November 30, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: JMB INCOME PROPERTIES, LTD. - XI
Commission File No. 0-15966
Form 8-K
Gentlemen:
Transmitted, for the above-captioned registrant, is the electronically filed
executed copy of registrant's current report on Form 8K dated November 30,
1994.
Thank you.
Very truly yours,
JMB INCOME PROPERTIES, LTD. - XI
BY: JMB Realty Corporation
(Managing General Partner)
By: C. SCOTT NELSON
________________________________
C. Scott Nelson, Vice President
Accounting Officer
CSN:sf
Enclosures
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 15, 1994
JMB INCOME PROPERTIES, LTD. - XI
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(Exact name of registrant as specified in its charter)
Illinois 0-15966 36-3254043
- - ------------------- -------------- --------------------
(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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BANK OF DELAWARE OFFICE BUILDING
Wilmington, Delaware
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. JMB Income Properties, Ltd. -
XI (the "Partnership") through Three Hundred Delaware Avenue Associates, L.P.
(the "Venture") was the owner of the Bank of Delaware Office Building located
in Wilmington, Delaware. Effective November 15, 1994, due to the Venture's
default in the payment of debt service, the mortgage lender (EML Associates)
concluded proceedings to realize upon its mortgage security interest
represented by the land, building, and related improvements of the property
via a deed in lieu of foreclosure. In conjunction with the transfer of title
and release of the venture from liabilities of the property including those
related to asbestos, the Venture paid the mortgage lender a sum of
approximately $681,000 which includes the net cash flow of the property since
the suspension of the payment of debt service in February 1994. The property
consists of a 314,000 square foot office building, and was 61% occupied at the
time of the transfer of title.
The Venture has recognized a gain of approximately $1,000,000 for
financial reporting purposes in 1994, and expects to recognize a loss of
approximately $4,200,000 for Federal income tax purposes, virtually all of
which is allocable to the Partnership pursuant to the venture agreement.
Pursuant to the terms of the JMB Income Properties, Ltd. - XI Partnership
Agreement, the gain on disposition in 1994 will be allocated 1% to the General
Partners and 99% to the Limited Partners. There will be no distributable
proceeds as a result of this transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not applicable.
(b) Pro forma Financial Information - Narrative.
For financial reporting purposes, the Partnership treated its
investment in the venture as being 100% owned. As a result of the Venture
transferring title to the property to the lender, there will be no further
rental income, property operating expenses, depreciation, or mortgage interest
expense recorded for the Bank of Delaware Office Building which for the most
recent fiscal year (the year ended December 31, 1993) were approximately
$3,455,000, $2,090,000, $434,000, and $986,000, respectively. Rental income,
property operating expenses, depreciation, and mortgage interest expense for
the nine months ended September 30, 1994 were approximately $1,563,000,
$1,431,000, $295,000, and $739,000, respectively. Also, as a result of the
Venture transferring title to the property to the lender, there will be no
further assets and liabilities related to the property, which at September 30,
1994 consisted of land, building and improvements, and deferred expenses (net
of accumulated depreciation and amortization) of approximately $9,084,000;
cash and other current assets of approximately $714,000; current portion of
long-term debt (including accrued interest) of approximately $10,240,000; and
other liabilities of approximately $119,000.
(c) Exhibits
1. Deed in Lieu of Foreclosure Agreement dated November 15,
1994 between Three Hundred Delaware Avenue Associates, L.P. and EML
Associates.
2. Memorandum of Mutual Releases dated November 15, 1994
between Three Hundred Delaware Avenue Associates, L.P. and EML Associates.
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. - XI
BY: JMB Realty Corporation
(Managing General Partner)
By: C. SCOTT NELSON
________________________________
C. Scott Nelson, Vice President
Director of Partnership
Financial Reporting
Dated: November 30, 1994
DEED IN LIEU OF FORECLOSURE AGREEMENT
(The Bank of Delaware Building, Wilmington, Delaware)
THIS AGREEMENT is made and entered into as of the 15th day of
November, 1994, by and between THREE HUNDRED DELAWARE AVENUE ASSOCIATES,
L.P., a Texas limited partnership (hereinafter called "Seller"), and EML
ASSOCIATES, a New York general partnership (hereinafter called "Buyer").
R E C I T A L S
A. Seller is the owner of that certain real property located at
300 Delaware Avenue in the City of Wilmington, County of New Castle, State
of Delaware, consisting primarily of an office building (the "Office
Building") sometimes known as "The Bank of Delaware Building".
B. On February 28, 1989, Buyer made a loan (the "Loan") in the
original principal amount of $9,500,000 to Seller, which Loan is evidenced
by a promissory note (the "Note") captioned "MORTGAGE NOTE" in that amount
dated February 28, 1989. The Note is secured by, among other things, that
certain mortgage (the"Mortgage") captioned "DELAWARE MORTGAGE AND SECURITY
AGREEMENT" dated February 28, 1989, by Seller, as mortgagor, in favor of
Buyer, as mortgagee, and recorded on March 1, 1989 in the New Castle County
Recorder of Deed's Office at Mortgage Record Book Volume 1366, Page 108,
and that certain assignment of leases (the "Assignment of Leases")
captioned "ASSIGNMENT OF RENTS AND LEASES" dated February 28, 1989, by
Seller, as assignor, in favor of Buyer, as assignee. The Note, Mortgage,
assignment of Leases and the other documents and agreements executed by
Seller evidencing, securing or otherwise relating to the Loan are
hereinafter collectively referred to as the "Loan Documents".
C. Buyer is the present holder of the Loan and the Lender's
interest under the Loan Documents.
D. Seller is in default under the Loan Documents (the "Default").
E. Seller desires to obtain Lender's covenant not to maintain any
suit or action against it under the Loan Documents, and Seller is willing
to transfer the "Property" (as such term is defined in paragraph 3 below)
to Buyer.
F. The fair market value of the Property plus the "Closing
Payment" (as such term is hereinafter defined) is less than the
indebtedness evidenced by Note and secured by the Mortgage.
G. Buyer desires to acquire the Office Building on the terms and
conditions hereinafter documented.
NOW, THEREFORE, in consideration of the recitals set forth above and
of the mutual undertakings of the parties hereto, and of the sum of Ten
Dollars ($10.00) and other good and valuable consideration paid by each
party to the other, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, Seller and Buyer hereby
agree as follows:
1. Recitals. The recitals set forth above are accepted and
affirmed by each of Buyer and Seller and are incorporated herein by this
reference.
2. Certain Definitions. As used herein, the following terms have
the following meanings:
A. "Net Cash Flow" for the applicable period means the amount,
if any, by which (x) the sum of the "Cash Income" for such period, exceeds
(y) the "Cash Expenditures" for such period.
B. "Cash Income" for the applicable period means the gross
cash revenues and funds received by the Seller with respect to the Property
for such period (including all prepaid rents, prepaid payments and security
deposits applied or forfeited), including, but not limited to, fixed,
minimum or base rent under tenant leases, parking fees and charges and
tenant reimbursements and contributions, buy not including funds received
as capital contributions or financing proceeds or sale proceeds.
C. "Cash Expenditures" for the applicable period means cash
expenditures made by the Seller or which the Seller is obligated to make
for or during such period in the operation of or in connection with the
Property, including, but not limited to, payroll, business taxes and real
and personal property taxes and assessments, utility charges, insurance
premiums, property repair and maintenance costs, janitorial costs,
advertising costs, professional fees (including, buy not limited to, the
fees payable to Duane, Morris & Heckscher in connection with the tax appeal
for the Property), bank charges, leasing commissions, fees and costs,
tenant improvements and other capital costs, all expenditures made or
required to be made by JMB Properties, Co. as the manager of the Property
(the "Manager") under that certain management agreement (the "Management
Agreement") captioned "MANAGEMENT AGREEMENT" dated as of March 1, 1985, by
and between Seller and JMB Properties Corporation, as predecessor-in-
interest to Manage, all management fees and expenses of the Manager as
provided for in the Management Agreement and all other costs and expenses.
3. Conveyance of Property. Seller shall convey to Buyer, and
Buyer shall acquire from Seller, the land (the "Land") described in Exhibit
"A", attached hereto and made a part hereof, together with the following:
(i) all right, title and interest of Seller in and to the Office Building
and all other improvements, structures, supplies and fixtures located upon
the Land; (ii) all right, title and interest of Seller in and to those
items of personal property set forth in Exhibit "B" attached hereto and
made a part hereof (the "Personal Property"), located upon or about the
Land and used in the operation of the Land or the Office Building, but only
to the extent not owned or leased by any of the tenants of the Property or
the Manager of the Property; all right, title and interest of Seller in and
to the name "The Bank of Delaware Building" and any other trade name or
trademark used primarily in connection with the Land or the Office Building
(exclusive of any trademarks and/or tradenames of Seller, any of Seller's
constituent partners, Manager or any parties or entities related to or
affiliated with Seller or Manager, or any of the tenants and occupants of
the Property); (iii) to the extent assignable, all right, title and
interest of Seller in and to all of the following (the extent the same
relate to the Land or the Office Building or the other Property): all
leases (including the "Tenant Leases" [as such term is hereinafter
defined]), all contract rights, all account receivables (including all
uncashed checks and bank drafts), all guaranties and warranties, all
agreements, all tenant lists, all advertising materials, all telephone
exchange numbers, all operational and financial books, records and
documents with respect to the Property (exclusive of the personal books,
records and documents of Seller, Seller's constituent partners and
Manager), all governmental permits, authorization and approvals, all
surveys, plans, specifications and drawings of any description; and (iv) to
the extent assignable, all rights or choices of action or other claims of
any description relating to the Land, the Office Building, the Personal
Property, or any of the other Property as described herein (collectively
"Rights of Action") whether relating to periods of time prior to, on or
following the date of this Agreement, including, without limitation, any
claims or rights to any reductions, abatements or credits (collectively
"Tax Abatements") of any real estate or other taxes imposed by the City of
Wilmington, the State of Delaware, or any other governmental endued of any
description with respect to the Land, the Office Building, the Personal
Property, the Tenant Leases or any of the other Property described herein
(but not with respect to any income or franchise taxes imposed upon Seller,
any constituent partner of Seller or Manager ), provided that the Rights of
Action shall not include the "Retained Claims" (as such term is defined
below), and provided further that with respect to any rights of Action
relating to time periods prior to the date of this Agreement, Seller shall
retain such rights, jointly and/or in common with Buyer, to the extent
necessary for Seller to raise any of the same, as applicable, as an
affirmative defense, cross-claim, counterclaim or otherwise in any suit,
action, proceeding or matter brought or threatened against Seller by any
third party or otherwise, including any governmental agency or authority,
with respect to any such Right of Action relating to periods of time prior
to the date of this Agreement (all of the foregoing as described in this
paragraph 3 is collectively called the "Property"), all upon the terms,
covenants, and conditions hereinafter set forth. Notwithstanding the
foregoing or anything to the contrary herein or in any other agreement or
instrument executed or delivered in connection herewith, Seller shall
retain the following (collectively the "Retained Claims"): all of Seller's
rights, remedies, defenses, counter-claims and cross-complaints against
Tybout, Redfearn & Pell, P.A., ("Tybout"), its insurance company, Provident
Washington Insurance Company ("Provident"), E.I. DuPont deNemours & Company
("DuPont") (a former tenant of the Property), the Coffee Pause Marketing
Company and any other necessary or desirable parties or entities in
connection with the lawsuit filed by Provident and Tybout in connection
with the water leak in the space occupied by DuPont as described on Exhibit
"M" attached hereto and made a part hereof.
4. Closing Conference. The consummation (the "Closing") of the
conveyance herein provided shall be consummated through a closing
conference (the "Closing Conference"), which shall be held on the day of
the "Closing Date" at the offices of Obermayer, Rebmann, Maxwell & Hippel
at the 14th Floor of the Packard Building, S.E. Corner 15th and Chestnut
Streets, Philadelphia, Pennsylvania 19102, or such other place as shall be
agreed upon by Buyer and Seller. As used herein, "Closing Date" means
November 15, 1994, or such earlier date as may be agreed upon by Buyer and
Seller.
A. Deliveries to Escrow by Seller. Prior to the Closing
Date, Seller shall deliver or cause to be delivered to Eugene DiPrinzio,
Esq. ("Escrow Holder") at Young, Conaway, Stargatt & Taylor, 11th Floor,
Rodney Square North, Wilmington, Delaware 19899-0391, (312) 571-6664, the
following:
(1) The "Closing Payment ". As used herein, the
"Closing Payment is an amount equal to the sum of (x) $350,000, (y) the
tenant security deposit of Swartz, Campbell & Detweiler in the amount of
$1,500, (the "SCD Security Deposit") and (z) the Net Cash Flow from the
Property for the period from and after January 1, 1994 through October 31,
1994, inclusive (as adjusted for management fees and employee salaries and
benefits of the manger's personnel through the Closing Date). Buyer and
Seller agree that the Net Cash Flow for the period from and after February
1, 1994 through October 31, 1994, inclusive, is $294,451.50 (such amount
has been adjusted for management fees and employee salaries and benefits of
the Manager's personnel through the Closing Date).
(2) The "Closing Costs" (as such term is defined in
Section 4G below).
(3) A duly executed and acknowledged special warranty
deed ("Deed") in the form of Exhibit "D" attached hereto and made a part
hereof;
(4) A duly executed and acknowledged memorandum of
material releases (the "Memorandum") in the form of Exhibit "E" attached
hereto and made a part hereof;
(5) A State of Delaware Transfer Tax Return (the
"Delaware Return") in the form of Exhibit "F" attached hereto and made a
part hereof; and
(6) A City of Wilmington Transfer Tax Return (the "City
Return") in the form of Exhibit "F" attached hereto and made a part hereof.
(7) All uncashed checks and bank drafts properly
endorsed to Buyer, held by Seller on the Closing Date and relating to any
of the Property.
B. Delivery to Escrow by Buyer. Prior to the Closing Date,
Buyer shall deliver to Escrow Holder a duly executed and acknowledged
Memorandum.
C. Instructions to Title Company. The deliveries to be made
under subparagraphs A and B above shall be made in accordance with and
subject to a letter (the "Closing Procedure Letter") from Seller and Buyer
to Escrow Holder which is being executed concurrently herewith.
D. Delivery to Parties. Upon satisfaction of all the
conditions, in the Closing Procedure Letter for delivery of the Closing
Payment and the Closing Costs (other than the delivery of Seller's written
authorization to close the escrow under the Closing Procedure Letter) and
receipt of written advice by Escrow Holder that such conditions have been
satisfied and that Escrow Holder is prepared to close the escrow, the
following items are to be delivered at closing:
(1) Items To Be Delivered by Seller: Seller shall
deliver to Buyer the following:
(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 duly executed and acknowledged certificate ("Non-
Foreign Certificate") regarding the "non-foreign" status of Seller;
(c) All original leases, contracts, surveys, plans and
specifications, permits and approvals, books and records and other written
agreements or documents in Seller's possession directly relating to the
Property (provided, however that Seller shall not be required to Deliver to
Buyer hereunder any books, records or documents not to be conveyed by
Seller to Buyer pursuant to paragraph 3 above);
(d) A duly executed termination agreement (the
"Termination Agreement") in the form of Exhibit "H" attached hereto and
made a part hereof, dated as of the Closing Date, by and between Seller and
Manager, providing for the termination of the Management Agreement and the
release by Manager of Buyer and Seller and the release by Seller and Buyer
of Manager from any and all liability under the Management Agreement.
(e) Evidence reasonably satisfactory to Buyer respecting
the due organization of Seller 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 Buyer 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) Items to Be Delivered by Buyer. Buyer shall deliver
to Seller the following:
(a) A certified copy of the Note with an endorsement or
legend of release attached thereto, all in the form attached hereto as
Exhibit "I" and made a part hereof;
(b) A duly executed and acknowledged Assignment and
Assumption Agreement;
(c) Evidence reasonably satisfactory to Seller
respecting the due organization of Buyer and the due authorization and
execution of this Agreement and documents required to be delivered
hereunder; and
(d) Such additional documents as may be reasonably
required by Seller 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).
E. Closing. Escrow Holder shall close the escrow on the
Closing Date by (i) causing the Deed and the Memorandum to be recorded in
the Recorder's Office of the County of New Castle, Delaware, (ii) filing
the Delaware Return with the New Castle County Department of Finance as
agent for the State of Delaware, (iii) filing the City Return with the City
of Wilmington Department of finance, (iv) delivering the Closing Payment
and Undeposited Funds to Buyer, and (v) paying the Closing Costs to the
appropriate parties, all in accordance with the terms and provisions of the
Closing Procedures Letter.
F. Investment of Funds. To the extent required by the Closing
Procedure Letter, all funds received by Escrow Holder shall be, until the
closing, kept o deposit and invested in (a) United States Treasury
obligations, (b) United States Treasury-backed repurchase agreements issued
by a major money center banking institution acceptable to Seller, or (c)
such other manner as may be reasonably agreed to by Seller and Buyer.
Interest accruing to such account prior to the close of escrow shall be for
the account of Seller; interest accruing on all sums due Buyer after the
close of escrow shall be for the account of Buyer.
G. Closing Costs. In the event the Property is conveyed by
Seller to Buyer in accordance, with the terms and provisions of this
Agreement, Seller shall pay for the amounts (the "Closing Costs") described
on Exhibit "J", attached hereto and made a part hereof; provided, however,
in no event shall Seller be responsible for any attorneys' fees and costs
of Buyer's counsel in excess of $25,000 and any other closing Costs in
excess of $10,000. Seller and Buyer each affirms and agrees that the
Property is being conveyed to Buyer as the lender under the loan and the
sole holder of a bona-fide mortgage which is genuinely in default, by
Seller, as the mortgagor, in lieu of foreclosure and hence the Property is
exempt from the State of Delaware Realty Transfer Tax pursuant to 30 Del.
C. Section 5401 (1) (P), and accordingly neither Seller nor Buyer is obligated
to pay any documentary and other transfer taxes attributable to the Deed or
the conveyance of the Property.
H. Prorations. Subject to the terms and provisions of
paragraph 4J below and the remaining terms and provisions of this
paragraph, as Buyer is entitled to all Net Cash Flow from the Property,
there will not be any prorations. In order to facilitate the closing of
this transaction, Buyer and Seller agreed that Seller will not cash any
checks or deposits any amounts received by Seller from and after November
1, 1994 (collectively, the "Undeposited Funds". Instead, Seller at closing
will deliver such Undeposited Funds as are received by Seller on or prior
to closing (with all checks or bank drafts properly endorsed to Buyer).
Seller and Buyer agree that the Undeposited Funds (the total amount of
which is shown on Exhibit "K" attached hereto and made a part hereof) to be
paid, endorsed or transferred by Buyer at closing, are in addition to the
Cash Payment to be paid by Seller to Buyer. In addition, except for the
payroll of the Manager's employees and the Manager's fees through the
Closing Date, Seller shall not pay any of the costs
and expenses of the operation of the Property incurred after October 31,
1994 or billed after October 23, 1994. Buyer shall be solely responsible
for the payment of such cost and expenses and the payment of such bills.
In connection therewith, Seller shall cooperate with Buyer in determining
which costs, expenses and bills are outstanding and legitimate. Lastly,
Seller has not paid the County of New Castle's property taxes in the amount
of $222,500 that were payable on September 7, 1994 to the extent not
discharged or satisfied by Buyer's application of any Tax Abatements.
Buyer shall be solely responsible for the payment of such taxes and all
interest and penalties thereon and also shall be entitled to receive and
enjoy the benefit of any and all Tax Abatements.
I. No Merger. Seller and Buyer each acknowledges and agrees
that, notwithstanding the release of the obligations (whether personal or
otherwise) of Seller pursuant to the Loan Documents as provided in this
Agreement, all of the Loan Documents and the indebtedness evidenced and
secured thereby shall remain in full force and effect after the conveyance
of the Property by Seller to Buyer and the consummation of the other
transactions contemplated by this Agreement, it being expressly
acknowledged and agreed that the interest of Buyer in the Property after
all of the conveyances or transfers provided under or pursuant to this
Agreement shall not merge with the interest of Buyer in the Property as
lender under the Loan documents. It is the expressed intention of each of
the parties hereto that such interests of Buyer in the Property shall not
merge, but shall be and remain at all times separate and distinct,
notwithstanding any union of said interests in Buyer at any time by
purchase, termination or otherwise and that the lien of the Buyer in the
Property created by the Loan Documents or any of them shall be and remain
at all times a valid and continuous lien on the Property, unless and until
the lien of the loan Documents shall be satisfied or discharged
specifically by Buyer pursuant to written instrument effecting such
satisfaction or discharge. The provisions of this Paragraph 4I
notwithstanding, Buyer acknowledges and agrees that, unless the release of
Seller shall terminate and become void pursuant to the provisions of
paragraph 6D below, Seller shall not have any duty, obligation or liability
(whether personal or otherwise) with respect to the Loan Documents, and the
lien of the Loan Documents shall extend only to the Property and not to
Seller, any constituent partner, officer, shareholder, director, employee
or agent of Seller, or any other property or assets of Seller or any such
partner, officer, shareholder, director, employee or agent, and the lien of
any judgement pursuant to the Loan Documents shall be so restricted.
J. Seller to Remit Funds as Received. At Closing, Seller
shall deliver to Buyer any and all Undeposited Funds (with all checks or
bank drafts included therein properly endorsed to Buyer) or other funds
theretofore received by Seller with respect to any of the Property. Seller
further will promptly remit to Buyer any rent checks or other rentals or
income of any description with respect to any of the Property which may be
received by Seller from and after Closing (with all checks or bank drafts
included therein properly endorse to Buyer). Seller agrees to cooperate
with Buyer following Closing in notifying all tenants of the Property and
other persons or entities liable for the payment or performance of any
leases, contracts or other obligations conveyed or assigned to Buyer as
part of the Property to make such payments or performance directly to
Buyer.
K. Title Insurance. Buyer's obligation to acquire the
Property in accordance with the terms and provisions of this agreement
shall be conditioned upon the insurance by Ticor Title Insurance Company
(the "Title Company") of an owner's policy of title insurance (the "Owner's
Title Policy") in the form attached hereto as Exhibit "L" and made a part
hereof.
5. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of Seller.
(1) General Disclaimer. Except for the representations
and warranties specifically set forth in paragraphs 5A (2) and 5C of this
Agreement, the sale of the Property hereunder is and will be made on an "as
is" basis, without any other 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 presence or absence of hazardous
substances on or respecting the Property) the compliance of the Property
with applicable laws and regulations (including ,but 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 it has had ample
opportunity to 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 paragraphs 5A (2
and 5C below, Buyer will acquire the Property solely on the basis of its
own physical and financial examinations, review and inspections and the
title insurance protection afforded by any title insurance policy obtained
by it, including, but not limited to, the Owner's Title Policy. Without
limitation on the foregoing, Buyer acknowledges and agrees that the
Property contains asbestos and Buyer is acquiring the Property with full
knowledge of such asbestos. In connection therewith, Seller shall not have
any duty, obligation or liability to Buyer and its successors and assigns
in connection with such asbestos and any claims, causes of action, duties,
obligations, liabilities, costs, expenses and damages related thereto and
Buyer on behalf of itself and its successors and assigns waives any and all
of such duties, obligations and liabilities.
(2) Limited Representations and Warranties of Seller.
Subject to the provisions of paragraph 5A (1) above, Seller hereby
represents and warrants the following to Buyer as of the date hereof:
(a) 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
(including all requisite partnership actions and authorizations) executed
and delivered by and are and will be binding upon Seller. Seller is a
limited partnership, duly organized and validly existing under the laws of
the State of Texas, 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.
(b) Single Purpose Entity. To the actual knowledge of
Seller, Seller is a single purpose entity created and formed for the
purpose of owning the Property. Seller has no material assets other than
the Property.
(c) Cash Operating Statements. To the best of Seller's
knowledge, the cash operating statements with respect to the Property (the
"Operating Statements") for the period from and after January 1, 1994
through October 31, 1994 heretofore furnished by Seller to Buyer are true,
complete and correct as of the date made.
(d) Benefit of this Transaction. Seller believes that
the transactions contemplated by this Agreement are in its best interests.
Seller has been represented by an attorney, has reviewed this Agreement
carefully and understands its terms and conditions. Seller has signed this
Agreement and voluntarily and not under duress.
(e) Bankruptcy. Seller has not made any assignment for
the benefit of creditors, has not filed a petition in bankruptcy, has not
been adjudicated insolvent or bankrupt, has not petitioned a court for the
appointment of a receiver of or trustee for it or any substantial part of
its property, has not commenced any proceeding involving Seller under any
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or stature of any jurisdiction, and to the actual knowledge
of Seller, there is not pending against Seller any proceeding alleging
Seller's bankruptcy or insolvency. No order for relief has been entered
with respect to Seller under the Federal Bankruptcy Code.
(f) Condemnation. To the actual knowledge of Seller,
Seller has not received any written notice of any pending, threatened or
contemplated action by any governmental or private authority, agency or
entity having the power of eminent domain, which might result in any part
of the Property being taken by condemnation or conveyed in lieu thereof.
Seller shall, promptly upon receiving any such written notice or learning
of any such contemplated or threatened action, give Buyer written notice
thereof.
(g) Violations. To the actual knowledge of Seller and
except as described on Exhibit "M" attached hereto and made a apart hereof,
(i) Seller has not received any written notice from any insurance company,
public authority or tenant of any portion of the Property of the continuing
existence of any violation by the Land or the Office Building of any law,
ordinance, order, regulation or environmental requirement, including,
without limitation, zoning, construction, fire protection, building code,
health code, subdivisions, traffic, flood control, fire safety or
environmental violations, which requires work to be done to cure an
unsatisfactory condition with respect to the Land or the Office Building or
which could result in a termination of insurance coverage or an increase in
its costs, and (ii) neither Seller nor the Property is in material
violation of any "Environmental Statutes" (as such term is defined in
Article 52 of the Mortgage).
(h) Litigation. To the actual knowledge of Seller and
except as described on Exhibit "M" attached hereto and made a part hereof,
there are not any actions, suits or proceedings pending or threatened
before or by any judicial, administrative or union body or any arbiter or
any governmental authority against Seller or the Property which affect
title to the Property or any portion thereof, the compliance of the
Property with any applicable governmental law, ordinance, order, regulation
or requirement (including, without limitation zoning requirements and
Environmental Statutes), or the right or power of Seller to convey the
Property to Buyer in accordance with this Agreement.
(i) Non-Foreign Status. Seller is not a "foreign
person" as that term is defined in the Internal Revenue Code of 1986, as
amended, and the Regulations promulgated pursuant thereto.
(j) Damage. To the actual knowledge of Seller, there
has been no material damage or casualty to the Property which has not been
fully repaired or restored.
(k) List of Service Contracts. To the actual knowledge
of Seller, attached hereto as Exhibit "N" and made a part hereof, is a
full, true and correct list, as of the date of this Agreement, of all
written contracts and agreements relating to the management, maintenance
and operation of the Property or any portion thereof (exclusive of the
Management Agreement and any tenant and occupancy agreements)
(collectively, the "Service Contracts") in effect as of the date of this
Agreement. To the actual knowledge of Seller and except as described on
Exhibit "M" attached hereto and made a part hereof, there are no material
defaults (including any claims of which Seller has received written notice)
that are uncured under any of the Service Contracts by either Seller or any
other person or entity that is a party to any of the Service Contracts.
(l) List of Leases. To the actual knowledge of Seller,
attached hereto as Exhibit "O" and made a part hereof, is a true, correct
and complete list, as of the date of this Agreement, of all lease and
license agreements (including all written amendments thereto) respecting
the use or occupancy of any portion of the Office Building (the "Leases"),
setting forth the tenant's name, the date of each lease or license
agreements and the date of any amendment thereto. To the actual knowledge
of Seller and except as described on Exhibit "M" attached hereto and made a
part hereof, there are no material defaults (including any claims of which
Seller has received written notice) under any of the Leases either by
Seller or any tenant thereunder, nor are any commissions payable to any
broker, finder, agent or any other person or entity with respect to the
Leases or any extensions thereof. To the actual knowledge of Seller,
except for the SCD Deposit, there are no outstanding tenant security
deposits under any lease affecting any portion of the land or the Office
Building.
(m) Employees. There are no persons who are presently
employed by Seller with respect to the Property or any part thereof;
provided, however, that there are employees of Manager.
(n) Monetary Liabilities. To the actual knowledge of
Seller, Seller has no outstanding liabilities or obligations to any
creditors or other persons or entities (other than Buyer) for amounts in
the aggregate in excess of Three Hundred Fifty Thousand Dollars
($350,000.00).
Notwithstanding anything to the contrary in this Agreement or any
agreement or instrument executed in connection herewith, whenever a
representation or warranty made under this Agreement is made as to the
actual knowledge of Seller or the best knowledge of Seller, including, but
not limited to the representations and warranties of Seller set forth in
subparagraphs 5A (2) (c), (e), (f), (g), (h), (j), (k), (l) and (n) above,
such actual knowledge or best knowledge, as the case may be, shall be the
actual knowledge or best knowledge, as of the date hereof, of Ms. Marsha
Capodanno, the portfolio manager for JMB Income Properties, Ltd.-XI, Ms.
Carol Straka, the manager of the Property, and Mr. Michael Elrad, Vice
President of JMB Realty Corporation.
B. Representations and Warranties of Buyer.
Buyer hereby represents and warrants the following to Seller:
(1) Due Authority. This Agreement and all agreements,
instruments and documents herein provided to be executed or to be caused to
be executed by Buyer are and on the Closing Date will be duly authorized
(including all requisite partnership actions and authorizations), executed
and delivered by and are and will be binding upon Buyer. Buyer is a
general partnership, duly organized and validly existing under the laws of
the State of New York, and is duly authorized and qualified to do all
things required of it under this Agreement. Buyer has the capacity and
authority to enter into this Agreement and consummate the transactions
herein provided.
(2) Benefit of This Transaction. Buyer believes that
the transactions contemplated by this Agreement are in its best interests.
Buyer has been represented by an attorney, has reviewed this Agreement
carefully and understands its terms and conditions. Buyer has signed this
Agreement and proceeded with the transactions contemplated hereunder
voluntarily and not under duress
(3) Holder of Loan Documents. Buyer owns absolutely,
free and clear of all liens and encumbrances, all of the interest of the
lender, payee, and mortgagee under the Loan Documents and has not sold,
transferred, assigned, conveyed, hypothecated, pledged or encumbered all or
any part of its interest in the Loan Documents.
(4) Buyer Remedies. Acceptance of this Agreement by
Buyer and the consummation of the transactions contemplated hereunder are
in lieu of Buyer's exercise of available remedies against Seller for the
Default under the Loan Documents.
C. Mutual Representations Warranties of Buyer and Seller.
Buyer and Seller each represents and warrants the following to the other:
(1) Amount of Indebtedness. The aggregate of all
principal, interest and other sums unpaid and owing under the Loan
Documents on the date of this Agreement is in excess $12,479,417.00 (the
"Debt").
(2) Fair Market Value. The fair market value of the
Property plus the Closing Payment is less than the Debt as of the date of
this Agreement.
D. Survival. Any cause of action of a party for a breach of
the foregoing representations and warranties (or any representation or
warranty set forth in any agreement or instrument delivered in connection
herewith) shall survive until the date that is eighteen (18) full calendar
months after the Closing Date, at which time such representations and
warranties (and any cause of action resulting from a breach thereof not
then in litigation) shall terminate; provided, however, that in all events
any cause of action of a party for a breach of any of the representations
or warranties set forth in paragraphs 5A(2)(a), 5A(2)(b), 5A(2)(d),
5A(2)(e), 5A(2)(n), 5B, and 5C above shall survive until the thirtieth
(30th) day following the expiration of any and all applicable statutes of
limitations provided for any legal or equitable action of any nature
(pursuant to any bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, equity, or any similar statutes, laws or
principles) to challenge, suspend, void or set aside the conveyance of the
Property or any portion thereof to Buyer pursuant to this Agreement.
6. Covenant Not to sue; Release of Seller; Release of Buyer; Seller
Bankruptcy Covenant.
A. Covenant Not to Sue. Subject to the terms and provisions
of Section 6D below, if the Deed is recorded, then, upon the Closing Date,
Buyer and Seller each shall be deemed to have covenanted and agreed not to
bring, file or commence any action, suit, claim or cause of action against
the other with respect to any duty, obligation or liability under the Loan
Documents; provided, however, that the foregoing covenant not to sue shall
not extend or apply to any breach by either Seller or Buyer of any of their
respective representations, warranties or obligations under this Agreement
or any agreement or instrument delivered in connection herewith.
B. Release of Seller.
(1) Release. As further consideration for Seller's
execution of this Agreement, Buyer, for itself, and to the extent
enforceable, the Equitable Life Assurance of the United States
("Equitable"), affiliates of Buyer, affiliates of Equitable (including, but
not limited to, Equitable Real Estate Investment Management, Inc.) and
their respective successors and assigns (collectively, the "Buyer
Parties"), as of the Closing Date, hereby absolutely and irrevocably
waives, releases, and forever discharges Seller, Manager and their
respective partners, officers, shareholders, directors, employees, parent,
subsidiary, affiliated and associated corporations, participants,
affiliated or associated agents, affiliated or associated servants and
affiliated or associated advisors (but not including any contractors,
consultants, suppliers, mechanics' and materialmen) and predecessor
entities of any of the foregoing (collectively the "Released Parties") from
any and all claims, rights, demands, actions, suits causes of actions,
damages, counterclaims, defenses, losses, costs, obligations, liabilities
and expenses of every kind or nature know or unknown, suspected or
unsuspected, fixed or contingent, foreseen or unforeseen (collectively,
"Claims"), arising out of or relating directly or indirectly to any
circumstances or state of facts pertaining to the Loan, the Loan documents
or the Property, including claims related to the actions of Seller, Claims
related to the environmental condition of the Property (including the
existence of asbestos on, in or about the Property and any and all Claims
under the Comprehensive Environmental Response Compensation and Liability
Act [CERCLA] 42U.S.C. Section 9601 et seq) and Claims of duress, waiver,
bad faith, interference in the business of the Buyer Parties, or any
nonperformance of any agreement or obligation related thereto, or any
statements, representations, acts or omissions, intentional, willful,
negligent or innocent, by any of the Released Parties in any way connected
with, relating to or affecting, directly or indirectly, the Loan, the Loan
Documents, or the Property; provided, however, that the foregoing release
shall not extend to, include or benefit any third party person or entity
not included within the Released Parties (including, but without
limitation, prior third party owners or holders of any interest in any of
the Property, professionals, contractors, consultants, insurers,
guarantors, suppliers, mechanics and materialmen at any time retained by or
in behalf of any of the Release Parties), and provided further that the
foregoing shall not constitute a release of or extend to any of Seller's
obligations, representations or warranties (or any matter involving a
breach thereof by Seller) under this Agreement or under any agreement or
instrument delivered in connection herewith.
(2) Non-Reliance By Buyer Parties. Each of the Buyer
Parties hereby acknowledges that it has not relied upon any representation
of any kind made by Seller in making the foregoing release.
(3) No Transfer of Claims by Buyer Parties. Each of the
Buyer Parties represents and warrants that it has not heretofore assigned,
or transferred, or purported to assign or to transfer, to any person or
entity, any Claim released hereunder or any portion thereof or interest
therein, and each of the Buyer Parties agrees to indemnify, defend and hold
the Released Parties harmless from and against any and all such Claims
based on or arising out of any such assignment or transfer or purported
assignment or transfer.
(4) No Admission of Liability by Seller. It is
understood and agreed that this paragraph 6B shall not be deemed or
construed as an admission by Seller of liability of any nature whatsoever
arising from or related to the subject of this paragraph 6B.
(5) Advice of Counsel to Buyer Parties. Each of the
Buyer Parties hereby agrees, represents and warrants that it has had advice
of counsel of its own choosing in negotiations for and the preparation of
this Agreement, including the foregoing release, that it has read the
provisions of this Agreement, including the foregoing release, and that it
is fully aware of its contents and legal effect.
(6) Damages and Attorney's Fees. Each of the Buyer
Parties agrees that if it hereafter commences, joins in, or in any manner
seeks relief through any suit arising out of, based upon, or relating to
any of the claims or in any manner asserts against such Released Parties,
or any of them, any of the Claims, then the Buyer will pay to such released
parties, and each of them, in addition to any other damages caused to such
Released Parties thereby, all attorneys' fees incurred by such Released
Parties in defending or otherwise responding to said suit or claim.
C. Release of Buyer.
(1) Release. As further consideration for Buyer's
execution of this Agreement, Seller, for itself, and to the extent
enforceable, JMB Realty corporation ("JMB"), affiliates of Seller,
affiliates of JMB (including, but not limited to, JMB Income Properties,
Ltd.-XI ["JMB-XI"] and Manager) and their respective successors and assigns
(collectively, the "Seller Parties"), as of the Closing Date, hereby
absolutely and irrevocably waives, releases, and forever discharges Buyer
and its partners, officers, shareholders, directors, employees, parent
subsidiary, affiliated and associated corporations, participants,
affiliated or associated agents, affiliated or associated servants and
affiliated or associated advisors (but not including any contractors,
consultants, suppliers, mechanics and materialmen) and predecessor entites
of any of the foregoing (collectively the "Buyer Released Parties") from
any and all Claims, arising out of or relating directly or indirectly to
any circumstances or state of facts pertaining to the Loan, the Loan
Documents or the Property, including Claims related to the actions of
Buyer, Claims related to the environmental condition of the Property
(including that existence of asbestos on, in or about the Property and any
and all Claims under CERCLA) and Claims of duress, usuary, waiver, bad
faith, interference in the business of the Seller Parties, or any
nonperformance of any agreement or obligation related thereto, or any
statements, representations, acts or omissions, intentional, willful,
negligent or innocent, by any of the Buyer Released Parties in any way
connected with, relating to or affecting, directly or indirectly, the Loan,
the Loan Documents, or the Property; provided, however, that the foregoing
release shall not extend to, include or benefit any thirty party person or
entity not included within the Buyer Released Parties (including, but
without limitation, prior third party owners or holders of any interest in
any of the Property, professionals, contractors, consultants, insurers,
guarantors, suppliers, mechanics and materialmen at any time retained by or
in behalf of any of the Buyer Released Parties), and provided further that
the foregoing shall not constitute a release of or extend to any of Buyer's
obligations, representations or warranties (or any matter involving a
breach thereof by Buyer) under this Agreement or under any agreement or
instrument delivered in connection herewith.
(2) Non-Reliance by Seller Parties. Each of the Seller
Parties hereby acknowledges that it has not relied upon any representation
of any kind made by Buyer in making the foregoing release.
(3) No Transfer of Claims by Seller Parties. Each of
the Seller Parties represents and warrants that it has not heretofore
assigned, or transferred, or purported to assign or to transfer, to any
person or entity, any Claim released hereunder or any portion thereof or
interest therein, and each of the Seller Parties agrees to indemnify,
defend and hold the Buyer Released Parties harmless from and against any
and all such Claims based on or arising out of any such assignment or
transfer or purported assignment or transfer.
(4) No Admission of Liability by Buyer. It is
understood and agreed that this paragraph 6C shall not be deemed or
construed as an admission by Buyer of liability of any nature whatsoever
arising from or related to the subject of this paragraph 6C.
(5) Advice of Counsel to Seller Parties. Each of the
Seller Parties hereby agrees, represents and warrants that it has had
advice of counsel of its own choosing in negotiations for and the
preparation of this Agreement, including the foregoing release, that it has
read the provisions of this Agreement, including the foregoing release, and
that it is fully aware of its contents and legal effect.
(6) Damages and Attorneys' Fees. Each of the Seller
Parties agrees that if it hereafter commences, joins in, or in any manner
seeks relief through any suit arising out of, based upon, or relating to
any of the Claims or in any manner asserts against such Buyer Released
Parties, or any of them, any of the Claims, then the Seller will pay to
such Buyer Release Parties, and each of them, in addition to any other
damages caused to such Buyer Released Parties thereby, all attorneys' fees
incurred by such Buyer Released Parties in defending or other wise
responding to said suit or claim.
D. Termination of Releases. Anything in this Agreement or
in any instrument or document delivered in connection herewith to the
contrary notwithstanding, in the event that the conveyance of the Property
and/or the payment, endorsement or transfer of the amounts constituting the
Cash Payment and/or the Undeposited Funds are set aside or deemed null and
void pursuant to any bankruptcy, insolvency, fraudulent conveyance or any
similar proceedings, such that the Property is conveyed back to Seller
and/or the entire Cash Payment and/or all Undeposited Funds are returned to
Seller, then the releases and covenants by Buyer and Seller set forth in
Paragraphs 6A, 6B and 6C shall be automatically rescinded, terminated and
void ab initio and of no force and effect, and the terms and provisions of
the Loan Documents and all indebtedness and obligations of all parties and
the rights and remedies of Buyer thereunder shall remain in full force and
effect as if this Agreement had not been executed or delivered and the
transactions contemplated herein had not taken place, and in such event
Buyer shall have the right to proceed to exercise any and all rights and
remedies available under the Loan Documents, or at law or equity, or
otherwise; provided, however, that in the event all or any portion of the
Cash Payment or the Undeposited Funds is returned by Buyer to Seller
pursuant to any bankruptcy, insolvency, fraudulent conveyance or similar
proceeding (but they conveyance of the Property from Seller to Buyer is not
otherwise rescinded, voided or set aside), then such releases and covenants
shall not be rescinded and Seller shall only be liable to Buyer for the
portion of the Cash Payment and/or the Undeposited Funds returned by Buyer
to Seller; and provided further, that in the event the Property is conveyed
back to Seller but not all of the Cash Payment and the Undeposited Funds
are returned to Seller pursuant to any bankruptcy, insolvency, fraudulent
conveyance or similar proceeding, then Buyer shall be liable to Seller for
the portion of the Cash Payment and/or the Undeposited Funds not returned
by Buyer to Seller.
E. Certain Covenants of Seller. In consideration of Buyer's
acceptance of this Agreement and as an essential inducement for Buyer to
enter into this Agreement and accept the conveyance and transfer of the
Property from Seller, Seller hereby agrees and covenants with Buyer, which
covenants and agreements shall survive Closing, that: (i) Seller shall not
file for, bankruptcy or other relief under any federal or state bankruptcy,
reorganization, fraudulent conveyance or other similar federal or state
statute or law of any description; and (ii) Seller will vigorously oppose
any petition or proceeding under any such law or statute made by any other
person or entity; and (iii) that in the event a proceeding is initiated and
exists against Seller under Chapter of Title 11 of the U.S. Code (a
"Bankruptcy Proceeding", then at all times prior to any order or
determination requiring the reconveyance of the Property or the return of
the Cash Payment or the Undeposited Funds to Seller, Seller shall
immediately consent to relief from the automatic stay provisions of 11
U.S.C. Subsection 362 ("Stay Relief") in favor of Buyer in said Bankruptcy
Proceeding, and Seller will execute such consents, stipulations, pleadings
and/or other documents as are required by the Bankruptcy Court overseeing
the Bankruptcy Proceeding or as reasonably required by the Buyer in order
to permit Buyer to obtain Stay Relief immediately (Seller agreeing that is
will not in any way contest and/or object to Stay relief being granted on
an immediate basis in favor o Buyer, and will interpose no objection,
defense and/or claim whatsoever). Notwithstanding anything to the contrary
in the Agreement or any agreement or instrument executed in connection with
the Agreement, the provisions of clause (iii) of the preceding sentence
shall not apply in any event or under any circumstance at any time prior to
the conveyance of the Property by Seller to Buyer in accordance with the
terms and provisions of this Agreement, or at any time after any order or
determination requiring the reconveyance of the Property or the return of
the Cash Payment or the Undeposited Funds to Seller.
7. Miscellaneous
A. Brokers. 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 paragraph 7A shall survive the
Closing of the transactions hereunder or the earlier termination of this
Agreement.
B. Limitation of Liability. No constituent partner in
or agent of Seller (other than JMB-XI but not any of the constituent
partners of JMB-XI), nor any advisor, trustee, director, partner,
affiliate, officer, employee, beneficiary, shareholder, participant,
representative or agent of any corporation or trust that is or becomes a
constituent partner in Seller (including but not limited to, JMB Realty
Corporation) 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, on behalf of itself and its successors
and assigns, hereby waives any and all such personal liability. Without
limitation on the foregoing, neither the negative capital account of any
constituent partner (including JMB-XI) in Seller (or in any other
constituent partner of Seller), nor any obligation of any Constituent
partner in Seller (or in any other constituent partner of Seller) to
restore a negative capital account or to contribute capital to Seller (or
to any other constituent partner of Seller), shall at any time be deemed to
be the property or an asset of Seller or any such other constituent partner
(and neither Buyer nor any of its successors of assigns shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account or a partner's obligation to restore or contribute
to its capital account).
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.
F. Governing Law. This Agreement shall be construed
and enforced in accordance with the laws of the State of Delaware.
G. Successors and Assigns. Buyer, upon prior written
notice to Seller, may 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). 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:
EML Associates
c/o Equitable Real Estate Investment Management, Inc.
Mellon Bank Center, 42nd Floor
1735 Market Street
Philadelphia, Pennsylvania 19103
Attention: Mr. Gary Prugh
With Copy To:
Obermayer, Rebmann, Maxwell & Hippel
111 South 15th Street
Packard Building
14th Floor
Philadelphia, Pennsylvania 19102
Attention: Jeffrey B. Rotwitt, Esq.
To Seller:
Three Hundred Delaware Avenue Associates, L.P.
c/o JMB Realty Corporation
900 North Michigan Avenue
19th Floor
Chicago, Illinois 60611
Attention: Mr. Michael Elrad
With Copy To:
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (JBN)
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.
I. Legal Costs. 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, with 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. Survival. Subject to the limitations on the survival
of the representations and warranties set forth in paragraph 5D above, all
unperformed obligations of either party hereunder shall survive the Closing of
the transactions provided for in this Agreement.
K. Further Assurances. Each party following the Closing
Date agrees to promptly execute and deliver such agreements or instruments as
shall reasonably be requested by the other party in order to effectuate or
perfect the transactions provided for in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
THREE HUNDRED DELAWARE AVENUE
ASSOCIATES, L.P.
a Texas limited partnership
By: JMB INCOME PROPERTIES, LTD.-XI,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By: ____________________
Name: ____________________
Title: Authorized Signatory
"Assignor"
EML ASSOCIATES,
a New York general partnership
By: ML/EQ Real Estate Portfolio, L.P.
a Delaware limited partnership
By: EREIM Managers Corp., general partner
By: Equitable Real Estate
Investment Management, Inc.,
authorized signatory of EREIM Managers Corp.
By: FREDERICK F. BUCHHOLZ
---------------------
Frederick F. Buchholz,
Executive Vice President <PAGE>
Parcel No. 26-028-40-047
Record Plan/Microfilm No.
Prepared by: PIRCHER, NICHOLS & MEEKS
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attn: Jay B. Newman, Esquire
MEMORANDUM OF MUTUAL RELEASES
THIS MEMORANDUM OF MUTUAL RELEASES is made and entered into as of the
15th day of November, 1994 by and between THREE HUNDRED DELAWARE AVENUE
ASSOCIATES, L.P., a Texas limited partnership ("Borrower"), and EML
ASSOCIATES, a New York general partnership ("Lender").
WITNESSETH, THAT:
A. WHEREAS, on February 28, 1989 Lender made a loan (the
"Loan") to Borrower in the original principal amount of $9,500,000 which Loan
is evidenced by a promissory note (the "Note") captioned "MORTGAGE NOTE" in
that amount dated February 28, 1989. The Note is secured by, among other
things, that certain mortgage (the "Mortgage") captioned "DELAWARE MORTGAGE
AND SECURITY AGREEMENT" dated February 28, 1989 by Borrower, as mortgagor, in
favor of Lender, as mortgagee, and recorded on March 1, 1989 in the New Castle
County Recorder of Deeds Office at Record Book Volume 1366, Page 108.
B. On November 15 ,1994, Lender and Borrower entered into that
certain agreement (the "Agreement") captioned "DEED IN LIEU OF FORECLOSURE
AGREEMENT" providing for, among other matters, the conveyance by Borrower to
Lender of that certain real property (the"Property") located at 300 Delaware
Avenue in the City of Wilmington, County of New Castle, State of Delaware,
consisting primarily of an office building sometimes known as "The Bank of
Delaware Building" which property is described on Exhibit "A" attached hereto
and made a part hereof.
C. Pursuant to the Agreement and concurrently with the
conveyance of the Property by Borrower to Lender, Borrower and Lender each
provided the other with mutual releases (the"Releases") with respect to the
Property, the Loan and the agreements, documents and instruments evidencing
and/or securing the Loan (herein called the "Loan Documents") as provided for
in paragraphs 6B and 6C of the Agreement and Lender has provided with a
covenant not to sue as provided Borrower for in paragraph 6A of the Agreement.
D. Borrower and Lender have entered into this Memorandum of
Mutual Releases to evidence the Releases and the covenant not to sue in the
real property records for the Property.
NOW THEREFORE, in consideration of the recitals set forth above
and the mutual undertakings of the parties hereto, and the sum of Ten Dollars
($10.00) and other good and valuable consideration paid by each party to the
other, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, Lender and Borrower agree as follows:
1. Lender, for itself, and to the extent enforceable, The
Equitable Life Assurance of the United States ("Equitable"), affiliates of
Lender, affiliates of Equitable (including, but not limited to, Equitable Real
Estate Investment Management, Inc.) and their respective successors and
assigns, as of the date hereof, hereby absolutely and irrevocably waive,
release and forever discharge Borrower and its partners, officers,
shareholders, directors, associated and affiliated agents, associated and
affiliated servants, associated and affiliated advisors, employees, parent and
subsidiary corporations, participants and predecessor entities to any of the
foregoing from any and all "Claims" (as such term is defined in the Agreement)
as provided for in paragraph 6B of the Agreement.
2. Borrower, for itself, and to the extent enforceable, JMB
Realty corporation ("JMB"), affiliates of Borrower, affiliates of JMB
(including, but not limited to, JMB Income Properties, Ltd.-XI) and their
respective successors and assigns, as of the date hereof, hereby absolutely
and irrevocably waive, release and forever discharge Lender and its partners,
officers, shareholders, directors, associated and affiliated agents,
associated and affiliated servants, associated and affiliated advisors,
employees, parent and subsidiary corporations, participants and predecessor
entities to any of the foregoing from any and all Claims as provided for in
paragraph 6C of the Agreement.
3. Lender, for itself and its successors and assigns, covenants
and agrees that it will not bring, file or commence any action, suit, claim or
cause of action against Borrower, or its successors and assigns, with respect
to any duty, obligation or liability of the borrower under the Loan Documents.
4. The waivers, releases and covenants provided for in
paragraphs 1,2 and 3 above are made in accordance with the terms and
provisions of the Agreement and are subject to the terms and provisions of
paragraph 6D of the Agreement.
5. The provisions of the Memorandum are intended to provide
record notice of certain terms and provisions of the Agreement, and are not
intended to modify any of the terms or provisions of the Agreement. In the
event of any inconsistency or contradiction between any term or provision of
the Memorandum with any term or provision of the Agreement, the Agreement
shall govern and control.
IN WITNESS WHEREOF, this Memorandum of Mutual Releases is made and
entered into as of the day and year first above written.
THREE HUNDRED DELAWARE AVENUE ASSOCIATES, L.P.,
a Texas limited Partnership
By: JMB INCOME PROPERTIES, LTD.-XI,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation
General Partner
By: ____________________
Name: ____________________
Title: ____________________
"Borrower"
EML ASSOCIATES,
a New York general partnership
By: ML/EQ Real Estate Portfolio, L.P.
a Delaware limited partnership
By: EREIM Mangaers Corp., general partner
By: Equitable Real Estate Investment Mgmt.,Inc.
authorized signatory of EREIM Managers Corp.
By: FREDERICK F. BUCHHOLZ
------------------------
Frederick F. Buchholz,
Executive Vice President
