE CONTRACTS
Imperial Services Trap service Agreement dated February 6, 1997
Security Link Ameritech Alarm Services dated February 6, 1997
Myers Services Independent Contractor continuing Service Agreement dated
January 3, 1997
Musor Music of Texas Lease Agreement dated December 1, 1993
Paul Copenhaver d/b/a Master Sweep Independent Contractor continuing
Service Agreement dated February 6, 1997
Laldlaw (Trinity) Waste Systems Customer Service Agreement dated April 3,
1995
Grant Leighton Associates of Texas Independent contractor continuing
Service Agreement dated December 22, 1998
Grant Leighton Associates of Texas Independent contractor continuing
Service Agreement dated December 22, 1998
Felco Auto Lease dated February 2, 1998
Metering and Data Specialties continuing Service Agreement dated December
21, 1994
Center Services Independent Contractor continuing Service Agreement dated
December 22, 1998
Aramark Uniform Services Independent Contractor continuing Service
Agreement dated February 4, 1998
McKesson Water Products Customer Lease Agreement dated February 10, 1998
AT&T Property Manager contract dated 1/20/96
AT&T Security contract dated 1/23/96
PageNet Service Lease Agreement dated August 1, 1996
PageNet Service/Lease Agreement dated July 29, 1996
Rancotyp-Postalia, Inc. Rental Agreement dated April 15, 1997
Infinitel Public Telephone Space Lease Agreement dated January 29, 1997,
amended September 30, 1997.
$1.29 Cleaners Independent Contractor Service Agreement dated June 1, 1996
3M Media Outdoor Display Advertising (Outdoor Systems Advertising)
Agreement dated September 22, 1992
Cherry Hills Photo & Train Agreement dated February 10, 1998.
Independent Contractor Continuing Service Agreement between North Hills
Mall Associates and Center Services Inc. dated December 22, 1999.
Independent Contractor Continuing Service Agreement between North Hills
Mall Associates and Grant Leighton dated December 22, 1998.
<PAGE>
EXHIBIT "K"
ENVIRONMENTAL REPORTS
Environmental Report prepared by PSI Environmental Services, dated
August 4, 1989.
Phase I Environmental Site Assessment prepared by Furgo Environmental,
Inc., dated November 20, 1995.
EXHIBIT 10.2
- ------------
FIRST AMENDMENT TO PURCHASE AGREEMENT
-------------------------------------
(North Hills Mall; North Richland Hills, Texas)
This First Amendment To Purchase Agreement ("First Amendment") is
made and entered into as of the 29th day of June, 1999, by and among NORTH
HILLS MALL ASSOCIATES, an Illinois general partnership ("Seller"), NORTH
HILLS, LTD., a Texas limited partnership ("NHL"), and THE KEST CHILDREN'S
TRUST (the "Kest Trust", NHL and the Kest Trust are hereinafter
individually and collectively called "Buyer"), with reference to the
following facts:
A. Seller and Buyer entered into that certain "Purchase Agreement"
(the "Agreement") dated as of the 22nd day of June, 1999 (the "Execution
Date"), pursuant to which Seller agreed to sell, and Buyer agreed to buy,
that certain real property located in the City of North Richland Hills,
County of Tarrant, State of Texas, consisting primarily of a shopping
center sometimes known as the "North Hills Mall" (the "Property"). Unless
otherwise defined herein, capitalized terms have the meanings defined in
the Agreement.
B. Seller and Buyer wish to modify and amend the Agreement subject
and strictly in accordance with the terms of this First Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Buyer hereby amend
the Agreement as follows:
1. Recitals. The recitals set forth above are not merely
recitals, but form an integral part of this First Amendment.
2. Due Diligence Extension Option. Upon Buyer's delivery of (i)
advance written notice to Seller and (ii) an additional ONE HUNDRED
THOUSAND DOLLARS ($100,000) in immediately available federal funds to
Escrow Holder on or before 1:00 PM (Central time) on Thursday, July 15,
1999 (which funds shall thereafter be deemed an addition to and a part of
the Escrow Deposit [in the aggregate amount of $300,000]), the Due
Diligence Period, as defined in Section 4.B of the Agreement, shall be
extended until 5:00 PM (Central time) on Friday, July 30, 1999.
3. Addition to Exhibit "I" to Agreement. The following is hereby
added to Exhibit "I" to the Agreement under the "Contempo Casuals" heading:
"Fifth Lease Extension Agreement between North Hills Mall
Associates and The Wet Seal, Inc. dated June 18, 1999."
4. Ratification of Purchase Agreement. Buyer and Seller hereby
agree that except as expressly provided herein, the provisions of the
Agreement shall be, and remain, in full force and effect (such Agreement
being hereby ratified and confirmed by the parties hereto), and that if any
provision of this First Amendment conflicts with the Agreement, then the
provisions of this First Amendment shall prevail.
5. Miscellaneous. This First Amendment may be executed in
counterparts and delivered by facsimile transmission.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
First Amendment effective as of the date first set forth above.
BUYER:
NORTH HILLS, LTD.,
a Texas limited partnership
By: BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By: _________________________
Name: _________________________
Title:_________________________
THE KEST CHILDREN'S TRUST
By: _________________________
Michael Kest, Trustee
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: _________________________
Name: _________________________
Title: ________________________
EXHIBIT 10.3
- ------------
SECOND AMENDMENT TO PURCHASE AGREEMENT
----------------------------------------------
(North Hills Mall; North Richland Hills, Texas)
This Second Amendment To Purchase Agreement ("Second Amendment") is
made and entered into as of the 30th day of July, 1999, by and among NORTH
HILLS MALL ASSOCIATES, an Illinois general partnership ("Seller"), NORTH
HILLS, LTD., a Texas limited partnership ("NHL"), and THE KEST CHILDREN'S
TRUST (the "Kest Trust", NHL and the Kest Trust are hereinafter
individually and collectively called "Buyer"), with reference to the
following facts:
A. Seller and Buyer entered into that certain "Purchase Agreement"
(the "Original Agreement") dated as of the 22nd day of June, 1999 (the
"Execution Date"), pursuant to which Seller agreed to sell, and Buyer
agreed to buy, that certain real property located in the City of North
Richland Hills, County of Tarrant, State of Texas, consisting primarily of
a shopping center sometimes known as the "North Hills Mall" (the
"Property"). The Original Agreement was subsequently amended by that
certain First Amendment To Purchase Agreement ("First Amendment") made and
entered into as of the 29th day of June, 1999, by and among Seller and
Buyer. The Original Agreement as amended by the First Amendment is
hereinafter referred to as the "Agreement". Unless otherwise defined
herein, capitalized terms have the meanings defined in the Agreement.
B. Seller and Buyer wish to modify and amend the Agreement subject
and strictly in accordance with the terms of this Second Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Buyer hereby amend
the Agreement as follows:
1. Recitals. The recitals set forth above are not merely
recitals, but form an integral part of this Second Amendment.
2. Due Diligence Extension. The Due Diligence Period, as defined
in Section 4.B of the Agreement, is hereby extended until 5:00 PM (Central
time) on Wednesday, August 4, 1999.
3. Ratification of Purchase Agreement. Buyer and Seller hereby
agree that except as expressly provided herein, the provisions of the
Agreement shall be, and remain, in full force and effect (such Agreement
being hereby ratified and confirmed by the parties hereto), and that if any
provision of this Second Amendment conflicts with the Agreement, then the
provisions of this Second Amendment shall prevail.
4. Miscellaneous. This Second Amendment may be executed in
counterparts and delivered by facsimile transmission.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Second Amendment effective as of the date first set forth above.
BUYER:
NORTH HILLS, LTD.,
a Texas limited partnership
By: BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By: _________________________
Name: _________________________
Title:_________________________
THE KEST CHILDREN'S TRUST
By: _________________________
Michael Kest, Trustee
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: _________________________
Name: _________________________
Title:_________________________
EXHIBIT 10.4
- ------------
THIRD AMENDMENT TO PURCHASE AGREEMENT
-------------------------------------
(North Hills Mall; North Richland Hills, Texas)
This Third Amendment To Purchase Agreement ("Third Amendment") is
made and entered into as of the 11th day of August, 1999, by and among
NORTH HILLS MALL ASSOCIATES, an Illinois general partnership ("Seller"),
NORTH HILLS, LTD., a Texas limited partnership ("NHL"), and THE KEST
CHILDREN'S TRUST (the "Kest Trust", NHL and the Kest Trust are hereinafter
individually and collectively called "Buyer"), with reference to the
following facts:
A. Seller and Buyer entered into that certain "Purchase Agreement"
(the "Original Agreement") dated as of the 22nd day of June, 1999 (the
"Execution Date"), pursuant to which Seller agreed to sell, and Buyer
agreed to buy, that certain real property located in the City of North
Richland Hills, County of Tarrant, State of Texas, consisting primarily of
a shopping center sometimes known as the "North Hills Mall" (the
"Property"). The Original Agreement was subsequently amended by (i) that
certain First Amendment To Purchase Agreement ("First Amendment") made and
entered into as of the 29th day of June, 1999, and (ii) that certain
Second Amendment To Purchase Agreement ("Second Amendment") made and
entered into as of the 30th day of July, 1999, both by and among Seller and
Buyer. The Original Agreement as amended by the First Amendment and Second
Amendment is hereinafter referred to as the "Agreement". The Agreement as
amended by this Third Amendment is hereinafter referred to as the "Amended
Agreement". Unless otherwise defined herein, capitalized terms have the
meanings defined in the Agreement.
B. The Kest Trust delivered to Seller a Termination Notice dated
August 3, 1999 (the "Termination Notice"), purporting to terminate the
Agreement.
C. Seller and Buyer wish to ratify, confirm, reaffirm, reinstate,
modify and amend the Agreement subject to and strictly in accordance with
the terms of this Third Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Buyer hereby
ratify, confirm, reaffirm, reinstate and amend the Agreement as follows:
1. Recitals. The recitals set forth above are not merely
recitals, but form an integral part of this Third Amendment.
2. Recession. Buyer and Seller agree that the Termination Notice
shall be deemed rescinded and of no force or effect. Accordingly, the
parties agree that Escrow Holder and Seller shall treat the Termination
Notice as if the same was never delivered.
3. Deposited Funds & Closing Date. Concurrently herewith Buyer
shall deposit with Escrow Holder FIVE HUNDRED THOUSAND DOLLARS ($500,000)
(which funds are hereby deemed to be the Deposited Funds) in immediately
available federal funds, which funds are NON-REFUNDABLE (subject only to
satisfaction of the conditions set forth in subparagraphs 4.C, 4.E and 4.F
of the Agreement). Provided that the Deposited Funds are delivered as set
forth above, the Closing Date, as defined in Paragraph 5 of the Agreement,
shall be extended to Tuesday, November 16, 1999, or such earlier date as
may be agreed upon by Buyer and Seller. In connection with the foregoing,
(i) Buyer shall have no further right to extend the Closing Date pursuant
to Paragraph 5 of the Agreement and (ii) the Deposited Funds may be
immediately released to Seller in accordance with Paragraph 5 of the
Agreement.
<PAGE>
4. Buyer Contingencies. Buyer hereby approves and/or waives
satisfaction of all contingencies and conditions precedent to its
obligation to purchase the Property except for satisfaction of the
conditions set forth in subparagraphs 4.C, 4.E and 4.F of the Agreement.
Buyer hereby expressly acknowledges that the Due Diligence Period has
expired and Buyer (including, without limitation, the Kest Trust, Michael
Kest as trustee) has no further right to terminate the Agreement pursuant
to subparagraph 4.B of the Agreement or otherwise. In this connection,
Buyer hereby acknowledges and agrees that Buyer shall be deemed to have
delivered Buyer's Approval Notice to Seller prior to the expiration of the
Due Diligence Period.
5. Form of REA Estoppel Certificate; Estoppel Certificates.
Exhibit "E-3" attached to the Agreement is hereby deleted and replaced in
its entirety with the Exhibit "E-3" attached hereto. Notwithstanding
anything to the contrary in the Agreement, (i) any estoppel certificate
delivered in connection with the Agreement that is dated on or after August
1, 1999 shall, for the purposes of subparagraphs 4.E and 4.F of the
Agreement, be deemed to have been dated and delivered less than 60 days
prior to the Closing Date and (ii) the conditions set forth in
subparagraphs 4.E and 4.F of the Agreement shall be deemed satisfied unless
there exists a change to the form of any estoppel certificate delivered in
connection with the Agreement which materially and adversely affects the
current operations and use of the Property, and, in connection with any REA
Estoppel, the condition set forth in subparagraph 4.F of the Agreement
shall be deemed satisfied if such estoppel states, regardless of the form
of such certificate, (a) that the REA is unmodified and in full force and
effect (or, if there are modifications, that the same is in full force and
effect as modified and stating the modifications), (b) the date to which
any charges payable under the REA have been paid in advance, if any, and
(c) whether or not to the knowledge of the signer of such certificate any
other party to the REA is in default in the performance of any covenant,
agreement or condition contained in the REA, and if so, specifying each
such default of which the signer may have knowledge.
6. Loan Assumption; Obligations Absolute. Buyer desires to assume
(whether or not consummated, the "Assumption"), at Buyer's sole cost and
expense (it being understood that Buyer is hereby obligated to pay
[directly or through Seller] all fees, costs and expenses associated with
the potential Assumption), the existing loan (the "Loan") and the related
financing documents encumbering and/or concerning the Property, and Seller
is willing to reasonably cooperate therewith, without liability, cost,
expense or other obligation, to the extent Seller deems, in its sole and
absolute discretion, that such cooperation is reasonably necessary in
attempting to consummate the Assumption. NOTWITHSTANDING ANYTHING TO THE
CONTRARY SET FORTH HEREIN OR IN THE AGREEMENT, BUYER SHALL REIMBURSE SELLER
IN IMMEDIATELY AVAILABLE FEDERAL FUNDS FOR ALL COSTS AND EXPENSES INCURRED
BY SELLER IN CONNECTION WITH OR RELATING TO THE ASSUMPTION (REGARDLESS IF
SUCH COSTS ARE INTERNALLY OR EXTERNALLY GENERATED) WITHIN TWO (2) BUSINESS
DAYS OF WRITTEN DEMAND FOR REIMBURSEMENT FROM SELLER TO ROBERT S. MANNS,
ESQ. (AS REPRESENTATIVE OF AND COUNSEL TO BUYER), WHICH DEMAND MAY BE MADE
BY FACSIMILE TRANSMISSION TO (310) 271-9929. FAILURE OF BUYER TO REIMBURSE
SELLER AS SET FORTH IN THIS PARAGRAPH 6 SHALL BE A MATERIAL BREACH OF THE
AMENDED AGREEMENT, AND UPON THE ELECTION OF SELLER, THE DEPOSITED FUNDS
SHALL BE DELIVERED TO (OR RETAINED BY) SELLER AS FULL COMPENSATION AND
LIQUIDATED DAMAGES UNDER AND IN CONNECTION WITH THE AMENDED AGREEMENT.
Buyer's obligations and agreements set forth herein and in the Agreement,
including, without limitation, Buyer's obligation to Purchase the Property
and to pay all cost and expense associated with the Assumption, shall be
absolute and shall not be affected if the Assumption does not in fact
occur, is not approved or is not otherwise consummated or if the Assumption
is rejected, at any time or in any fashion, by representatives of the
holder of the Loan or representatives of such holder's loan servicer. In
furtherance of the foregoing, Buyer and Seller acknowledge and agree that
the neither the consummation of the Assumption nor Buyer's obtainment of
other third party financing is a condition precedent to Buyer's obligation
to purchase the Property.
<PAGE>
7. Time of the Essence. Buyer and Seller hereby reaffirm and
agree that time shall be of the essence in the Amended Agreement.
8. Ratification of Purchase Agreement. Buyer and Seller hereby
agree that except as expressly provided herein, the provisions of the
Agreement shall be, and remain, in full force and effect (such Agreement
being hereby ratified and confirmed by the parties hereto, notwithstanding
any prior termination thereof), and that if any provision of this
Third Amendment conflicts with the Agreement, then the provisions of this
Third Amendment shall prevail.
9. Miscellaneous. This Third Amendment may be executed in
counterparts and delivered by facsimile transmission.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Third Amendment effective as of the date first set forth above.
BUYER:
NORTH HILLS, LTD.,
a Texas limited partnership
By: BURK COLLINS & CO., INC.,
a Texas corporation,
its general partner
By: _________________________
Name: _________________________
Title:_________________________
THE KEST CHILDREN'S TRUST
By: _________________________
Michael Kest, Trustee
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: _________________________
Name: _________________________
Title:_________________________
<PAGE>
Exhibit "E-3"
FORM OF REA ESTOPPEL CERTIFICATE
REA ESTOPPEL CERTIFICATE
______________ __, 1999
VIA OVERNIGHT DELIVERY VIA TELECOPY (310) 201-8912
North Hills Mall Associates Pircher, Nichols & Meeks
c/o JMB Realty Corporation 1999 Avenue of the Stars, 26th Floor
900 North Michigan Avenue Los Angeles, CA 90067
Chicago, Illinois 60611 Attention: CSH (1-581)
Attention: Ms. Julia Stibolt
Re: North Hills Mall;
North Richland Hills, Texas (the "Property")
--------------------------------------------
Ladies and Gentlemen:
The undersigned hereby certifies to you, your lender(s), any
prospective purchaser of all of part of your interest in the Property
(collectively, the "Relying Parties"), and each Relying Party's successors
and assigns that, except as listed on Schedule "A" attached hereto and made
a part hereof:
1. That certain "OPERATING AGREEMENT" dated July 11, 1978,
originally by and among Federated Stores Realty, Inc. (predecessor-in-
interest to North Hills Mall Associates, an Illinois general partnership),
Federated Department Stores, Inc. (predecessor-in-interest to Primary
Properties Corporation, a Delaware corporation a/k/a Foley's), R. E. Cox &
Company (predecessor-in-interest to The Dunlap Company-Texas, a Nevada
corporation) and Berry Street Realty Company, and recorded in Volume 6526
at Page 745 of the Deed Records of Tarrant County, Texas, as amended by (i)
that certain "Amendment to Operating Agreement" made as of the 9th day of
February, 1979 and recorded in Volume 6687 at Page 687 of the Deed Records
of Tarrant County, Texas, (ii) that certain "SECOND AMENDMENT TO OPERATING
AGREEMENT" made and entered into as of the 19th day of December, 1984 and
recorded in Volume 8051 at Page 402 and re-recorded and re-filed in Volume
8132 at Page 2036 of the Deed Records of Tarrant County, Texas, which,
among other matters, added Mervyn's, a California corporation, as an
additional party to the original Operating Agreement and (iii) that certain
"THIRD AMENDMENT TO OPERATING AGREEMENT" made as of the September 13, 1994
and recorded in Volume 11802 at Page 781 of the Deed Records of Tarrant
County, Texas (collectively and together with the related agreements
identified on Exhibit "A" attached hereto, the "REA") constitute the only
agreements or understandings between North Hills Mall Associates, an
Illinois general partnership, and the undersigned with respect to the
matters contained therein, and the REA has not been modified, changed,
altered or amended in any respect, except as described in this Paragraph 1.
2. The REA is in full force and effect and constitutes a legally
valid instrument, binding and enforceable against the undersigned in
accordance with its terms.
3. To the best knowledge of the undersigned, no other party
subject to the REA is in default in any manner in the performance of any of
the terms, covenants, conditions or provisions of the REA.
4. The undersigned has not made advance payment of any charges
payable under the REA.
<PAGE>
The individual executing this certificate on behalf of the
undersigned has been duly authorized to make the statements herein
contained and to execute and deliver this certificate.
The undersigned agrees that this letter shall inure to the benefit of
and is being relied upon by the Relying Parties and each Relying Party's
successors and assigns.
Very truly yours,
_________________________________,
a ________________________________
By: __________________________
Name: __________________________
Title:__________________________
<PAGE>
SCHEDULE "A"
Exceptions to REA Estoppel Certificate
<PAGE>
EXHIBIT "A"
Supplemental Agreement to Operating Agreement dated December 19, 1984 by
and between JMB Income Properties, Ltd.-X, The Dunlap Company and Berry
Street Realty Company.
Supplemental Agreement to Operating Agreement dated December 19, 1984 by
and between JMB Income Properties, Ltd.-X and Mervyn's.
EXHIBIT 10.5
- ------------
AGREEMENT AND
FOURTH AMENDMENT TO PURCHASE AGREEMENT
--------------------------------------
(North Hills Mall; North Richland Hills, Texas)
This Agreement and Fourth Amendment To Purchase Agreement
("Fourth Amendment") is made and entered into as of the 16th day of
November, 1999, by and among NORTH HILLS MALL ASSOCIATES, an Illinois
general partnership ("Seller") NORTH HILLS CREEK MALL, L.P., a Texas
limited partnership ("Buyer"), NORTH HILLS, LTD., a Texas limited
partnership ("NHL"), THE KEST CHILDREN'S TRUST (the "Kest Trust", NHL and
the Kest Trust are hereinafter individually and collectively called
"Assignor"), BURK COLLINS, an individual and ROBERT S. MANNS, an
individual, with reference to the following facts:
A. Seller and Assignor entered into that certain "Purchase
Agreement" (the "Original Agreement") dated as of the 22nd day of June,
1999 (the "Execution Date"), pursuant to which Seller agreed to sell, and
Assignor agreed to buy, that certain real property located in the City of
North Richland Hills, County of Tarrant, State of Texas, consisting
primarily of a shopping center sometimes known as the "North Hills Mall"
(the "Property"). The Original Agreement was subsequently amended by (i)
that certain First Amendment To Purchase Agreement ("First Amendment") made
and entered into as of the 29th day of June, 1999, by and among Seller and
Assignor; (ii) that certain Second Amendment To Purchase Agreement
("Second Amendment") made and entered into as of the 30th day of July,
1999, by and among Seller and Assignor, and (iii) that certain Third
Amendment To Purchase Agreement ("Third Amendment") made and entered into
as of the 11th day of August, 1999, by and among Seller and Assignor. The
Original Agreement as amended by the First Amendment, Second Amendment and
Third Amendment is hereinafter referred to as the "Agreement". The
Agreement as amended by this Fourth Amendment is hereinafter referred to as
the "Amended Agreement". Unless otherwise defined herein, capitalized
terms have the meanings defined in the Agreement.
B. Assignor subsequently assigned, and Buyer assumed, all of
Assignor's rights and obligations as "Buyer" under the Agreement.
C. The undersigned parties wish to agree and ratify, confirm,
modify and amend the Agreement subject to and strictly in accordance with
the terms of this Fourth Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Buyer and Seller hereby
ratify, confirm, reaffirm and amend the Agreement and the undersigned
parties agree as follows:
1. Recitals. The recitals set forth above are not merely
recitals, but form an integral part of this Fourth Amendment.
2. Assignment / Reaffirmation of Assignment. To the extent not
previously accomplished, (i) Assignor hereby assigns to Buyer all of
Assignor's right, title and interest in and to the Agreement in order to
confer upon Buyer all of the benefits of a successor, assign or nominee of
Assignor under the Agreement, and Assignor acknowledges that this
assignment shall not release Assignor from any liability or obligation as
"Buyer" under the Agreement (as hereby amended) and (ii) Buyer hereby
accepts assignment of the Agreement as aforesaid and assumes all of
Assignor's obligations under the Agreement.
<PAGE>
3. Escrow Holder. Escrow Holder, as originally defined in
Paragraph 3.A of the Agreement, shall be Chicago Title Company located at
700 Flower Street, Suite 900, Los Angeles CA 90017, Attn.: Terry Gervasi,
Escrow No. 91005609-X40, Phone: (213) 488-4379, FAX: (213) 488-4388.
4. Closing Date. The Closing Date, as originally defined in
Paragraph 5 of the Agreement, shall be extended to Friday, November 19,
1999, or such earlier date as may be agreed upon by Buyer and Seller.
5. Buyer Contingencies. Buyer and Assignor hereby acknowledge and
agree that all contingencies and conditions precedent to its obligation to
purchase the Property (other than delivery of Seller's closing documents
into escrow) have been satisfied or are hereby expressly waived.
6. Buyer Representations and Warranties. Buyer hereby represents
and warrants to Seller, as of the date hereof and as of the Closing Date,
that this Fourth Amendment and all agreements, instruments and documents
provided in the Amended Agreement to be executed or to be caused to be
executed by Buyer are and on the Closing Date will be duly authorized,
executed and delivered by and are binding upon Buyer; Buyer is a limited
partnership, duly organized and validly existing and in good standing under
the laws of the State of Texas, and is duly authorized and qualified to do
all things required of it under this Fourth Amendment and the Amended
Agreement; and Buyer has the capacity and authority to enter into this
Fourth Amendment and the Amended Agreement and consummate the transactions
provided in the Amended Agreement without the consent or joinder of any
other party. The foregoing representations and warranties of Buyer shall
survive the Closing and the delivery and recordation of the Deed.
7. Buyer Indemnity. Burk Collins, Robert S. Manns and Buyer
(collectively, the "Indemnitors") jointly and severally agree to indemnify,
defend, protect, save and hold harmless Seller and its successors, assigns
and affiliates in accordance with the terms and conditions set forth on the
Indemnity Agreement attached hereto as Exhibit "A", and the Indemnitors
agree to execute and deliver to Seller at Closing such Indemnity Agreement
(such execution and delivery being a condition precedent to Seller's
obligation to close under the Agreement). The obligations of the
Indemnitors set forth in this Paragraph 7 shall survive the Closing and the
delivery and recordation of the Deed.
8. Tax Impound. Buyer and Seller have been informed by the
current holder (the "Holder") of the Loan that, as of November 5, 1999, the
balance of the tax impound account (the "Impound Account") being held
pursuant to the Loan was $796,245.48. Based upon such figure, the Holder
has indicated that it will retain in the Impound Account approximately
$286,811.87 for payment of the 1999 real estate taxes on the Property and
refund approximately $509,433.61 at Closing through escrow. Seller shall
receive a proration credit at Closing in the amount of the Impound Account
(prior to refund), and all real estate (and business property) taxes shall
be prorated between Buyer and Seller in accordance with the Agreement and
based upon the actual tax bills for the 1999 tax year attached hereto as
Exhibit "B". By executing this Fourth Amendment, Buyer and Seller hereby
instruct Holder to pay upon the Closing the real estate taxes on the
Property in accordance with the appropriate tax bill attached hereto as
Exhibit "B". Seller and Buyer have determined the total amount of refunds
owed (and that will be owed) to Property tenants pursuant to their
respective excess real estate tax contributions for the 1999 tax year and
all prior periods is $45,010.79, and Buyer shall receive a proration credit
at Closing (in full satisfaction and release of Seller [as Seller, landlord
or otherwise], and Buyer hereby assumes all of Seller's obligations, with
respect to such real estate tax contributions) equal to $39,831.47 (based
on a November 19, 1999 Closing) for the purpose of making reimbursements to
Property tenants for excess real estate tax contributions attributable to
Seller's period of Property ownership.
<PAGE>
9. Assumption Reaffirmation and Agreement. Buyer and Assignor
hereby (i) expressly reaffirm their agreement to reimburse Seller in
immediately available federal funds for all costs and expenses incurred by
Seller in connection with or relating to the Assumption, as such obligation
is set forth in Paragraph 6 of the Third Amendment, (ii) agree to pay all
such outstanding amounts at Closing through escrow and (iii) agree that all
such amounts shall be due and owing upon demand by Seller regardless if and
when the Closing occurs.
10. Assignment of Right of First Refusal. The Assignment and
Assumption Agreement shall be deemed to include, to the extent assignable
without the consent of any third party and without representation,
warranty, guaranty or liability of any kind or nature, Seller's right,
title and interest, if any, in and to that certain right of first refusal
granted under that certain letter agreement dated October 19, 1983 from
Federated Stores Realty, Inc. and Federated Department Stores, Inc.
(collectively, "Federated") to (and accepted and agreed to by) JMB Realty
Corporation ("JMB"), as amended by that certain letter agreement dated
December 7, 1984 from Federated to (and accepted and agreed to by) JMB.
The foregoing assignment shall be effective upon the Closing, if and when
the same occurs.
11. Stub Property. Upon the Closing, Seller shall cause JMB Income
Properties, Ltd.-X to deed to Buyer that certain real property with a
parcel address of 7540 Grapevine Highway in the City of North Richland
Hills, County of Tarrant, State of Texas consisting of approximately 1.05
acres, in the form of Exhibit "C" attached hereto.
12. Buyer Proration Credit. Buyer shall receive a non-refundable
proration credit at Closing equal to $112,000 subject to and in
consideration for Buyer's funding of $425,000 into a new impound account in
connection with the Loan and the Assumption.
13. Time of the Essence. Buyer and Seller hereby reaffirm and
agree that time shall be of the essence in the Amended Agreement.
14. Ratification of Purchase Agreement. Buyer and Seller hereby
agree that except as expressly provided herein, the provisions of the
Agreement shall be, and remain, in full force and effect (such Agreement
being hereby ratified and confirmed by the parties hereto), and that if any
provision of this Fourth Amendment conflicts with the Agreement, then the
provisions of this Fourth Amendment shall prevail.
15. Miscellaneous. This Fourth Amendment may be executed in
counterparts and delivered by facsimile transmission.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Fourth Amendment effective as of the date first set forth above.
BUYER:
NORTH HILLS CREEK MALL, L.P.,
a Texas limited partnership
By: Fountain Mall, Inc.,
a Texas corporation, its general partner
By: ________________________________________
Burk Collins,
Its President and Authorized Signatory
SELLER:
NORTH HILLS MALL ASSOCIATES,
an Illinois general partnership
By: JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation, Its General Partner
By: _________________________
Name: _________________________
Title: ________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
<PAGE>
ASSIGNOR:
NORTH HILLS, LTD.,
a Texas limited partnership
By: BURK COLLINS & CO., INC.,
a Texas corporation, its general partner
By: _________________________
Name: _________________________
Title: ________________________
By: THE KEST CHILDREN'S TRUST
By: _________________________
Michael Kest, Trustee
INDEMNITORS:
------------------------------
Burk Collins, an individual
------------------------------
Robert S. Manns, an individual
<PAGE>
EXHIBIT "A"
FORM OF
INDEMNITY AGREEMENT
<PAGE>
EXHIBIT "B"
1999 Tax Bills
[See Attached]
<PAGE>
EXHIBIT "C"
FORM OF DEED
DEED WITHOUT WARRANTY
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS
COUNTY OF TARRANT
JMB INCOME PROPERTIES, LTD.-X, an Illinois limited partnership
("Grantor"), for and in consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) TEN DOLLARS, and other good and valuable consideration paid by
NORTH HILLS CREEK MALL, L.P., a Texas limited partnership ("Grantee"), the
receipt and sufficiency of which are hereby acknowledged and confessed,
subject to the exceptions, liens, encumbrances, terms and provisions
hereinafter set forth and described, has GRANTED, BARGAINED, SOLD and
CONVEYED, and by these presents does hereby GRANT, BARGAIN, SELL and
CONVEY, unto Grantee all of that certain lot, tract or parcel of land
situated in the City of North Richland Hills, Tarrant County, Texas, and
being more particularly described in Exhibit "A" attached hereto and
incorporated herein by reference, together with all improvements located on
such land (such land and improvements being collectively referred to as the
"Property").
This conveyance is made by Grantor and accepted by Grantee subject to
all covenants, conditions, easements, encumbrances and all other matters of
record and all other matters that can be determined by a visual inspection
or a complete and accurate survey of the Property (the "Permitted
Exceptions").
TO HAVE AND TO HOLD the Property, subject to the Permitted
Exceptions, unto Grantee, and its successors and assigns forever, without
express or implied warranty; and all warranties that might arise by common
law and the warranties in Sec 5.023 of the Texas Property Code (or its
successor) are excluded.
GRANTEE ACKNOWLEDGES THAT THE CONVEYANCE OF THE PROPERTY IS
SPECIFICALLY MADE "AS-IS" AND "WHERE-IS," WITHOUT ANY REPRESENTATIONS OR
WARRANTIES EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED
WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY OR ANY
OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM
COMMERCIAL CODE OR OTHERWISE.
EXECUTED on November ___, 1999.
GRANTOR:
JMB Income Properties, Ltd.-X,
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation, Its General Partner
By: _________________________
Name: _________________________
Title: ________________________
<PAGE>
STATE OF ILLINOIS )
) S.S.
COUNTY OF COOK )
On ____________________, before me, ____________________, a Notary
Public in and for said County and State, personally appeared __________,
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity and that by his/her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Signature:
----------------------------------------
My commission expires:
------------------------------
SPACE FOR NOTARY SEAL OR STAMP
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
[See Attached]
<PAGE>
EXHIBIT "A"
FORM OF
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Indemnity") is entered into as of
November ___, 1999, by BURK COLLINS, individually ("Collins "), ROBERT S.
MANNS, individually ("Manns "), and NORTH HILLS CREEK MALL, L.P., a Texas
limited partnership ("NHCM"; together with Collins and Manns,
"Indemnitor"), in favor of NORTH HILLS MALL ASSOCIATES, an Illinois general
partnership ("Associates").
R E C I T A L S
---------------
A. Associates is the owner of certain improved real property in
the City of North Richland Hills, County of Tarrant, State of Texas,
consisting primarily of a shopping center sometimes known as the "North
Hills Mall" (the "Property").
B. Associates and NORTH HILLS, LTD., a Texas limited partnership
("NHL"), and THE KEST CHILDREN'S TRUST (the "Kest Trust", NHL and the Kest
Trust are hereinafter individually and collectively called "Assignor")
entered into that certain "Purchase Agreement" (the "Original Agreement")
dated as of the 22nd day of June, 1999, pursuant to which Associates agreed
to sell, and Assignor agreed to buy, the Property. The Original Agreement
was subsequently amended by (i) that certain First Amendment To Purchase
Agreement ("First Amendment") made and entered into as of the 29th day of
June, 1999, by and among Associates and Assignor; (ii) that certain
Second Amendment To Purchase Agreement ("Second Amendment") made and
entered into as of the 30th day of July, 1999, by and among Associates and
Assignor; (iii) that certain Third Amendment To Purchase Agreement
("Third Amendment") (iv) that certain Agreement and Fourth Amendment To
Purchase Agreement ("Fourth Amendment") made and entered into as of the
16th day of November, 1999, by and among Associates and NHCM (as successor-
in-interest to Assignor pursuant to an assignment agreement whereby
Assignor assigned, and Buyer assumed, all of Assignor's rights and
obligations as "Buyer" under the Original Agreement, as then amended). The
Original Agreement as amended by the First Amendment, Second Amendment,
Third Amendment and Fourth Amendment is hereinafter referred to as the
"Agreement".
C. As a condition to and in consideration for Associates entering
into the Fourth Amendment (and for other good and valuable consideration),
Associates has required and Indemnitor has agreed (i) to indemnify
Associates against all cost, expense, liability and loss relating to or
arising from the continued existence and NHCM's assumption of the existing
loan (the "Loan") made to Associates now held by LaSalle Bank National
Association, as Trustee for the Registered Holders of Chase Commercial
Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates
Series 1996-1 and the related financing documents encumbering and/or
concerning the Property, including, without limitation, all documents
executed by Associates in connection with the Loan and NHCM's assumption of
thereof, (ii) to indemnify Associates against all cost, expense, liability
and loss relating to or arising from Property tenants' real estate tax
obligations and (iii) to execute and deliver this Indemnity to Associates
on the "Closing Date" (as hereinafter defined).
D. Indemnitor, either directly or through its affiliates, has a
financial interest in the Agreement, the transaction governed by the
Agreement and the potential acquisition of the Property, and it is in
Indemnitor's interest for Associates to enter into the Fourth Amendment.
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Indemnitor agrees as follows:
1. Definitions. As used in this Indemnity, the following terms
shall have the meanings attributed to them below:
A. "Closing Date" means the "Closing Date" set forth in the
Agreement.
B. "Claim" means any claim, demand, liability, loss, duty,
obligation, offset, lien, right or cause of action of any nature (whether
or not known, anticipated or suspected by Indemnitor or capable of being
known, anticipated or suspected by Indemnitor) made, incurred, threatened,
instituted or brought at any time after the Closing Date (and before the
Closing Date to the extent relating to the Loan assumption negotiation,
documentation, diligence and approval process), directly or indirectly and
in any manner or forum, by reason of or in connection with NHCM's
assumption of the Loan, the Loan (to the extent Associates would have been
released from or would have a good faith defense against the same if the
Loan had been satisfied and paid in full on the Closing Date), any document
executed by Associates in connection with NHCM's assumption of the Loan,
the real and/or personal property now or hereafter encumbered pursuant to
the Loan (to the extent Associates would have been released from or would
have a good faith defense against the same if the Loan had been satisfied
and paid in full on the Closing Date), or the reimbursement of or payment
by Property tenants with respect to their respective real estate (and
business property) tax obligations.
C. "Claimant" means any person or entity that makes,
threatens, institutes or brings any Claim against any Indemnified Party or
that demands payment of any Costs from any Indemnified Party or to whom any
Indemnified Party becomes obligated to pay any Costs.
D. "Costs" means any and all damages, losses, fines,
penalties, awards, assessments, charges, fees, costs and expenses of any
nature suffered or incurred by any person as a result of or in connection
with any Claim, including, without limitation, (i) compliance, legal,
investigative, preventive, planning, and related costs, (ii) costs relating
to any judicial, administrative, arbitration or mediation action, suit,
hearing or proceeding, including court costs, filing fees, charges for
transcripts, arbitrators' or mediators' fees and witness fees, (iii) the
fees and disbursements of outside legal counsel and accountants and the
reasonable charges of in-house counsel and accountants, and (iv) all fees
and expenses incurred by Associates in connection with and relating to the
Loan assumption.
E. "Indemnified Parties" means Associates and its successors
and assigns, the directors, officers, employees, partners, members,
shareholders and agents of Associates and such assignees and successors,
and their respective heirs, executors, administrators, legal
representatives, successors and assigns.
2. Indemnity. From and after the Closing Date, and subject to the
occurrence of the Closing Date, Indemnitor agrees to indemnify, defend
(with counsel satisfactory to each affected Indemnified Party), protect,
save and hold harmless the Indemnified Parties from and against any and all
Claims and Costs suffered or incurred by any of the Indemnified Parties at
any time on or after the Closing Date (and before the Closing Date to the
extent relating to the Loan assumption negotiation, documentation,
diligence and approval process), except to the extent such Claims and Costs
are the result of fraud by any Indemnified Party.
<PAGE>
A. Obligation to Advance or Reimburse Costs. Within five
business days after Indemnitor's receipt from any Indemnified Party of any
demand that Indemnitor pay or reimburse such Indemnified Party for having
paid any Costs, and provided that such demand is accompanied by bills,
invoices, receipts or other documentation reasonably establishing the
amount and nature of such Costs, Indemnitor shall pay the full amount of
such Costs that such Indemnified Party has not yet paid (with such payment
to be made either to the Indemnified Party or directly to the Claimant, as
directed in the Indemnified Party's demand) and shall reimburse such
Indemnified Party for the full amount of Costs that the Indemnified Party
already has paid. Without in any way implying that Indemnitor's strict
compliance with the foregoing payment obligation is not required, any such
payment or portion thereof that Indemnitor fails to pay within five
business days after Indemnitor's receipt of any Indemnified Party's demand
for such payment shall bear interest from the date of Indemnitor's receipt
of the demand at the lesser of 18% per annum or the maximum rate allowed by
law.
B. Participation by Indemnified Parties. All Indemnified
Parties affected by any Claim shall have the right to participate, with
counsel of their choice, in the defense of such Claim. Indemnitor shall
not settle or compromise any Claim without first obtaining written approval
of the proposed settlement or compromise from all affected Indemnified
Parties.
C. Obligations Cumulative. Indemnitor's obligations under
this Indemnity shall be in addition to any other obligations or liability
that Indemnitor may have to the Indemnified Parties at law or in equity,
including any obligation of contribution or compensation under the
Agreement.
3. Assignment. This Indemnity shall inure to the benefit of, and
be binding upon and enforceable by, the parties to this Indemnity and their
respective successors and assigns and each other Indemnified Party;
provided, however, that Indemnitor shall not delegate any of its
obligations or liabilities under this Indemnity without the prior written
consent of Associates, which may be granted or withheld in the sole
discretion of Associates. Any such delegation shall not relieve Indemnitor
of liability for the due performance of the delegated obligations.
4. Severability. In the event any clause, sentence, term,
condition or provision of this Indemnity shall be held by any court of
competent jurisdiction to be illegal, invalid or unenforceable for any
reason, the remaining portions of this Indemnity shall nonetheless remain
in full force and effect.
5. Modifications. This Indemnity cannot be changed, modified or
supplemented except in a writing signed by the party against whom
enforcement of such change, modification or supplement is sought.
6. Applicable Law. This Indemnity shall be governed by and
construed and enforced under the laws of the State of Texas (without regard
to conflicts of law), except where federal law is applicable (including,
without limitation, any applicable federal law preempting state laws).
7. Counterparts. This Indemnity may be executed in one or more
counterparts or duplicate originals, each of which shall be deemed an
original, but all of which together shall constitute but one and the same
instrument.
<PAGE>
8. Attorneys' Fees. In the event any litigation is instituted by
Indemnitor or any Indemnified Party to enforce or construe any provision of
this Indemnity, the prevailing party shall be entitled to have and recover
from the other party all attorneys' fees, witness fees, court costs and
other litigation expenses incurred by the prevailing party, as determined
by the court (including, if an Indemnified Party is the prevailing party,
all attorneys' fees, court costs and other expenses incurred by such
Indemnified Party in connection with any insolvency, bankruptcy,
reorganization, arrangement or other similar proceeding involving
Indemnitor that in any way affects the exercise by such Indemnified Party
of its rights and remedies under this Indemnity).
9. Waiver. The failure by any party hereto to enforce any term or
provision of this Indemnity shall not constitute a waiver of the right to
enforce the same term or provision, or any other term or provision,
thereafter. No waiver by any party of any term or provision of this
Indemnity shall be deemed or shall constitute a waiver of any other
provisions (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided in writing.
10. Additional Waivers. Indemnitor acknowledges that, if
Indemnitor is comprised of more than one person or entity (individually, a
"Indemnitor Party" and collectively, the Indemnitor Parties"), none of the
Indemnitor Parties constitutes a guarantor because each of such parties is
fully responsible for the obligations under this Indemnity, subject to the
limitations of liability expressly set forth herein (and each of such
parties hereby waives to the extent permitted by law any claim to the
contrary). In addition, and without limitation on the foregoing waiver or
any other waivers contained in this Indemnity:
(A) Obligation Absolute. Each Indemnitor Party hereby
unconditionally waives to the extent permitted by law any defense to the
enforcement of this Indemnity based on the characterization of any such
Indemnitor Party as a guarantor and without limitation:
(1) The obligations of such Indemnitor Party hereunder
shall remain in full force and effect without regard to, and shall not be
affected or impaired by the following, any of which may be taken without
the consent of, or notice to, such Indemnitor Party, nor shall any of the
following give such Indemnitor Party any recourse or right of action
against Associates:
(a) Any express or implied amendment,
modification, renewal, addition, or supplement to this Indemnity or the
Agreement;
(b) Any exercise or non-exercise by Associates of
any right or privilege under this Indemnity or the Agreement;
(c) Any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Indemnitor Party or any other Indemnitor Party, or any
guarantor (which term shall include any other party at any time directly or
contingently liable for any of Indemnitor's obligations under this
Indemnity) or any affiliate of any Indemnitor Party, or any action taken
with respect to this Indemnity by any trustee or receiver, or by any court,
in any such proceeding, whether or not such Indemnitor Party shall have had
notice or knowledge of any of the foregoing;
(d) Any release or discharge of any other
Indemnitor Party from its liability under this Indemnity or any release or
discharge of any endorser or guarantor or of any other party at any time
directly or contingently liable for the obligations secured by this
Indemnity;
<PAGE>
(e) Any assignment or other transfer of this
Indemnity; and
(f) Any acceptance of partial performance of the
obligations.
B. Waivers. Each Indemnitor Party unconditionally waives to
the extent permitted by law any defense to the enforcement of this
Indemnity, including:
(1) All presentments, demands for performance, notices
of nonperformance, protests, notices of protest, notices of dishonor, and
notices of acceptance of this Indemnity;
(2) Any right to require Associates to proceed against
any other Indemnitor Party or any guarantor at any time or to proceed
against or exhaust any security held by Associates at any time or to pursue
any other remedy whatsoever at any time;
(3) The defense of any statute of limitations affecting
the liability of such Indemnitor Party hereunder, the liability of any
other Indemnitor Party or any guarantor under this Indemnity, or the
enforcement hereof, to the extent permitted by law;
(4) Any defense arising by reason of any invalidity or
unenforceability of (or any limitation of liability in) this Indemnity or
any disability of any Indemnitor Party or any guarantor or of any manner in
which Associates has exercised its rights and remedies under this
Indemnity, or by any cessation from any cause whatsoever of the liability
of any Indemnitor Party or any guarantor;
(5) Without limitation on clause (4) above, any defense
based upon any lack of authority of the officers, directors, partners or
agents acting or purporting to act on behalf of any Indemnitor Party or any
principal of any Indemnitor Party or any defect in the formation of any
Indemnitor Party or any principal of any Indemnitor Party;
(6) [Intentionally Deleted];
(7) Any defense based upon an election of remedies by
Associates, or any election of remedies, which destroys or otherwise
impairs the subrogation rights of such Indemnitor Party or the rights of
such Indemnitor Party to proceed against any other Indemnitor Party or any
guarantor for reimbursement, or both;
(8) Any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in
amount nor in any other aspects more burdensome than that of a principal;
(9) Any defense based upon Associates' election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application
of Section 1111(b)(2) of the Federal Bankruptcy Code or any successor
statute;
(10) Any defense based upon any borrowing or any grant
of a security interest under Section 364 of the Federal Bankruptcy Code;
(11) Any duty of Associates to advise such Indemnitor
Party of any information known to Associates regarding the financial
condition of any other Indemnitor Party and all other circumstances
affecting any other Indemnitor Party's ability to perform its obligations
to Associates, it being agreed that such Indemnitor Party assumes the
responsibility for being and keeping informed regarding such condition or
any such circumstances; and
<PAGE>
(12) Any right of subrogation, reimbursement,
exoneration, contribution or indemnity, or any right to enforce any remedy
which Associates now has or may hereafter have against any other Indemnitor
Party or any benefit of, or any right to participate in, any security now
or hereafter held by Associates.
C. Subrogation. Each Indemnitor Party understands that the
exercise by Associates of certain rights and remedies may affect or
eliminate such Indemnitor Party's right of subrogation against any other
Indemnitor Party or any guarantor and that such Indemnitor Party may
therefore incur partially or totally nonreimbursable liability hereunder.
Nevertheless, each Indemnitor Party hereby authorizes and empowers
Associates, its successors, endorsees and assigns, to exercise in its or
their sole discretion, any rights and remedies, or any combination thereof,
which may then be available, it being the purpose and intent of such
Indemnitor Party that the obligations hereunder shall be absolute,
continuing, independent and unconditional under any and all circumstances.
Notwithstanding any other provision of this Indemnity to the contrary, so
long as any indebtedness secured by this Indemnity remains outstanding each
Indemnitor Party hereby waives and releases any claim or other rights which
such Indemnitor Party may now have or hereafter acquire against any other
Indemnitor Party or any guarantor of all or any of the obligations of such
Indemnitor Party hereunder that arise from the existence or performance of
such Indemnitor Party's obligations under this Indemnity, including any
right of subrogation, reimbursement, exoneration, contribution or
indemnification, any right to participate in any claim or remedy of
Associates against any other Indemnitor Party or any collateral which
Associates now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, by any
payment made hereunder or otherwise, including, without limitation, the
right to take or receive from any other Indemnitor Party, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights.
D. [Intentionally Deleted].
E. Independent Obligations. The obligation of such
Indemnitor Party hereunder is independent of the obligation of any other
Indemnitor Party and, in the event of any default hereunder, a separate
action or actions may be brought and prosecuted against such Indemnitor
Party whether or not such Indemnitor Party is the alter ego of any other
Indemnitor Party and whether or not any other Indemnitor Party is joined
therein or a separate action or actions are brought against any other
Indemnitor Party. Associates's rights hereunder shall not be exhausted
until all of the obligations secured by this Indemnity have been fully paid
and performed.
F. Subordination. Without limitation on the waiver and
release contained in subsection C above and to the extent permitted by law
and so long as any indebtedness secured by this Indemnity remains
outstanding:
(1) Each Indemnitor Party subordinates all present and
future indebtedness owing by any other Indemnitor Party to such Indemnitor
Party to the obligations at any time owing by any other Indemnitor Party to
Associates. Each Indemnitor Party assigns all such indebtedness to
Associates as security for this Indemnity.
(2) Each Indemnitor Party agrees to make no claim on
such indebtedness until all obligations of any other Indemnitor Party under
this Indemnity have been fully discharged.
<PAGE>
(3) Each Indemnitor Party further agrees not to assign
all or any part of such indebtedness unless Associates is given prior
notice and such assignment is expressly made subject to the terms of this
Indemnity. If Associates so requests, (i) all instruments evidencing such
indebtedness shall be duly endorsed and delivered to Associates, (ii) all
security for such indebtedness shall be duly assigned and delivered to
Associates, (iii) such indebtedness shall be enforced, collected and held
by such Indemnitor Party as trustee for Associates and shall be paid over
to Associates, and (iv) such Indemnitor Party shall execute, file and
record such documents and instruments and take such other action as
Associates deems necessary or appropriate to perfect, preserve and enforce
Associates's rights in and to such indebtedness and any security therefor.
If such Indemnitor Party fails to take any such action, Associates, as
attorney-in-fact for such Indemnitor Party, is hereby authorized to do so
in the name of such Indemnitor Party. The foregoing power of attorney is
coupled with an interest and cannot be revoked.
G. Bankruptcy No Discharge; Repayments. So long as
any of the obligations guaranteed hereunder shall be owing to Associates,
no Indemnitor Party shall, without the prior written consent of Associates,
commence or join with any other party in commencing any bankruptcy,
reorganization or insolvency proceedings of or against any other Indemnitor
Party. Each Indemnitor Party understands and acknowledges that by virtue
of this Indemnity, it has specifically assumed any and all risks of a
bankruptcy or reorganization case or proceeding with respect to any other
Indemnitor Party. As an example and not in any way of limitation, a
subsequent modification of the obligations secured by this Indemnity in any
reorganization case concerning any other Indemnitor Party shall not affect
the obligation of each such Indemnitor Party to pay and perform the
obligations secured by this Indemnity in accordance with its original
terms. In any bankruptcy or other proceeding in which the filing of claims
is required by law, each Indemnitor Party shall file all claims which such
Indemnitor Party may have against any other Indemnitor Party relating to
any indebtedness of any other Indemnitor Party to such Indemnitor Party and
shall assign to Associates all rights of such Indemnitor Party thereunder.
If any Indemnitor Party does not file any such claim, Associates, as
attorney-in-fact for such Indemnitor Party, is hereby authorized to do so
in the name of such Indemnitor Party or, in Associates's discretion, to
assign the claim to a nominee and to cause proof of claim to be filed in
the name of Associates's nominee. The foregoing power of attorney is
coupled with an interest and cannot be revoked. Associates or its nominee
shall have the right, in its reasonable discretion, to accept or reject any
plan proposed in such proceeding and to take any other action which a party
filing a claim is entitled to do. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized
to pay such claim shall pay to Associates the amount payable on such claim
and, to the full extent necessary for that purpose, each Indemnitor Party
hereby assigns to Associates all of such Indemnitor Party's rights to any
such payments or distributions; provided, however, such Indemnitor Party's
obligations hereunder shall not be satisfied except to the extent that
Associates receives cash by reason of any such payment or distribution. If
Associates receives anything hereunder other than cash, the same shall be
held as collateral for amounts due under this Indemnity. Notwithstanding
anything to the contrary herein, the liability of each Indemnitor Party
hereunder shall be reinstated and revised, and the rights of Associates
shall continue, with respect to any amount at any time paid by or on behalf
of any Indemnitor Party on account of this Indemnity which Associates shall
restore or return by reason of the bankruptcy, insolvency or reorganization
of any Indemnitor Party or for any other reasons, all as though such amount
had not been paid.
<PAGE>
11. Successive Actions; Remedies Cumulative. Each occurrence of a
Claim shall give rise to a separate cause of action under this Indemnity,
which may be enforced by each affected Indemnified Party from time to time
in a single action or in a series of actions, and the obligations of
Indemnitor under this Indemnity shall continue for as long as any
Indemnified Party may be subject to any Claim. The rights and remedies of
the Indemnified Parties under this Indemnity shall be cumulative with any
and all other rights and remedies available to the Indemnified Parties in
equity or at law.
12. Notices. Whenever Indemnitor or Associates shall desire to
give or serve any notice, demand, request or other communication with
respect to this Indemnity ("Notice"), each such Notice shall be in writing
and shall be personally served or sent by a commercial overnight delivery
service or by certified mail, return receipt requested, and shall be deemed
to have been received on the date actually received if personally served or
on the next business day after deposit with an overnight delivery service
or on the date of receipt or refusal as shown on the return receipt if sent
by certified mail. The addresses of the parties to which Notices shall be
sent (until notice of a change is served as provided in this Section) are
as follows:
Indemnitor: Associates:
Collins: North Hills Mall Associates
c/o Law Offices of Robert S. Manns c/o JMB Realty Corporation
9665 Wilshire Blvd., Suite 410 900 North Michigan Avenue
Beverly Hills, CA 90212 Chicago, Illinois 60611
Attention: Robert S. Manns, Esq. Attention: Julia A. Stibolt
Manns & NHCM:
North Hills Creek Mall, L.P.
c/o Fountain Mall, Inc.
1848 Norwood Plaza, Suite 214
Hurst, Texas 76054
Attention: Mr. Burk Collins
Notice of a change of address shall be given by 15 days' advance
written notice in the manner set forth in this Section.
13. Obligations Joint and Several. If Indemnitor consists of more
than one person or entity, each shall be jointly and severally liable under
this Indemnity.
14.Miscellaneous. This Indemnity may be executed in one or more
counterparts, each of which shall constitute an original, fully binding
agreement on the part of the executing party, and all of which taken
together shall constitute one agreement.
<PAGE>
IN WITNESS WHEREOF, Indemnitor has caused this Indemnity to be
executed by its duly authorized representative as of the date first above
written.
INDEMNITOR:
NORTH HILLS CREEK MALL, L.P.,
a Texas limited partnership
By: Fountain Mall, Inc.,
a Texas corporation,
its general partner
By: ____________________
Burk Collins,
Its President
and Authorized Signatory
--------------------------------
BURK COLLINS, an individual
--------------------------------
ROBERT S. MANNS, an individual
