<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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) September 22, 1998
--------------------------------
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-14122 36-3330657
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Two North Riverside Plaza, Suite 1000, Chicago, Illinois 60606-2607
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 207-0020
-----------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
This document consists of 62 pages.
The Exhibit Index is located on page 3.
<PAGE>
ITEM 2. DISPOSITION OF ASSETS
- ------- ---------------------
First Capital Lansing Properties Limited Partnership, which is indirectly 50%
owned by First Capital Institutional Real Estate, Ltd. - 3, (the "Registrant"),
sold its interest in the real property commonly known as Holiday Office Park
North and South ("Holiday"), located in Lansing, Michigan to Lansing Mark
L.L.C., a Michigan Limited Liability Company (the "Purchaser").
The closing of this transaction occurred on September 22, 1998. Holiday was sold
for $13,500,000 in cash to an unrelated party pursuant to arm's-length
negotiations. The Registrant's share of Sale Proceeds approximated $6,500,000,
which was net of actual and estimated closing expenses. For the quarter ending
September 30, 1998, the Registrant will record a net gain for financial
reporting purposes of approximately $1,550,000 from this transaction. The
Registrant will distribute substantially all of the Sale Proceeds on February
28, 1999 to Limited Partners of record as of September 22, 1998.
Page 2
<PAGE>
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
- ------- --------------------------------------------
(page 5) Pro Forma Financial Information
<TABLE>
<CAPTION>
Exhibits
<S> <C>
2.1 (page 10) Closing Statement, dated September 22, 1998,
between the Registrant and the Purchaser.
2.2 (page 21) Contract for Purchase of Real Property, executed
in August 1998 between the Registrant and the Purchaser.
</TABLE>
No information is required under Items 1, 3, 4, 5, 6 and 8; therefore, those
Items have been omitted.
Page 3
<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 hereunto duly authorized.
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
By: FIRST CAPITAL FINANCIAL CORPORATION
As General Partner
October 6, 1998 By: /s/ NORMAN M. FIELD
- --------------- --------------------------------------
(Date) NORMAN M. FIELD
Vice President - Finance and Treasurer
Page 4
<PAGE>
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
The accompanying unaudited Pro Forma Balance Sheet has been presented as if the
sales of Holiday and the Ellis Building ("Ellis") (sold in August 1998) had
occurred on June 30, 1998. The accompanying unaudited Pro Forma Statement of
Income and Expenses for the six months ended June 30, 1998 has been presented as
if the sales of Holiday and Ellis had occurred on December 31, 1997. The
accompanying unaudited Pro Forma Statement of Income and Expenses for the year
ended December 31, 1997 has been presented as if the sales of Holiday, Ellis,
Park Plaza Professional Building (sold in December 1997) and 3120 Southwest
Freeway Office Building (sold in February 1997) had occurred on December 31,
1996. The properties sold in 1997 and Ellis are hereafter collectively referred
to as the "Sold Properties". In the opinion of the General Partner, all
adjustments necessary to reflect the financial condition and results of
operations of the Partnership exclusive of Holiday and the Sold Properties have
been made. The unaudited pro forma financial statements are not necessarily
indicative of what the actual financial position and results of operations would
have been had such transactions actually occurred as of December 31, 1996 and
1997 and June 30, 1998, nor do they purport to represent the results of
operations of the Registrant for any future periods.
Page 5
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
PRO FORMA BALANCE SHEET
(Unaudited)
(All dollars rounded to nearest 00s)
ASSETS
June 30, 1998
------------------------------------------------------
Holiday Ellis Pro Forma
Balance Pro Forma Pro Forma Balance
Sheet Adjustments Adjustments Sheet
----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Investment in commercial rental property:
Land $ 860,000 $ $ (860,000) $
Buildings and improvements 5,467,700 (5,467,700)
----------- ---------- ----------- ------------
6,327,700 (6,327,700)
Accumulated depreciation and amortization (2,557,300) 2,557,300
----------- ---------- ----------- ------------
Total investment property, net of
accumulated depreciation and amortization 3,770,400 (3,770,400)
Cash and cash equivalents 4,638,900 6,500,000 6,584,300 17,723,200
Investment in debt securities 993,300 993,300
Restricted cash 50,000 (50,000)
Rents receivable 3,800 5,600 9,400
Investment in joint venture 5,017,800 (5,017,800)
Other assets 41,900 (16,700) 25,200
----------- ----------- ----------- -----------
$14,516,100 $ 1,482,200 $ 2,752,800 $18,751,100
=========== =========== =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 200,500 $ $ (131,400) $ 69,100
Due to Affiliates 65,500 65,500
Security deposits 20,400 (20,400)
Distributions payable 355,700 6,499,700 6,673,000 13,528,400
Other liabilities 28,500 28,500
----------- ----------- ----------- -----------
670,600 6,499,700 6,521,200 13,691,500
----------- ----------- ----------- -----------
Partners' capital:
General Partner (deficit) (136,500) 15,500 29,500 (91,500)
Limited Partners (45,737 Units issued
and outstanding) 13,982,000 (5,033,000) (3,797,900) 5,151,100
----------- ----------- ----------- -----------
13,845,500 (5,017,500) (3,768,400) 5,059,600
----------- ----------- ----------- -----------
$14,516,100 $ 1,482,200 2,752,800 $18,751,100
=========== =========== =========== ===========
The accompanying notes are an integral part of the pro forma financial statements
</TABLE>
Page 6
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INSITUTIONAL REAL ESTATE, LTD. - 3
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
Six Months Ended June 30, 1998
--------------------------------------------------------
Pro Forma
Statement of Holiday Ellis Statement of
Income and Pro Forma Pro Forma Income and
Expenses Adjustments Adjustments Expenses
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Income:
Rental $ 665,700 $ $ (665,700) $
Interest 332,400 (7,000) 325,400
------------ ----------- ----------- ------------
998,100 (672,700) 325,400
------------ ----------- ----------- ------------
Expenses:
Depreciation and amortization 119,800 (119,800)
Property operating:
Affiliates 33,700 (33,700)
Nonaffiliates 151,600 (151,600)
Real estate taxes 47,500 (47,500)
Insurance - Affiliate 5,400 (5,400)
Repairs and maintenance 87,300 (87,300)
General and administrative:
Affiliates 9,900 9,900
Nonaffiliates 70,200 70,200
------------ ----------- ----------- ------------
525,400 (445,300) 80,100
------------ ----------- ----------- ------------
Income before income from participation in
joint venture 472,700 0 (227,400) 245,300
Income from participation in joint venture 170,900 (170,900)
------------ ----------- ----------- ------------
Net income $ 643,600 $ (170,900) $ (227,400) $ 245,300
============ =========== =========== ============
Net income allocated to General Partner $ 71,200 $ (33,200) $ (13,500) $ 24,500
============ =========== =========== ============
Net income allocated to Limited Partners $ 572,400 $ (137,700) $ (213,900) $ 220,800
============ =========== =========== ============
Net income allocated to Limited Partners
per Unit (45,737 Units outstanding) $ 12.52 $ (3.01) $ (4.68) $ 4.83
============ =========== =========== ============
The accompanying notes are an integral part of the pro forma financial statements
</TABLE>
Page 7
<PAGE>
FIRST CAPITAL INSITUTIONAL REAL ESTATE, LTD. - 3
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
Year Ended December 31, 1997
-----------------------------------------------
Sold Pro Forma
Holiday Properties Statement of
Statement of Pro Forma Pro Forma Income and
Income and Adjustments Adjustments Expenses
Expenses (Unaudited) (Unaudited) (Unaudited)
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental $2,846,600 $ $(2,846,600) $
Interest 298,700 (6,600) 292,100
Net gain on sales of property 183,500 (183,500)
---------- ---------- ----------- --------
3,328,800 (3,036,700) 292,100
---------- ---------- ----------- --------
Expenses:
Depreciation and amortization 701,100 (701,100)
Property operating:
Affiliates 210,300 (210,300)
Nonaffiliates 588,200 (588,200)
Real estate taxes 301,400 (301,400)
Insurance - Affiliate 27,200 (27,200)
Repairs and maintenance 463,800 (463,800)
General and administrative:
Affiliates 19,400 19,400
Nonaffiliates 127,900 127,900
---------- ---------- ----------- --------
2,439,300 (2,292,000) 147,300
Income before income from particpation
in joint venture 889,500 0 (744,700) 144,800
Income from participation in joint
venture 423,600 (423,600)
---------- ---------- ----------- --------
Net income $1,313,100 $ (423,600) $ (744,700) $144,800
========== ========== =========== ========
Net income allocated to General
Partner $ 189,100 $ (71,800) $ (102,800) $ 14,500
========== ========== =========== ========
Net income allocated to Limited
Partners $1,124,000 $ (351,800) $ (641,900) $130,300
========== ========== =========== ========
Net income allocated to Limited
Partners per Unit (45,737 Units
outstanding) $ 24.58 $ (7.69) $ (14.04) $ 2.85
========== ========== =========== ========
</TABLE>
The accompanying notes are an integral part of the pro forma
financial statements
Page 8
<PAGE>
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
Notes to Pro Forma Balance Sheet and
Pro Forma Statements of Income and Expenses
1) For the purpose of the Pro Forma Balance Sheet:
a) the accounts for land, buildings and improvements, accumulated
depreciation and amortization, restricted cash, rents receivable, other
assets, accounts payable and accrued expenses and security deposits have been
adjusted as of June 30, 1998 to reflect the sale of the Registrant's interest
in Ellis. The account for investment in joint venture has been adjusted as of
June 30, 1998 to reflect the sale of the Registant's interest in Holiday.
b) Cash and cash equivalents has been adjusted to include the net cash
received by the Registrant from the purchasers of Holiday and Ellis.
c) Distributions payable has been adjusted to reflect the amount of the
special distributions of Sale Proceeds of Holiday and Ellis to Limited
Partners as if such special distributions had been declared as of June 30,
1998.
2) For the purpose of the Pro Forma Statements of Income and Expenses for the
six months ended June 30, 1998 and for the year ended December 31, 1997, the
adjustments to the income and expenses reflect the Registrant's interest in
Holiday and the operations of the Sold Properties.
Page 9
<PAGE>
===============================================================================
CLOSING STATEMENT INFORMATION
===============================================================================
Property Name: HOLIDAY OFFICE PARK
Seller: FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP
an Illinois limited partnership
Purchaser: Lansing Mark L.L.C.,
a Michigan limited liability company
Proration Date: 9/22/98
Proration as of: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
Closing Date: 9/22/98
Closing as of: TUESDAY, SEPTEMBER 22, 1998
Tax Begin Date: 1/1/98
Tax End Date: 12/31/98
Month Begin Date 9/1/98
Month End Date 9/30/98
<PAGE>
CLOSING STATEMENT
HOLIDAY OFFICE PARK
- --------------------------------------------------------------------------------
SELLER: FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP
an Illinois limited partnership
PURCHASER: Lansing Mark L.L.C.,
a Michigan limited liability company
PRORATION DATE: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
CLOSING (FUNDING) TUESDAY, SEPTEMBER 22, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT CREDIT
PURCHASER SELLER
----------- -------------
<S> <C> <C>
PURCHASE PRICE 13,500,000.00
EARNEST MONEY (held by Chicago Title) 200,000.00
INTEREST ON EARNEST MONEY POC
PRO-RATE PROPERTY TAXES (259,019.82)
[See Schedule A]
PRO-RATE SEPTEMBER, 1998 LEASE CHARGES 68,163.31
[See Schedule D]
TENANT PREPAID RENTS 34,808.71
[See Schedule B]
PRO-RATE SERVICE CONTRACTS (4,819.92)
[See Schedule C]
SECURITY DEPOSITS 23,425.79
[See Schedule D]
MILESTONE CONSTRUCTION 15,549.00
K&D GENERAL CONTRACTORS, INC. 500.00
CREDIT FOR JACKSON NATIONAL 75,000.00
------------- -------------
SUBTOTALS 138,058.07 13,515,549.00
CASH AMOUNT DUE TO SELLER 13,377,490.93
------------- -------------
TOTAL CREDITS 13,515,549.00 13,515,549.00
============= =============
</TABLE>
NOTES:
[1] All prorations with regard to the county real estate taxes, personal
property taxes and assessments relating to the Property are final.
[2] Utility payments shall be directed to the parties for their respective
periods of ownership based upon meter reads ordered prior to the Closing
Date.
[3] Seller agrees to pay all invoices or charges payable to service contract
vendors or other vendors of supplies or services which are unpaid at
Closing and relate to periods prior to and including September 22, 1998, or
which relate to periods after Closing to the extent Seller received a
credit from Purchaser at Closing.
APPROVED: SELLER APPROVED: PURCHASER
FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP Lansing Mark L.L.C.,
an Illinois limited partnership a Michigan limited
liability company
By: First Lansing Associates By:_____________________
("Lansing Associates"), an Illinois joint Name:___________________
venture, as General Partner Its:____________________
By: First Capital Institutional Real Estate, Ltd.-2
("FCIRE-2"), a Florida limited partnership, a joint venturer
and
First Capital Institutional Real Estate, Ltd.-3
("FCIRE-3"), a Florida limited partnership, a joint venturer
By: First Capital Financial Corporation, formerly known
as First Capital Properties Corporation, as General
Partner of FCIRE-2 and FCIRE-3
By: ________________________________
Name:______________________________
Its:_________________________________
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
SOURCES AND USES STATEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
PURCHASER'S SOURCES AND USES:
<S> <C> <C>
BALANCE OF CASH TO BE FUNDED BY PURCHASER 13,377,490.93
-------------
ADDITIONAL CASH OUTLAYS BY PURCHASER:
CHICAGO TITLE INSURANCE COMPANY
Title Insurance Policy Endorsements 0.00
Loan Premium 6,882.40
Escrow Fees (50%) 375.00
Recording Charges (100%) 500.00
Out of Pocket Costs (copies, UPS, Zoning search) 287.00
UCC Searches ($513.00 incurred to date; est. of Michigan $600.00) 1,113.00
Additional Survey Cost (100%) 3,000.00
----------
PURCHASER'S CLOSING COSTS 12,157.40
-------------
TOTAL CASH OUTLAY BY PURCHASER 13,389,648.33
=============
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER'S SOURCES AND USES:
CASH AMOUNT DUE TO SELLER 13,377,490.93
Earnest Money (held by Chicago Title) 200,000.00
-------------
TOTAL SELLER'S SOURCES 13,577,490.93
-------------
ITEMS PAYABLE FROM SELLER'S PROCEEDS AT CLOSING:
CHICAGO TITLE INSURANCE COMPANY
Title Insurance Policy Endorsements 0.00
Title Insurance Base Premium (100%) 18,356.00
Transfer Taxes - State/County (100%) 116,100.00
Survey Costs 9,025.00
3.1 Zoning Endorsement (100%) 2,753.40
Escrow Fees (50%) 375.00
----------
146,609.40
COMMISSION FOR HOLMES BARILE REALTY ADVISORS, INC. (1) 220,000.00
COMMISSION FOR CB RICHARD ELLIS MARTIN (2) 50,000.00
-------------
TOTAL CASH OUTLAY BY SELLER 416,609.40
BALANCE TO SELLER 13,160,881.53
=============
</TABLE>
(1) See wire instructions.
(2) See check instructions.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
- -------------------------------------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
PRO-RATA 1998/1999 PROPERTY TAXES
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ACTUAL FISCAL REAL ESTATE TAXES (City Tax) - Paid by Seller [1] 41,790.00
----------
(State Education)
PURCHASER'S PRORATA SHARE OF 1998 TAXES 8/365 2.19%
----------
PURCHASER'S SHARE OF 1998 TAXES 915.95
SELLER'S SHARE OF 1998 TAXES 40,874.05
----------
CREDIT DUE TO PURCHASER (SELLER): (915.95)
==========
ACTUAL 1998 REAL ESTATE TAXES ( City Tax) - Paid by Seller [2]
(City, School and Community College) 265,950.11
----------
PURCHASER'S PRORATA SHARE OF 1998 TAXES 281/365 76.986%
----------
PURCHASER'S SHARE OF 1998 TAXES 204,745.15
SELLER'S SHARE OF 1998 TAXES 61,204.96
CREDIT DUE TO PURCHASER (SELLER): (204,745.15)
==========
ACTUAL FISCAL 1999 REAL ESTATE TAXES ( City Tax) - Paid by Seller [3]
(State Education) 36,410.40
----------
PURCHASER'S PRORATA SHARE OF 1998 TAXES 365/365 100.000%
----------
PURCHASER'S SHARE OF 1998 TAXES 36,410.40
SELLER'S SHARE OF 1998 TAXES -
CREDIT DUE TO PURCHASER (SELLER): (36,410.40)
==========
ACTUAL 1998 REAL ESTATE TAXES (County Tax) - Paid by Seller [4] 61,861.38
----------
PURCHASER'S PRORATA SHARE OF 1998 TAXES 100/365 27.40%
----------
PURCHASER'S SHARE OF 1998 TAXES 16,948.32
SELLER'S SHARE OF 1998 TAXES 44,913.06
CREDIT DUE TO PURCHASER (SELLER): (16,948.32)
==========
TOTAL CREDIT DUE TO PURCHASER (SELLER) (259,019.82)
</TABLE>
[1] Taxes are payable in advance and have been paid by Seller for the period
10/1/97-9/30/98.
[2] Taxes are payable in advance and have been paid by Seller for the period
7/1/98-6/30/99.
[3] Taxes are payable in advance and have been paid by Seller for the period
10/1/98-9/30/99.
[4] Taxes are payable in advance and have been paid by Seller for the period
1/1/98-12/31/98.
<PAGE>
SCHEDULE B
- --------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
TENANT PREPAID RENTS
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT
SUITE # TENANT NAME PREPAID
- --------------------------------------------------------------------------------
<S> <C> <C>
Prepaid Rent:
Progressive Casualty Insurance 1,254.53
Kharacterz 30,000.00
Lansing Oral Surgery 1,890.15
Mercury Finance Co. 1,662.50
Neumann & Canjar 0.03
Dietz Janitorial 1.50
CREDIT TO PURCHASER 34,808.71
=========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE C
- --------------------------------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RECURRING PAYABLES PRORATION
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
- ---------------------------------------------------------------------------------------------------------
SERVICE CONTRACTS
CREDIT DUE
BILLING PERIOD # of DAYS PURCHASER
VENDOR NAME PAYMENT BEGIN END CREDIT or (SELLER)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PAID BY SELLER
ADT Security System (696.87) 03/01/98 02/28/99 159 (303.57)
ADT Security System (364.54) 04/01/98 03/31/99 190 (189.76)
ADT Security System (586.09) 05/01/98 04/30/99 220 (353.26)
Clean Team - USA (17,735.96) 09/01/98 09/30/98 8 (4,729.59)
Frident Neopost (502.44) 03/01/98 02/28/99 159 (218.87)
Hyacinth House (185.00) 09/01/98 09/30/98 8 (49.33)
Len's Carpet (1,030.00) 07/01/98 09/30/98 8 (89.57)
Millar Elevator Service Company (481.57) 09/01/98 09/30/98 8 (128.42)
CREDIT DUE TO PURCHASER (SELLER) (6,062.37)
-----------
PAYABLE BY PURCHASER
Grainger Container 937.00 09/01/98 09/30/98 22 687.13
Pagenet 42.37 09/01/98 09/30/98 22 31.07
Rose Exterminator Company 230.00 09/01/98 09/30/98 22 168.67
Schafers Lawn & Snow 258.60 09/01/98 09/16/98 22 355.58
CREDIT DUE TO PURCHASER (SELLER) 1,242.45
----------
TOTAL CREDIT DUE TO PURCHASER (SELLER) (4,819.92)
===========
</TABLE>
Notes:
<PAGE>
SCHEDULE D
- -------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
SEPTEMBER SEPTEMBER SEPTEMBER
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS(1) RENT CHARGES INCOME CHARGES PAID
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Holiday Office Park North 1000
Child Support Enforcement - 640.52 - - 640.52 640.52
Child Support Enforcement - 3,885.75 - - 3,885.75 3,885.75
Child Support Enforcement - 714.00 - - 714.00 714.00
Child Support Enforcement - 909.91 - - 909.91 909.91
Estate Preservation Services 321.75 321.75 - - 321.75 321.75
Office of Systems Management - 5,315.00 - - 5,315.00 5,315.00
Ross & Associates 227.00 262.85 - - 262.85 262.85
Holiday Office Park North 1020
Child Support Enforcement - 1,341.08 - - 1,341.08 1,341.08
Child Support Enforcement - 1,709.87 - - 1,709.87 1,709.87
Child Support Enforcement - 6,820.00 - - 6,820.00 6,820.00
Child Support Enforcement - 1,680.45 - - 1,680.45 1,680.45
General Service Administration - 475.00 - - 475.00 -
Research North, Inc. 400.00 782.35 - - 782.35 782.35
Reynolds & Reynolds - 390.00 - - 390.00 390.00
United States Army - 735.00 - - 735.00 735.00
Holiday Office Park North 1048
Amertich Publishing - 5,734.17 - - 5,734.17 5,734.17
Erie Construction - - - - 587.66 587.66
Jackson National Life - 9,915.88 - - 9,915.88 9,915.88
Jackson National Life - - - - 2,608.49 2,608.49
Jackson National Life - 4,262.50 - - 4,262.50 4,262.50
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 9/1 FOR 9/1 PMTS SHARE O/S SHARE O/S
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Holiday Office Park North 1000
Child Support Enforcement 170.81 - - - - -
Child Support Enforcement 1,036.20 - - - - -
Child Support Enforcement 190.40 - - - - -
Child Support Enforcement 242.64 - - - - -
Estate Preservation Services 85.80 - - - - -
Office of Systems Management 1,417.33 - - - - -
Ross & Associates 70.09 - - - - -
Holiday Office Park North 1020
Child Support Enforcement 357.62 - - - - -
Child Support Enforcement 455.97 - - - - -
Child Support Enforcement 1,818.67 - - - - -
Child Support Enforcement 448.12 - - - - -
General Service Administration - 475.00 - 475.00 348.33 126.67
Research North, Inc. 208.63 - - - - -
Reynolds & Reynolds 104.00 - - - - -
United States Army 196.00 - - - - -
Holiday Office Park North 1048
Amertich Publishing 1,529.11 - - - - -
Erie Construction 156.71 - - - - -
Jackson National Life 2,644.23 - - - - -
Jackson National Life 695.60 - - - - -
Jackson National Life 1,136.67 - - - - -
</TABLE>
Page 1 of 14
<PAGE>
SCHEDULE D
- -------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
SEPTEMBER SEPTEMBER SEPTEMBER
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS(1) RENT CHARGES INCOME CHARGES PAID
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jackson National Life - 7,058.33 - - 7,058.33 7,058.33
Jackson National Life - 3,465.00 - - 3,465.00 3,465.00
Jackson National Life - 2,135.00 - - 2,135.00 2,135.00
Jaydon, Inc. 300.00 - - 379.50 379.50 379.50
Med-Bill Corp. - - - 350.00 350.00 350.00
Med-Bill Corp. - - - 350.00 350.00 350.00
Spartan Services, Inc. - 1,594.46 - - 1,594.46 -
Spartan Services, Inc. - - - 2,348.75 2,348.75 -
U.S. Geological Survey - 1,045.42 - - 1,045.42 1,045.42
UAW-GM Legal Services - - - 180.50 180.50 180.50
Holiday Office Park 6500
Corporations and Securities - 11,261.25 - - 11,261.25 11,261.25
Lakeland Dental Laboratory 4,971.25 5,381.25 - - 5,381.25 5,381.25
Office of Technology Res. - 3,149.30 - - 3,149.30 3,149.30
UAW-GM Legal Services 6,415.66 3,186.46 - - 3,186.46 3,186.46
UAW-GM Legal Services - 2,159.67 - - 2,159.67 2,159.67
Holiday Office Park North 6520
Attorney General - 17,128.42 - - 17,128.42 17,128.42
U.S. Geological Survey - 8,268.56 - - 8,268.56 8,268.56
Holiday Office Park South 6545 -
Capital Area Intrfaith - 208.33 - - 208.33 208.33
Capital Area Intrfaith - - - 73.50 73.50 73.50
Catholic Social Services - - - 34.98 34.98 33.00
Consumer Energy 903.72 903.72 - - 903.72 903.72
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 9/1 FOR 9/1 PMTS SHARE O/S SHARE O/S
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jackson National Life 1,882.22 - - - - -
Jackson National Life 924.00 - - - - -
Jackson National Life 569.33 - - - - -
Jaydon, Inc. 101.20 - - - - -
Med-Bill Corp. 93.33 - - - - -
Med-Bill Corp. 93.33 - - - - -
Spartan Services, Inc. - 1,594.46 - 1,594.46 1,169.27 425.19
Spartan Services, Inc. - 2,348.75 - 2,348,75 1,722.42 626.33
U.S. Geological Survey 278.78 - - - - -
UAW-GM Legal Services 48.13 - - - - -
Holiday Office Park 6500
Corporations and Securities 3,003.00 - - - - -
Lakeland Dental Laboratory 1,435.00 - - - - -
Office of Technology Res. 839.81 - - - - -
UAW-GM Legal Services 849.72 - - - - -
UAW-GM Legal Services 575.91 - - - - -
Holiday Office Park North 6520
Attorney General 4,567.58 2,753.66 2,753.66 - 2,753.66 -
U.S. Geological Survey 2,204.95 - - - - -
Holiday Office Park South 6545
Capital Area Intrfaith 55.55 - - - - -
Capital Area Intrfaith 19.60 - - - - -
Catholic Social Services 8.80 1.98 - 1.98 1.45 0.53
Consumer Energy 240.99 - - - -
</TABLE>
<PAGE>
SCHEDULE D
- -------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
SEPTEMBER SEPTEMBER SEPTEMBER
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS(1) RENT CHARGES INCOME CHARGES PAID
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Corporations & Securities - - - 641.50 641.50 641.50
Dept. of Commerce - 538.00 - - 538.00 538.00
Dept. of Commerce - 766.20 - - 766.20 766.20
Dept. of Commerce - 1,463.72 - - 1,463.72 1,463.72
Detroit Edison - 925.36 - - 925.36 925.36
Dolman Associates - 3,718.05 - - 3,718.05 3,718.05
Foster Grandparents - 210.60 - - 210.60 210.60
Marygold, Inc. DBA Coffee - 459.42 - - 459.42 459.42
Merrill & Associates - 524.70 - - 524.70 524.70
Michigan Public Service Co. - 16,260.83 - - 16,260.83 16,260.83
Michigan Public Service Co. - 46,020.25 - - 46,020.25 46,020.25
R.S.V.P. - 402.17 - - 402.17 402.17
Rapid Copy - 320.00 - - 320.00 320.00
Service Master Capital - 393.75 - - 393.75 393.75
US Army/Marine - 18,035.27 - - 18,035.27 -
Holiday Office Park South 6546
Corps. & Securities - 23,629.38 - - 23,629.38 23,629.38
Holiday Office Park South 6810
Bahrie, Ronald - 681.08 - - 681.08 681.08
Coe, Sally 631.67 631.67 - - 631.67 295.46
Commercial Equipment Comp. 678.50 811.25 - - 811.25 811.25
Damas, Raymond - 663.68 - - 663.68 663.68
Erie Construction - 2,062.50 - - 2,062.50 2,062.50
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 9/1 FOR 9/1 PMTS SHARE O/S SHARE O/S
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Corporations & Securities 171.07 - - - - -
Dept. of Commerce 143.47 - - - - -
Dept. of Commerce 204.32 - - - - -
Dept. of Commerce 390.33 - - - - -
Detroit Edison 246.76 - - - - -
Dolman Associates 991.48 - - - - -
Foster Grandparents 56.16 - - - - -
Marygold, Inc. DBA Coffee 122.51 - - - - -
Merrill & Associates 139.92 - - - - -
Michigan Public Service Co. 4,336.22 - - - - -
Michigan Public Service Co. 12,272.07 - - - - -
R.S.V.P. 107.25 - - - - -
Rapid Copy 85.33 - - - - -
Service Master Capital 105.00 - - - - -
US Army/Marine - 36,070.54 18,035.27 18,035.27 31,261.13 4,809,41
Holiday Office Park South 6546
Corps. & Securities 6,301.17 - - - - -
Holiday Office Park South 6810
Bahrie, Ronald 181.62 - - - - -
Coe, Sally 78.79 336.21 - 336.21 246.55 89.66
Commercial Equipment Comp. 216.33 - - - - -
Damas, Raymond 176.99 - - - - -
Erie Construction 550.00 - - - - -
</TABLE>
<PAGE>
SCHEDULE D
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
- -----------------------------------------------------------------------------------------------------------
SEPTEMBER SEPTEMBER SEPTEMBER
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS(1) RENT CHARGES INCOME CHARGES PAID
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Four Seasons Travel - 640.03 - - 640.03 640.03
Innervision Unisex Salon (1) - 1,828.75 - - 1,828.75 -
Kharacterz - - - - - -
Lansing Oral Surgery - 1,890.15 - - 1,890.15 1,890.15
McNamee Porter & Seeley 1,891.93 2,487.50 - - 2,487.50 2,487.50
Mercury Finance Co. 831.25 831.25 - - 831.25 831.25
Michigan Library Association - 1,534.50 - - 1,534.50 1,534.50
Michigan Library Consort. - 5,291.25 - - 5,291.25 5,291.25
Neumann & Canjar - 2,007.38 - - 2,007.38 2,007.38
Telplus Services, Inc. 2,000.46 2,000.46 - - 2,000.46 2,000.46
Voss Insurance Services 1,224.00 1,326.00 - - 1,326.00 1,326.00
Holiday Office Park South 940
Child Support Enforcement - 4,174.61 - - 4,174.61 4,174.61
Child Support Enforcement - 6,350.00 - - 6,350.00 6,350.00
Endodontic Specialists - 1,439.27 - - 1,439.27 1,439.27
Holiday Office Park South 920
Amurol Confections Company 762.38 826.58 - - 826.58 826.58
Burlingame Company - 1,630.83 - - 1,630.83 1,630.83
Dietz Janitorial - 342.00 - - 342.00 342.00
Dominion Exploration - 547.29 - - 547.29 547.29
Jackson National Life - 1,920.00 - - 1,920.00 1,920.00
M.A.C.U.L. 375.00 375.00 - - 375.00 375.00
Natral Gas Consultants 375.00 563.67 - - 563.67 563.67
Partners Psychological Services 558.85 576.98 - - 576.98 576.98
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 9/1 FOR 9/1 PMTS SHARE O/S SHARE O/S
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Four Seasons Travel 170.67 - - - - -
Innervision Unisex Salon (1) - 1,828.75 - 1,828.75 1,341.08 487.67
Kharacterz - - - - - -
Lansing Oral Surgery 504.04 - - - - -
McNamee Porter & Seeley 663.33 - - - - -
Mercury Finance Co. 221.67 - - - - -
Michigan Library Association 409.20 - - - - -
Michigan Library Consort. 1,411.00 - - - - -
Neumann & Canjar 535.30 - - - - -
Telplus Services, Inc. 533.46 - - - - -
Voss Insurance Services 353.60 - - - - -
Holiday Office Park South 940
Child Support Enforcement 1,113.23 - - - - -
Child Support Enforcement 1,693.33 - - - - -
Endodontic Specialists 383.81 - - - - -
Holiday Office Park South 920
Amurol Confections Company 220.42 - - - - -
Burlingame Company 434.89 - - - - -
Dietz Janitorial 91.20 - - - - -
Dominion Exploration 145.94 - - - - -
Jackson National Life 512.00 - - - - -
M.A.C.U.L. 100.00 - - - - -
Natral Gas Consultants 150.31 - - - - -
Partners Psychological Services 153.86 - - - - -
</TABLE>
Page 4 of 14
<PAGE>
SCHEDULE D
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
HOLIDAY OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, TUESDAY, SEPTEMBER 22, 1998
- -------------------------------------------------------------------------------------------------------------------------------
SEPTEMBER SEPTEMBER SEPTEMBER
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS(1) RENT CHARGES INCOME CHARGES PAID
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Progressive Casualty Insurance (2) 1,949.79 - - 1,949.79 1,949.79
Washington Inventory Service 557.37 785.63 - - 785.63 785.63
==========================================================================================
Totals 23,425.79 272,678.05 - 7,554.88 280,232.93 255,612.51
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 9/1 FOR 9/1 PMTS SHARE O/S SHARE O/S
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Progressive Casualty Insurance (2) 519.94 11,304.60 11,304.60 - 11,304.60 -
Washington Inventory Service 209.50 - - - - -
=============================================================================
Totals 68,163.31 56,713.95 32,093.53 24,620.42 50,148.49 6,565.46
</TABLE>
NOTES:
(1) Restated Promissory Note dated December 1, 1996 expired August 1, 1998. A
new Promissory Note is out for execution for $41,537.41 due 100% to Seller.
(2) Progressive Casualty owes Seller $11,304.60 for tenant improvements
completed in their space.
<PAGE>
HOLIDAY OFFICE PARK NORTH AND SOUTH
LANSING, MICHIGAN
REAL ESTATE SALE AGREEMENT
--------------------------
THIS REAL ESTATE SALE AGREEMENT (this "Agreement") is made as of the ____
day of August, 1998, by and between FIRST CAPITAL LANSING PROPERTIES LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller"), and LANSING MARC
L.L.C., a Michigan limited liability company ("Purchaser").
RECITALS
--------
A. Seller is the owner of record title to that certain parcel of real estate
(the "Real Property") located in Lansing, Michigan, which Real Property is more
particularly described in EXHIBIT A attached hereto and made a part hereof, and
upon which is situated an office park commonly known as Holiday Office Park
North and South (collectively, the "Office Buildings").
B. Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, the Property (as such term is defined in Section 1 below), each in
accordance with and subject to the terms and conditions set forth in this
Agreement.
THEREFORE, in consideration of the above Recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. PURCHASE AND SALE
-----------------
Subject to and in accordance with the terms and conditions set forth in
this Agreement, Purchaser shall purchase from Seller and Seller shall sell to
Purchaser the Real Property, together with: (a) the Office Buildings and all
other improvements located thereon and any and all of Seller's rights,
easements, licenses and privileges presently thereon or appertaining thereto;
(b) Seller's right, title and interest in and to the leases affecting the
Property or any part thereof that are listed on EXHIBIT N (individually, a
"Lease", and collectively, the "Leases"); (c) the interest of Seller in all
security deposits paid by tenants under the Leases that are listed on EXHIBIT N
attached hereto and which are not applied by Seller in accordance with the terms
of the Leases and/or applicable law between the date of this Agreement and
Closing (the "Security Deposits"); (d) all of Seller's right, title and interest
in and to the furniture, furnishings, fixtures, equipment (excluding computer
equipment), maintenance vehicles, tools and other tangible personalty located on
the Property and used in connection therewith that are listed on EXHIBIT K
attached hereto (the "Tangible Personal Property"); (e) all right, title and
interest of Seller under any and all of the maintenance, service, leasing,
brokerage, advertising and other like contracts and agreements with respect to
the ownership and operation of the Property that are listed on EXHIBIT C
attached hereto (the "Service Contracts"); (f) if and to the extent
transferable, all of Seller's interest, if any, in and to all warranties and
guaranties relating to the Property, if any; (g) if and to the extent
transferable, all of Seller's interest, if any, in and to all plans,
specifications and floor plans for the Office Buildings located at the Office
Buildings, if any; and (h) if and to the extent transferable, all of Seller's
right, title and interest in and to any existing intangible property pertaining
to the Property (the "Intangible Personal Property"), including the name
"Holiday Office Park", but specifically
1
<PAGE>
excluding any intangible property pertaining in any way to the rights associated
with the name "Equity Office" or the name of any entity containing the words
"Equity Office" as a part thereof; all to the extent applicable to the period
from and after the Closing (as such term is defined in Section 4(A) below). The
Real Property, together with items (a) through (h) above, shall be collectively
referred to in this Agreement as the "Property". The term "Property" expressly
excludes: (i) all property owned by tenants or other users or occupants of the
Property (except to the extent that any Security Deposits are deemed to be
"owned" by a tenant under applicable law); (ii) all rights with respect to any
refund of taxes applicable to any period prior to the Closing Date (as defined
in Section 4(A) below); and (iii) all computers and computer-related equipment
located at the management office of the Property.
2. PURCHASE PRICE
--------------
The purchase price to be paid by Purchaser to Seller for the Property is
Thirteen Million Five Hundred Thousand Dollars ($13,500,000) (the "Purchase
Price"). The Purchase Price shall be paid as follows:
A. Earnest Money.
(i) Prior to the date of this Agreement, Purchaser and Equity Office
Properties Management Corp., a Delaware corporation ("EOPMC"), on behalf of
Seller, entered into that certain letter of intent (the "Letter of Intent")
dated as of June 15, 1998 and accepted by Purchaser on June 18, 1998.
Purchaser, pursuant to the Letter of Intent, has deposited initial earnest
money in the amount of Fifty Thousand Dollars ($50,000) (the "Initial
Earnest Money") with the Chicago, Illinois office of Chicago Title
Insurance Company (the "Escrowee"). Upon execution of this Agreement,
Purchaser shall deposit additional earnest money in the amount of One
Hundred Fifty Thousand Dollars ($150,000) (the "Additional Earnest Money";
the Initial Earnest Money and the Additional Earnest Money, together with
any interest accrued thereon, net of investment costs, if any, are
collectively referred to herein as the "Earnest Money") with the Escrowee.
To direct the Escrowee as to the retention, investment and disbursement of
the Earnest Money, Purchaser, Seller and Escrowee entered into that certain
joint order escrow agreement (the "Joint Order Escrow Agreement"), a copy
of which is attached hereto as EXHIBIT D. The Earnest Money shall be
invested as Seller and Purchaser so direct pursuant to the terms and
provisions of the Joint Order Escrow Agreement. Any and all interest earned
on the Earnest Money shall be reported to Purchaser's federal tax
identification number.
(ii) If the transaction closes in accordance with the terms of this
Agreement, at Closing, the Earnest Money shall be delivered by Escrowee to
Seller as part payment of the Purchase Price. If the transaction fails to
close due to a default on the part of Purchaser and Seller is not otherwise
in material default hereunder, the Earnest Money shall be delivered by
Escrowee to Seller, as liquidated and agreed upon damages as more
particularly provided in Section 7(B) below. If the transaction fails to
close due to a default on the part of Seller and Purchaser is not otherwise
in material default hereunder, Purchaser shall have the remedies provided
for in Section 7(A) below and, in the event that Purchaser elects or is
deemed to have elected option (x) in Section 7(A) below, the Earnest Money
shall be delivered by Escrowee to Purchaser.
B. Cash at Closing. At Closing, Purchaser shall pay to Seller, by wire
transferred current federal funds, an amount equal to the Purchase Price,
minus the sum of the Earnest Money which Seller receives at Closing from
the Escrowee, and plus or minus, as the case may require, the closing
prorations and adjustments to be made pursuant to Section 4(C) below.
2
<PAGE>
3. EVIDENCE OF TITLE
-----------------
A. Title Commitment. Seller shall, within ten (10) days after the date
of this Agreement, obtain and cause to be delivered to Purchaser a
commitment for an ALTA Owner's Title Insurance Policy (the "Title
Commitment"), in the amount of the Purchase Price, issued by the Chicago,
Illinois office of Chicago Title Insurance Company (the "Title Insurer"),
together with copies of all underlying documents set forth therein (the
"Title Documents"). Purchaser may request, at its sole expense,
endorsements to the Title Commitment; provided, however, that the inclusion
of such endorsements in the Title Commitment shall not be a condition to
Purchaser's obligations under this Agreement. Seller shall, at no liability
to Seller, reasonably cooperate with Purchaser and Title Insurer to obtain
those endorsements requested by Purchaser, the cost of which endorsements
shall be borne solely by Purchaser. At Closing, the conveyance of the
Property to Purchaser shall be subject only to those exceptions to title
which are more fully described on attached EXHIBIT B (the "Existing
Permitted Exceptions") and those exceptions to title which become Permitted
Exceptions pursuant to Section 3(C) below (collectively, the "Permitted
Exceptions").
B. Survey. Seller shall, within 15 days of the date of this Agreement,
obtain and cause to be delivered to Purchaser, an updated survey of the
Real Property (the "Survey") prepared by Bock and Clark in accordance with
the survey requirements attached hereto as Exhibit T (the "Survey
Requirements"). The Survey shall be certified to Purchaser (or Purchaser's
assignee hereunder), Seller and the Title Insurer. Such certification shall
state that the Survey was made in accordance with "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Survey," jointly established and
adopted by ALTA/ACSM in 1992 and pursuant to the Accuracy Standards (as
adopted by ALTA and ACSM and in effect on the date of such certification)
of an "Urban Survey." Purchaser may request, at its sole expense,
additional requirements for the Survey; provided, however, that the
inclusion of such requirements on the Survey shall not be a condition to
Purchaser's obligations under this Agreement. Seller shall, at no liability
to Seller, reasonably cooperate with Purchaser and the surveyor to obtain
the survey requirements set forth in the survey certification attached
hereto as Exhibit U, the cost of which requirements (to the extent they
differ from the Survey Requirements) shall be borne solely by Purchaser.
C. Review of Title Commitment and Survey. If the Title Commitment or
Survey disclose exceptions to title other than the Existing Permitted
Exceptions (such exceptions to title being referred to as the "Disclosed
Exceptions") then Purchaser shall have until 5:00 p.m. (Chicago, Illinois
time) on the tenth (10th) day after the date of Purchaser's receipt of the
last of the Title Commitment and Survey, within which to notify Seller of
any such Disclosed Exceptions to which Purchaser objects. If any additional
exceptions to title other than the Existing Permitted Exceptions and the
Disclosed Exceptions (such exceptions to title being referred to herein as
the "New Disclosed Exceptions") arise between the date of the Title
Commitment, the Survey and the Closing, Purchaser shall have five (5) days
after its receipt of notice of same within which to notify Seller of any
such New Disclosed Exceptions to which Purchaser objects. Any such
Disclosed Exceptions or New Disclosed Exceptions not objected to by
Purchaser as aforesaid shall become "Permitted Exceptions" hereunder. If
Purchaser objects to any such Disclosed Exceptions or New Disclosed
Exceptions, Seller shall have until Closing (but in any event at least
twenty [20] days after it receives notice of Purchaser's objection(s)) to
remove such Disclosed Exceptions or New Disclosed Exceptions, which removal
may be accomplished by waiver or endorsement by the Title Insurer. If
Seller fails to remove any such Disclosed Exceptions or New Disclosed
Exceptions as aforesaid, Purchaser may, as its sole and exclusive remedy,
terminate this Agreement and obtain a return of the Earnest Money. If
Purchaser does
3
<PAGE>
not elect to terminate this Agreement, Purchaser shall consummate the
Closing and accept title to the Property subject to all such Disclosed
Exceptions and New Disclosed Exceptions (in which event, all such Disclosed
Exceptions and New Disclosed Exceptions, together with the Existing
Permitted Exceptions, shall be deemed "Permitted Exceptions" hereunder).
4. CLOSING
-------
A. Closing Date. The "Closing" of the transaction contemplated by this
Agreement (that is, the payment of the Purchase Price, the transfer of
title to the Property, and the satisfaction of all other terms and
conditions of this Agreement) shall occur forty-five (45) days after the
later date on which this Agreement is executed by the parties hereto, at
the office of the Escrowee (in person and/or by telecopy and/or overnight
courier) or at such other time and place as Seller and Purchaser shall
agree in writing. The "Closing Date" shall be the date of Closing. If the
date for Closing above provided for falls on a Saturday, Sunday or legal
holiday, then the Closing Date shall be the next business day.
B. Closing Documents and Deliveries.
(i) Seller. At Closing, Seller shall deliver to Purchaser the
following:
(a) a limited warranty deed (the "Deed"), subject only to the
Permitted Exceptions;
(b) a limited warranty bill of sale (the "Bill of Sale") in the
form attached hereto as EXHIBIT J;
(c) a letter advising tenants under the Leases of the change in
ownership of the Property in the form of EXHIBIT L attached hereto;
(d) a letter advising vendors under the Service Contracts of the
change in ownership of the Property in the form of EXHIBIT M attached
hereto;
(e) four (4) counterparts of an assignment and assumption of the
Leases and Security Deposits in the form of EXHIBIT E attached hereto
(the "Lease Assignment"), executed by Seller;
(f) four (4) counterparts of an assignment and assumption of the
Service Contracts in the form of EXHIBIT F attached hereto (the
"Service Contract Assignment"), executed by Seller;
(g) an affidavit stating, under penalty of perjury, Seller's
U.S. taxpayer identification number and that Seller is not a foreign
person within the meaning of Section 1445 of the Internal Revenue
Code;
(h) four (4) counterparts of a closing statement (the "Closing
Statement") to be executed by Seller and Purchaser, containing the
Closing Delinquency Schedule (as defined in Section 4(C)(i)(b) below)
and setting forth the prorations and adjustments to the Purchase Price
as required by Section 4(C) below, executed by Seller;
4
<PAGE>
(i) all executed Estoppel Certificates (as defined in Section
8(B)(i) below) received by Seller as of the Closing Date to the extent
not previously delivered to Purchaser or its counsel;
(j) four (4) counterparts of a letter with respect to Seller's
delivery of information required under 29 C.F.R.
(S)1910.1001(j)(2)(ii) and 29 C.F.R. (S)1926.1101(n)(6) (the "OSHA
Letter") in the form of EXHIBIT O attached hereto, executed by Seller;
(k) four (4) counterparts of a Quit Claim Assignment of Permits
and General Intangibles (the "Permit Assignment") in the form of
EXHIBIT R attached hereto;
(l) any transfer tax declaration, real property conveyance
statement or similar document (the "Transfer Tax Declarations") that
Seller is required by law to execute in order to record the Deed with
the Ingham County, Michigan recorder, executed by Seller; and
(m) copies of those Leases and all material amendments thereto
for which Estoppel Certificates were not received by Seller or
Purchaser prior to the Closing Date, certified by Seller to be, to the
Actual Knowledge of Seller, true and correct (Purchaser hereby
acknowledging that, as more particularly provided in Section 9(C)
below, Seller's liability under such certifications shall terminate on
a date no later than the two hundred seventieth (270th) day after the
Closing Date);
(ii) Purchaser. Purchaser shall deliver or cause to be delivered to
Seller at Closing:
(a) the funds required pursuant to Section 2(B) above;
(b) four (4) counterparts of the Lease Assignment, executed by
Purchaser;
(c) four (4) counterparts of the Service Contract Assignment,
executed by Purchaser;
(d) four (4) counterparts of the Closing Statement, executed by
Purchaser;
(e) copies of any executed Estoppel Certificates received by
Purchaser as of the Closing Date, if any;
(f) four (4) counterparts of the OSHA Letter, executed by
Purchaser;
(g) four (4) counterparts of the Permit Assignment, executed by
Purchaser; and
(h) the Transfer Tax Declarations, executed by Purchaser.
C. Closing Prorations and Adjustments.
----------------------------------
(i) The following items are to be prorated or adjusted (as
appropriate) as of the Closing Date, it being understood that for purposes
of prorations and adjustments, Purchaser shall be deemed the owner of the
Property as of the Closing Date and Seller shall be deemed the
5
<PAGE>
owner of the Property as of the day prior to the Closing Date; provided,
however, that in the event that Seller and Seller's mortgage lender, if
any, receive the net funds from the Escrowee after 2 PM (New York, New York
time) on the Closing Date due to delay in delivery of funds or closing
documents by or on behalf of Purchaser, then, for purposes of prorations
and adjustments, Seller shall be deemed the owner of the Property as of the
Closing Date and Purchaser shall be deemed the owner of the Property as of
the day after the Closing Date:
(a) real estate and personal property taxes and assessments
(initially on the basis of the most recent ascertainable tax bill if
the current bill or evidence sufficient to calculate the amount of the
taxes for the period through Closing is not then available);
(b) the "minimum" or "base" rent payable by tenants under the
Leases ("Base Rent"); provided, however, that rent and all other sums
which are due and payable to Seller by any tenant but uncollected as
of the Closing shall not be adjusted, but Purchaser shall cause the
rent and other sums for the period prior to Closing to be remitted to
Seller if, as and when collected, but only after such rents are first
applied towards any unpaid rents first becoming due and payable
subsequent to the Closing Date. If any tenant pays rent in arrears
under the terms of its Lease, Seller shall receive a credit at Closing
for its share of such tenant's uncollected rent attributable to the
month in which the Closing occurs (the "Seller's Rent Credit");
provided, however, that in the event that Purchaser does not receive
the rent from such tenant for the month in which Closing occurs by the
end of the first week of the following month, Seller shall promptly
remit Seller's Rent Credit to Purchaser. At Closing, the Closing
Statement shall contain a schedule (the "Closing Delinquency
Schedule") of all such past due but uncollected rent and other sums
owed by tenants (the "Past Due Rents"). Purchaser shall include the
amount of the Past Due Rents in the first bills thereafter submitted
to the tenants in question after the Closing and shall continue to do
so for six (6) months thereafter. Purchaser shall promptly deliver to
Seller a copy of each such bill submitted to tenants. Purchaser shall
promptly remit to Seller any such Past Due Rents paid by tenants set
forth on the Closing Delinquency Schedule, but only if a deficiency in
the then current rent is not thereby created. To the extent not set
forth on the Closing Delinquency Schedule, percentage or overage rent
shall be prorated as follows: with respect to percentage rents, and
upon receipt by Purchaser, Purchaser shall furnish to Seller copies of
all sales reports from tenants relative thereto, including, without
limitation, all sales reports with respect to any tenants whose lease
years have expired as of the Closing but whose sales reports were not
available on Closing and sales reports of any tenants whose lease year
expires after Closing, and the amount of any rents (including, without
limitation, percentage or overage rents and Tenant Reimbursements) to
be paid by any tenant shall be made in accordance with such tenant's
Lease as now existing (Purchaser hereby covenanting and agreeing not
to modify the Leases after Closing to change the date and/or method
for payment of such amounts with respect to the period prior to
Closing until after the occurrence of the reprorations described in
Section 4(C)(ii) below) and Purchaser shall, after Closing, promptly
pay to Seller a prorata portion of such rents, based upon
apportionment being made as of the Closing Date, promptly after the
date when such rents are received from the tenant;
(c) with respect to tenant improvement costs and/or allowances
or leasing commissions relating to any new leases, or any
modification, amendment, restatement or renewal of existing Leases
(each, a "New Lease", and collectively, the "New Leases") executed
between the date of this Agreement and Closing with the consent of
Purchaser granted (or deemed to be granted) in accordance with Section
10(L)(1) below, Seller and
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Purchaser agree that such costs, allowances and leasing commissions
shall be prorated over the initial term of any such New Lease with
Seller being responsible for a portion of such costs, allowances and
leasing commissions based on the ratio of Base Rent payments received
by Seller through the Closing Date to the total Base Rent payable over
the initial term of the particular New Lease and, in the event that
Seller has paid such costs, allowances and/or leasing commissions
prior to Closing, Purchaser shall reimburse Seller at Closing for the
amount of any such costs, allowances and/or leasing commissions paid
by Seller, based on the above-described proration and, in the event
Seller has not paid such costs, allowances and/or leasing commissions
prior to Closing, Purchaser shall be responsible for payment of all
such costs, allowances and leasing commissions after Closing;
(d) intentionally omitted;
(e) the amount of the Security Deposits, if any, with Purchaser
receiving a credit at Closing against the Purchase Price in the amount
of such Security Deposits;
(f) water, sewer, electric, telephone and all other utility and
fuel charges, fees and use charges, fuel on hand (at cost plus sales
tax), and any deposits with utility companies (to the extent possible,
utility prorations will be handled by meter readings on the day
immediately preceding the Closing Date);
(g) amounts paid or payable under the Service Contracts.
Notwithstanding anything in this Agreement to the contrary, (i)
Purchaser will receive a credit at Closing for any unpaid amounts
under the construction contract with K&D General Contractors, Inc.
("K&D Contract") set forth on Exhibit C, and (ii) Seller shall receive
a credit at Closing for any payments that Seller has, prior to
Closing, made under the construction contract with Milestone
Construction Company ("Milestone Contract") set forth on Exhibit C.
Seller further agrees to indemnify, defend and hold Purchaser harmless
from and against any costs and expenses incurred by Purchaser under
the K&D Contract but not credited to Purchaser at Closing, including,
without limitation, reasonable attorneys' fees incurred by Purchaser
in enforcing the foregoing indemnity, but not including any costs or
expenses related to any amendments, change orders or modifications
made to the K&D Contract after Closing;
(h) assignable license and permit fees, if any; and
(i) other similar items and expenses of operation.
(ii) Notwithstanding the foregoing and subject to Sections 4(C)(iii)
and 4(C)(iv) below, Seller shall in all events be entitled to retain
amounts paid by tenants for reimbursement of real estate taxes and
assessments, common area maintenance, mall maintenance, utility charges,
water and sewer charges, insurance and merchant's association dues and
assessments and all other charges to or contributions by tenants under the
Leases other than Base Rent (such assessments, costs, expenses, dues and
charges being referred to herein as the "Tenant Reimbursable Expenses", and
the amounts payable by tenants under the Leases with respect to the Tenant
Reimbursable Expenses being referred to herein as the "Tenant
Reimbursements") as of the Closing; provided that any Tenant Reimbursements
paid to Seller which pertain to the month of Closing and any months
thereafter shall be prorated as provided in accordance with Section 4(C)(i)
above.
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(iii) As soon as practical after Closing, but in no event later than
May 31, 1999, Seller and Purchaser shall, with respect to any amounts
prorated or adjusted at Closing pursuant to Section 4(C)(i) above based on
estimates or formulae, as applicable, jointly determine and reapportion
such amounts in accordance with Section 4(C)(i) above upon determination of
the actual costs or expenses with respect thereto. In the event that the
amount credited to Purchaser by Seller at Closing exceeds the amount of the
credit that Purchaser should have received had such actual amounts been
available at Closing, Purchaser shall promptly remit such excess amount to
Seller. In the event that the amount credited to Seller by Purchaser at
Closing exceeds the amount of the credit that Seller should have received
at Closing had such actual amounts been available at Closing, Seller shall
promptly remit such excess amount to Purchaser. In the event that, after
such reapportionment: (1) the amount of Tenant Reimbursements retained by
Seller as provided in Section 4(C)(ii) above is less than the amount of
Tenant Reimburseable Expenses paid by Seller (whether by direct payment by
Seller or by proration as provided in Section 4(C)(i) above) with respect
to 1998 and the landlord under the Leases is entitled to recover all or a
portion of such expenditures under the terms of Leases, then Purchaser
shall bill such tenants for such amounts and continue to bill such tenants
for such amounts until such amounts are collected each month for up to two
(2) months thereafter, provide Seller with copies of such bills upon
issuance, and collect such amounts on behalf of Seller and, upon receipt,
remit such collected amounts to Seller; and (2) the amount of Tenant
Reimbursements collected by Seller for 1998 and retained by Seller as
provided in Section 4(C)(ii) above exceeds the amount of Tenant
Reimburseable Expenses paid by Seller (whether by direct payment by Seller
or by proration as provided in Section 4(C)(i) above) with respect to 1998
then, to the extent required under the terms of the Leases, Seller shall
promptly remit such excess amounts to the Purchaser; provided that, to the
extent any such excess amounts are otherwise payable to tenants owing Past
Due Rents, Seller may offset the amounts due to such tenants against Past
Due Rents owing to Seller and remit any remaining amounts to Purchaser.
Purchaser shall be thereafter obligated to promptly remit the applicable
portion to the particular tenants entitled thereto (or apply such amounts
to arrearages in rental obligations to the extent permitted under the terms
of the applicable Leases), and Purchaser shall indemnify, defend, and hold
Seller, its partners, and their respective directors, officers, employees,
and agents, and each of them, harmless from and against any losses, claims,
damages and liabilities, including, without limitation, reasonable
attorneys' fees and expenses incurred in connection therewith, arising out
of or resulting from Purchaser's failure to remit any such amounts to
tenants in accordance with the provisions hereof.
(iv) Seller shall be responsible for the reconciliation with tenants
of Tenant Reimbursements and Tenant Reimbursable Expenses for the calendar
year 1997, and (a) in the event the amount of Tenant Reimbursements
retained by Seller as provided in Section 4(C)(ii) above is less than the
amount of Tenant Reimbursable Expenses paid by Seller (whether by direct
payment by Seller or by proration as provided in Section 4(C)(i) above)
with respect to 1997 and the landlord under the Leases is entitled to
recover such difference under the terms of the Leases, then Seller shall be
entitled to bill such tenants and retain any such amounts due from tenants,
and (b) in the event that the amount of Tenant Reimbursements collected by
Seller for 1997 and retained by Seller as provided in Section 4(C)(ii)
above exceeds the amount of Tenant Reimbursable Expenses paid by Seller
(whether by direct payment by Seller or by proration as provided in Section
4(C)(i) above) with respect to 1997 then, to the extent required under the
terms of the Leases, Seller shall promptly remit such excess amounts to the
applicable tenants; provided that, to the extent any such excess amounts
are otherwise payable to tenants owing Past Due Rents, Seller may offset
the amounts due to such tenants against Past Due Rents owing to Seller and
remitting any remaining amounts to such tenants.
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(v) If Seller has not received all Past Due Rents or other amounts
owed to it by tenants within sixty (60) days after the Closing Date or
within sixty (60) days after such other amounts may be due, Seller at its
sole cost and expense, shall be entitled at any time within the twelve (12)
month period after the applicable sixty (60) day period, to commence such
actions or proceedings not affecting possession or enforcing landlord's
liens or resulting in termination of the Lease in question as Seller shall
desire to collect any such Past Due Rents or other amounts, and Purchaser
shall cooperate with Seller in any such action.
(vi) For purposes of this Section 4(C), the amount of any expense
credited by one party to the other shall be deemed an expense paid by that
party. The terms and provisions of this Section 4(C) shall survive the
Closing and delivery of the Deed.
(vii) Seller will pay, or cause to be paid, any and all amounts due
and owing to employees of Seller or its management agent employed at the
Property as of Closing. To the extent (a) any such employees are employed
by Seller pursuant to the terms of a union agreement, and (b) any such
union employees are hired by Purchaser at Closing, then Seller shall credit
Purchaser with an amount equal to all vacation pay and other employee
benefits accrued through the Closing, unless Seller is required to pay such
amounts to the applicable employees or such other parties pursuant to the
terms of the union agreement.
(viii) Tax Appeals Prior Tax Years. Prior to the date hereof, Seller
filed an appeal of the assessed value of the tax parcel on which the 6546
Mercantile Way building is located (the "6546 Parcel") with respect to tax
bills issued in the 1996, 1997 and 1998 calendar years and requesting a
corresponding reduction in real estate taxes payable with respect to the
tax and/or calendar years covered by such tax bills. Purchaser and Seller
hereby agree that: (1) Seller may, after Closing, if it so elects, continue
to pursue and control the real estate tax appeal and reduction process with
respect to the tax bills referenced herein and shall have the right to
engage counsel, consultants, expert witnesses and appraisers as Seller
shall reasonably determine to be necessary with respect to such process at
no cost to Purchaser; (2) Seller shall be responsible for the cost of any
counsel, consultant, expert witness or appraiser employed by Seller to
obtain any reduction of real estate taxes for such tax and/or calendar
years; and (3) Purchaser shall have the right to reasonably approve that
portion of any settlement of the tax appeal pertaining to taxes accruing
from and after the Closing Date. In the event that any refunds of taxes
applicable to any period prior to the Closing Date have not been received
by Seller as of the Closing, Seller shall retain all rights with respect to
any refund of such taxes, subject to the rights of tenants under Leases.
D. Transaction Costs. Seller shall be responsible for and shall pay (i)
the cost to prepare the Survey in accordance with the Survey Requirements,
(ii) the State of Michigan, Ingham County and City of Lansing transfer
taxes and/or documentary stamps (the "Transfer Taxes") owed in connection
with the Deed (and Seller and Purchaser shall timely execute and deliver
such forms and returns as are necessary in connection therewith), (iii) the
base premium for the owner's title insurance policy to be issued to
Purchaser at Closing (the "Title Policy"), and (iv) the cost of recording
fees for documents that are recorded to clear title exceptions. Purchaser
shall be responsible and pay for (1) all costs of any and all endorsements
to the Title Policy (except for endorsements to insure over exceptions to
title which are not Permitted Exceptions in the event that Seller elects to
obtain such endorsements, the cost of which endorsements, if any, shall be
paid by Seller), (2) all recording charges for recording the Deed, (3) all
additional costs for the Survey for work that goes beyond the scope of the
Survey Requirements, and (4) all of Purchaser's due diligence costs,
including without limitation, any fees and expenses of environmental
consultants, engineers and any other consultants. Seller and Purchaser
shall each
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pay one-half (1/2) of all escrow fees, whether or not the Closing occurs.
In addition, Purchaser and Seller shall each be responsible for the fees of
their respective attorneys.
E. Possession. Upon Closing, Seller shall deliver to Purchaser
possession of the Property, subject only to the Permitted Exceptions.
5. CASUALTY LOSS AND CONDEMNATION
------------------------------
If, prior to Closing, the Property or any part thereof shall be taken by
eminent domain or condemned, or destroyed or damaged by fire or other casualty,
Seller shall promptly so notify Purchaser. In the event that either: (i) the
reasonable cost to restore the Property due to such damage or destruction is
greater than One Million Dollars ($1,000,000) (a "Material Casualty"), or (ii)
any material portion of the Office Buildings are taken or condemned (a "Material
Condemnation"), then Purchaser shall have the option to terminate this Agreement
by delivery of its written termination notice to Seller within fifteen (15) days
of Seller's written notice thereof. If (a) the aforementioned casualty is not a
Material Casualty, (b) the aforementioned taking or condemnation is not a
Material Condemnation, or (c) Purchaser does not elect to terminate this
Agreement pursuant to the provisions of the preceding sentence (time being of
the essence with respect to any such election), then Seller and Purchaser shall
consummate the transaction contemplated by this Agreement without abatement of
the Purchase Price, Seller shall keep Purchaser reasonably apprised of
settlement negotiations and Purchaser shall be entitled during the period
following the Inspection Period and prior to Closing to approve the terms of any
property insurance settlement, such approval not to be unreasonably withheld or
delayed, and to receive at Closing the taking, condemnation or property
insurance proceeds (or an assignment of the right to such proceeds) (less any
amounts applied against costs incurred or income lost by Seller as a result of
such occurrence) plus a credit against the Purchase Price in the amount of any
uninsured loss (as to property only) and any deductible payable by Seller under
applicable property insurance, and Seller shall, at Closing, execute and deliver
to Purchaser all customary proofs of loss, assignments of claims and other
similar items. If Purchaser elects to terminate this Agreement pursuant to the
provisions of this Section 5 and Purchaser is not in default under this
Agreement, the Earnest Money shall be returned to Purchaser by the Escrowee, in
which event this Agreement shall, without further action of the parties, become
null and void and neither party shall have any further rights or obligations
under this Agreement except those rights and obligations which expressly survive
termination of this Agreement as provided herein and Seller's rights under the
Confidentiality Agreement (as defined in Section 8(A) below).
6. BROKERAGE
---------
Seller, pursuant to a separate written agreement (the "Broker Agreement"),
is obligated to pay upon Closing (but not otherwise) a brokerage commission to
Holmes Barile Realty Advisors, Inc. ("Broker") for services rendered in
connection with the sale and purchase of the Property. Seller shall indemnify
and hold Purchaser harmless from and against any and all claims of Broker
related to Seller's agreement under the Broker Agreement to pay Broker a
commission in connection with the purchase and sale of the Property, including,
without limitation, reasonable attorneys' fees and expenses incurred by
Purchaser in connection with such claim. Purchaser represents and warrants to
Seller that Purchaser does not have any agreement with any broker or finder in
connection with the Property. Seller and Purchaser shall each indemnify and hold
the other harmless from and against any and all claims of all brokers and
finders (other than a claim by Broker against Seller of the type described in
the first sentence of this Section 6, which claim Seller shall be obligated to
indemnify Purchaser against in accordance with the preceding sentence) claiming
by, through or under the indemnifying party and in any way related to the sale
and purchase of the Property, this Agreement or otherwise, including, without
limitation, reasonable attorneys' fees and expenses incurred by the indemnified
party in connection with such claim. The
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provisions of this Section 6 shall survive the Closing and delivery of the Deed
or sooner termination of this Agreement.
7. DEFAULT AND REMEDIES
--------------------
A. Seller Default. Notwithstanding anything to the contrary contained in
this Agreement, if (i) Seller fails to perform in accordance with the terms
of this Agreement, (ii) Purchaser is not otherwise in material default
hereunder, and (iii) the Closing does not occur, then, as Purchaser's sole
and exclusive remedy hereunder and at Purchaser's option, either (x) the
Earnest Money shall be returned to Purchaser, in which event this Agreement
shall be null and void, and neither party shall have any rights or
obligations under this Agreement, or (y) upon notice to Seller not less
than ten (10) days thereafter, and provided an action is filed within
thirty (30) days thereafter, Purchaser may seek specific performance of
this Agreement, but not damages. Purchaser's failure to seek specific
performance as aforesaid shall constitute its election to proceed under
clause (x) above. If Purchaser has elected, or is deemed to have elected,
clause (x) pursuant to this Section and Seller has willfully failed to
perform its material obligations under this Agreement prior to such
election, Purchaser shall, in addition to the remedy contained in clause
(x), be entitled to collect its actual out-of-pocket expenses incurred in
connection with this Agreement not to exceed $20,000 from Seller.
B. Purchaser Default. If (i) Purchaser fails to perform in accordance
with the terms of this Agreement, (ii) Seller is not in material default
hereunder, and (iii) the Closing does not occur, the Earnest Money may be
retained by Seller as liquidated and agreed upon damages and as Seller's
sole and exclusive remedy with respect thereto other than those rights that
survive a termination of this Agreement as provided herein and Seller's
rights under the Confidentiality Agreement. If Purchaser is required to but
does not deposit with the Escrowee the Earnest Money as provided in Section
2(A)(i) above, the sum of Two Hundred Fifty Thousand and No/100 Dollars
($200,000) shall nonetheless be recoverable by Seller from Purchaser as
Earnest Money and without prejudice to Seller's other rights and remedies
provided in this Agreement. PURCHASER AND SELLER ACKNOWLEDGE AND AGREE THAT
(1) THE EARNEST MONEY IS A REASONABLE ESTIMATE OF AND BEARS A REASONABLE
RELATIONSHIP TO THE DAMAGES THAT WOULD BE SUFFERED AND COSTS INCURRED BY
SELLER AS A RESULT OF HAVING WITHDRAWN THE PROPERTY FROM SALE AND THE
FAILURE OF CLOSING TO OCCUR DUE TO A DEFAULT OF PURCHASER UNDER THIS
AGREEMENT; (2) THE ACTUAL DAMAGES SUFFERED AND COSTS INCURRED BY SELLER AS
A RESULT OF SUCH WITHDRAWAL AND FAILURE TO CLOSE DUE TO A DEFAULT OF
PURCHASER UNDER THIS AGREEMENT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL
TO DETERMINE; (3) PURCHASER SEEKS TO LIMIT ITS LIABILITY UNDER THIS
AGREEMENT TO THE AMOUNT OF THE EARNEST MONEY IN THE EVENT THIS AGREEMENT IS
TERMINATED AND THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT DOES NOT
CLOSE DUE TO A DEFAULT OF PURCHASER UNDER THIS AGREEMENT; AND (4) THE
EARNEST MONEY SHALL BE AND CONSTITUTE VALID LIQUIDATED DAMAGES.
PURCHASER INITIALS: SELLER INITIALS:
------------------- --------------------
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C. Post-Closing Remedies. After Closing, Seller and Purchaser shall,
subject to the terms and conditions of this Agreement (including, without
limitation, Section 10(P) below), have such rights and remedies as are
available at law or in equity, except that neither Seller nor Purchaser
shall be entitled to recover from the other consequential or special
damages. The provisions of this Section 7 shall survive the Closing and
delivery of the Deed or sooner termination of this Agreement.
8. CONDITIONS PRECEDENT
--------------------
A. Inspection Period. There presently exists that certain
confidentiality agreement dated December 3, 1997, from Broker on behalf of
Seller, on the one hand, and Purchaser, on the other, as modified by that
certain modification amendment dated June 15, 1998 and accepted by
Purchaser on June 18, 1998 (collectively, the "Confidentiality Agreement"),
a copy of which is attached hereto as EXHIBIT Q. Subject to Section 10(G)
below and the provisions of the Confidentiality Agreement, Purchaser and/or
its agents have had the period between June 18, 1998 and the date of this
Agreement within which to inspect the Property and conduct such non-
invasive, non-intrusive tests, surveys and inspections as Purchaser deemed
reasonably necessary or appropriate (the "Inspection Period"). During the
period between the date of this Agreement and Closing, Purchaser shall have
the right to continue to inspect and enter the Property to conduct the
inspections and testing described in the preceding sentence, subject to
Section 10(G) below and the provisions of the Confidentiality Agreement.
Purchaser, by its execution of this Agreement, acknowledges that it had an
opportunity during the Inspection Period to inspect the Property and all
Disclosures (as defined in Section 10(H) below) and make such other
inquiries and investigations and obtain such reports and analyses it deemed
adequate in connection with its decision to purchase the Property, and, as
a result thereof, Purchaser agrees that, except as specifically set forth
in this Agreement, it shall purchase the Property in its "AS IS, WHERE IS"
condition, subject to ordinary wear and tear and as more particularly
provided in Section 10(H) below.
B. Estoppel Certificates.
---------------------
(i) It shall be a condition precedent to Purchaser's obligation to
close the purchase and sale transaction contemplated in this Agreement that
Purchaser shall have received, at Closing, estoppel certificates
(individually, an "Estoppel Certificate" and collectively, the "Estoppel
Certificates") dated as of a date no more than forty-five (45) days prior
to Closing, from tenants occupying not less than eighty percent (80%) of
the net rentable square footage of space at the Property actually leased as
of the end of the Inspection Period pursuant to valid and existing Leases
and in form and content as set forth herein. The Estoppel Certificates
executed by tenants shall be substantially in the form of EXHIBIT G
attached hereto (the "Form Tenant Estoppel Certificate"), except that an
Estoppel Certificate shall be deemed an acceptable Estoppel Certificate for
purposes of this Section 8(B)(i) if: (1) it contains the qualification by
the tenant of any statement as being to the best of its knowledge or as
being subject to any similar qualification, and/or (2) it contains any
tenant objection to addressing or certifying the Estoppel Certificate to
Purchaser's mortgage lender, if any, or is not addressed or certified to
such mortgage lender, and/or (3) it is in a form required by the applicable
Tenant's Lease (the aforesaid acceptable Estoppel Certificates to be
delivered are collectively referred to as the "Required Estoppel
Certificates"). If Seller does not provide Purchaser with an Estoppel
Certificate from a tenant of the Property, at Closing Seller shall provide
Purchaser with a copy of such tenant's Lease and all material amendments
thereto certified by Seller to be, to the Actual Knowledge of Seller, true
and correct and certifying that prepaid rent under such Lease will be shown
on the Closing Statement.
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(ii) In the event that Seller is unable to provide to Purchaser the
Required Estoppel Certificates at Closing as provided above, Purchaser may
either: (x) elect not to purchase the Property, in which event this
Agreement shall be null and void, the Escrowee shall promptly return the
Earnest Money to Purchaser and thereafter neither Seller nor Purchaser
shall have any further rights or obligations under this Agreement, other
than those rights and obligations which expressly survive termination of
this Agreement and the rights and obligations under the Confidentiality
Agreement; or (y) elect to purchase the Property notwithstanding Seller's
inability to provide the Required Estoppel Certificates, in which event
Seller shall not be obligated to provide any additional Estoppel
Certificates to Purchaser after Closing. The provisions of this Section
8(B)(ii) shall survive the Closing and delivery of the Deed.
(iii) If any Estoppel Certificates contain statements or allegations
that a default or potential default exists on the part of Seller under the
Lease in question and (1) the existence or the substance of such
allegations or statements were contained in any Disclosures (as defined in
Section 10(H) below) prior to the end of the Inspection Period, or (2)
prior to the end of the Inspection Period Purchaser otherwise obtained
actual knowledge of facts revealing the substance of such statements or
allegations, or (3) Purchaser elects that Closing occur notwithstanding the
existence of such default of potential default, then such Estoppel
Certificates shall be deemed acceptable for purposes of this Section 8(B),
notwithstanding the existence of such allegations or statements and Seller
shall have no liability to Purchaser hereunder with respect to the
existence of such allegations, statements or information. The provisions of
this Section 8(B)(iii) shall survive the Closing and delivery of the Deed.
C. Accuracy of Seller's Representations. It shall be a condition
precedent to Purchaser's obligation to close the purchase and sale
transaction contemplated in this Agreement that each of Seller's
representations set forth in Section 9(A) below shall be true and correct
in all material respects as of Closing, as modified by any Inspection
Period Disclosures (as defined in Section 9(B) below) prior to the end of
the Inspection Period. In the event that Seller makes any Pre-Closing
Disclosures (as defined in Section 9(B) below) to Purchaser, Purchaser
shall have the right to terminate this Agreement and receive the return of
the Earnest Money by delivering written notice thereof to Seller on or
before the earlier of Closing or the fifth (5th) business day after
Purchaser receives written notice of such Pre-Closing Disclosure. If
Purchaser does not terminate this Agreement pursuant to its rights under
this Section 8(C), then such representations shall be deemed modified to
conform them to the Inspection Period Disclosures and the Pre-Closing
Disclosures. The provisions of this Section 8(C) shall survive the Closing
and delivery of the Deed or sooner termination of this Agreement.
9. SELLER'S REPRESENTATIONS AND COVENANTS
--------------------------------------
A. Representations. Seller represents to Purchaser that, as of the date
of this Agreement:
(i) Title to Real Property. Seller holds fee simple title to the Real
Property.
(ii) Organization; Authority. Seller is a limited partnership, duly
organized and in good standing under the laws of the State of Illinois.
Seller has the power and authority under Seller's partnership agreement
("Seller's Organizational Documents") to sell, transfer, convey and deliver
the Property to be sold and purchased hereunder, and all action and
approvals required thereunder have been duly taken and obtained in order to
sell, transfer, convey and deliver the Property as aforesaid.
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(iii) No Breach. The execution and delivery of this Agreement, the
consummation of the transactions contemplated herein and fulfillment of the
terms hereof will not result in a breach of any of the terms or provisions
of, or constitute a default under, any provision of Seller's Organizational
Documents.
(iv) Condemnation. Seller has not received from any governmental
authority any written notice of any pending condemnation or taking by
eminent domain of the Property or any portion thereof.
(v) Litigation. Except as set forth on EXHIBIT I attached hereto,
Seller has not been served with written notice of any material litigation
which is still pending against Seller with respect to Seller's ownership or
operation of the Property which will affect the Property after Closing.
(vi) Violations. Except as set forth on EXHIBIT H attached hereto
or as set forth in the "Disclosures" (as defined in Section 10(H) below),
to the "Actual Knowledge of Seller" (as hereinafter defined), Seller has
not received during the immediately preceding twelve (12) months any
written notice from any governmental authority of any material violation of
any state or federal law, rule or regulation concerning the Property or any
part thereof, which has not been cured prior to the date of this Agreement,
provided that Seller makes no representation or warranty as to the
Property's compliance with the American with Disabilities Act.
(vii) Leases. There are no Leases affecting the Property other than
as shown on Exhibit N, and prior to the date hereof, Seller has delivered
true and correct, to the Actual Knowledge of Seller, copies of the Leases
and all material amendments thereto to Purchaser.
(viii) Tenant Improvement Costs/Leasing Commissions. There are no
tenant improvement costs and/or allowances or leasing commissions for which
the owner of the Property shall be responsible after Closing, other than
amounts due under the construction contract with K&D listed on Exhibit C
for which Purchaser shall receive a credit at Closing pursuant to Section
4(C)(i)(g).
(ix) Construction Contracts. To the Actual Knowledge of Seller:
(i) attached hereto as Exhibit S are true and correct copies of the K&D
Contract and the Milestone Contract (each a "Construction Contract", and
collectively, the "Construction Contracts"), (ii) there have been no
material change orders or other modifications to the Construction Contracts
which affect the scope or cost of the work described therein except as
shown on Exhibit S, (iii) no payments have been made under the Construction
Contracts, and (iv) no payments shall be due under a Construction Contract
until the work described therein is completed.
When used in this Agreement, the term "Actual Knowledge of Seller"
shall mean and be limited to the actual (and not imputed, implied or
constructive) current actual knowledge of Alissa Helgesen, Vice President-
Dispositions of Equity Office Properties Trust, a Maryland real estate
investment trust ("EOP"), and all due inquiries have been made of Ms.
Helgesen by Seller in connection with the representations and warranties of
Seller listed above. Notwithstanding anything herein to the contrary,
Alissa Helgesen shall not (whether prior to or after Closing) have any
personal liability or obligation whatsoever with respect to any matters set
forth in this Agreement or with respect to any of Seller's representations
herein being or becoming untrue, inaccurate or incomplete in any respect.
Any knowledge or notice given to any of Seller's other agents, servants,
representatives or employees shall not be imputed to Seller.
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<PAGE>
B. Representations Remade. At Closing, Seller shall be deemed to remak and
restate the representations set forth in Section 9(A) except that the
representations shall be updated: (i) by Seller delivering written notice
to Purchaser to reflect any fact, matter or circumstance which Seller's
Chicago, Illinois representatives become aware of that would make any of
Seller's representations contained in Section 9(A) untrue or incorrect in
any material respect, (ii) to reflect any Disclosures prior to the
Inspection Period, (iii) to reflect any statements or allegations in
Estoppel Certificates that a default or potential default exists on the
part of Seller under the respective Leases in question not previously
disclosed to Purchaser that would otherwise make any of Seller's
representations in Section 9(A) untrue in any material respect, and (iv) to
reflect Purchaser's actual knowledge, prior to the end of the Inspection
Period, of facts inconsistent with or different from the representations
set forth herein.
C. Survival. The representation and warranty set forth in Section 9(A)(i)
shall not survive the Closing. The representations and warranties set forth
in Section 9(A)(ii) through Section 9(A)(viii), subject to modifications
thereto as provided in Section 9(B), shall survive the Closing and the
delivery of the Deed, but only for a period of two hundred seventy (270)
days thereafter, and not otherwise. Notice of any claim as to a breach of
any such representations must be made to Seller prior to the expiration of
such two hundred seventy (270) day period or it shall be deemed a waiver of
the right to assert such claim.
D. Defaults by tenants under Leases and vendors under Service Contracts.
Seller does not represent that any particular Service Contract will be in
force or effect as of the Closing or that tenants under Leases or the
parties to the Service Contracts will not be in default under their
respective Leases or Service Contracts, and neither the existence of any
default by any tenant under its Lease nor the default of any party under
any Service Contract shall affect the obligations of Purchaser hereunder;
provided, however, the foregoing shall not affect the conditions contained
in Sections 8(B) or 8(C) above. The provisions of this Section 9(D) shall
survive the Closing and delivery of the Deed.
E. Estoppel Certificates supersede representations. In the event that an
Estoppel Certificate is received from a tenant (before or after Closing)
which confirms the accuracy of the representations made in Section 9(A) (as
modified as provided in Section 9(B)), then the representations in Section
9(A) (as modified as provided in Section 9(B)) shall be deemed to be
superseded by such Estoppel Certificate (and, in such event, Seller shall
no longer have any liability hereunder with respect to the portion of the
representation superseded). The provisions of this Section 9(E) shall
survive the Closing and delivery of the Deed.
10. MISCELLANEOUS
-------------
A. Entire Agreement. All understandings and agreements heretofore had
between Seller and Purchaser with respect to the Property are merged in
this Agreement, which alone fully and completely expresses the agreement of
the parties. Purchaser further acknowledges that, except as expressly
provided in this Agreement, neither Seller nor any agent or representative
of Seller has made, and Seller is not liable for or bound in any manner by,
any express or implied warranties, guaranties, promises, statements,
inducements, representations or information pertaining to the Property. The
provisions of this Section 10(A) shall survive the Closing and delivery of
the Deed.
B. No Assignment. Except for an assignment to a Permitted Assignee (as
hereinafter defined), neither this Agreement nor any interest hereunder
shall be assigned or transferred by Purchaser without the written consent
of Seller, which consent may be withheld in the sole and
15
<PAGE>
absolute discretion of Seller. For purposes of this Agreement, the term
"Permitted Assignee" shall be defined to mean a partnership, corporation or
limited liability company owned or controlled by Purchaser. Upon an
assignment to a Permitted Assignee such Permitted Assignee shall execute
and deliver an agreement to Seller in which such Permitted Assignee assumes
all of the obligations of Purchaser under this Agreement. Upon an
assignment of this Agreement to a Permitted Assignee: (1) Purchaser shall
not be relieved of any subsequently accruing liability under this
Agreement, and (2) as used in this Agreement, the "Purchaser" shall be
deemed to include such Permitted Assignee. Seller may assign or otherwise
transfer its interest under this Agreement beginning on the two hundred
seventy first (271st) day after the Closing Date. As used in this
Agreement, the term "Seller" shall be deemed to include any assignee or
other transferee of any Seller. Upon any such transfer by a Seller, such
Seller shall be relieved of any subsequently accruing liability under this
Agreement. Subject to the foregoing, this Agreement shall inure to the
benefit of and shall be binding upon Seller and Purchaser and their
respective successors and assigns. The provisions of this Section 10(B)
shall survive the Closing and delivery of the Deed or sooner termination of
this Agreement.
C. Amendments. This Agreement shall not be modified or amended except in
a written document signed by Seller and Purchaser.
D. Time of the Essence. Time is of the essence of this Agreement.
E. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Michigan. The provisions of this
Section 10(E) shall survive the Closing and delivery of the Deed or sooner
termination of this Agreement.
F. Notices. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and delivered (i)
personally, (ii) by certified mail, return receipt requested, postage
prepaid, (iii) by overnight courier (such as Federal Express), or (iv) by
facsimile transmission (with a copy sent via (i), (ii) or (iii)), addressed
as follows:
1. If to Seller:
c/o Equity Office Properties Management Corp.
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Telephone: (312) 466-3595
Facsimile: (312) 559-5051
Attention: Alissa Helgesen
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<PAGE>
With a copy to:
Rosenberg & Liebentritt, P.C.
Suite 1600
Two North Riverside Plaza
Chicago, Illinois 60606
Telephone: (312) 466-4577
Facsimile: (312) 454-0335
Attention: Daniel Acosta
2. If to Purchaser:
c/o Marc Realty
223 West Jackson Boulevard
Chicago, Illinois 60606
Telephone: (312) 922-5820
Facsimile: (312) 922-5826
Attention: Laurence H. Weiner
With a copy to:
Barnes & Thornburg
200 West Madison
Suite 2610
Chicago, Illinois 60606
Telephone: (312) 357-1313
Facsimile: (312) 759-5646
Attention: Robert Shadur
All notices given in accordance with the terms hereof shall be deemed
received (1) when delivered, if personally delivered, (2) forty-eight (48)
hours after posting, if sent by certified mail, return receipt requested,
postage prepaid, (3) the next business day after deposit with the courier
company, if sent by overnight courier, and (4) on the day sent, if sent by
facsimile transmission prior to the close of the recipient's business day.
Either party hereto may change the address for receiving notices, requests,
demands or other communication by notice sent in accordance with the terms
of this Section 10(F). The provisions of this Section 10(F) shall survive
the Closing and delivery of the Deed or sooner termination of this
Agreement.
G. Inspections. Purchaser's right of inspection pursuant to Section 8(A)
above shall be subject to the rights of tenants under the Leases and other
occupants and users of the Property. No inspection shall be undertaken
without reasonable prior notice to Seller. Seller shall have the right to
be present at any or all inspections. Purchaser may contact tenants
directly; provided that Purchaser shall notify Seller forty-eight (48)
hours prior to any such contact so that Seller may have a representative
present during such contact. No inspection shall involve the taking of
samples or other physically invasive procedures without the prior consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion. Notwithstanding anything to the contrary contained in this
Agreement, Purchaser shall indemnify and hold Seller and its
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<PAGE>
employees and agents, and each of them, harmless from and against any and
all losses, claims, damages and liabilities (including, without limitation,
reasonable attorneys' fees incurred in connection therewith) arising out of
or resulting from Purchaser's exercise of its rights under this Agreement,
including, without limitation, its rights of inspection as provided for in
Section 8(A) above. Except upon the written request of Seller pursuant to
Section 10(K) below, Purchaser shall not deliver to Seller copies of any of
the studies, reports, surveys or other information, data and/or documents
relating to the Property or any part thereof prepared by or at the request
of Purchaser, its employees, agents, representatives or contractors. The
provisions of this Section 10(G) shall survive the Closing and delivery of
the Deed or sooner termination of this Agreement.
H. As-Is Condition. ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY AND
PURCHASER'S OPPORTUNITY TO INSPECT THE PROPERTY AND EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT, PURCHASER AGREES TO TAKE THE PROPERTY "AS IS"
WITH ALL FAULTS AND CONDITIONS THEREON, SUBJECT TO USE, ORDINARY WEAR AND
TEAR, NATURAL DETERIORATION AND SUCH OTHER MATTERS AS ARE PERMITTED BY THIS
AGREEMENT. ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS,
INCLUDING, WITHOUT LIMITATION, THE ITEMS SET FORTH IN EXHIBIT P ATTACHED
HERETO (COLLECTIVELY, THE "DISCLOSURES") PROVIDED OR MADE TO PURCHASER OR
ITS CONSTITUENTS OR AGENTS BY SELLER, ITS AGENTS, EMPLOYEES, CONTRACTORS OR
REPRESENTATIVES, CONCERNING THE PROPERTY SHALL NOT BE REPRESENTATION OR
WARRANTIES. EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, PURCHASER
SHALL NOT RELY ON SUCH DISCLOSURES, BUT RATHER, PURCHASER SHALL RELY ONLY
ON ITS OWN INSPECTION OF THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER SELLER NOR
ITS AGENTS, EMPLOYEES, CONTRACTORS OR REPRESENTATIVE HAS MADE, AND NONE OF
THEM MAKES AND EACH SPECIFICALLY DISCLAIMS ANY STATEMENTS, REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE NATURE,
QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
WATER, SOIL AND GEOLOGY, (B) THE INCOME HERETOFORE DERIVED OR TO BE DERIVED
FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL
ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON, (D) THE COMPLIANCE
OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE
HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY, OR (F) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY, AND
SPECIFICALLY DISCLAIM ANY REPRESENTATIONS REGARDING TERMITES OR WASTES, AS
DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40
C.F.R., OR ANY HAZARDOUS SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980 ("CERCLA"),
AS AMENDED, AND REGULATIONS PROMULGATED THEREUNDER.
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<PAGE>
PURCHASER, ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE
NOT TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION OR CLAIM OR
CONTRIBUTION, INDEMNITY OR OTHER ACTION OR CLAIM AGAINST SELLER OR ITS
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ASSIGNS
(A) UNDER ANY FEDERAL, STATE OR LOCAL ENVIRONMENTAL OR HEALTH AND SAFETY
LAW OR REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT, OR ANY SIMILAR
LAW NOW EXISTING OR HEREAFTER ENACTED; (B) WITH RESPECT TO, IN CONNECTION
WITH OR RESULTING FROM ANY DISCHARGE, DISPOSAL, RELEASE OR ESCAPE OF ANY
CHEMICAL, OR ANY HAZARDOUS OR TOXIC MATERIAL WHATSOEVER, ON, AT, TO OR FROM
THE PROPERTY; OR (C) ANY ENVIRONMENTAL CONDITIONS OR OTHER CONDITIONS
WHATSOEVER ON, UNDER OR IN THE VICINITY OF THE PROPERTY.
THE PROVISIONS OF THIS SECTION 10(H) SHALL SURVIVE THE CLOSING AND
DELIVERY OF THE DEED OR SOONER TERMINATION OF THIS AGREEMENT.
I. Waiver of Jury Trial. In any lawsuit or other proceeding under or with
respect to this Agreement, Purchaser waives any rights it may have to trial
by jury. In addition, Purchaser waives any right to seek recission of the
transaction provided for in this Agreement. The provisions of this Section
10(I) shall survive the Closing and delivery of the Deed or sooner
termination of this Agreement.
J. Confidentiality. Purchaser acknowledges that all information with
respect to the Property obtained or developed by Purchaser, or furnished or
to be furnished to Purchaser is, has been and will be so furnished on the
condition that Purchaser maintain the confidentiality thereof. Accordingly,
Purchaser shall, and shall cause its directors, officers and other
personnel and representatives to, hold in strict confidence, and not
disclose to any other party without the prior written consent of Seller:
(i) any of the information with respect to the Property delivered to
Purchaser by Seller or any of its agents, representatives or employees, or
(ii) the existence of this Agreement or any term or condition hereof, or
(iii) the results of any inspections or studies undertaken in connection
herewith or any other information obtained or developed by Purchaser. In
addition, neither Purchaser nor Purchaser's directors, officers and other
personnel and representatives shall solicit offers to purchase the Property
to any other party without the prior written consent of Seller.
Notwithstanding the above, Purchaser may disclose such information to
individuals or entities necessary for Purchaser to consummate the
transaction contemplated herein (such as investors, lenders, engineers,
attorneys, prospective management companies, environmental consultants,
accountants and tax advisors) and as required by law. Purchaser shall, with
respect to any parties to whom the existence of this Agreement or any
information with respect to the Property is disclosed, notify such parties
of the existence of the Confidentiality Agreement and its applicability to
any such information provided to any such parties. In the event the Closing
does not occur and this Agreement is terminated, Purchaser shall, upon
written request by Seller, promptly return to Seller all copies of all such
information without retaining any copy thereof or extract therefrom.
Purchaser's obligations under this Section 10(J) shall survive any
termination of this Agreement. Purchaser's obligations under this Section
10(J) shall terminate and be of no further force and effect if the Closing
occurs hereunder.
K. Reports. If for any reason Purchaser does not consummate the Closing,
then Purchaser shall, upon Seller's written request, assign and transfer to
Seller all of its right, title and interest
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<PAGE>
in and to any and all studies, reports, surveys and other information,
data and/or documents relating to the Property or any part thereof prepared
by or at the request of Purchaser, its employees and agents, and shall
deliver to Seller copies of all of the foregoing. The provisions of this
Section 10(K) shall survive any termination of this Agreement.
L. New Leases. Seller and Purchaser further agree as follows:
1. From and after the date of this Agreement through the Closing,
Seller shall promptly deliver, as applicable, to Purchaser for review
(a "New Lease Notice") a copy of any proposed New Lease. During the
period between the date of this Agreement and Closing, Purchaser shall
have the right (exercisable in its reasonable discretion) to approve or
disapprove of any New Lease by responding in writing to Seller's New
Lease Notice within five (5) days after Purchaser's receipt of the New
Lease Notice. If Purchaser fails to approve or disapprove of such New
Lease within such five (5) day period, Purchaser shall be deemed to
have conclusively approved of such New Lease. In the event that
Purchaser reasonably disapproves of such New Lease within such five (5)
day period, Seller shall not enter into such New Lease. If Seller
enters into such a New Lease after Purchaser reasonably disapproves of
such New Lease as provided in the preceding sentence, then Purchaser
shall have the right, within five (5) days after Purchaser's receipt of
written notice of Seller's entering into such New Lease, to terminate
this Agreement. If Purchaser does not so terminate this Agreement,
Purchaser shall be deemed to have conclusively approved of such New
Lease. If Purchaser elects to terminate this Agreement pursuant to the
provisions of this Section 10 (L)(1) and Purchaser is otherwise
entitled hereunder to return of the Earnest Money, the Earnest Money
shall be returned to Purchaser by the Escrowee, in which event this
Agreement shall, without further action of the parties, become null and
void and neither party shall have any further rights or obligations
under this Agreement except those rights and obligations which
expressly survive termination of this Agreement as provided herein and
Seller's rights under the Confidentiality Agreement (as defined in
Section 8(A) above).
2. All tenant improvement costs and/or allowances and leasing
commissions relating to New Leases entered into by Seller between the
date of this Agreement and prior to Closing which Purchaser approves
(or is deemed to approve) in accordance with Section 10(L)(1) above,
shall be prorated in accordance with Section 4(C)(i)(c) above.
M. Reporting Person. Seller and Purchaser hereby designate Escrowee to act
as and perform the duties and obligations of the "reporting person" with
respect to the transaction contemplated by this Agreement for purposes of
26 C.F.R. Section 1.6045-4(e)(5) relating to the requirements for
information reporting on real estate transaction closed on or after January
1, 1991. In this regard, Seller and Purchaser each agree to execute at
Closing, and to cause the Escrowee to execute at Closing, a Designation
Agreement, designating Escrowee as the reporting person with respect to the
transaction contemplated by this Agreement.
N. Counterparts. This Agreement may be executed in any number of identical
counterparts, any or all of which may contain signatures of fewer than all
of the parties but all of which taken together shall constitute a single
instrument.
O. No Recording. Neither this Agreement nor a memorandum thereof shall be
recorded against the Property.
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<PAGE>
P. Limitation of Liability. Purchaser acknowledges and agrees that any
recovery against Seller that Purchaser may be entitled to as a result of
any claim, demand or cause of action that Purchaser may have against Seller
with respect to this Agreement and the transactions contemplated herein
shall only be recoverable against Seller in an amount not in excess of Five
Hundred Thousand ($500,000.00). The provisions of this Section 10(P) shall
survive the Closing and the delivery of the Deed.
Q. Conflict. In the event of a conflict between the terms and provisions
of the Confidentiality Agreement and this Agreement, the terms and
provisions of this Agreement shall control.
R. No survival unless specifically provided. Except as specifically
provided for in this Agreement, the rights, obligations, representations,
warranties, covenants and agreements of the parties set forth in this
Agreement shall not survive the Closing or any termination of this
Agreement.
S. No third-party beneficiaries. Except as specifically provided herein,
no third parties shall have the benefit of any of the provisions of this
Agreement, nor is this Agreement made with the intent that any person or
entity other than Seller and Purchaser shall rely hereon.
T. Letter of Intent. Effective as of the date of this Agreement, the
Letter of Intent is terminated and of no further force and effect.
U. Potential Mechanic's Liens related to Tenant Buildout. Should the
timing and/or scope of work to be performed by the lessor under Leases
and/or New Leases require Seller to enter into contracts with contractors
or other parties during the period between expiration of the Inspection
Period and Closing in order to comply with the lessor's obligations under
such Leases and/or New Leases and the work performed under such contracts
will not be completed prior to Closing, Seller shall promptly submit the
proposed contract with such contractor or other parties to Purchaser for
its approval. Purchaser shall have the right (exercisable in its reasonable
discretion) to approve or disapprove of such contract. If Purchaser fails
to approve or disapprove of such contract within five (5) days after its
receipt of same, Purchaser shall be deemed to have conclusively approved of
such contract. In the event Purchaser reasonably disapproves of such
contract within such five (5) day period, Seller shall not enter into such
contract. If Seller enters into such contract after Purchaser reasonably
disapproves of such contract as provided in the preceding sentence, then
Purchaser shall have the right, within five (5) days after Purchaser's
receipt of written notice of Seller's entering into such contract, to
notify Seller in writing as to whether or not it will elect to terminate
the Agreement due to Seller entering into such contract. Upon Seller's
receipt of written notice from Purchaser of Purchaser's intent to terminate
the Agreement as permitted under the preceding sentence, Seller shall have
five (5) days to terminate such contract so as to result in no liability to
Purchaser after Closing under such contract and, in the event that Seller
so terminates such contract within such five (5) day period, Purchaser
shall not be permitted to terminate the Agreement due to Seller entering
into such contract. If Seller does not terminate the contract as provided
above within the five (5) day period, then, if Purchaser is otherwise
entitled hereunder to return of the Earnest Money, the Earnest Money shall
be returned to Purchaser by the Escrowee, in which event this Agreement
shall, without further action of the parties, become null and void and
neither party shall have any further rights or obligations under this
Agreement except those rights and obligations which expressly survive
termination of this Agreement as provided herein and Seller's rights under
the Confidentiality Agreement (as defined in Section 8(A) above). If a
contract approved under this Section 10(U)
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requires that Seller pay any amounts under such contract prior to Closing,
Seller shall pay such amounts (and such amounts shall be prorated between
Purchaser and Seller as provided in Sections 4(C)(i)(c) and 4(C)(i)(d)
above). At Closing, Purchaser shall assume the obligations of Seller under
all contracts approved under this Section 10(U) and all Service Contracts
with respect to construction, including the obligation for payment of all
amounts owed under such contracts and Service Contracts after Closing. If
any such approved contract(s) and/or Service Contracts result in work for
which the provider or subcontractor thereunder may obtain a lien against
the Property if such work is not paid for and Purchaser is obligated to pay
for such work as provided in the preceding sentence, then the "Permitted
Exceptions" shall be deemed to include any potential liens and related
notices of commencement as a result thereof. The provisions of this Section
10(U) shall survive the Closing and delivery of the Deed.
V. Operation of Property. Between the date of this Agreement and the
Closing Date, Seller shall operate the Property in the normal course of
Seller's business and maintain the Property in the same condition as of the
date of this Agreement, ordinary wear and tear excepted and subject to
Section 5 above. Notwithstanding anything in the preceding sentence to the
contrary, in no event shall Seller be required to make any capital
improvements to the Property, or expend, in the aggregate, in excess of
$25,000 for repairs (the extent and scope of which shall be determined by
Seller in its reasonable discretion).
W. Tenant SNDAs. Purchaser's mortgage lender has requested that certain
tenants execute, prior to Closing, a subordination, non-disturbance and
attornment agreement (each, an "SNDA" and collectively, the "SNDAs") in the
form provided by such lender. Seller will permit Purchaser to provide an
SNDA to each such tenant, subject to the following: (i) Purchaser shall
only be permitted to send an SNDA to a tenant after Purchaser has confirmed
to Seller, in writing, that it has received the Estoppel Certificate
executed by such tenant and that such Estoppel Certificate satisfies the
provisions of Section 8(B) of this Agreement with respect to such tenant's
Lease; and (ii) Purchaser hereby acknowledges and agrees that Seller is
permitting Purchaser to provide the SNDAs to such tenants solely as a
courtesy to Purchaser and the receipt of the SNDAs in the form provided to
each of the tenants or in any other form is not a condition precedent to
Closing.
X. Parking Lot Repairs. Seller shall before the Closing Date expend up
to $8,000 to stripe and seal the parking lots for the Property.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Agreement as of the date first above written.
SELLER:
FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP,
an Illinois limited partnership
By: First Lansing Associates ("Lansing Associates"),
an Illinois joint venture, as General Partner
By: First Capital Institutional Real Estate,
Ltd.-2 ("FCIRE-2"), a Florida limited
partnership, a joint venturer
and
First Capital Institutional Real Estate,
Ltd.-3 ("FCIRE-3"), a Florida limited
partnership, a joint venturer
By: First Capital Financial Corporation,
formerly known as First Capital
Properties Corporation, as General
Partner of FCIRE-2 and FCIRE-3
By:____________________________________
Name:__________________________________
Its:___________________________________
Date:_______________________
PURCHASER:
LANSING MARC L.L.C., a Michigan limited liability
company
By:________________________________________________
Name:______________________________________________
Its:_______________________________________________
Date:______________________________________________
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<PAGE>
LIST OF EXHIBITS
----------------
A - Legal Description
B - Permitted Exceptions
C - Service Contracts
D - Joint Order Escrow Agreement
E - Assignment and Assumption of Leases
and Security Deposits
F - Assignment and Assumption of Service Contracts
G - Form Tenant Estoppel Certificate
H - Notice of Violations of Law
I - List of Litigation
J - Bill of Sale
K - Tangible Personal Property
L - Notice Letter to Tenants
M - Notice Letter to Vendors
N - Rent Roll
O - OSHA Letter
P - Environmental Reports
Q - Confidentiality Agreement
R - Quit Claim Assignment of Permits and General
Intangibles
S - Construction Contracts
T - Survey Requirements
U - Survey Certification
Note: All capitalized terms not defined in the
following exhibits shall have the same meaning ascribed
to them in the Agreement.
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EXHIBIT A
LEGAL DESCRIPTION
-----------------
Parcel 1
- --------
Lots 9, 10, 11, 12 and 13, HOLIDAY PLAZA, according to the plat thereof recorded
in Liber 27 of plats, page 32, Ingham County Records.
Parcel 2
- --------
Lots 2, 3, 4, 5, 6, 7, and 8, HOLIDAY PLAZA, according to the plat thereof
recorded in Liber 27 of plats, page 32, Ingham County Records.
Parcel 3
- --------
Lot 1, LONG COMMERCE PARK, a subdivision on part of the Southwest 1/4 of Section
10, Town 3 North, Range 2 West, City of Lansing, Ingham County, Michigan,
according to the plat thereof recorded in Liber 30 of plats, pages 13 and 14,
Ingham County Records, EXCEPT that part of Lot 1 said LONG COMMERCE PARK
described as commencing at the Southeast corner of said Lot 1, thence running
South 82 degrees 16 minutes 46 seconds West 211.08 feet along the South line of
said Lot; thence North 0 degrees 50 minutes East 30.0 feet; thence South 89
degrees 33 minutes East 0.40 feet; thence South 0 degrees 29 minutes 17 seconds
West 23.35 feet; thence South 89 degrees 30 minutes 43 seconds East 15.40 feet;
thence North 0 degrees 29 minutes 17 seconds East 24.08 feet, thence South 89
degrees 30 minutes 43 seconds East 89.0 feet; thence North 59 degrees 39 minutes
17 seconds East 87.69 feet to the Easterly line of said Lot 1, thence
Southeasterly 53.80 feet along the arc of a 3,820.85 foot radius curve to the
left whose chord bears South 31 degrees 40 minutes 48 seconds East 53.80 feet to
the point of beginning.
Parcel 4
- --------
Lots 3, 4, 5 and 6, LONG COMMERCE PARK, according to the plat thereof recorded
in Liber 30 of plats, pages 13 and 14, Ingham County Records.
25
<PAGE>
EXHIBIT B
PERMITTED EXCEPTIONS
--------------------
1. Acts of Purchaser, and those claiming by, through and under Purchaser.
2. General and special taxes and assessments not yet delinquent.
3. Rights of tenants under the Leases.
4. Zoning, building and other governmental and quasi-governmental laws, codes
and regulations.
5. Any adverse claim to any portion of the Property which has been created by
artificial means or has accreted to any such portion so created and riparian
rights, if any.
6. Those matters which are set forth in the Title Commitment and Survey which
are (i) not objected to by Purchaser, or (ii) waived by Purchaser pursuant
to the provisions of Section 3(C) of this Agreement.
26
<PAGE>
EXHIBIT C
HOLIDAY OFFICE PARK NORTH AND SOUTH
SERVICE CONTRACTS
-----------------
- --------------------------------------------------------------------------------
VENDOR NAME TYPE OF SERVICE
- --------------------------------------------------------------------------------
27
<PAGE>
EXHIBIT D
JOINT ORDER ESCROW AGREEMENT
----------------------------
Exhibit D follows this page
28
<PAGE>
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
OF LEASES AND SECURITY DEPOSITS
-------------------------------
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (this
"Assignment") is entered into as of the ______________ day of __________, 1998,
by and between FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP, an
Illinois limited partnership ("Assignor"), having offices at Two North Riverside
Plaza, Chicago, Illinois 60606, and ______________________, a __________
("Assignee"), with an office at _____________________.
1. Property. The "Property" shall mean the real property located in the
City of Lansing, County of ___________, State of Michigan, legally described in
EXHIBIT A attached to this Assignment, together with all of Assignor's right,
title and interest in and to the building, structures and other improvements
located thereon, and commonly known as "Holiday Office Park North and South".
2. Leases. The "Leases" shall mean all leases affecting the Property, or
any part thereof, which leases are listed on EXHIBIT B attached hereto. "Lease"
shall mean any one of the Leases.
3. Security Deposits. "Security Deposits" shall mean all unapplied
security deposits held by Assignor under the Leases that are set forth on
EXHIBIT C attached hereto.
4. Contract. "Contract" shall mean that certain Real Estate Sale
Agreement dated _______________, 1998 by and between Assignor, as Seller, and
____________________, as Purchaser, for the purchase and sale of the Property.
5. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns to Assignee the entire right, title and interest of Assignor in and to
the Leases and the Security Deposits as applicable to the period from and after
the date hereof.
6. Assumption. Assignee hereby assumes all of the covenants, agreements
and obligations of Assignor under or in connection with the Leases as applicable
to the period from and after the date hereof, and Assignee further assumes all
liability of Assignor for the proper refund or return of the Security Deposits
and the interest on the Security Deposits if, when and as required by the Leases
or otherwise by law. In addition, Assignee agrees to pay (i) in accordance with
Section 4(C)(i)(c) of the Contract, the brokerage fees, brokerage or leasing
commissions and tenant improvements costs and/or allowances payable in
connection with the New Leases (as defined in the Contract) set forth on EXHIBIT
D attached hereto or as otherwise described in such exhibit; and (ii) in
accordance with Section 4(C)(i)(d) of the Contract, all brokerage fees, leasing
commissions, tenant improvement costs and/or allowances payable in connection
with the Leases set forth on EXHIBIT E attached hereto or as otherwise described
on such exhibit and not paid as of the date hereof.
7. Enforcement. If Assignor or Assignee must resort to a court of law or
equity in order to enforce the provisions of this Assignment as against the
other, the non-prevailing party shall pay the reasonable attorney's fees and
expenses of the prevailing party.
29
<PAGE>
8. Third Parties. Except as set forth in Section 10 of this Assignment,
no third party shall have the benefit of any of the provisions of this
Assignment, nor is this Assignment made with the intent that any person or
entity other than Assignor or Assignee rely hereon.
9. Limited Liability. By accepting this Assignment, Assignee expressly
understands and agrees that any recovery against Assignor that Assignee may be
entitled to as a result of any claim, demand or cause of action that Assignee
may have against Assignor with respect to this Assignment shall only be
recoverable against Assignor as provided in Section 10(P) of the Contract.
10. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
11. Counterparts. This Assignment may be executed in any number of
identical counterparts, any or all of which may contain signatures of fewer than
all of the parties but all of which taken together shall constitute a single
instrument.
12. Indemnification. Assignee hereby unconditionally, absolutely and
irrevocably agrees to indemnify, defend and hold Assignor harmless of, from and
against any and all costs, claims, obligations, damages, penalties, causes of
action, losses, injuries, liabilities and expenses, including, without
limitation, reasonable attorneys' fees and expenses, arising out of, in
connection with or accruing under the Leases with respect to the period on or
after the date hereof, including, but not limited to, any such liabilities or
expenses arising in connection with any of the Security Deposits, prepaid rent
or other sums held by Assignee as the landlord under any of the Leases or any
brokerage fees or leasing commissions which are payable with respect to the
renewal or extension of any Leases by tenants accruing from and after the date
hereof to the extent such Leases are set forth on EXHIBIT D or E attached
hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
30
<PAGE>
[signature page attached to Assignment and Assumption of Leases and
Security Deposits]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment the
day and year first above written.
ASSIGNOR:
FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP,
an Illinois limited partnership
By: First Lansing Associates ("Lansing Associates"),
an Illinois joint venture, as General Partner
By: First Capital Institutional Real Estate,
Ltd.-2 ("FCIRE-2"), a Florida limited
partnership, a joint venturer
and
First Capital Institutional Real Estate,
Ltd.-3 ("FCIRE-3"), a Florida limited
partnership, a joint venturer
By: First Capital Financial Corporation,
formerly known as First Capital
Properties Corporation, as General
Partner of FCIRE-2 and FCIRE-3
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
ASSIGNEE:
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
EXHIBITS
--------
A - Legal Description of the Property
B - List of Leases
C - Security Deposits
D - New Leases
E - T.I. and Commissions - Existing Leases
31
<PAGE>
EXHIBIT F
ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
----------------------------------------------
THIS ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS (this "Assignment") is
entered into as of the ____ day of __________, 1997 by and between FIRST CAPITAL
LANSING PROPERTIES LIMITED PARTNERSHIP, an Illinois limited partnership
("Assignor"), having offices at Two North Riverside Plaza, Chicago, Illinois
60606, and ________________, a __________ ("Assignee"), with an office at
________________________________.
1. Property. The "Property" shall mean the real property located in the
City of Lansing, County of , State of Michigan, legally described in EXHIBIT
A attached to this Assignment, together with all of Assignor's right, title and
interest in and to the building, structures and other improvements located
thereon, and commonly known as "Holiday Office Park North and South".
2. Contract. "Contract" shall mean that certain Real Estate Sale
Agreement dated _______________, 1998 by and between Assignor, as Seller, and
_________________, as Purchaser, for the purchase and sale of the Property.
3. Service Contracts. "Service Contracts" shall mean the service
contracts entered into with respect to the ownership and operation of the
Property that are listed on EXHIBIT B attached to this Assignment.
4. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns to Assignee the entire right, title and interest of Assignor in and to
the Service Contracts as applicable to the period from and after the date
hereof.
5. Assumption. Assignee hereby assumes all of the covenants, agreements
and obligations of Assignor under or in connection with the Service Contracts as
applicable to the period from and after the date hereof.
6. Enforcement. If Assignor or Assignee must resort to a court of law or
equity in order to enforce the provisions of this Assignment as against the
other, the non-prevailing party shall pay the reasonable attorney's fees and
expenses of the prevailing party.
7. Third Parties. Except as set forth in Section 10 of this Assignment,
no third party shall have the benefit of any of the provisions of this
Assignment, nor is this Assignment made with the intent that any person or
entity other than Assignor or Assignee shall rely hereon.
8. No Representations or Warranties. This Assignment shall not be
construed as a representation or warranty by Assignor as to the transferability
of the Service Contracts, and Assignor shall have no liability to Assignee in
the event that any or all of the Service Contracts (i) are not transferable to
Assignee or (ii) are canceled or terminated by reason of this assignment or any
acts of Assignee.
9. Limited Liability. By accepting this Assignment, Assignee expressly
understands and agrees that any recovery against Assignor that Assignee may be
entitled to as a result of any claim, demand or cause of action that Assignee
may have against Assignor with respect to this Assignment shall only be
recoverable against Assignor as provided in Section 10(P) of the Contract.
32
<PAGE>
10. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
11. Counterparts. This Assignment may be executed in any number of
identical counterparts, any or all of which may contain signatures of fewer than
all of the parties but all of which taken together shall constitute a single
instrument.
12. Indemnification. Assignee hereby unconditionally, absolutely and
irrevocably agrees to indemnify, defend and hold Assignor harmless of, from and
against any and all costs, claims, obligations, damages, penalties, causes of
action, losses, injuries, liabilities and expenses, including, without
limitation, reasonable attorneys' fees and expenses, arising out of, in
connection with or accruing under the Service Contracts which are applicable to
the period on and after the date hereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
33
<PAGE>
[signature page attached to Assignment and Assumption of Service Contracts]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment the
day and year first above written.
ASSIGNOR:
FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP,
an Illinois limited partnership
By: First Lansing Associates ("Lansing Associates"), an
Illinois joint venture, as General Partner
By: First Capital Institutional Real Estate, Ltd.-2
("FCIRE-2"), a Florida limited partnership, a
joint venturer
and
First Capital Institutional Real Estate, Ltd.-3
("FCIRE-3"), a Florida limited partnership, a
joint venturer
By: First Capital Financial Corporation,
formerly known as First Capital Properties
Corporation, as General Partner of FCIRE-2
and FCIRE-3
By:______________________________________
Name:____________________________________
Its:_____________________________________
ASSIGNEE:
By:______________________________
Name:____________________________
Title:___________________________
EXHIBITS
--------
A - Legal Description of Property
B - Service Contracts
34
<PAGE>
EXHIBIT G
FORM TENANT ESTOPPEL CERTIFICATE
--------------------------------
First Capital Lansing Properties Limited Partnership
c/o Equity Office
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Attention: Ms. Alissa Helgesen
Lehman Brothers Holdings Inc.,
its successors and assigns
3 World Financial Center
200 Vesey Street
New York, NY 10285
Lansing Marc L.L.C.
c/o Marc Realty
223 West Jackson Boulevard
Chicago, Illinois 60606
Re: Confirmation of Lease Agreement for premises at [insert address] (the
"Premises") forming part of [insert name of center] (the "Property")
Ladies and Gentlemen:
At the request of First Capital Lansing Properties Limited Partnership, an
Illinois limited partnership ("Landlord"), the undersigned hereby certifies to
you and agrees as follows recognizing that you will rely on the information
contained herein:
1. The undersigned is the tenant under a lease dated __________, 19___
for premises located at ______________________________, as amended by the
following amendments (the "Lease"):
If no amendments are listed, the undersigned certifies that the Lease has
not been amended.
2. The Lease is in full force and effect and has not been amended,
modified, supplemented or superseded (except as specifically stated above), and
together herewith constitutes the entire agreement between the undersigned and
Landlord with respect to the Premises. There is no other agreement (except for
the agreements contained herein) between the undersigned and the Landlord with
respect to the Premises or any other space at the Property.
3. Neither the undersigned nor the Landlord is in default under the Lease.
There is no defense, offset, claim, or counterclaim by or in favor of the
undersigned against Landlord under the Lease or against the obligations of the
undersigned under the Lease.
35
<PAGE>
4. The undersigned has not received notice and is not aware of any prior
transfer, assignment, hypothecation or pledge by Landlord or of any of
Landlord's interest in the Lease, except to Lehman Brothers Holdings Inc.
5. The monthly base or minimum rent due under the Lease is
____________________ and has been paid through _______________, 19__ and all
additional rent due under the Lease has been paid through ____________, 19__.
6. There are no actions, voluntary or otherwise, pending or, to the best
knowledge of the undersigned, threatened against the undersigned under the
bankruptcy, reorganization, moratorium or similar laws of the United States, any
state thereof or any other jurisdiction.
7. The undersigned has accepted possession, and taken occupancy of, the
Premises; the term of the Lease has commenced; the undersigned has commenced the
payment of rents for all space subject to the Lease; and the expiration date of
the Lease is ___________________.
8. All work to be performed by Landlord under the Lease has been completed
in accordance with the Lease and has been accepted by the undersigned and all
reimbursements and allowances due to the undersigned under the Lease in
connection with any work performed by Landlord or the undersigned have been paid
in full.
Very truly yours,
______________________, Tenant
By:_____________________________________
Name:
Title:
Date: ____________________, 1998
36
<PAGE>
EXHIBIT H
NOTICES OF VIOLATIONS OF LAWS
-----------------------------
None
37
<PAGE>
EXHIBIT I
LIST OF LITIGATION
------------------
None
38
<PAGE>
EXHIBIT J
BILL OF SALE
------------
SPECIAL WARRANTY BILL OF SALE
-----------------------------
THIS SPECIAL WARRANTY BILL OF SALE (this "Bill of Sale") is executed as of
the ____ day of _________, l998, by FIRST CAPITAL LANSING PROPERTIES LIMITED
PARTNERSHIP, ("Seller"), having offices at Two North Riverside Plaza, Chicago,
Illinois 60606, in favor of __________________, a __________ ("Purchaser"), with
an office at ___________________________________________.
l. Property. The "Property" shall mean the real property located in the
City of Lansing, Michigan, legally described in EXHIBIT A attached to this Bill
of Sale, together with all of Seller's right, title and interest in and to the
building, structures and other improvements located thereon, and commonly known
as "Holiday Office Park North and South".
2. Personal Property. The "Personal Property" shall mean the Tangible
Personal Property as defined in that certain Real Estate Sale Agreement dated
the ___ day of _____________, 1998 (as amended, the "Contract"), by and between
Seller and ____________ with respect to the purchase and sale of the Real
Property and other property as described therein, as such Personal Property is
more particularly described on attached EXHIBIT C.
3. Sale. For good and valuable consideration received by Seller, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby sells,
assigns and transfers the Personal Property to Purchaser free of any liens or
encumbrances other than those matters set forth on EXHIBIT B attached hereto
(the "Permitted Exceptions"). Seller covenants and agrees to warrant specially
and forever defend title to the Personal Property unto Purchaser against all and
every person or persons lawfully claiming the whole or any part thereof by,
through or under Seller, and none other, but subject in any event to the
Permitted Exceptions. Except as set forth in the two (2) preceding sentences,
Seller makes no warranties or representations as to the Personal Property. The
Personal Property is transferred "AS IS, WHERE IS" and ALL WARRANTIES OF
QUALITY, FITNESS AND MERCHANTABILITY ARE HEREBY EXCLUDED.
4. Limited Liability. By accepting this Bill of Sale, Purchaser expressly
understands and agrees that any recovery against Seller that Purchaser may be
entitled to as a result of any claim, demand or cause of action that Purchaser
may have against Seller with respect to this Bill of Sale shall only be
recoverable against Seller as provided in Section 10(P) of the Contract.
39
<PAGE>
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the day and year
first above written.
SELLER:
FIRST CAPITAL LANSING PROPERTIES LIMITED PARTNERSHIP,
an Illinois limited partnership
By: First Lansing Associates ("Lansing Associates"), an
Illinois joint venture, as General Partner
By: First Capital Institutional Real Estate, Ltd.-2
("FCIRE-2"), a Florida limited partnership, a
joint venturer
and
First Capital Institutional Real Estate, Ltd.-3
("FCIRE-3"), a Florida limited partnership, a
joint venturer
By: First Capital Financial Corporation,
formerly known as First Capital Properties
Corporation, as General Partner of FCIRE-2
and FCIRE-3
By:_______________________________________
Name:_____________________________________
Its:______________________________________
40
<PAGE>
EXHIBIT K
TANGIBLE PERSONAL PROPERTY
--------------------------
41
<PAGE>
EXHIBIT L
---------
NOTICE LETTER TO TENANTS
------------------------
[Letterhead of Equity Office Properties Management Corp.]
NOTICE TO TENANTS
______________, 1998
Re: Holiday Office Park North and South, Lansing, Michigan (the "Property")
Dear Tenant:
This is to notify you that the Property has been sold to
_____________________, and that ________________________ has been retained by
the new owner as managing agent of the building.
Any security or other deposits and any prepaid rents under your lease have
been transferred to the new owner.
Effective immediately, all rental payments, notices to the Landlord, and
correspondence pursuant to your lease should be mailed to the following address:
Rents: Notices:
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
Attention: _______________________
Additionally, please have new Certificates of Insurance issued naming
____________________ as an additional insured. Please deliver said Certificate
to new owner at the "Notices" address set forth above.
Very truly yours,
EQUITY OFFICE PROPERTIES MANAGEMENT CORP., a
Delaware corporation, as agent
By:__________________________________________
Name:________________________________________
Its:_________________________________________
42
